id-dritt Edition XXX Volume 2
2020 Published by Għaqda Studenti tal-Liġi
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Produced and published by Għaqda Studenti tal-Liġi (GħSL), the University of Malta’s Law Students’ Society. Correspondence in relation to this publication should be forwarded to: The Publications Officer / Editor-In Chief, Id-Dritt Room 219, GħSL Office Faculty of Laws University of Malta Msida, Malta or Email us at: publications@għsl.org © Għaqda Studenti tal-Liġi 2020 All Rights Reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, without the prior permission in writing of the copyright holder and the publisher, application for which shall be made to the publisher. Proofreading and editing done by the Editorial Board and the Publications Office. Some articles have been modified for reasons of clarity and/or uniformity. Opinions expressed in Id-Dritt Volume XXX do not necessarily represent the views of the Editorial Board, the Publications Office, the Publications Officer, or Għaqda Studenti tal-Liġi. Printed in Malta by Progress Press Co. Ltd Żona Industrijali, Triq L-Intornjatur, Mrieħel, BKR 3000, Malta Cover and Publication Design by Matthew Charles Zammit ISBN no: 978-9918-9506-2-1
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Preface Emma-Marie Sammut Vice-President Għaqda Studenti tal-Liġi
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d-Dritt, year after year, has continued to live up to its status and name. It is an incredible feat in itself, to compile such a gargantuan of a book, brimming with seasoned legal thought and principle. The effort that goes into its pages is no easy task, and it is incredible that the Editorial Board and the Publications Office continue to build on the records set by previous years. I may be biased in my writing, being a former Publications Officer myself in 2019, but Id-Dritt is the backbone of the organisation and the COVID-19 pandemic will not snuff its blazing light this year. It has indubitably reached an important milestone and, for thirty-years, the partnership between students and legal professionals has flourished to a point that elicits a yearly expectation. The culmination of every edition is, of course, an accomplishment in and of itself, and I, myself, was more than humbled to be a contributor this year. This year’s, however, is somewhat a testament to the blood, sweat and tears of the Office’s predecessors. It is also a foundation of respect shown to its prominent legal experts - a foundation which not only fosters excellence, but acknowledges the expertise and diligence of Id-Dritt’s contributors. It is crucial that the eaxpectations Id-Dritt is subject to and its subsequent foundations are preserved. Not only does this year’s edition boast of a culmination of consistency, but it also reflects the spirit of the organisation as a whole. It is a record-breaking edition, for there has never been an Id-Dritt with more than thirty articles and, with such variety, that will surely crystallise it as the Publications Office’s greatest feat, yet. Unfortunately - nay, luckily future officers have this impressive benchmark to refer to. Anything less in future years would not be a defeat in itself, however, as it is always quality which triumphs over quantity, and this year, we are blessed with both. From commentaries and discussions on administrative law to animal law, and commercial law to development and planning legislation, amongst other worthwhile reads such as technology, environmental and press law, and many more, this year’s variety offers an exercise in broadening horizons. Needless to say, Id-Dritt has come a long way and deserves its prestige. I am proud of how far this Office has come throughout the years. I am proud of the variety enshrined in both volumes this year. I am proud of the vi
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individuals who, through their dedication and earnestness, produced such a memorable edition. Consistency is key, but so is dedication and hard work. And, to the future of the Publications Office, an important principle to live by is perhaps Winston Churchill’s: ‘Continuous effort – not strength or intelligence – is the key to unlocking our potential.’ Intelligence without diligence is nothing but a skeleton that could have supported great potential. On this note, I must say that it has been my pleasure to write this preface. It is always a pleasure to be part of such unbelievable triumphs. Well done, once again, to the Publications Office and its Editorial Board. Thank you for your loyalty to the project and for your respect to the book itself. Ad multos annos, Id-Dritt!
Emma-Marie Sammut
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Opening Address Maria Refalo
Editor-In-Chief Id-Dritt XXX
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his year marks the Commemorative 30th Edition of the Id-Dritt legal journal, which has been published since 1944. Id-Dritt is a peer-reviewed journal penned by professionals in the legal field, not only for law students, but also to the general public. The past Id-Dritt editions provide a multitude of legal topics, and this year’s edition is no exception. In this year’s commemorative edition, the Publications Committee compiled a number of articles on a variety of topics, including public law, constitutional law, criminal law, financial law, and tax law. Journals like Id-Dritt portray the importance of sharing knowledge of the legal expertise. Whilst Id-Dritt may prove to be beneficial to law students and legal professionals alike in order to expand their knowledge on various topics, Id-Dritt is also beneficial to the general public. It is important to stress the knowledge of legal subjects not only to those practising within the legal field, but also to those persons who seek to act righteously in society, and those who are seeking a remedy to a legal issue that has arisen in the past, or is likely to arise in the future. Hence, the collection of Id-Dritt would definitely be an asset in every library, consisting of various current legal topics. My journey with GħSL started on my first day at the University of Malta Freshers Week as a first-year law student. I was looking forward to joining a student organisation that would not only help me establish connections with fellow law students, but also help me achieve insight on various legal developments. In my second year at the University of Malta, I joined the Legal Aid Committee, and since my third year, I formed part of the Publications Committee. In March 2019, I was approached by this year’s Publications Officer, Justine Xuereb, to see whether I was interested in being this year’s Editor-in-Chief, which I gladly accepted. This role consisted in communicating directly with the contributors and peer-reviewers of the journal. I remember my first meeting as part of the Publications Committee back in 2017, where the process of publication of the Journal was explained to the editors within the Committee. I remember feeling welcome within a group of ambitious students who all enjoyed working with the sole aim of sharing their knowledge with others. My experience as part of the Publications x
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Committee was very positive and I truly encourage law students to join GħSL throughout their law course. I would firstly like to thank the Publications Officer, Justine Xuereb, for giving me the opportunity to be this year’s Editor-in-Chief. Her dedication is truly reflected in this year’s edition of Id-Dritt. Secondly, I would like to thank the editors of the Publications Committee for all their hard work and dedication to make this edition possible. Finally, I would like to extend my thanks to all contributors and peerreviewers whose contribution was paramount to the publication of this edition of Id-Dritt.
Maria Refalo
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Foreword Natalino Caruana De Brincat
Lecturer, Public Law Faculty of Laws
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t gives me great pleasure to accept the invitation extended to me by the Editorial Board of Id-Dritt to prepare the foreword to the commemorative XXX Edition of the journal. As a student and subsequently as both legal practitioner and lately a member of the academic team within the Faculty of Laws, I always keenly read and refer to the well-researched academic contributions in the past editions and consider that such are to be valued when considering that locally, publications of such academic level related to legal matters are quite limited. The legal profession is one of the most noble professions. If one had to make a comparison between the medical profession and the legal profession, it will transpire that both deal with a body. The former aims at the well being of the biological body, whilst the latter aims at the good order of the body within society. In a country like Malta, where the Rule of Law is paramount and ingrained in its roots, lawyers are a vital contribution to the fully functional body of the State, that is, Democracy in its own magnificence, this when considering that Parliament should be the body which promotes laws, however it is the judicial body which guarantees that such laws are properly interpreted. Such interpretation is usually founded on the legal knowledge and illustrations of the vivid legal mind of the Judge, who in turn was a legal practitioner and a student reading law, possibly also a past contributor to this journal. The legal profession evolved, likewise in other countries: the traditional lawyer based on court-room day in day out reality changed, having several practitioners shifting their direction towards other sectors and branches of the profession, where the role of the lawyer might sometimes be perceived to be more that of a consultant rather than as the voice of his clients in court. Nevertheless, whatever the specialisation within the legal profession a lawyer might be inclined towards, one must always maintain at all times the highest professional and ethical standards. The latter shall be the compass used for a graduate lawyer so that one is perceived fortiter in re, suaviter in modo. In my humble opinion, a good lawyer will always remain a law student throughout his professional progression, whether being a junior lawyer, xiv
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senior lawyer, lecturer or a member of the Bench, because one would have to keep up to date researching legal matters, reading judgments on a daily basis and checking changes to the various laws. Unfortunately, one area of the Profession which is lacking is legal research and publication namely due to other commitments, time constraints and lack of resources in general. Generally speaking, lawyers find themselves extremely challenged by stiff deadlines and other professional commitments, which makes it virtually a sacrifice, to steal some time away from their loved ones, for them to publish articles or monographs. This stark reality makes Id-Dritt even more of a milestone towards the continuous development of any legal professional, for including an array of legal topics, and serving as a point of reference. GħSL should be considered as not merely a body of Law Students, but also a vibrant entity which through its dedication is directly contributing towards the development of our profession. I congratulate the entire GħSL Committee, past and present members, especially those involved in this year’s Editorial Board for their commitment, dedication and for successfully producing yet another edition of such a unique journal.
Natalino Caruana De Brincat B.A. (Hons), LL.B, Dip Notary Public (Melit), Dip Infosys, MBA (Leics), LL.D (Melit)
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Editorial Board Id-Dritt XXX
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Justine Xuereb
Publications Officer
Maria Refalo
Editor-In-Chief
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Cressida Scorfna Danielle Gauci David Chetcuti Dimech Ethan Brincat Evgeny Caruana Jessica Spiteri Josela Psaila Spiteri Jurgen Micallef Lenka Portelli Maria Farrugia Marie Claire Mizzi Martina Calafato Martina Cassar Matthew Camilleri Paula Briffa Raphael Butigieg Sarah Mifsud Shelby Aquilina Stephanie Camilleri Editors
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Executive Board Għaqda Studenti tal-Liġi
2019/2020
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Celine Cuschieri Debono President
Emma-Marie Sammut Vice-President
Marc Dimech
Secretary General
Sean Portelli
Financial Officer
Matthew Charles Zammit
Public Relations Officer
Graziella Schembri
Academic Officer
Shelby Aquilina
Conferences Officer
Michela Galea Seychell
External Relations Officer
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Ylenia Busuttil
International Officer
Clive Aquilina
Leisure Officer
Martina Darmanin
Marketing Officer
Maya Spiteri Dalli
Policy Officer
Mariah Micallef
Projects Officer
Justine Xuereb
Publications Officer
Valentina Cassar
Resources Officer
Sarah Mifsud
Board Member
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Contents
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International Criminal Law Kathleen Vella
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Prosecuting ISIS for committing crimes against humanity and genocide against the Yazidis: The implications and limitations under International Law
Roberta Spiteri
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Auctores Intellectuales: A critical analysis of ICC jurisprudence on the concept of coperpetration
Andrea Zammit
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ll valore risocializzante della pena detentiva sottolineato dalla sentenza torreggiani e l’art. 27(3) cost
Legal History Mark. A. Sammut
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Amabile Bonello’s essay on the Public law of Malta
Andrea Zammit
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Pro-Italianism, treason and conspiracy in wartime Malta - A judicial inquiry into deportation and capital punishment as imperial deterrents
Maritime Law Kevin Dingli
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Legal implications arising from the decision of the Maltese Court of Appeal regarding the Bright Star (ex Trading Fabrizia) case xxvi
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Police Law Peter Paul Zammit
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The Police Commissioner: An unregulated officer of the law?
Press Law Kevin Aquilina
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An evaluation of the diritto di cronaca under the Maltese Press Act
Private International Law Therese Lia
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A comparison of the Hague Convention, and the Recast Regulation
Research Methods 207
Frances Camilleri-Cassar ‘Originality’ is of utmost importance in academic writing: What counts as original?
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Succession Law Carmelo Gafà Daniele Gafà
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The Merits or otherwise, of the selection of “the last habitual residence of the deceased as the Principal Connecting Factor in the EU Succession Regulation (EU) – No. 650/2012
Taxation Law Shu-Chien Chen
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Towards a neutral corporate tax for the transportation industry – Rethinking the transportation industry formula of the Common Consolidated Corporate Tax Base Directive Proposal under EU law
Sean Portelli
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The scope of the ‘pure’ VAT exemptions and their interpretation by the CJEU, with particular reference to the services referred to in Article 135(1)(g) of Directive 2006/112 EC as well as the provisions’ transposition into Maltese law
Technology Law Julian Bajada
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Pacta Sunt Servanda and smart contracts Is code law?
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Marc Dimech
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How could Distributed Ledger Technology and Smart Contracts bring about a paradigm shift in consumer rights legislation?
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Kathleen Vella Prosecuting ISIS for committing crimes against humanity and genocide against the Yazidis: The implications and limitations under International Law
Dr Kathleen Vella read for a Bachelor of Laws with International Relations (2012) and Doctor of Laws (2015) at the University of Malta. She is highly interested in matters related to human rights, and for that purpose, wrote her Doctoral thesis on challenging the unlawful detention of asylumseekers in light of the ECtHR judgments against Malta. She has also written a number of articles on the promotion and protection of human rights. Upon graduation, she joined the diplomatic corps, and is currently reading for an LL.M in Diplomacy and International Law.
