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Hungary vs Slovakia, Gabjikovo Nagymaros Project Case

Facts:
The joint Hungarian–Czechoslovak project was agreed upon on 16 September 1977 in the Budapest Treaty. The treaty envisioned a cross-border barrage system between the towns of Gabcikovo, Czechoslovak Socialist Republic (now Slovak Republic) and Nagymaros, People's Republic of Hungary (now Hungary). The dams would eliminate regular flooding (like the disastrous ones of 1954 and 1965) and provide a clean source of electric power. They would also allow year-long navigability of the river and serve as a part of the Rhine-Main-Danube Canal system of inland navigation.

The plan was to divert part of the river into an artificial canal at Dunakiliti (a village in Hungary) to the hydroelectric power plant near Gabcíkovo (eight turbines, 720 MW). The canal would return the water into a deepened original riverbed and at Nagymaros a smaller dam and power-plant (158 MW) would be constructed. The plant in Gabcíkovo was to be a peak power plant and the dam in Nagymaros, about 100 km downstream, was to limit fluctuations of the water level. Because most of the construction was planned to occur in Slovak territory, the Hungarian government was obligated to participate in some construction in Slovakia, to ensure equal investment by both sides. Electricity produced was to be shared equally between the two countries.

At the same time, by the terms of the Treaty, the contracting parties undertook to ensure that the quality of water in the Danube was not impaired as a result of the Project, and that compliance with the obligations for the protection of nature arising in connection with the construction and operation of the System of Locks would be observed.

As a result of intense criticism which the Project had generated in Hungary, the Hungarian Government decided on 13 May 1989 to suspend the works at Nagymaros pending the completion of various studies which the competent authorities were to finish before 31 July 1989. On 21 July 1989, the Hungarian Government extended the suspension of the works at Nagymaros until 31 October 1989, and, in addition, suspended the works at Dunakiliti until the same date. Lastly, on 27 October 1989, Hungary decided to abandon the works at Nagymaros and to maintain the status quo at Dunakiliti.

During this period, negotiations took place between the parties. Czechoslovakia also started investigating alternative solutions. One of them, an alternative solution subsequently known as Variant C, entailed a unilateral diversion of the Danube by Czechoslovakia on its territory some 10 kilometres upstream of Dunakiliti. In its final stage, Variant C included the construction at Cunovo of an overflow dam and a levee linking that dam to the south bank of the bypass canal.

Provision was made for ancillary works. On 23 July 1991, the Slovak Government decided to begin, in September 1991, construction to put the Gabcikovo Project into operation by the provisional solution. Work on Variant C began in November 1991. Discussions continued between the two parties but to no avail, and, on 19 May 1992, the Hungarian Government transmitted to the Czechoslovak Government a Note Verbale terminating the 1977 Treaty with effect from 25 May 1992. On 15 October 1992, Czechoslovakia began work to enable the Danube to be closed and, starting on 23 October, proceeded to the damming of the river.

PROCEDURAL HISTORY
The Court finally takes note of the fact that on 1 January 1993 Slovakia became an independent State; that in the Special Agreement thereafter concluded between Hungary and Slovakia the Parties agreed to establish and implement a temporary water management regime for the Danube; and that finally they concluded an Agreement in respect of it on 19 April 1995, which would come to an end 14 days after the Judgment of the Court.

The Court also observes that not only the 1977 Treaty, but also the related instruments are covered in the preamble to the Special Agreement and that the Parties, when concentrating their reasoning on the 1977 Treaty, appear to have extended their arguments to the related instruments.

Here, the court is in the reference to the International Court of Justice or byname the World Court, the principle judicial organ of the United Nations. The ICJ was established in 1945 by the San Francisco Conference, which also created the UN. All members of the UN are parties to the statute of the ICJ, and nonmembers may also become parties. The court’s inaugural sitting was in 1946.

The court’s primary function is to pass judgment upon disputes between sovereign states. Only states may be parties in cases before the court, and no state can be sued before the World Court unless it consents to such an action. The ICJ decides disputes in accordance with international law as reflected in international conventions, international custom, general principles of law recognized by civilized nations, judicial decisions, and writings of the most highly qualified experts on international law.

Hence in the given case, there is an international issue which comes under the jurisdiction of international law, thus the case was under the International Court of Justice.

Issues:
  1. In terms of Article 2, paragraph 1 (a), of the Special Agreement, the Court is requested to decide whether the Republic of Hungary was entitled to suspend and subsequently abandon, in 1989, the works on the Nagymaros Project and on the part of the Gabcíkovo Project for which the Treaty attributed responsibility to the Republic of Hungary.
     
  2. By the terms of Article 2, paragraph 1 (b), of the Special Agreement, the Court is asked in the second place to decide whether the Czech and Slovak Federal Republic was entitled to proceed, in November 1991, to the 'provisional solution' and to put into operation from October 1992 this system.
     
  3. By the terms of Article 2, paragraph 1 (c), of the Special Agreement, the Court is asked, to determine what are the legal effects of the notification, on 19 May 1992, of the termination of the Treaty by the Republic of Hungary.
     
  4. By the terms of the treaty, the court was asked to determine whether the construction of the project will lead to damage the river and environmental concerns after the completion of the project in the Danube River.
     
  5. Lastly, Does the corpus of international law which relates to the environment now consists of the general obligations of states to ensure that activities within their jurisdiction and control respects the environment of other states or areas beyond national control?

RULE OF LAW
Three aspects of the judgement are particularly relevant in the context of the no-harm rule.

The first aspect is related to the question whether Hungary was permitted to suspend and abandon the project without engaging its responsibility under a state of necessity justification. In this context, the ICJ indicated the conditions for a state of necessity to apply. One of the conditions is that the act of necessity should concern the protection of an essential interest.

The Court noted that the environmental protection of a territory was among the situations that could trigger a state of necessity and recognized that it had no difficulty in acknowledging that the concerns expressed by Hungary for its natural environment in the region affected by the Gab?íkovo–Nagymaros Project related to an ‘essential interest’ of that State.

The second aspect relevant to the no-harm rule is the argument made by Hungary about the relationship between the principle of prevention and the principle of precaution. Hungary argued that the previously existing obligation not to cause substantive damage to the territory of another State had evolved in an erga omnes obligation of prevention of damage pursuant to the ‘precautionary principle’.

Hungary invoked this principle to justify the violation of a treaty signed with Czechoslovakia. Accordingly, their explanation was that the principle of precaution requires decision-makers to consider the risks of environmental damage and to take measures to minimize such risks. It imposes both obligations of means and of results. Together with prevention, both principles are intertwined with the requirement to conduct an environmental impact assessment which is now provided both in conventional and customary law. According to Hungary, states were required by international law.

The third relevant aspect is that the Gab?íkovo–Nagymaros case tries to clarify the relationship between the principle of equitable and reasonable use and the obligation not to cause significant damage. While the Court referred to the equitable utilization principle on a number of occasions in the Gab?íkovo case, McCaffrey has noted that the Court decided not to follow Hungary who relied on the no-harm principle in its pleadings, by not referring to it at all in the decision (McCaffrey 1998, p. 27). McCaffrey nuances what can be deduced from this choice by emphasizing that it does not necessarily mean that the ‘no-harm’ rule has been weakened; but it suggests that the Court views the principle of equitable utilization to be the more important of the two.

ANALYSIS
For Issue No. 1 - The Court observes that it has no need to dwell upon the question of the applicability or non-applicability in the present case of the Vienna Convention of 1969 on the Law of Treaties, as argued by the Parties. It needs only to be mindful of the fact that it has several times had occasion to hold that some of the rules laid down in that Convention might be considered as a codification of existing customary law.

The Court takes the view that in many respects this applies to the provisions of the Vienna Convention concerning the termination and the suspension of the operation of treaties, set forth in Articles 60 to 62. Neither has the Court lost sight of the fact that the Vienna Convention is in any event applicable to the Protocol of 6 February 1989 whereby Hungary and Czechoslovakia agreed to accelerate completion of the works relating to the Gabcikovo-Nagymaros Project.

The Court cannot accept Hungary's argument to the effect that, in 1989, in suspending and subsequently abandoning the works for which it was still responsible at Nagymaros and at Dunakiliti, it did not suspend the application of the 1977 Treaty itself or then reject that Treaty. The conduct of Hungary at that time can only be interpreted as an expression of its unwillingness to comply with at least some of the provisions of the Treaty and the Protocol of 6 February 1989, as specified in the Joint Contractual Plan.

The effect of Hungary's conduct was to render impossible the accomplishment of the system of works that the Treaty expressly described as single and indivisible. The Court has no difficulty in acknowledging that the concerns expressed by Hungary for its natural environment in the region affected by the Gabcikovo-Nagymaros Project related to an essential interest of that State.

It is of the view, however, that, with respect to both Nagymaros and Gabcíkovo, the perils invoked by Hungary, without prejudging their possible gravity, were not sufficiently established in 1989, nor were they imminent; and that Hungary had available to it at that time means of responding to these perceived perils other than the suspension and abandonment of works with which it had been entrusted. What is more, negotiations were under way which might have led to a review of the Project and the extension of some of its time limits, without there being need to abandon it.