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1. Introduction
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uring the past decades, the rise and expansion of terrorist organisations has posed a great challenge to contemporary international law. The Islamic State of Iraq and Syria (hereinafter referred to as ISIS), being one of many such organisations, has been particularly difficult due to its transnational operations and members hailing from every corner of the world. Whilst its members have been committing terrorist attacks across the globe, this article will only address the atrocities committed against the Yazidis, an ethno-religious minority, in Iraq and Syria. Although the international community has been categorical in its affirmation that ISIS has committed genocide and crimes against humanity against the Yazidi population;, in practice, the prosecution of perpetrators is proving much more difficult than expected. In this context, this article will first analyse the definitions of genocide and crimes against humanity, which will be followed by a brief contextual introduction to ISIS and the atrocities it has committed against the Yazidis. The third part of this article will examine the legal challenges in prosecuting perpetrators and will attempt to propose the best forum wherein the perpetrators acting on behalf of ISIS could be prosecuted for the said atrocities.1
2. Defining genocide and crimes against humanity under international law One can argue that mankind tends to progress (or regress) at a much quicker pace than legal instruments foresee, and this often renders us relatively unable to wholly address, from a legal perspective, the horrors as they unfold. Whilst the drafting of specific conventions on genocide and war crimes have alleviated some of the unclarity surrounding the definition and commission of such crimes, the same cannot be stated with regard to crimes against humanity for which no codified instrument exists to date. A proposed ‘Convention on the Prevention and Punishment of Crimes Against Humanity’ has been drafted which borrows the same definition from 1 This article will not examine the actions carried out by the Iraqi and Syrian States prior to, concurrently, during, or following the attacks by ISIS.
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‘genocide’ means any of the following acts committed with intent to destroy, in whole or in part, a national, ethnical, racial or religious group, as such: (a) Killing members of the group; (b) Causing serious bodily or mental harm to members of the group; (c) Deliberately inflicting on the group conditions of life calculated to bring about its physical destruction in whole or in part; (d) Imposing measures intended to prevent births within the group; (e) Forcibly transferring children of the group to another group. If one dissects the above definition, one would establish that genocide contains three cumulative elements: the commission of a crime from the exhaustive list; the intent to destroy, to one degree or another; and a targeted group which falls within one of the enlisted four groups. Interestingly, ‘in whole or in part’ implies that the actual number of people affected is not explicitly set out and that what is relevant for there to be genocide is the commission of the act against a group of people, specifically due to their identifiable membership to one (or more) of the mentioned groups. This distinguishable characteristic is one of the most essential features of genocide, and one which is absent from the definition of crimes against humanity. As for intent, reference should be made to the Rutaganda Trial Judgement of the International Criminal Tribunal for Rwanda (ICTR) wherein the Tribunal delved into the vital components of specific intent and held that, [f]or any of the acts charged to constitute genocide, the said acts must have been committed against one or more persons because such person or persons were members of a specific group, and specifically, because of their membership in this group. Thus, the victim is singled out not by reason of his individual identity, but rather on account of his being a member of a national, ethnical, racial or religious group.6 int/resource-library/Documents/RS-Eng.pdf> accessed 23 July 2019. 6 Prosecutor v. Georges Anderson Nderubumwe Rutaganda (Judgement and Sentence)
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Although this might suggest that genocide may be straightforward to prove and prosecute, in practice, and to the dismay of victims, it would appear that a narrower definition of ‘genocide’ tends to be afforded. This can be demonstrated by the case of the Former Yugoslavia in the 1990s wherein, whilst recognising that atrocities had indeed been committed, Bosnian Muslims in Srebrenica were found to be victims of ethnic cleansing, rather than genocide due to the difficulty of proving intent. The International Court of Justice found that: [it was] however not convinced, on the basis of the evidence before it, that it has been conclusively established that the massive killings of members of the protected group were committed with the specific intent (dolus specialis) on the part of the perpetrators to destroy, in whole or in part, the group as such. The Court has carefully examined the criminal proceedings of the ICTY and the findings of its Chambers […] and observes that none of those convicted were found to have acted with specific intent (dolus specialis). The killings outlined […] may amount to war crimes and crimes against humanity, but the Court has no jurisdiction to determine whether this is so. In the exercise of its jurisdiction under the Genocide Convention, the Court finds that it has not been established by the Applicant that the killings amounted to acts of genocide prohibited by the Convention. 7 In other words, whilst the absence of the specific intent would not exclude the finding of war crimes or crimes against humanity, intent is a sine qua non element of genocide. 2.2 Crimes Against Humanity This article has already delved into the lack of a codified instrument addressing crimes against humanity. In this case, and until the proposed Convention is adopted, the guiding document is the Rome Statute. According to Article 7 of the said Statute, crimes against humanity are defined as: ICTR-96-3-T (6 December 1999), para 60 <https://unictr.irmct.org/sites/unictr.org/files/case-documents/ictr-96-3/trial-judgements/ en/991206.pdf> accessed 7 July 2019. 7 Application of the Convention on the Prevention and Punishment of the Crime of Genocide case (Bosnia & Herzegovina v. Serbia & Montenegro) (Judgment) [2007] ICJ https://www. icj-cij.org/files/case-related/91/091-20070226-JUD-01-00-EN.pdf accessed> 2 July 2019.
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any of the following acts when committed as part of a widespread or systematic attack directed against any civilian population, with knowledge of the attack: (a) Murder; (b) Extermination; (c) Enslavement; (d) Deportation or forcible transfer of population; (e) Imprisonment or other severe deprivation of physical liberty in violation of fundamental rules of international law; (f) Torture; (g) Rape, sexual slavery, enforced prostitution, forced pregnancy, enforced sterilization, or any other form of sexual violence of comparable gravity; (h) Persecution against any identifiable group or collectivity on political, racial, national, ethnic, cultural, religious, gender as defined in paragraph 3, or other grounds that are universally recognized as impermissible under international law, in connection with any act referred to in this paragraph or any crime within the jurisdiction of the Court; (i) Enforced disappearance of persons; (j) The crime of apartheid; (k) Other inhumane acts of a similar character intentionally causing great suffering, or serious injury to body or to mental or physical health.8 Therefore, for crimes against humanity to be committed, there must 8 Rome Statute of the International Criminal Court [as amended] (adopted 17 July 1998, entered into force 1 July 2002) 2187 UNTS 38544 <https://www.International Criminal Court-cpi. int/resource-library/Documents/RS-Eng.pdf> accessed 23 July 2019.
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be the presence of any of the eleven crimes enlisted in the article which form ‘part of a widespread or systematic attack directed against any civilian population, with knowledge of the attack.’ However, unlike genocide, the victims do not need to belong to a specific group, and the victims are members of the civilian population, indiscriminately and irrespectively of any distinctive feature which may distinguish them as belonging to a specific group. In this sense, whereas genocide may only be committed against four certain types of groups, crimes against humanity have a broader application. No specific intent (as contained in the definition of genocide) needs to be proven in crimes against humanity. The reference in Article 7(2)(a) to ‘a State or organisational policy to commit such attack’ is also of utmost relevance since it confirms that the perpetrator does not necessarily need to be a State actor. Moreover, this clause also excludes individuals who commit such crimes on their own volition and who are not affiliated with any organisation or State. Questions arose in the Tadic case as to whether crimes against humanity may only be committed by a State actor or not. The said case concluded that a link to the State is not required and that crimes against humanity can be committed by ‘forces which, although not those of the legitimate government, have de facto control over, or are able to move freely within defined territory.’9 In Katanga, the Chamber also held that, ‘such a policy may be made either by groups of persons who govern a specific territory or by any organisation with the capability to commit a widespread or systematic attack against a civilian population.’10 Another challenging aspect of crimes against humanity is the fact that the enlisted crimes also tend to constitute crimes under ordinary domestic criminal legislation if the chapeau of a ‘widespread of systematic attack against a civilian population’ is not present. Establishing and proving this link is crucial since otherwise one would only be able to prosecute for the respective ordinary crimes enlisted in the article, rather than crimes against humanity.
9 Prosecutor v. Dusko Tadic aka Dule (Opinion and Judgment) ICTY IT-94-1-T (7 May 1997) para 654 <www.icty.org/x/cases/tadic/tjug/en/tad-tsj70507JT2-e.pdf> accessed 2 August 2019. 10 Prosecutor v. Germain Katanga & Mathieu Ngudjolo Chui (Pre-Trial Chamber I) ICC-01/04-01/07 (30 September 2008) para 396 <https://www.icc-cpi.int/CourtRecords/ CR2008_05172.PDF> accessed 10 August 2019.
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3. ISIS and the Yazidis 3.1 ISIS as a Non-State Armed Actor In the past, atrocious acts, as the ones under discussion, were mostly committed by States, and therefore the commission of such acts by terrorist organisations such as by ISIS and Boko Haram, amongst several others, has questioned the extent to which international legal instruments, which were traditionally applied against State actors, could now be enforced against non-State actors. ISIS’s actions in themselves raise legal concerns. If one assumes that it is only the State itself who could use legitimate force within its own territory, then it would follow that non-State actors would be acting unlawfully if they use force within a sovereign State. In addition, the modus operandi of ISIS has challenged principles which the drafters of international legal instruments had had in mind, since ISIS not only operates transnationally across State Parties through terrorist attacks, but also in territories over whom the International Criminal Court has no jurisdiction since they are nonState Parties, such as in Syria and Iraq.11 ISIS, a non-State armed actor, can be described as a highly organised splinter group of the Al Qaeda terrorist organisation, which advanced owing to the power vacuum and lawlessness it found in Iraq and Syria. ISIS, led by Abu Bakr Al Baghdadi, overtook its parent organisation not only with regards to conquered territory, but also in terms of the numbers of recruited fighters and financial resources.12 In order for a non-State armed group to be recognised as such, the said group, (i) with its own identity and (ii) chain of command, (iii) should have the potential to employ arms through the use of force to achieve political, ideological, or economic objectives, (iv) should not pertain to any formal military structure of a State, State alliance, or intergovernmental organisations, and (v) should not be under the control of the State wherein they operate.13 In the past, ISIS would have been immune from prosecution since it was necessary to establish an explicit link of the perpetrator to a State. This 11 This will be examined in Section 3.2.1. 12 Evan Tyner, ‘EIP Explainer: Understanding Daesh/ISIS’ (European Institute for Peace) <http://www.eip.org/en/news-events/eip-explainer-understanding-daeshisis> accessed 7 July 2019. 13 OCHA, ‘Humanitarian Negotiations with Armed Groups: A Manual for Practitioners’ January 2006 p23 <https://www.unocha.org/sites/unocha/files/HumanitarianNegotiationswArmedGroupsManual.pdf> accessed 17 July 2019.
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was removed in 1998 through the amendments to the Rome Statute which instead, added the possible connection to an organisation, rather than to a State. Therefore, the terms ‘directed’ or ‘policy’ in the definition of crimes against humanity and the obligation of all States to prevent a nd punish the commission of genocide suggest, irrespective of who the actor is, that ISIS could not escape justice solely due to the fact that the actions committed were not attributable to a particular State. Whilst one has already referred to the Katanga case, wherein a member of an armed group was convicted of crimes against humanity, we have more recently witnessed the arrest and conviction of more non-State actors for other crimes before the International Criminal Court; most notably, militia leaders of the Democratic Republic of Congo for war crimes and crimes against humanity, of a member of Al Qaeda for the destruction of cultural property in Timbuktu, and of a non-State actor who had forces under his command in the Central African Republic for crimes against humanity.14 3.2 Atrocities against the Yazidis in Iraq and Syria Sinjar, a city situated in northern Iraq, was the home of the majority of Yazidis, an ethno-religious minority whom ISIS publicly perceived as infidels. With the practical impossibility of converting into Yazidi, and with the requirement of having both parents Yazidi, the Yazidi population remained a very close-knit society which was reluctant to marry out of their faith. The earlier attacks commenced in early August 2014, when ISIS terrorised Sinjar by killing some members, kidnapping others, and forcing others to flee. The attacks on the 3rd of August 2014 were extremely organised and in concert with other simultaneous attacks from all sides of Sinjar, leaving Sinjar and the Yazidi population practically defenceless. Within a few hours of the attack, the Yazidis were trapped without the ability of escaping the knowingly forthcoming horrors. Few managed to escape to Mount Sinjar, to whom international efforts attempted to deliver aid and evacuate them; however, hundreds lost their lives in the process. 14 Prosecutor v. Bosco Ntaganda ICC-01/04-02/06 <https://www.International Criminal Court-cpi.int/CaseInformationSheets/NtagandaEng.pdf>; Prosecutor v. Admad Al Faqi Al Mahdi ICC-01/12-01/15 (27 September 2016) <https://www.International Criminal Court-cpi.int/ CaseInformationSheets/Al-MahdiEng.pdf>; <https://en.unesco.org/courier/2017-october-december/ahmad-al-faqi-al-mahdi-i-plead-guilty> accessed 2 August 2019; Human Rights Watch, ‘Central Africa Republic/ICC: New Chance for Justice- ICC takes custody of first suspect in second investigation’ (Nairobi, 19 November 2018) <https://www.hrw.org/news/2018/11/19/ central-african-republic/icc-new-chance-justice> accessed 3 August 2019
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More than half a million Yazidi individuals have been killed or displaced. In November 2014, the United Nation’s Independent International Commission of Inquiry on the Syrian Arab Republic (IICISAR) concluded that: As an armed group bound by Common Article 3 of the Geneva Conventions and customary international law, ISIS has violated its obligations toward civilians and persons hors de combat, amounting to war crimes. In areas where ISIS has established effective control, ISIS has systematically denied basic human rights and freedoms and in the context of its attack against the civilian population, has perpetrated crimes against humanity.15 In the first quarter of 2015, the investigation head of the United Nations, Mr Suki Nagra, stated that the attacks which had been committed against the Yazidis were well-organised and planned and were therefore not random and coincidental.16 The unequivocal finding that genocide may have been committed against the Yazidis came in mid-2016 when IICISAR declared that: ISIS has committed, and continues to commit, the crime of genocide, as well as multiple crimes against humanity and war crimes, against the Yazidis. [...] ISIS seeks to destroy the Yazidis in multiple ways, as envisaged by the drafters of the 1948 Genocide Convention.17 Apart from the displacement from Sinjar (Iraq) into Syria, systematic violations were committed against the Yazidis who were captured, which included the forced segregation of Yazidi men and women into three groups: males over 12 years of age, women and children, and boys aged 7 and above, with each group facing further abuse, along with other measures so as to prevent the birth of Yazidi children as well as forced impregnation of Yazidi women so as to change the demographics of the Yazidi.18 15 Report of the Independent International Commission of Inquiry on the Syrian Arab Republic, ‘Rule of Terror: Living under ISIS in Syria’ (2014) UN doc A/HRC/27/CRP.3 para 74. 16 Stephanie Nebehay, ‘ICC should prosecute Islamic State for Iraq genocide, war crimes: U.N.’ (Reuters) (Genva, 19 March 2015) <https://www.reuters.com/article/us-mideast-crISIS-iraq-un/icc-should-prosecute-islamic-state-for-iraq-genocide-war-crimes-u-nidUSKBN0MF0TX20150319> accessed 11 July 2019. 17 UN Human Rights Council, “They came to destroy”: ISIS Crimes Against the Yazidis’ UN doc A/HRC/32/CRP.2 15 June 2016 para 202 <https://www.ohchr.org/Documents/HRBodies/HRCouncil/CoISyria/A_HRC_32_CRP.2_en.pdf> accessed 1 August 2019. 18 Report of the Independent International Commission of Inquiry on the Syrian Arab Republic, ‘Rule of Terror: Living under ISIS in Syria’ (2014) UN doc A/HRC/27/CRP.3 para 57: ‘The
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The membership component found within the definition of genocide is also considered to be fulfilled since the Yazidis are considered to be an ethnoreligious group. Whilst disagreements and unclarity surround the notion of whether Yazidis are a distinct religious group or not, the jurisprudence from both the ICTY and the ICTR suggests that the perception of the perpetrator is vital and is to be taken into account. ISIS’s perception that the Yazidis are ‘infidels’ is hence both significant and essential.19 On the other hand, one could argue that ISIS’s desire to conquer and control the territory within Sinjar, coupled with the sexual pleasure derived from kidnapped Yazidi girls and women, might contradict the specific intent to destroy the group. However, a closer look at the horrors committed would demonstrate that the intent to destroy was specific due to the fact that the attack was explicitly aimed at the eradication of the Yazidis, rather than a generic desire to conquer land and/or sexual gratification. This attack may be compared to accounts by other individuals living in Sinjar who confirmed that Arab individuals living in the same area were allowed to remain without suffering the same fate as their Yazidi counterparts. On this comparison, the report ‘“They Came to Destroy”: ISIS Crimes Against the Yazidis’ states that: No other religious group present in ISIS-controlled areas of Syria and Iraq has been subjected to the destruction that the Yazidis have suffered. Arab villagers who did not flee Sinjar in advance of the ISIS attack were allowed to remain in their homes, and were not captured, killed, or enslaved. While the Christian communities still living in ISIS-controlled territory live difficult and often precarious existences, are viewed with suspicion, and are vulnerable to attack if ISIS perceive they are seeking protection from non-aligned forces, their right to exist as Christians within any Islamic state existing at any point in time, is recognised as long as they pay the jizya tax. Under ISIS’s radical interpretation of Islam, however, it is impermissible for Yazidis to live as Yazidis inside its enslavement of Yazidi women was undertaken as part of ISIS’s attack on civilian communities considered to be infidels. Their treatment in unlawful confinement and stated motivation behind their capture and enslavement demonstrates the intent of ISIS to forcibly impregnate and thereby affect the ethnic and religious composition of the group. Undertaken as part of a widespread and systematic attack, these acts amount to the crimes against humanity of enslavement, rape and sexual violence.’ 19 ibid para 37: ‘ISIS regards Yazidi Kurdish community as infidels and their religious practices, ‘deviant’.
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so-called caliphate because they are not People of the Book.20
4. Limitations of international law The following section will deal with the legal challenges and limitations of prosecuting and holding ISIS accountable for the horrors they have committed in Iraq and Syria. 4.1 Who should be prosecuted? The seemingly spectacular rise of ISIS, along with the West’s lack of preparation and underestimation of its potential, were in themselves tempting to many foreign fighters. This was reinforced with ISIS’s establishment of the ‘Caliphate’ in parts of Iraq and Syria which made it seem all the more powerful. Thousands of European foreign fighters voluntarily joined ISIS and, as they return home, fears arise as to the manner with which they should be dealt with: whether to prosecute them for joining a terrorist organisation; to prosecute them for acts committed whilst in Iraq and Syria; or whether greater focus should be afforded to deradicalization. In several States, both joining a terrorist organisation and travelling abroad to conflict zones are now considered to be crimes, and prosecution for such crimes may be quite straightforward; however, prosecuting perpetrators for the atrocities committed in Syria and Iraq may prove to be more challenging than desired. ISIS is an extremely well-planned organisation with an established hierarchy. The question which one should therefore delve into is who, from the hierarchy, should be prosecuted. The answer lies in Article 258 of the Rome Statute, which explicitly states that whosoever commits such a crime within the jurisdiction of the International Criminal Court, shall be both individually responsible and liable. This degree of participation varies from the actual commission of an act (individually or jointly, through orders or solicitation), to facilitating, aiding or abetting the commission of a crime.21 However, in the history of the International Criminal Court’s prosecutions, due to the lengthy 20 UN Human Rights Council, “They came to destroy”: ISIS Crimes Against the Yazidis’ UN doc A/HRC/32/CRP.2 15 June 2016 para 162 <https://www.ohchr.org/Documents/HRBodies/HRCouncil/CoISyria/A_HRC_32_CRP.2_en.pdf> accessed 1 August 2019. 21 Rome Statute of the International Criminal Court [as amended] (adopted 17 July 1998, entered into force 1 July 2002) 2187 UNTS 38544 <https://www.International Criminal Court-cpi. int/resource-library/Documents/RS-Eng.pdf> accessed 23 July 2019.
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procedure and resources required for a prosecution to take place before the International Criminal Court, only those at the top of the hierarchy tend to actually be prosecuted. Reference must also be made to the principle of active personality which has at times been considered as the ‘easiest’ method of exercising jurisdiction over members of ISIS. This would mean that members of ISIS, who are nationals of International Criminal Court State Parties, would fall within Article 12(2)(b) of the Rome Statute, and may therefore be prosecuted in the domestic courts of their home State. However, a contrario sensu, this would mean that those at the highest echelons of ISIS’s hierarchy would escape prosecution, since they are mostly from non-State Parties. Whilst prosecuting members of the lower hierarchal levels of ISIS may set an example and act as a deterrent, the seeming impunity of the higher and more responsible individuals is frustrating, to say the least.22 4.2 Who could and should prosecute? For justice to be served, there must be a court or tribunal which would be competent to hear such cases. Prosecution of such crimes may take place in three different fora: (i) before the International Criminal Court; (ii) through the setting up of ad hoc tribunals or hybrid courts; or (iii) by national courts in virtue of the principle of universality, territoriality or personality. 4.2.1 Prosecution by the International Criminal Court Individual criminal responsibility is at the fulcrum of the International Criminal Court, irrespective of whether the perpetrator is a State actor or not. One of the most significant benefits of the International Criminal Court is its permanent structure as well as its explicitly laid out provisions in its Statute to prosecute perpetrators of genocide, crimes against humanity, war crimes and crimes of aggression.23 The International Criminal Court is governed by the principle of complementarity and is only able to exert its jurisdiction if the States concerned do not prosecute the perpetrators themselves. Since 22 Anna Marie Brennan, ‘Prosecuting ISIL before the International Criminal Court’ (American Society of International Law, 17 September 2015) <https://www.asil.org/insights/ volume/19/issue/21/prosecuting-isil-international-criminal-court-challenges-and-obstacles accessed> 1 July 2019. 23 Rome Statute of the International Criminal Court [as amended] (adopted 17 July 1998, entered into force 1 July 2002) 2187 UNTS 38544, Article 5 https://www.International Criminal Court-cpi.int/resource-library/Documents/RS-Eng.pdf accessed 23 July 2019.
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the crimes committed against the Yazidis by ISIS constitute crimes which are explicitly mentioned in the Rome Statute, the International Criminal Court has both the material and temporal jurisdiction to prosecute. According to Article 12 of the Rome Statute, the International Criminal Court has jurisdiction solely over crimes committed within the territory, or by nationals, of its State Parties.24 This is mainly problematic since neither Syria nor Iraq are State Parties, as well as due to the fact that the leaders of ISIS are often nationals of non-State Parties - as this article has already mentioned. This would mean that in reality, in the current context, although unlikely due to the past practices of the International Criminal Court, charges before the International Criminal Court may only be brought against ‘foreign fighters’ who are nationals of State-Parties and who would have committed such crimes on non-State Party territory in virtue of the active personality principle. Another method for the International Criminal Court to be able to prosecute perpetrators for crimes committed in non-State Parties is through a referral by the United Nations Security Council, as provided for in Article 13(b) of the Rome Statute. This has already been enforced twice in the cases of Darfur (in virtue of resolution 1593 of 2005) and Libya (in virtue of resolution 1970 of 2011). Although the original attempt to grant the International Criminal Court the authority to investigate the commission of horrendous crimes and the ‘widespread violations of human rights and international humanitarian law committed in a pervasive climate of impunity by the Syrian authorities and pro-government militias as well by non-State armed groups’, was supported by over 60 countries, the referral was blocked by China and Russia, two permanent members on the Security Council.25 Another possibility is for the affected non-State Parties, that is Syria or Iraq in this case, to submit themselves to the jurisdiction of the International Criminal Court in virtue of Article 12(3) which states that in order for the Court to exercise jurisdiction in a non-State Party, the said State would need to ‘accept the exercise of jurisdiction by the Court with respect to the crime in 24 Rome Statute of the International Criminal Court [as amended] (adopted 17 July 1998, entered into force 1 July 2002) 2187 UNTS 38544 https://www.International Criminal Court-cpi. int/resource-library/Documents/RS-Eng.pdf accessed 23 July 2019. 25 UN News Service, ‘Russia, China block Security Council referral of Syria to International Criminal Court’ (22 May 2014) <https://news.un.org/en/story/2014/05/468962-russia-china-block-security-council-referral-syria-international-criminal-court> accessed 7 July 2019.
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question’.26 This may be quite complex since it would require the agreement between the United Nations and the affected State/s, some of which may not be in a position to negotiate due to their internal state of affairs. Moreover, this might also subject members of the respective national authorities to scrutiny and investigation for crimes committed under their watch, and thus such States might be reluctant to accept the exercise of the International Criminal Court’s jurisdiction. 4.2.2 Prosecution by an ad hoc tribunal or hybrid court Following the horrors of ethnic cleansing in the former Yugoslavia, and Rwandan genocide, the international community recognised the necessity of establishing and improving tools with which they could prevent and prosecute such acts, as well as of the possibility of setting up ad hoc international criminal tribunals. Ad hoc tribunals were set up for both horrors through the International Criminal Tribunal for the Former Yugoslavia (ICTY) and the International Criminal Tribunal for Rwanda (ICTR), respectively. An international criminal tribunal may be set up as a subsidiary organ of the United Nations Security Council, owing to the fact that the Security Council has been given the power to deal with threats to peace in virtue of Articles 39-42 of the United Nations Charter. The setup of such tribunals would be in accordance with the rule of law and international human rights instruments, and may only enforce universal criminal offences such as genocide, crimes against humanity and war crimes. Since ISIS’s actions are indeed considered to be threats to the peace, it would be fair for one to assume that the establishment of such an ad hoc tribunal would be considered favourably by several States and members of the international community, and perhaps as the most feasible solution. Sweden is one of the most vocal supporters of the establishment of an ad hoc tribunal which would address the crimes which were committed in Syria, and which should be modelled on the ICTY and ICTR. It suggests that such an ad hoc tribunal is to be situated in Iraq which would facilitate preservation of, and access to, evidence, but which would also be in a position to deal with the thousands of European foreign fighters who are still in Syria and Iraq.27 26 Rome Statute of the International Criminal Court [as amended] (adopted 17 July 1998, entered into force 1 July 2002) 2187 UNTS 38544 <https://www.International Criminal Court-cpi. int/resource-library/Documents/RS-Eng.pdf> accessed 23 July 2019. 27 Helen Warrell, ‘Sweden proposes international tribunal to try Isis fighters’ Financial Times (London, 19 May 2019) <https://www.ft.com/content/9086250e-7802-11e9-bbad7c18c0ea0201> accessed 21July 2019.