For issue No. 2 - Czechoslovakia had maintained that proceeding to Variant C and putting it into operation did not constitute internationally wrongful acts; Slovakia adopted this argument. During the proceedings before the Court Slovakia contended that Hungary's decision to suspend and subsequently abandon the construction of works at Dunakiliti had made it impossible for Czechoslovakia to carry out the works as initially contemplated by the 1977 Treaty and that the latter was therefore entitled to proceed with a solution which was as close to the original Project as possible. Slovakia invoked what it described as a principle of approximate application to justify the construction and operation of Variant C.

It explained that this was the only possibility remaining to it of fulfilling not only the purposes of the 1977 Treaty, but the continuing obligation to implement it in good faith. The Court observes that it is not necessary to determine whether there is a principle of international law or a general principle of law of ''approximate application because, even if such a principle existed, it could by definition only be employed within the limits of the treaty in question. In the view of the Court, Variant C does not meet that cardinal condition with regard to the 1977 Treaty.

The Court notes that between November 1991 and October 1992, Czechoslovakia confined itself to the execution, on its own territory, of the works which were necessary for the implementation of Variant C, but which could have been abandoned if an agreement had been reached between the parties and did not therefore predetermine the final decision to be taken.

For as long as the Danube had not been unilaterally dammed, Variant C had not in fact been applied. Such a situation is not unusual in international law or, for that matter, in domestic law. A wrongful act or offence is frequently preceded by preparatory actions which are not to be confused with the act or offence itself. It is as well to distinguish between the actual commission of a wrongful act (whether instantaneous or continuous) and the conduct prior to that act which is of a preparatory character and which does not qualify as a wrongful act.

Slovakia also maintained that it was acting under a duty to mitigate damages when it carried out Variant C. It stated that:
It is a general principle of international law that a party injured by the non-performance of another contract party must seek to mitigate the damage he has sustained.

But the Court observes that, while this principle might thus provide a basis for the calculation of damages, it could not, on the other hand, justify an otherwise wrongful act. The Court further considers that the diversion of the Danube carried out by Czechoslovakia was not a lawful countermeasure because it was not proportionate.

For issue No. 3:
During the proceedings, Hungary presented five arguments in support of the lawfulness, and thus the effectiveness, of its notification of termination. These were the existence of a state of necessity; the impossibility of performance of the Treaty; the occurrence of a fundamental change of circumstances; the material breach of the Treaty by Czechoslovakia; and, finally, the development of new norms of international environmental law.

Slovakia contested each of these grounds
  1. State of Necessity:
    The Court observes that, even if a state of necessity is found to exist, it is not a ground for the termination of a treaty. It may only be invoked to exonerate from its responsibility a State which has failed to implement a treaty
     
  2. Impossibility of Performance:
    The Court finds that it is not necessary to determine whether the term object in Article 61 of the Vienna Convention of 1969 on the Law of Treaties (which speaks of permanent disappearance or destruction of an object indispensable for the execution of the treaty as a ground for terminating or withdrawing from it) can also be understood to embrace a legal regime as in any event, even if that were the case, it would have to conclude that in this instance that regime had not definitively ceased to exist. The 1977 Treaty- and in particular its Articles 15, 19 and 20- actually made available to the parties the necessary means to proceed at any time, by negotiation, to the required readjustments between economic imperatives and ecological imperatives.
     
  3. Fundamental changes of circumstances:
    In the Court's view, the prevalent political conditions were not so closely linked to the object and purpose of the Treaty that they constituted an essential basis of the consent of the parties and, in changing, radically altered the extent of the obligations still to be performed. The same holds good for the economic system in force at the time of the conclusion of the 1977 Treaty. Nor does the Court consider that new developments in the state of environmental knowledge and of environmental law can be said to have been completely unforeseen.
     
  4. Material Breach of Treaty:
    Hungary's main argument for invoking a material breach of the Treaty was the construction and putting into operation of Variant C. The Court pointed out that it had already found that Czechoslovakia violated the Treaty only when it diverted the waters of the Danube into the bypass canal in October 1992. In constructing the works which would lead to the putting into operation of Variant C, Czechoslovakia did not act unlawfully. In the Court's view, therefore, the notification of termination by Hungary on 19 May 1992 was premature. No breach of the Treaty by Czechoslovakia had yet taken place and consequently Hungary was not entitled to invoke any such breach of the Treaty as a ground for terminating it when it did.
     