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In certain instances, an ad hoc tribunal might be better suited to hear certain cases, and the number of prosecutions might even be higher than those of the International Criminal Court as was the case with the ICTY. The setting up of such a tribunal close to where the acts have been committed would also be beneficial for evidentiary purposes, most notably for witnesses to give their testimonies and for the gathering of evidence. In order to establish such a tribunal, one would require not only a strong political will, but also a massive amount of resources and expertise, backed by a sound legal structure which would take a considerable amount of time to be formally established. If States such as Syria and Iraq would still be reluctant to give up their jurisdiction and to submitting themselves to the International Criminal Court’s jurisdiction, a hybrid court may be set up, which would be comprised of local judges assisted by international experts, and which would utilise a domestic setup whilst assuming the objectives of an international court - as was the case with the Extraordinary Chambers in the Court of Cambodia and the Special Tribunal for Lebanon. The nature of a hybrid court would therefore require Syrian and Iraqi consent, but this is also unlikely for Syria due to its unstable political context. The exact location of the tribunal might also be challenging, and questions on independence and impartiality might be raised if such tribunals are set up in neighbouring third countries. 4.2.3 Prosecution by national courts In the first part of this paper, one established that States have an erga omnes obligation to prosecute genocide and crimes against humanity due to the principle of universality. However, this may be easier said than done since concerns might arise as to whether the exercise of jurisdiction would be considered as an encroachment upon the sovereignty of the State upon whose territory the crimes would have been committed. In virtue of the principle of territoriality, perpetrators should be prosecuted in Iraq and Syria, since the atrocities were committed on their territory. However, considering the gravity of the crimes in question and the current state of affairs in both Syria and Iraq, the claim of the enforcement of universal jurisdiction against the sovereignty of a State, which is on the brink of collapse, may be favoured. The ongoing tumultuous state of political affairs in Syria render prosecution in Syria both improbable and impractical since doubts may be 18
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raised as to the Syrian courts’ legitimacy, independence and impartiality. Moreover, postponing prosecution until the political context improves would only delay (and deny) justice further. Iraq has already started prosecuting members of ISIS, and whilst this might be a step in the right direction for justice to be served, the United Nations has called for the transparent, fair and thorough conduct of proceedings, and has also warned against the hasty sentencing to death of those found guilty. Moreover, the UN Special Rapporteur on extrajudicial, summary or arbitrary executions added that ‘[t] he Government of Iraq should take appropriate steps to prosecute the crimes perpetrated against the Iraqi people, including alleged genocide, crimes against humanity and war crimes’ whilst ensuring that the international legal standards are upheld.28 One must also delve into the role of the respective domestic courts to prosecute their own nationals for atrocities committed in Iraq and Syria in terms of the active personality principle. Whilst a number of States have already commenced the prosecution of their own nationals, others have relied on the assumption that it is Iraq, as a sovereign State, who should prosecute perpetrators for crimes committed on its territory. In July 2019, the Netherlands commenced the prosecution of the first Dutch perpetrator for war crimes carried out in Syria, as well as trying others for joining ISIS.29 However, the same cannot be held for the thousands of other European foreign fighters who are still in Syria and Iraq, and whose countries refuse to let them return. The French authorities have held that the prosecution of foreign fighters for crimes committed in Iraq are a ‘sovereign’ matter for Iraq and as such, should be dealt with by Iraq.30 Germany too has been criticised for ‘obstructing justice’ for not accepting to take back German nationals who have committed atrocities against the Yazidi.31 Interestingly, in the case of 28 OHCHR News, ‘Iraq: UN expert says prosecution of ISIL leadership must be fair and thorough’ (Geneva, 4 April 2019) <https://www.ohchr.org/EN/NewsEvents/Pages/DisplayNews.aspx?NewsID=24440&LangID=E> accessed 1 August 2019. 29 Sinead Barry, ‘Alleged Islamic State militant on trial in Netherlands for war crimes’ (Euronews) (9 July 2019) <https://www.euronews.com/2019/07/09/alleged-islamic-state-militant-on-trial-in-netherlands-for-war-crimes> accessed on 1 August 2019. 30 BBC, ‘French Islamic State members sentenced to death in Iraq’ (27 May 2019) <https://www.bbc.com/news/world-middle-east-48414670> accessed 1 August 2019; BBC, ‘French Islamic State accused handed over to face trial in Iraq’ (26 February 2019) <https://www. bbc.com/news/world-europe-47370288> accessed 1 August 2019. 31 Natalie Muller, ‘Germany is failing to prosecute IS foreign fighters, Yazidis accuse’ DW (29 May 2019) <https://www.dw.com/en/germany-is-failing-to-prosecute-is-foreign-fightersyazidis-accuse/a-48944533>; Chase Winter, ‘As IS crumbles, Syrian Kurds want Germany to take back foreign fighters’ DW (4 February 2019) <https://www.dw.com/en/as-is-crumbles-syrian-
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Prosecutor v. Droubi, the Swedish courts prosecuted a Syrian citizen for war crimes which he had committed in Syria. What is of particular importance in this case is that neither Droubi nor his victims were Swedish, and that he was prosecuted upon taking residence in Sweden after he had committed the crimes.32 This paper will not delve into the responsibilities of Iraq and Syria in terms of their statutory duties to prevent and to act, with the latter arising the moment a State finds out, or is expected to know, of the atrocities being carried out. However, in such a case, one would need to determine to what extent they could have prevented genocide from occurring, and whether there were any measures within their powers which they could have taken to prevent and punish genocide.33 One would also need to look into the relationship between Iraq and Syria on the one hand, and ISIS on the other, and the extent to which the said States could somehow influence the actions of ISIS. 4.3 Collection and preservation of evidence Since States have an erga omnes obligation to prosecute such atrocities, it stands to follow that every State should also have a fully-fledged specialised unit in place which would be capable of investigating crimes under international law due to the principle of universality. One must admit that this is extremely sensitive not only due to the technical difficulties in collecting and preserving data and carrying out investigations in general, but also due to the complexities which may arise in connection with various types of evidence.34 As for our current context of prosecuting ISIS, determining which court or tribunal is the competent forum is only the tip of the iceberg, since one would need to address other challenges such as the proper collection and preservation of evidence. kurds-want-germany-to-take-back-foreign-fighters/a-47336852> 32 Prosecutor v. Mouhannad Droubi B 13656-14 (Södertörn District Court, Sweden) 26 February 2015. 33 Application of the Convention on the Prevention and Punishment of the Crime of Genocide case (Bosnia & Herzegovina v. Serbia & Montenegro) (Judgment) [2007] ICJ para 425-450 <https://www.icj-cij.org/files/case-related/91/091-20070226-JUD-01-00-EN.pdf> accessed 2 July 2019. 34 The different types of evidence themselves pose their own respective challenges depending on whether they are witness testimonials, documentary, scientific, digital, direct, indirect or circumstantial evidence. More information can be found on <https://ir.lawnet.fordham. edu/cgi/viewcontent.cgi?article=2696&context=ilj> accessed 24 July 2019.
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Naturally, an important element in the challenge of prosecuting ISIS is to collect and preserve evidence on the ground, specifically from Sinjar and its surrounding areas. For this purpose, the United Nations Investigative Team to Promote Accountability for Crimes Committed by ISIS (UNITAD), which is based in Iraq, has been set up so as to assist prosecution teams with securing convictions against ISIS members. The Resolution which set up UNITAD declared that the purpose of the said Investigative Team is: … to support domestic efforts to hold ISIL (Da’esh) accountable by collecting, preserving, and storing evidence in Iraq of acts that may amount to war crimes, crimes against humanity and genocide committed by the terrorist group ISIL (Da’esh) in Iraq, to the highest possible standards […] to ensure the broadest possible use before national courts, and complementing investigations being carried out by the Iraqi authorities, or investigations carried out by authorities in third countries…35 UNITAD has been collecting evidence, from the most crucial locations, most notably the Sinjar region and mass graves in the vicinities, as well as imagery and first-hand accounts from both victims and villagers living in the area. This undoubtedly requires excellent, effective and specialised investigation and evidence gathering. Whilst courts tend to grant a higher probative value to direct evidence rather than circumstantial evidence, the latter type of evidence is also accepted as was shown in the case of Prosecutor v. Bemba.36 The weight to be afforded to each type of evidence would also need to be looked into. For instance, in witness testimonials, credibility and reliability would be essential, whereas in documentary evidence, the ‘provenance, source or author, as well as their role in the relevant events [and] the chain of custody’ will be assessed.37 When the affected areas are difficult to access, aerial imagery has proven vital for the collection of evidence, and the cases of Krstic, Blagojevic, Popovic et al and Tolimir are considered to be landmark cases for aerial imagery evidence in their constant reliance on the said imagery, as well as for placing 35 UNITAD was established through Resolution 2379 (2017) as adopted by the Security Council at its 8052nd meeting on 21 September 2017 <https://undocs.org/S/RES/2379(2017)> accessed 7 August 2019. 36 Prosecutor v. Jean-Pierre Bemba Gombo (Trial Chamber judgment) ICC-01/05-01/08 (21 March 2016) para 239 <https://www.International Criminal Court-cpi.int/CourtRecords/ CR2016_02238.PDF> accessed 22 July 2019. 37 ibid para 237.
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the burden of proof on the defence to demonstrate that the digital images were not authentic or lack reliability.38
5. Conclusion More than five years have passed since the first attacks were committed against the Yazidis by ISIS, and justice is still nowhere in sight for the thousands of victims. This article has attempted to address the legal challenges which has resulted in the slow progress of justice. Despite the fact that all the requisite elements seem to be present, and have been declared so by the highest bodies of the international community, there is still a sense of reluctance to move forward, not only within the United Nations Security Council but also in the domestic courts. This article concludes that although a specialised ad hoc tribunal might be the most effective forum to prosecute perpetrators, the setting up of such a tribunal is in itself challenging. Moreover, due to the stalemate at the United Nations Security Council, both the International Criminal Court and a specialised ad hoc tribunal seem to be out of the question at this stage. As a result, domestic courts (more specifically Western courts) must step in to ensure that justice is served to the thousands of Yazidis who have been traumatised, displaced and killed. Whilst recognizing that some prosecutions have now commenced through the Iraqi courts, one must ensure that the international legal standards and requirements are upheld and respected, and bear in mind that under no circumstances do two wrongs make a right.
38 Prosecutor v. Radislav Krstic (Trial Chamber judgment) IT-98-33-T (2 August 2001) <www.icty.org/x/cases/krstic/tjug/en/krs-tj010802e.pdf> accessed 7 August 2019; Prosecutor v. Vidoje Blagojevic & Dragan Jokic Trial Chamber judgment IT-02-60-T (17 January 2005) <www.icty.org/x/cases/blagojevic_jokic/tjug/en/bla-050117e.pdf> accessed 7 August 2019; Prosecutor v. Vujadin Popovic et al Case no IT-05-88-T 10 June 2010 <www.icty.org/x/cases/ popovic/tjug/en/100610judgement.pdf> p 19; Prosecutor v. Zdravko Tolimir (Trial Chamber judgment) IT-05-88/2-T (12 December 2012) p 23 <http://www.icty.org/x/cases/tolimir/tjug/ en/121212.pdf > accessed 7 August 2019.
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Roberta Spiteri Auctores Intellectuales: A critical analysis of ICC jurisprudence on the concept of coperpetration
Roberta Spiteri is a Bachelor of Laws graduate, currently pursuing her Master of Advocacy at the University of Malta. Her legal interests lie mainly in public international law, human rights law and international criminal law. She intends to pursue an LL.M specialising in these fields, and is set to sit for her warrant exam in January 2021.
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1. Introduction
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ince the adoption of the Statute of the International Criminal Court (hereafter ‘the Statute’ or ‘Rome Statute’) by 60 States, which established the permanent International Criminal Court (hereafter ‘ICC’ or ‘the Court’) on 1 July 2002, the Court has had jurisdiction over ‘the most serious crimes of concern to the international community as a whole’, namely genocide, crimes against humanity, war crimes, and aggression.1 These crimes typically occur in the context of a widespread and collective system of criminality, whereby the execution is planned and put into action by a number of senior political or military leaders, but physically perpetrated by one or several subordinates.2 Difficulties are presented as issues of collective responsibility arise and it becomes more challenging to find the right balance between the objective actus reus and the subjective requirement of mens rea. An effective justice system allows for attribution of individual responsibility to the guilty perpetrator/s. Due to the geographic remoteness of these leaders from the scene of the crime, Prosecutors have struggled to gather proof which directly links the leaders to the commission of the crime, so as to hold them individually criminally responsible as principal perpetrators under Article 25(3)(a) of the Statute (hereafter ‘Article 25(3)(a)’). This provision applies when an individual ‘commits’ a crime either ‘as an individual’ (direct perpetration), ‘jointly with another person’ (co-perpetration), or ‘through another person’ (indirect perpetration, or perpetration-by-means).3 Sub-paragraphs (b) - (d) outline other forms of accessorial participation. As a result, the ICC could no longer keep applying the traditional modes of criminal liability from which it could often only be concluded that they were only liable as accessories. Such application would properly reflect neither the magnitude of their involvement as auctores intellectuales (i.e intellectual perpetrators or masterminds) nor their degree of blameworthiness in the commission of these atrocities. The careful application of the appropriate mode of liability hence becomes the most important consideration to be made by the Court during these trials. To this end, it has had to develop theories of liability which are distinct from those applied domestically. 1 United Nations General Assembly, Rome Statute of the International Criminal Court (last amended 2010), A/Conf.183/9, 17 July 1998 (Rome Statute), Article 5. 2 See Prosecutor v. Tadić, Appeals Chamber Judgment, IT-94-1A, Appeals Chamber, 15 July 1999 (‘Tadić’), para 191. 3 Rome Statute, Article 25(3)(a). 24
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In Lubanga, the ICC interpreted Article 25(3)(a) to include co-perpetration by means of control over the crime - that mode of liability which horizontally links the accused to other political or military leaders, who may also be responsible for the crimes committed by the direct perpetrator. The judges in Katanga and Ngudjolo elaborated further and held that such control over crime can also consist in organisational control. The Pre-Trial Chamber (PTC) adopted a novel interpretation of indirect perpetration - that mode of liability which vertically links the accused leader with an organisation that extends down to the direct perpetrator from the leadership level. It created the concept of indirect co-perpetration in response to a situation of remote collective crime by senior political or military leaders. The development of this doctrine sheds light on the main challenges regarding the interpretation and the application of the modes of liability under Article 25(3)(a) that are faced by the ICC. This article focuses primarily on the formation and adoption by the ICC of direct and indirect co-perpetration, their elements and whether they are consistent with a strict interpretation of Article 25(3)(a). The question arises whether indirect co-perpetration attributes liability more adequately to senior political or military leaders, or whether a more suitable path forward exists for the Prosecution to attach liability to such intellectual perpetrators. This article also explores interrelated questions such as why the ICC distinguishes between principal and accessorial liability under Article 25(3), and what sort of approach should the ICC be adopting when attributing liability to intellectual perpetrators. There is certainly no clear answer to all these questions. In fact, the Trial Chambers in two of the Court’s Judgments have had conflicting views, as shall be seen. While the constitutive elements of co-perpetration were interpreted broadly in the ICC’s first conviction, the expansive interpretation was rejected in its latest one. Particular attention is given to the ICC Cases of Lubanga, Katanga and Ngudjolo, and Katanga, and the position at law is considered as of 30 April 2019.
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2. The Origins of Co-Perpetration 2.1 Rejection of the Doctrine of JCE by the ICC The International Criminal Tribunal for the former Yugoslavia (ICTY) has relied heavily upon the Anglo-American doctrine of JCE4, which is based on a subjective approach to distinguish between principals and accessories, to hold senior political and military leaders responsible for their crimes. In search of a more accurate approach of charging such leaders, the ICC has strayed from this doctrine, interpreting Article 25(3)(a) as embodying the German notion of ‘control over the crime’, and created the notion of indirect co-perpetration. Naturally, the Court had its reasons for rejecting the doctrine of JCE. This doctrine had been claimed to be ‘firmly established in customary international law’,5 although it was also criticised for being incompatible with the general principles of law, particularly those of legality and culpability. The ICC has doubted the value of precedent of some of the cases that JCE was founded upon and does not believe that a simple transfer of the case law of the ad hoc tribunals to the ICC is the best way forward. In its view, the Statute should always be applied first before customary law, which applies only as a subsidiary source of international law. The Court has in fact affirmed that Article 21 of the Statute disregards the necessity of JCE.6
2.2 Roxin’s Control Theory The foundation for the ‘control over the crime’ theory as developed by the German criminal law scholar Claus Roxin in the 1960s,7 was laid down in the case of Lubanga. The PTC interpreted ‘committed’ in Article 25(3) (a) as constituting the notion of ‘control over the crime’.8 Roxin’s theory of Tatherrschaft (‘dominion over the act’) extends principal liability to those who, despite not being physically involved in committing the offence, possess 4 Joint Criminal Enterprise 5 Tadic (n 2), para 220. 6 Prosecutor v Germain Katanga and Mathieu Ngudjolo Chui, ICC-01/04–01/07–717, PTC I, DCC, 30 September 2008 (Katanga and Ngudjolo), para 508. 7 Claus Roxin, Täterschaft und Tatherrschaft (De Gruyter, 2006) 242-52, 704-17. 8 See Prosecutor v Thomas Lubanga Dyilo, ICC-01/04-01/06-803, PTC I, Decision on the Confirmation of Charges (DCC), 29 January 2007 (Lubanga), para 330.
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control over the acts of the physical perpetrators.9 The notion of control over crime has since been embraced by the majority of German and Spanish jurists and the ICC later adopted it as if it were its own. It appears to have both a restrictive as well as an expansive effect on the concept of joint perpetration.10 The concept finds its limitation with respect to those participants in the criminal enterprise without whose contribution the criminal plan would not have been realised. At the same time, the scope of perpetration has been broadened to also include perpetrators who despite never physically exercising any of the constituting acts of the offence in question, exercise control, albeit from afar. The control theory may be credited for fairer labelling of the accused as principal perpetrator or accessory accordingly.11 Nevertheless, it remains controversial at the ICC. It has been criticised on the basis that indirect perpetration cannot possibly be claimed when the person carrying out the act is autonomous and criminally responsible.12 Counter-critique has however pointed out that it is perfectly possible to hold the person behind the scenes responsible together with the person who physically committed the act, since both possessed sufficient control over the criminal act, albeit independently of each other.13 While Judge Fulford and Judge van den Wyngaert strongly disagrees with the Court’s reliance on German theory, Ohlin does not view this as problematic. On the contrary, he considers it to be an independent exercise to develop an international criminal law theory. Van Sliedregt meets these views half-way and considers that although the control theory may be regarded as ‘subsumed under Article 25(3)(a)’, due to its recognition of the functional perpetrator, Roxin’s theory should still be approached with caution.14 Notwithstanding the varying views, the ICC continues to apply the control theory to all the forms of perpetration in Article 25(3)(a), as well as the subsequently created notion of indirect co-perpetration. 9 Gerhardt Werle, Boris Burghardt, ‘Claus Roxin on Crimes as part of Organized Power Structures’ (2011) 9 JICJ 191-205. 10 Jens Ohlin, Elies van Sliedregt, Thomas Weigend, ‘Assessing the Control-Theory’ (2013) 26 Leiden JIL 725, 728. 11 Elies van Sliedregt, ‘The Curious Case of International Criminal Liability’, (2012) 10 JICJ 1171, 1183. 12 Elies van Sliedregt, ‘Perpetration and Participation in Article 25(3)’, Chapter 20 of Carsten Stahn (ed), The Law And Practice Of The International Criminal Court (OUP 2015) 508. 13 Thomas Weigend, ‘Indirect Perpetration’ Chapter 22 of Stahn (ed) (n 11) 552. 14 van Sliedregt, ‘Perpetration and Participation in Article 25(3)’ (n 10) 507-8.
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3. Direct and Indirect Co-Perpetration in the Jurisprudence of the ICC 3.1 Direct Co-perpetration: Interpretation in ‘Lubanga’ 3.1.1 Objective and Subjective Elements of Co-Perpetration based on the Notion of Joint Control over the Crime The PTC adopted the liability mode of co-perpetration for the first time in its narrow sense in the case of Lubanga and relied on Roxin’s doctrine of ‘functional control over the act’ (‘funktionelle Tatherrschaft’),15 enabling a clear distinction between perpetrators and accessories: The concept of co-perpetration based on joint control over the crime is rooted in the principle of the division of essential tasks for the purpose of committing a crime between two or more persons acting in a concerted manner. Hence, although none of the participants has overall control over the offence because they all depend on one another for its commission, they all share control because each of them could frustrate the commission of the crime by not carrying out his or her task.16 In order to establish co-perpetration based on joint control, two objective elements are required: 1) the existence of an agreement or common plan between two or more persons,17 and 2) a coordinated essential contribution by each co-perpetrator resulting in the realisation of the actus reus of the crime/s.18 Thus, the key element of this mode of liability is shared control between all of the co-perpetrators, and any co-perpetrator has the power to disrupt the implementation of the common plan and the execution of the crime at any given time, simply by withholding their contribution to the crime. That being 15 Lubanga (n 7), para 341; See also Katanga and Ngudjolo (n 5), para 521. 16 Ibid (n 7) para 342 with reference to the detailed analysis of co-perpetration in Prosecutor v Milomir Stakić, IT-97-24-T, TrCh II, 31 July 2003 (Stakić), para 440; See also Ibid (n 5), paras 521, 525. 17 Ibid (n 7), paras 343-5; Ibid (n 5), paras 522-3. 18 Ibid (n 7) paras 346-8; Ibid (n 5) paras 524-5.
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said, collecting evidence to prove the ‘essential’ nature of the contribution and the ability to frustrate the commission of the crime can be an arduous task for the prosecution, as this requires speculation as to how the sequence of events would have unfolded without the suspect’s contribution.19 As for the mental element, an elevated degree of mens rea is not necessary. The PTC simply requires from the accused: 1) fulfilment of the subjective elements of the crime in question, including any ulterior intent or dolus specialis,20 2) mutual awareness and acceptance together with the other co-perpetrators that the realisation of the objective elements of the crime will result, if the common plan is implemented,21 and; 3) awareness of the factual circumstances enabling him or her to jointly control the crime.22
3.1.1.1 Interpretation of ‘Agreement or Common Plan’ The importance of this element relies on the interdependence of the coperpetrators, who must necessarily reach an agreement in a coordinated manner in order to jointly execute the crime.23 A contribution made by a senior political or military leader without any agreement with the other coperpetrators does not qualify him as a principal co-perpetrator. At best, he may be labelled an accessory. This is because such a leader would not be aware of the interdependent relationship between the co-perpetrators, and so the contributions made by them cannot be attributed to him. The agreement must essentially contain ‘an element of criminality’,24 although it may have been originally directed at the attainment of a legal goal. Such element may result: a) if certain conditions are met, or b) if the co19 Thomas Weigend ‘Intent, Mistake of Law, and Co-perpetration in the Lubanga Decision on Confirmation of Charges’ (2008) 6 JICJ 471, 480. 20 Ibid (n 7), paras 349-60. 21 ibid paras 361-5. 22 ibid paras 366-7. 23 Lubanga (n 7), para 343; Katanga and Ngudjolo (n 5), para 522. 24 Ibid (n 7) para 344.
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perpetrators, being aware of the risk that implementing the common plan will result in the commission of the crime, accept such an outcome.25 That said, some controversy seems to have arisen regarding the nature of the common plan. At the Trial Chamber, the defence insisted that criminal liability on the basis of co-perpetration is established only where the common plan is ‘intrinsically criminal’,26 as it would otherwise be incapable of realising the objective element of criminal co-perpetration. The Chamber, following the PTC, adopted the broad view that intrinsic criminality does not need to be proven, nor is evidence required to prove that the common plan was targeted specifically at committing the crime in question.27 It requires, at the very least, the establishment of a ‘critical element of criminality’28 included in the common plan that sufficiently risks the commission of a crime throughout the ordinary course of action.29 Ambos30 agrees with the Trial Chamber that the plan should always be interpreted keeping the co-perpetrators’ original will in mind. Yet he fails to be convinced that a mere critical element of criminality is enough to create the common plan forming the basis of a joint commission of crime.31 The essential element for Ambos in order to prove mutual attribution of the alleged co-perpetrators is that the plan contains a somewhat defined crime to be committed. Under the pretence of establishing the statutory scope of the plan by reflecting it in the mental element, the Chamber invokes a combined reading of Articles 25(3)(a) and 30, and concludes that ‘committing the crime in question does not need to be the overarching goal of the co-perpetrators.’32 It also held that: 25 ibid. 26 Prosecutor v Lubanga, Judgement pursuant to Article 74 of the Statute, ICC-01/0401/06-2842, TrCh I, 14 March 2012 (Lubanga Judgment), para. 983. 27 ibid paras 983-4. 28 ibid para 984. 29 ibid paras 984, 987, 1012. 30 Ambos, ‘The First Judgment Of The International Criminal Court (Prosecutor V Lubanga): A Comprehensive Analysis Of The Legal Issues’ (2012) 12 International Criminal Law Review (ICLR) 115, 140 31 Ambos, ‘The First Judgment Of The International Criminal Court (Prosecutor V Lubanga): A Comprehensive Analysis Of The Legal Issues’ (2012) 12 International Criminal Law Review (ICLR) 115, 140. 32 Lubanga Judgement (n 25), para 985.
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the mental requirement that the common plan included the commission of a crime will be satisfied if the co-perpetrators knew that, in the ordinary course of events, implementing the plan will lead to that result.33 This very wide interpretation of ‘common plan’ has inevitably created a few issues. To begin with, it is effectively incompatible with the rule of strict interpretation. If the plan does not project the commission of physical crime, no agreement would exist that could be mutually attributed.34 Secondly, it arguably amounts to an infringement of the principle of individual criminal responsibility, insofar as it suggests that the defendant may be charged with crimes not originally included in the common plan. Furthermore, the interpretation does not co-exist with the theory of control over the crime. It does not follow that the party acting within the scope of the agreement has joint control over an offence falling outside the scope of the agreement that was individually perpetrated by another.35 Thirdly, the principle of proportionality is violated where the Chamber considers equal the joint commission of the crime and the mere creation of the risk of a person taking advantage of another’s contribution to commit an excess crime.36 The latter conduct is evidently less morally blameworthy than the former - such equation is disproportionate. This mode of liability may also be applied to senior political and military leaders who join the common plan, after the commencement of the realisation of the actus reus of the crime.37 Those who join at the execution stage will only be considered co-perpetrators, if they share essential control over the continuing realisation of the objective elements, together with the original co-perpetrators. They will only be criminally liable as co-perpetrators for that part of the common plan which they jointly controlled, although they could potentially be held responsible as accessories, if the circumstances permit.38 33 ibid para 986. 34 Alicia Gil Gil, Elena Maculan, ‘Current Trends In The Definition Of ‘Perpetrator’ By The International Criminal Court: From The Decision On The Confirmation Of Charges In The Lubanga Case To The Katanga Judgment’ (2015) 28 Leiden JIL 360. 35 ibid. 36 ibid. 37 Hector Olásolo, The Criminal Responsibility of Senior Political and Military Leaders as Principals to International Crimes (2010), 276. 38 ibid.