  5. {Issue No. 4} Development of New International Environmental Law:
    The Court notes that neither of the Parties contended that new peremptory norms of environmental law had emerged since the conclusion of the 1977 Treaty; and the Court will consequently not be required to examine the scope of Article 64 of the Vienna Convention on the Law of Treaties [which treats of the voidance and termination of a treaty because of the emergence of a new peremptory norm of general international law (jus cogens)].

    On the other hand, the Court wishes to point out that newly developed norms of environmental law are relevant for the implementation of the Treaty and that the parties could, by agreement, incorporate them through the application of Articles 15, 19 and 20 of the Treaty. These articles do not contain specific obligations of performance but require the parties, in carrying out their obligations to ensure that the quality of water in the Danube is not impaired and that nature is protected, to take new environmental norms into consideration when agreeing upon the means to be specified in the Joint Contractual Plan.

    By inserting these evolving provisions in the Treaty, the parties recognized the potential necessity to adapt the Project. Consequently, the Treaty is not static, and is open to adapt to emerging norms of international law. By means of Articles 15 and 19, new environmental norms can be incorporated in the Joint Contractual Plan. The awareness of the vulnerability of the environment and the recognition that environmental risks have to be assessed on a continuous basis have become much stronger in the years since the Treaty's conclusion.

For Issue No.5:
The corpus of international law which relates to the environment now consists of the general obligation of states to ensure that activities within their jurisdiction and control respects the environment of other states or areas beyond national control. The concept of sustainable development is in consonance with the need to reconcile economic development with the protection of the environment. Hence, the terms of agreements to implement must be negotiated by the parties.

Conclusion
After addressing all the issues and analysis of the honorable court, I would like to conclude according to the issues and analysis simultaneously, the Court finds that Hungary was not entitled to suspend and subsequently abandon, in 1989, the works on the Nagymaros Project and on the part of the Gabcíkovo Project for which the 1977 Treaty and related instruments attributed responsibility to it.

The Court finds that Czechoslovakia was entitled to proceed, in November 1991, to Variant C insofar as it then confined itself to undertaking works which did not predetermine the final decision to be taken by it. On the other hand, Czechoslovakia was not entitled to put that Variant into operation from October 1992. The Court finds that the notification of termination by Hungary of 19 May 1992 did not have the legal effect of terminating the 1977 Treaty and related instruments.

The Court is of the view that although it has found that both Hungary and Czechoslovakia failed to comply with their obligations under the 1977 Treaty, this reciprocal wrongful conduct did not bring the Treaty to an end nor justify its termination.

In the Judgment, the Court has concluded that both Parties committed internationally wrongful acts, and it has noted that those acts gave rise to the damage sustained by the Parties; consequently, Hungary and Slovakia are both under an obligation to pay compensation and are both entitled to obtain compensation. The Court observes, however, that given the fact, that there have been intersecting wrongs by both Parties, the issue of compensation could satisfactorily be resolved in the framework of an overall settlement if each of the Parties were to renounce or cancel all financial claims and counterclaims.

At the same time, the Court wishes to point out that the settlement of accounts for the construction of the works is different from the issue of compensation, and must be resolved in accordance with the 1977 Treaty and related instruments. If Hungary is to share in the operation and benefits of the Cunovo complex, it must pay a proportionate share of the building and running costs. There is, also and above all, the very principle of good faith which must lead here to the fulfilment of reciprocal duties remaining from a treaty which has not been implemented through the reciprocal fault of the two parties.

I would like to stand by the opinion of Vice-President Weeramant (of ICJ):
The principle of sustainable development in balancing the competing demands of development and environmental protection, the principle of continuing environmental impact assessment, and the question of the appropriateness of the use of an inter partes (between the parties) legal principle such as estoppel in the resolution of issues with erga omnes (towards everyone) implications such as a claim that environmental damage is involved. Judge Weeramantry stresses the importance of continuous environmental impact assessment of a project as long as it continues in operation. The duty of environmental impact assessment is not discharged merely by resort to such a procedure before the commencement of a project.

The standards to be applied in such continuous monitoring are the standards prevalent at the time of assessment and not those in force at the commencement of the project. aspect of environmental law referred to is the question whether principles of estoppel which might operate between parties are appropriate in matters such as those relating to the environment, which are of concern not merely to the two Parties, but to a wider circle:
Questions involving duties of an erga omnes nature may not always be appropriately resolved by rales of procedure fashioned for inter partes disputes. Judge Weeramantry draws attention to this aspect as one which will need careful consideration.

Award Winning Article Is Written By: Mr.Tushar Kanti Mohindroo
Awarded certificate of Excellence
Authentication No: MA34080099362-19-0521

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