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3.1.1.2 Interpretation of ‘Essential Contribution’ Despite the fact that co-perpetrators have joint control over the crime, each co-perpetrator is still in control of his own free and conscious contribution. A contribution is essential in the sense that, the only way one may frustrate the implementation of the common plan is by refusing to carry out their contribution.39 The assignment of an essential task in the implementation of a common plan is, therefore, an indispensable requisite for co-perpetratorship to be attributed to a senior political or military leader. If unfulfilled, such leader will have no real control over the crime. Since the co-perpetrator carries the same responsibility for the crime as the physical or the indirect perpetrator, the co-perpetrator’s contribution in the commission of the crime must be of similar weight in the realisation of the common plan.40 This contrasts with the notion of JCE whereby an accused’s contribution ‘need not be, as a matter of law, necessary or substantial’,41 but should at least be significant in order to be able to hold senior political and military leaders responsible as co-perpetrators, provided the common criminal purpose is still shared.42 Because the Majority has argued in favour of the hierarchical structure of the modes of participation contained in Article 25(3),43 lowering the contribution threshold to anything less than ‘essential’ would ‘deprive the notion of principal liability of its capacity to express the blameworthiness of those persons who are the most responsible for the most serious crimes of international concern.’ 44
Lubanga Judgment (n 25) 39 Lubanga (n 7) para 347; paras 999, 1006; Katanga and Ngudjolo (n 5), para 525. 40 Gerhardt Werle and Boris Burghardt, ‘Establishing Degrees of Responsibility: Modes of Participation in Article 25 of the ICC Statute’, in Elies van Sliedregt and Sergey Vasiliev (eds), Pluralism in International Criminal Law (2014) 962. 41 Prosecutor v Ante Gotovina et al, IT-06-90-T, TrCh I, 15 April 2011, para 1953(iii). 42 Olásolo (n 35) 277. 43 See Sections 3.1.2.2 , 3.1.2.3 and 3.1.2.4 below. 44 (Lubanga Judgement n.25) para 999.
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3.1.1.3 Interpretation of the Subjective Elements The requirement of the essential contribution detailed above must be fulfilled together with the subjective elements required by the crimes in question. This includes any requisite ulterior motive (or dolus specialis).45 PTC I46 interprets the cumulative requirement of ‘intent and knowledge’ of Article 30 of the Statute as embracing the notion of dolus as a general subjective element of the international core crimes, which includes dolus directus in the first degree, dolus directus in the second degree and the ICTY notion of dolus eventualis.47 In the latter type of dolus, the accused must carry out his/her contribution with the aim of committing the crimes agreed upon in the common plan and with certainty that the crimes will be executed as a logical consequence of the implementation of the common plan. Failing this, the accused must, at the very least, be aware of the risk of the commission of the crime resulting from the implementation of the common plan and reconcile himself with such a result.48 Where the chance of the crime occurring in the ordinary course of events is substantial, the suspect’s acceptance of the probability may be inferred from the fact that they carry out their contribution, having little to no regard of the high risk level.49 Where the level of risk is low, implicit acceptance of the above-mentioned probability is not enough - it must be clear and express.50 The PTC has required two additional subjective elements for coperpetration based on joint control. The accused and the other coperpetrators must mutually: (a) be aware of the risk that implementing their common plan may result in the realisation of the objective elements of the crime, and (b)
accept such a result by reconciling themselves with it
45 Lubanga (n 7), para 349. 46 Pre-Trial Chamber I 47 Olásolo (n 35) 281; Lubanga (n 7), para 351-2 with reference to the definition of dolus eventualis in Stakić (n 16), para 587. 48 Lubanga (n 7), para 353. 49 ibid para 353-4. 50 ibid para 354, with reference to Stakić (n 16), para 587.
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or consenting to it.51 The importance of this element for this mode of liability stems from the fact that the contributions made by the other co-perpetrators can be attributed to the senior political and military leaders who had no physical presence throughout the commission of the crime, yet controlled it remotely. That said, that is only possible if all of the co-perpetrators carry out their contributions to the implementation of the common plan and mutually accept the likely outcome of the commission of the crime.52 The final subjective element required, unknown to the notion of JCE, considers irrelevant the level of control of the accused over the commission of a crime and his awareness of the factual circumstances giving rise to such level of control. It requires the senior political or military leader to be aware: (i) that his/her role is essential to the implementation of the common plan and hence in the commission of the crime, and (ii) that s/he can – by reason of the essential nature of his/her task – frustrate the implementation of the common plan, and hence the commission of the crime, by refusing to perform the task assigned to him/her.53
3.1.2 Considering the Applicable Mode of Liability: Principal Responsibility under Article 25(3)(a) 3.1.2.1 The Prosecution and the Defence The prosecution separated the concept of co-perpetration within the meaning of Article 25(3)(a) from that of co-perpetration based on the existence of a JCE.54 It maintained that an individual is considered a coperpetrator of crime only when s/he has joint control over the crime as a result of the contribution attributed to them, which must, above all else, be 51 52 53 54
Ibid para 361. ibid para 362. Lubanga (n 7), para 367; Katanga and Ngudjolo (n 5), paras 538-9. Lubanga (n 7), para 323.
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essential to the commission of the crime.55 Contrarily, the defence challenged the prosecutor’s interpretation arguing that the concept of co-perpetration exceeds the terms of co-perpetration and indirect perpetration set out in the Statute, and is supported neither by customary international law nor by general principles of law derived from domestic legal systems.56
3.1.2.2 The Pre-Trial Chamber The concept of co-perpetration as a mode of criminal liability is interpreted by the PTC in a dualistic light: when the sum of the co-ordinated individual contributions of a plurality of persons results in the realisation of all the objective elements of a crime, any person making a contribution can be held vicariously responsible for the contributions of all the others and, as a result, can be considered as a principal to the whole crime.57 The PTC evaluates and considers the distinguishing factors between principals and accessories to crime in terms of three different approaches:58 1. The objective approach i.e. the realisation of one or more of the objective elements of the crime; 2. The subjective approach, which is inherent to the notion of JCE (or the common purpose doctrine) and 3. The control over the crime approach. The PTC rejects the first two approaches, deeming them irreconcilable with the Statute and exclusively supports the latter approach.59 It represents 55 56 57 58 59
ibid paras 322, 346. ibid para 324. ibid para 326. Lubanga (n 7) paras 328-330; See also Katanga and Ngudjolo (n 5), para 480. Ibid para 330.
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a dogmatic approach where the control theory is believed to equip the Court with the theoretical grounding of Article 25, which is then expected to reflect subtle differences in the way that responsibility is measured. As a result of the hierarchical distinction of the four modes of liability, the approach also seeks to demonstrate that Article 25(3) establishes several degrees of blameworthiness.60 The PTC seems to be moving away from the concept of co-perpetration within the meaning of Article 25(3)(a) and closer to that in Article 25(3) (d) wherein the concept is defined as a ‘contribution to the commission or attempted commission of a crime by a group of persons acting with a common purpose … with the aim of furthering the criminal activity of the group or in the knowledge of the criminal purpose’.61 The Chamber claims that had the drafters of the Statute wanted to opt for a subjective approach, the ICTY concept of JCE would have been a more appropriate basis for the concept of co-perpetration in accordance with Article 25(3)(a).62 The PTC interprets Article 25(3)(d) as providing a residual form of accessory liability that enables those contributions not falling within the meaning of Article 25(3)(b) or (c) to be criminalised by reason of the essential contributions made to the commission of the crime.63 To conclude, the concept of coperpetration as expressed in Article 25(3)(a) compliments the notion of joint control over the crime as the main criterion distinguishing principals from accessories.
3.1.2.3 The Trial Chamber The Chamber’s Majority affirmed and followed the PTC’s interpretation of co-perpetration based on the ‘control over crime’ approach.64 It directs its main emphasis regarding criminal liability for co-perpetration towards the element of ‘essential contribution’. The control over the crime is exercised collectively and not individually.65 This presupposes that ‘the accused does not need to be present at the scene of the crime, so long as he exercised, 60 61 62 63 64 65
Ohlin, van Sliedregt, Weigend (n 9) 740-5. Lubanga (n 7), para 334; Rome Statute, Article 25(3)(d). ibid para 335. ibid paras 337, 341. (Lubanga Judgement n. 25) para 978. ibid para 994.
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jointly with others, control over the crime.’ 66 With regards to the distinction between co-perpetration and the other forms of liability in Article 25, the Trial Chamber notes that the co-perpetrator’s contribution must be significantly greater than that of individuals held responsible under sub-paragraphs (c) and (d).67 Therefore, the PTC’s conclusion that the essential nature of the contribution is decisive was confirmed.68 This view reflects the Statute’s differentiation between principal and accessorial liability. The Chamber Majority supports this valuebased distinction, unlike Judge Fulford who adopts a radically different interpretation.69
3.1.2.4 The Appeals Chamber The Appeals Chamber confirmed the ICC’s first conviction and reinforces the distinction between principals and accessories.70 It also embraces the control theory to interpret Article 2571 and upholds the PTC’s and the Trial Chamber’s view that Article 25(3)(a) presents different degrees of blameworthiness.72 It follows with an explanation of how a normative assessment of the accused’s role should be carried out.73
3.1.3 Judge Fulford’s Separate Opinion Judge Fulford affirmatively rejected Roxin’s control theory and disagrees with the Court’s reliance on German law, mainly for two reasons.74 Firstly, 66 ibid para 1005. 67 ibid paras 996-7. 68 ibid paras 989, 999, 1000, 1006. 69 See Section 3.1.3 below. 70 Prosecutor v Thomas Lubanga Dyilo, ICC-01/04-01/06A A 5, Appeals Chamber, Judgment on the appeal of Mr Thomas Lubanga Dyilo against his conviction, 1 December 2014 (Lubanga Appeal Judgment). 71 ibid para 469. 72 ibid paras 467-8. 73 ibid paras 467-73. 74 Prosecutor v Thomas Lubanga Dyilo, ICC-0l/04-01/06, Separate Opinion of Judge Adrian Fulford to the Trial Chamber I, Judgement pursuant Article 74 of the Statute, 14 March 2012 (Separate Opinion Judge Fulford), para 6-12.
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the theory has not gained customary international law or general principle status, and therefore finds no ranking as a source of law under Article 21 of the Statute.75 Secondly, the control theory is not supported by the Rome Statute and a plain-text reading of Article 25(3)(a) is in fact required. This is arguably a more pragmatic approach. He fundamentally disagrees with the view that the theory is necessary to clearly distinguish between principal liability and accessory liability.76 He is unconvinced that accessories in sub-article (c) are more blameworthy than those who contribute to a common criminal endeavour under sub-article (d). In Ohlin’s words, the latter provision ‘seems to fit the paradigm of history of collective atrocities, so it seems odd to reduce it to the lowest step on the ladder of culpability’.77 Steffen Wirth has argued that Fulford’s dissent regarding the Statute’s dualist approach is unconvincing, and his view is in fact difficult to reconcile with Article 25.78 To his mind, it was never the drafters’ intention to imply that the various modes of commission under the four sub-articles of Article 25 are to be considered mutually exclusive to one another.79 Article 25(3) does not establish any ‘hierarchy of seriousness as regards the various forms of participation in a crime’.80 Thus, due to the fact that no sentencing range exists in the Statute that is in line with the degree of participation,81 an ‘unnecessary and unfair burden’82 was imposed on the prosecution. To this effect, he re-interprets the constitutive elements of co-perpetration in terms of a plain text reading of Article 25(3)(a): a. The involvement of at least two individuals. b. Coordination between those who commit the offence, which may take the form of an agreement, common plan or joint understanding, express or implied, to commit a crime or to undertake action that, in the ordinary course of events, will lead to the commission of the crime. 75 76 77 78 79 80 81 82
van Sliedregt, ‘Perpetration and Participation in Article 25(3)’ (n 11) 507. ibid. Ohlin (n 13) 528. Steffen Wirth , ‘Co-perpetration in the Lubanga Trial Judgment’, (2012) 10 JICJ 971-97. Separate Opinion Judge Fulford (n 71), para 7. ibid para 8. ibid para 9. ibid para 3.
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c. A contribution to the crime, which may be in/direct, provided, either way, there is a causal link between the individual’s contribution and the crime. d. Intent and knowledge, as defined in Article 30 of the Statute, or as ‘otherwise provided’ elsewhere in the Court’s legal framework. […]83 The third element aims to avoid ‘an investigation as to how events might have unfolded without the accused’s involvement’.84 Fulford further argues that the requirement of ‘essential’ contribution of each co-perpetrator holds no water under sub-paragraph (a), as it would set the liability threshold too high.85 The contribution must be intense enough to fall within the realm of criminality, but need not be essential for the objective elements of coperpetration to be satisfied. Although he accepted the general test that was employed by the Chamber, for the sake of fairness to the accused, he believes that a ‘lesser’ test should have been applied.86 Fulford concluded that this re-constructed interpretation of coperpetration is the correct one and the ICC should in future cases replace the joint control theory when considering the applicable mode of liability to attribute to senior political and military leaders. The Court should first base itself on a plain, ordinary meaning of Article 25(3)(a) and interpret it in light of its object and purpose. Only when this interpretation does not yield a useful result should a reference to a specific doctrine taken from a specific domestic context be made.
3.2 Indirect Co-Perpetration: Intepretation in Katanga and Ngudjolo 3.2.1 Objective and Subjective Elements of Indirect CoPerpetration Indirect co-perpetration has ‘distinct requirements’87 and requires proof of 83 84 85 86 87
ibid para 16. ibid para 17; Ohlin, van Sliedregt, Weigend (n 9) 728. ibid para 15. ibid para 21. Katanga and Ngudjolo (n 5), para 494.
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the objective and subjective elements of both co-perpetration and indirect perpetration. The PTC combines the application of joint control and organised structures of power (OSP) and puts forward five objective elements for this mode of liability. It first analyses three objective elements for perpetrationby-means in terms of Article 25(3)(a): 1) control over the organisation,88 2) organised and hierarchical apparatus of power89 and 3) execution of the crimes secured by almost automatic compliance with the orders.90 Next, it interprets the other two objective elements belonging to joint perpetration of a crime. These are the same as those explained in Lubanga: 4) existence of an agreement or common plan between two or more persons91 and 5) coordinated essential contribution by each co-perpetrator resulting in the realisation of the objective elements of the crime.92 The subjective elements are identical to those in Lubanga.
3.2.2 Considering the Applicable Mode of Liability: Principal Responsibility under Article 25(3)(a) 3.2.2.1 The Prosecution and the Defence The prosecution charged Katanga and Ngudjolo with criminal responsibility as co-perpetrators of a common plan under Article 25(3)(a) or alternatively, under sub-article (b), for ordering the commission of war crimes and crime against humanity.93 On the other hand, the Defence claimed that the definition of coperpetration based on joint control under Article 25(3)(a) was inconsistent with the intention of the drafters of the Statute and that it was not supported by domestic, customary or international law.94 They also objected to the theory as developed in Lubanga because: (i) it merged the liability modes of co-perpetration and indirect 88 89 90 91 92 93 94
ibid paras 500-10. ibid paras 511-4. ibid paras 515-8. ibid paras 522-3. ibid paras 524-6. ibid paras 469-70. ibid para 474.
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perpetration; (ii) it defined the common plan in a broad and imprecise manner and (iii) incorporated the concept of dolus eventualis.95
3.2.2.2 The Combination of Modes of Liability by the PreTrial Chamber Despite the Court’s efforts to address the collective and systematic nature of international crimes, situations have still arisen whereby senior political or military leaders fell outside the scope of both co-perpetration and indirect perpetration in order to be held principally liable. The ICC sought to solve this problem by amalgamating the two modes of liability to hold such leaders responsible as indirect co-perpetrators. The use of this form of perpetration has since featured in a number of ICC cases.96 The Chamber interpreted the connective ‘or’ in Article 25(3)(a) as deriving two possible meanings - one known as weak or inclusive, the other as strong or exclusive.97 The former disjunction means ‘either one or the other and possibly both’, while the latter means ‘either one or the other, but not both’.98 It concluded that: there are no legal grounds for limiting the joint commission of the crime solely to cases in which the perpetrators execute a portion of the crime by exercising direct control over it. Rather, through a combination of individual responsibility for committing crimes through other persons together with the 95 ibid. 96 Prosecutor v Jean-Pierre Bemba Gombo, ICC-01/05-01/08-15, PTC III, Warrant of Arrest for Jean-Pierre Bemba Gombo replacing the Warrant of Arrest issued on 23 May 2008, 10 June 2008; Prosecutor v Omar Hassan Ahmad Al Bashir, Decision of the Prosecution’s Application for a Warrant of Arrest against Omar Hassan Ahmad Al Bashir, ICC-02/05-01/09, 4 March 2009; Prosecutor v Francis Kirimi Muthaura et al, ICC-01/09-02/11-382-Red, PTC II, DCC Pursuant to Article 61(7)(a) and (b) of the Rome Statute, 23 January 2012; Prosecutor v Dominic Ongwen, ICC02/04-01/15, PTC II, DCC, 23 March 2016. 97 Katanga and Ngudjolo (n 5), para 491. 98 ibid.
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mutual attribution among the co-perpetrators at the senior level, a mode of liability arises which allows the Court to assess the blameworthiness of “senior leaders” adequately.99 The PTC has accepted that in the case of this form of perpetration, the control over crime amounts to ‘control over the organisation’ and applied Roxin’s theory of Organisationsherrschaft.100 The theory regulates simultaneously the horizontal relationship between members of the leadership and the vertical dimension of system criminality. It presupposes dominance over a hierarchical OSP that continues to operate regardless of any loss of one or several individual/s:101 […] While [the perpetrator’s] power of control over his own actions is unquestionable, the perpetrator is nonetheless, at the same time, a mere gear in the wheel of the machinery of power who can be replaced at any time, and this dual perspective places the intellectual author alongside the perpetrator at the heart of events.102 The PTC in Katanga and Chui has highlighted the notion of co-perpetration based on joint control in a similar way to the interpretation in Lubanga.103 The Court combined the two modes of liability in response to a complication that it faced regarding mutual attribution of crimes. The subordinates in this case belonged to groups of different ethnic origin.104 This meant that they would only execute orders if given to them directly by a superior commander of the same ethnicity.105 Consequently, the success of the attack was dependent on the joint and coordinated action between both leaders. Co-perpetration based on joint control of the crime was therefore considered unsuitable for application. Neither member of the common plan had directly committed the crimes in question. They simply controlled the outcome of the crime through an organised apparatus of power. The evidence brought before the PTC did not prove that Katanga and Ngudjolo 99 ibid para 492. 100 ibid paras 498-9. 101 Herman G. van der Wilt, ‘The Continuous Quest for Proper Modes of Criminal Responsibility’, (2009) 7 JICJ 307, 309. 102 Roxin (n 6) 245, quoted in Katanga and Ngudjolo (n 5), para 515. 103 Katanga and Ngudjolo (n 5), para 521; See also Lubanga (n 7), para 342. 104 ibid para 519. 105 ibid para 560.
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entered the village before the attack was concluded. Thus, the PTC applied the notion of indirect co-perpetration based on OSP and joint control, with the aim of making it easier to capture complex forms of collective violence and to charge and prosecute such leaders as principal perpetrators under Article 25(3)(a) for crimes committed by their subordinates:106 The leader’s ability to secure this automatic compliance with his orders is the basis for his principal - rather than accessorial - liability. The highest authority does not merely order the commission of a crime, but through his control over the organisation, essentially decides whether and how the crime would be committed. 107
3.2.3 Judge Van den Wyngaert’s Concurring Opinion Judge Christine Van den Wyngaert rejects the hierarchy of modes of participation under this provision.108 Similarly to Judge Fulford, she distances herself from the ‘control theory’ of liability for perpetration, stating inconsistency with the text of Article 25(3)(a) as her justification.109 She also does not distinguish between the blameworthiness of accessorial liability and that of principal liability for commission.110 In her view, this is primarily due to the fact that the accused’s guilt is dependent upon the factual circumstances of the case and not upon abstract categories.111 She interprets the common plan requirement as pertaining to the subjective, rather than to the objective element of co-perpetration.112 Contrary to the Trial Chamber’s view in Lubanga, she believes that a combined reading of Articles 25(3)(a) and 30 suggests that the commission of the crime in question is in fact, the overarching goal of the co-perpetrators. The test should be whether there is ‘voluntary coordination of action by each of the 106 Olásolo (n 35) 319-20. 107 Katanga and Ngudjolo (n 5), para 518. 108 Prosecutor v Mathieu Ngudjolo Chui, ICC-01/04-02/12-4, TrCh II, Concurring Opinion of Judge Van den Wyngaert to Judgement Pursuant to Article 74 of the Statute, 18 December 2012 (Concurring Opinion Judge Van den Wyngaert) para 6. 109 ibid. 110 ibid paras 22, 24. 111 ibid paras 24, 26. 112 ibid para 32.
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co-perpetrators’,113 resulting from a shared intent to bring about a particular consequence. Moreover, they must all be at least mutually aware that the consequences of their joint actions will, in the ordinary course of events, result in this conclusion.114 Van den Wyngaert is troubled by the PTC’s turning of the ‘common plan’ into an objective element in Lubanga and Katanga and Ngudjo. This shifts the focus onto the accused’s role in implementing the common plan, as opposed to the manner in which the accused’s conduct impacts the commission of the crime.115 The shift from the crime to the common plan shows that the notion of ‘joint perpetration’ has not been interpreted in a manner that is consistent with a strict interpretation of Article 25(3)(a). She proposes, like Fulford, a plain interpretation of this provision and concludes: (a) that there is no requirement for an ‘objective’ common plan (although this may be an element of proof of shared criminal intent) and (c) that the Statute does not contain a form of criminal responsibility that is based on the mere acceptance of a risk that a crime might occur as the consequence of personal or collective conduct.116 With regard to the essential contribution requirement, she agrees with Fulford’s criticism that this requirement finds no support in the Statute.117 However, rather than a causal link between the individual’s contribution and the crime,118 she believes that what is essential for joint perpetration is for there to be “a direct contribution to the realisation of the material elements of the crime”.119 She therefore places the emphasis of the commission of a crime on the realisation of its material elements.120 Van den Wyngaert is also critical of the PTC’s formation of ‘indirect coperpetration’.121 She disagrees that this concept should be inferred from 113 114 115 116 117 118 119 120 121
ibid. ibid. ibid para 34. ibid para 39. ibid para 42. Separate Opinion Judge Fulford (n 71), para 16(c). Concurring Opinion Judge Van den Wyngaert (n 105), paras 44, 46. ibid. ibid para 7.
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Article 25(3)(a . The creation of a new mode of liability from a combination of already existing modes of liability leads to a radical expansion of Article 25(3) (a) and violates the legality principle found in Article 22(2) of the Statute.122 The judge concludes that the notion of indirect co-perpetration is inconsistent with this provision and thus ‘has no place under the Statute as it is currently worded.’123
4. Katanga: Principal or Accessory? At the trial stage in Katanga and Ngudjolo, indirect co-perpetration as a mode of liability under Article 25(3)(a) proved unsuccessful, in respect of both accused. To establish the truth without qualification of the facts as accepted by the Prosecution and the PTC, the Chamber Majority re-characterised the facts and based Katanga’s conviction on common purpose liability under Article 25(3)(d)(ii): complicity in the commission of a crime by a group of persons acting with a common purpose.124 Meanwhile, Ngudjolo was acquitted due to insufficient evidence beyond a reasonable doubt, at the failure of at least two elements of indirect perpetration.125 In its analysis of Article 25(3)(a), the Trial Chamber unanimously rejected the view that Article 25(3) constitutes a hierarchy of modes of liabilities. It correctly reasons that neither the Statute nor the Rules of Evidence and Procedure offer a mitigation of punishment for the accessorial modes of liability, and so there is no reason why an accessory should be afforded a lighter penalty than a principal perpetrator or be considered less reprehensible: ‘[t]he Chamber underscores that Article 25 […] adverts not to the guilt of accused persons but to their individual criminal responsibility.’126 The Chamber essentially agrees that principal liability is autonomous in that it does not depend on the liability of a third person.127 Unlike in Lubanga, 122 ibid paras 6, 63-4. 123 ibid para 64. 124 Prosecutor v Germain Katanga and Mathieu Ngudjolo Chui, ICC-01/04-01/07, TrCh II, Decision on the Implementation of Regulation 55 of the Regulations of the Court and Severing the Charges against the Accused Persons, 21 November 2012. 125 Prosecutor v Mathieu Ngudjolo Chui, ICC-01/04-02/12, TrCh II, Judgment pursuant to Article 74 of the Statute, 18 December 2012. 126 Prosecutor v Katanga, Judgment pursuant to Article 74 of the Statute, ICC-01/0401/07, TrCh II, 7 March 2014 (Katanga), para 1386. 127 ibid paras 1385-6.
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the Majority in this case refused to associate the ‘control over the crime’ theory with a higher degree of guilt. This interpretation highlights the clear divide and conflicting approaches present in the jurisprudence of the ICC regarding the question of hierarchy in Article 25(3). It is therefore being questioned whether this interpretation is the best way forward for the delivery of justice or otherwise. The Chamber lists 5 elements that are presumed to be satisfied in the implementation of Article 25(3)(d)(ii).128 Interestingly, under the second element, in interpreting the notion of a group acting with a common purpose, the Chamber relied on the ad hoc tribunal concept of JCE.129 The ICC has affirmed that common purpose liability establishes ‘the lowest objective threshold for participation according to article 25’130 and that the accused need not share the group’s intentions to commit the crime.131 Considering the leniency of these standards, it is unsurprising that the Court views Article 25(3)(d) as a residual mode of liability that is less blameworthy than other modes such as co-perpetration. It has also been argued that ‘contribution to the commission of a crime’ under Article 25(3)(d) could replace (in)direct co-perpetration.132 In Mbarushimana, the PTC admitted that common purpose liability will impose an excessive burden if the slightest contribution satisfies the contribution requirement of Article 25(3)(d),133 which must ‘[i]n any other way’ be less than that required for liability under Article 25(3)(a)-(c). Under the third element, the Chamber clarifies that the contribution made must be significant, in the sense that it must crucially be ‘connected to the commission of the crime and not solely to the activities of the group in a general sense.’134 This standard sets a lower threshold of participation than the essential contribution standard of co-perpetration as set out in Lubanga.135 The 128 ibid para 1620. 129 ibid para 1625. 130 Prosecutor v William Ruto and Joshua Sang, DCC, ICC-01-09-01/11, PTC II, 23 January 2012, para 354. 131 Katanga (n 123), para 1638. 132 Maria Aksenova, ‘The Modes Of Liability at the ICC: The Labels that Don’t Always Stick’, (2015) 15 ICLR 645. 133 Prosecutor v Callixte Mbarushimana, ICC-01/04-01/10, PTC I, DCC, 16 December 2011, paras 276-7. 134 Katanga (n 123), para 1632. 135 Marjolean Cupido, ‘Common Purpose Liability versus Joint Perpetration: A Practical View on the ICC’s Hierarchy of Liability Theories’ (2016) 29 LJIL 897, 903.
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Chamber noted that a case-by-case analysis is required in order to determine whether an accused influenced the occurrence of the crime,or not.136 It was concluded that ‘a direct nexus between the conduct of the accessory and that of the physical perpetrator need not be established.’137 The researcher considers this interpretation as a step in the right direction, as it makes it much easier for the prosecution to attribute criminal responsibility to intellectual perpetrators. The accused was held liable as an accessory under Article 25(3)(d) and still sentenced to 12 years’ imprisonment - only two years less than the sentence given to Lubanga, who was held liable as a co-perpetrator under Article 25(3)(a). Future ICC judges would do well to follow this path and continue to further develop this perspective.
5. Final Observations and Concluding Remarks Why does the ICC insist on distinguishing between principal and accessorial liability under Article 25(3)? The answer to this valid question can be found in the Court’s pursuit of expressive justice. It mainly aims to achieve this by sending a condemning message in its decisions. It is certainly vital that the intellectual perpetrator is clearly shown to be just as culpable as the physical perpetrator of the crime. Typically, this has been done by referring to them as a ‘principal’ who ‘commits’ crimes, so as to communicate to victims and the international community as a whole who the ‘real’ culprit was.138 The first judgment of the ICC convicted the accused as a co-perpetrator under Article 25(3)(a). Prior to Lubanga, the ICC had interpreted the ‘essential contribution’ and the ‘common plan’ elements of co-perpetration broadly. This interpretation assumed that the label of ‘principal’ reflects a higher degree of blameworthiness than that of ‘accessory’, and it arguably violates the principles of legality and individual criminal responsibility.139 The Appeals Chamber in Lubanga has since confirmed this view stating that ‘a person who is found to commit a crime him or herself bears more blameworthiness than a person who contributes to the crime of another person or persons’.140 136 Katanga (n 123), para 1634. 137 ibid para 1635. 138 Ohlin, van Sliedregt, Weigend (n 14) 745; van Sliedregt, ‘Perpetration and Participation in Article 25(3)’ (n 11) 511. 139 Gil Gil, Maculan (n 32) 369. 140 Lubanga Appeal Judgment (n 67), para 462.
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At the same time, the Court has held that secondary liability is dependent on whether the perpetrator acts and that principal liability is not the subject of such dependence.141 This point was rightly affirmed in Katanga, whereby the expansive interpretation was rejected and it was held that the derivative nature of the contribution (‘significant’ as opposed to ‘essential’) made by the accused is a more appropriate criterion to distinguish between the modes of liability under Article 25(3).142 This approach is preferred in that it respects a strict reading of the constitutive elements of Article 25(3)(a). Before an accused can be charged as a perpetrator, it must first be proven that he had close and effective control over the realisation of the actus reus of the crime. This requirement ensures that this mode of liability is not unduly expanded as was the case in the past. In this sense, the researcher is in full agreement with Judge Van den Wyngaert: Courts of criminal justice cannot claim to protect an accused’s fundamental rights to a fair trial while making expansive interpretations of articles that define modes of liability.143 The jurisprudence considered in this article widens the scope of principal liability and effectively renders some of the elements incompatible with a strict interpretation of Article 25(3)(a) of the Statute. This has created some issues which can, however, be prevented. For instance, the issues arising from the broad interpretation of the element of ‘agreement or common plan’ could have been averted if co-perpetration liability covered only crimes forming part of the common plan or agreement and similarly, if indirect perpetration liability required the criminal mastermind to have directed the commission of the crime. Provided all members of the common plan may be held responsible as co-perpetrators for committing crimes that were not agreed upon in the common plan, all may be charged for merely contributing to the common plan, even though it may not be intrinsically criminal.144 In cases of strict superior-subordinate relationships, as can be seen in Katanga and Ngudjolo, the theory of joint control over the crime may not be the most appropriate. This is mainly because the level of mutual 141 Lubanga Judgment (n 25), para 998. 142 Katanga (n 123), para 1632. 143 Concurring Opinion Van den Wyngaert (n 105), para 68. 144 Lubanga Judgement (n25), paras 1221-2, 1267, 1270.
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dependency greatly restricts the scope of co-perpetratorship. Moreover, the researcher agrees with Judge Fulford’s rejection of Roxin’s theory of control over the crime as a basis for the mode of co-perpetration. Fulford believes that this was neither required by Article 25 nor supported by any of the other legal sources under Article 21. It seems as though the Court has not done enough to justify the foundation of the doctrine of co-perpetration on imported domestic criminal law theory within a general theory of sources of international law.145 Co-perpetration as a mode of liability is generally limited to attributing the conduct of a co-perpetrator to an accused. However, in those cases where the intellectual perpetrators are senior leaders, as was Lubanga, there is also an important element of indirect perpetration. Thus, the mode of indirect co-perpetration could arguably provide a more appropriate way to impute criminal responsibility.146 It can be rightly stated that the creation of indirect co-perpetration based on the notions of OSP and joint control, better reflects the horizontal and vertical relationships bringing about the commission of the crimes and liability as attached more appropriately to senior political and military leaders. Despite all this, such innovation still leaves much to be desired. For instance, hardly any thought has been given to the manner in which and under what circumstances ad hoc combinations of modes of liability can or should be made. Pending clarification on this point by the Court, the researcher is in agreement with Judge van den Wyngaert’s opinion that indirect co-perpetration radically expands Article 25(3)(a) and that it violates the legality principle to the point that it ‘has no place under the Statute as it is currently worded.’147 The researcher proposes therefore that the ICC first formally develops a doctrine of ‘indirect perpetration by an organisation’ that attributes liability to horizontal relationships, before attaching at will novel modes of liability that are inconsistent with a strict interpretation of Article 25(3)(a). When such doctrine has been established and put into practice, the ICC may then wish to consider revising the wording of Article 25(3)(a) to include ‘indirect co-perpetration’ as another principal mode of liability. While it is perhaps worth it for the Court to consider amending the Statute to include a mode of liability that is specifically aimed at senior political and 145 146 147
Ohlin (n 72) 517. Wirth (n 73) 995. Concurring Opinion Judge Van den Wyngaert (n 105), para 64.
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military leaders, a more suitable path forward could be for the Prosecution to attach the mode of liability that is easiest to prove when considering the circumstances and facts of the case. This may be an accessory mode of liability, as was the case in Katanga, which would enable the prosecution to prove more easily the undeniable liability of a senior political or military leader and ensure that justice is served. The ICC should then, in its decision, clearly demonstrate that such auctores intellectuales is culpable as if he were the physical perpetrator (principal). This can be ensured in two steps. First, by punishing him as though he physically perpetrated the crime himself, so as to adequately reflect the magnitude of his involvement in its commission. By accepting a hierarchy of blameworthiness, the Appeals Chamber in Lubanga implied that categorising principals and accessories, and sentencing, are now linked.148 However, in this regard, the researcher completely agrees with van Sliedregt’s statement that ‘[t]here is no rule or theory that links accessorial liability to a mitigated form of criminal responsibility’.149 While Article 25(3) reflects a differential model, the sentencing provisions in the Statute provide for a unitary range of punishment.150 Secondly, if the idea of Article 25(3) constituting a hierarchy is rejected, the label of ‘principal’ should be extended on a case-by-case basis to those who are to be considered ‘most responsible’, even if they were convicted under any of the accessorial modes of liability. This is to ensure that the condemning message is passed on clearly, and that the accused is labelled fairly. The accused’s guilt should depend upon the factual circumstances of the case and not upon abstract categories.151 Additionally, nothing holds the ICC back from labelling in its decision or judgment, senior political or military leaders who are charged as accessories as ‘auctores intellectuales’, in order to further strengthen this message. The ICC’s hierarchical structure of Article 25(3) is weak. There needs to be a movement ‘away from preserving a misguided assumption that accessories are inherently less blameworthy than principals and that the blameworthiness of political and military leaders can therefore only be fully 148 Lubanga Appeal Judgement (n 67), para 469. 149 van Sliedregt, ‘Perpetration and Participation in Article 25(3)’ (n 11) 513. 150 Hans Vest, ‘Problems of Participation. Unitarian, Differentiated Approach, or Something Else?’, (2014) 12 JICJ 295, 307. 151 Concurring Opinion Judge Van den Wyngaert (n 105), paras 24, 26.
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captured by treating them as principals.’152 The ICC should be considering each case as unique and should focus on a strict interpretation of the wording of the Statute. It should be noted, however, that one can only begin to understand the scope of the criminal responsibility and the importance of distinguishing the different modes of liability in light of jurisprudence, of which to date, there has not been much. Hence, there is certainly room for future research to critically observe the manner in which the ICC applies liability theories in practice. The approaches and interpretations that have been analysed in this article expose the ever-present disagreement on the issue of which mode of liability best attributes responsibility to intellectual perpetrators. Although the Rome Statute does not preach the doctrine of precedent, precedents may still be applied in subsequent decisions pursuant to Article 21(2) of the Statute. That said, the inconsistency in the ICC decisions that have been put forward to date, weakens the predictability of the jurisprudence of the Court. It is imperative that the Court now strives to reach a consensus on such a fundamental issue.
152
ibid para 70.
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Andrea Zammit ll valore risocializzante della pena detentiva sottolineato dalla sentenza Torreggiani e l’art. 27(3) cost
Dr Andrea Zammit is a University of Malta alumnus and currently forms part of the civil and commercial law department of the legal firm IURIS Malta in Valletta. Zammit successfully graduated with a Bachelor of Laws and Master in Advocacy degree from the University of Malta in 2018. In 2016, he spent a semester of studies abroad at the prestigious Universita’ degli studi di Urbino Carlo Bo, where he defended a paper titled ‘Il valore risocializzante della pena detentiva sottolineato dalla sentenza Torreggiani e l-ART. 27(3°) Cost.’. His Bachelor’s thesis purported to be a judicial inquiry into the main deterrents used by the British colonials as a means of containing Pro-Italianism in wartime Malta. Besides being a practitioner, Zammit is also into research ranging from legal history to the Theory of Law, as well as other subjects which pertain to the studies of history, philosophy and the arts.
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The paper titled ‘Il valore risocializzante della pena detentiva sottolineato dalla sentenza Torreggiani e l-ART. 27(3°) Cost.’ was written in December 2016 following a study trip to the Venetian correctional facilities of Santa Maria Maggiore and Casa di reclusione femminile Giudecca. Zammit defended his paper in front of his examining professor, Professor Iacopo Saccomani, in relation to the study-unit ‘Penitentiary Law’ and in pursuit of his Erasmus exchange experience at the Universita’ degli studi di Urbino Bo. The paper attempts to approach the study of penitentiary law as that relating to the purpose and organisation of correctional facilities in Italy as well as alternatives to incarceration aimed at rehabilitating convicts towards their effective reinsertion into society. It does so through reference of seminal ECHR judgment Torreggiani v. Italy and through a problematique of the notion of punishment and its teleological efficaciousness, as well as an overview of some of the most significant legislative reforms introduced in Italy which reflect both the acquis of the fundamental rights regime, as well as the inherent scope of punishment: re-education and rehabilitation of the subject within the very fabric of society.
1. Introduzione
I
spirato dall’illuminismo francese, fu il giurista milanese Cesare Beccaria a valorizzare il principio della pena nella sua più celebre opera, Dei Delitti e delle pene, trattando principalmente la legittimità dello ius puniendi statale1 e l’efficacia deterrente della pena.2 Seppure lontano dal concetto di prevenzione speciale3 nella risocializzazione del soggetto, il contributo del 1 Cesare Beccaria, Dei delitti e delle pene (18ª edizione, Feltrinelli 2014) 38-39: ‘Ecco dunque sopra di che è fondato il diritto del sovrano di punire i delitti: sulla necessità di difendere il deposito della salute pubblica dalle usurpazioni particolari; e tanto più giuste sono le pene, quanto più sacra ed inviolabile è la sicurezza, e maggiore la libertà che il sovrano conserva ai sudditi’. 2 ibid 15: ‘Il fine dunque non è altro che d’impedire il reo dal far nuovi danni ai suoi cittadini e di rimuovere gli altri dal farne uguali’. 3 Emiliano Dolcini, ‘Rieducazione Del Condannato E Rischi Di Involuzioni Neoretributive:
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Beccaria spianò la strada per ulteriori nuove prospettive sulle tematiche legate alla pena legale e al trattamento penitenziario. Quest’ultimo prevede l’avvio della realtà carceraria, ovvero il luogo dove nella maggior parte degli scenari si svolge la riforma del soggetto. Il carattere preventivo del carcere poneva delle domande importanti già nell’epoca dell’Ottocento; con il modello ideale del panottico e la teoria di Bentham dell’invisibilità del controllo per favorire il recupero sociale del reo e la sua convinzione in essa4, seguito dalla biopolitica novecentesca di Foucault come ineluttabile ammissione del fallimento del sistema carcerario moderno essendo ‘produttore di delinquenza’.5 Nei tempi attuali, la natura intrinsecamente desocializzante del carcere è ormai un dato di fatto risaputo, ed è per questo che, grazie al contributo della Corte CEDU, in rilievo vi è l’utilità delle misure alternative e pene detentive non carcerarie come lavoro di pubblica utilità che tende alla rieducazione del soggetto come, ad esempio, nel caso di un tossicodipendente.6 Attraverso l’osservanza del principio di legalità racchiuso nell’articolo 25 comma 2 della Costituzione, la pena deve essere preceduta da un processo giusto a prescindere dalla gravità del reato e dalla personalità del reo.7 Si inizia a riscontrare un problema durante l’espiazione della pena e la tipologia specifica del regime di esecuzione da applicare tenendo conto di quanto l’efficacia rieducativa sia legata alla modalità di esecuzione.8 Con la presente ricerca, mi sono prefisso l’obiettivo di soffermarmi sulle finalità rieducative della pena detentiva offrendo una lettura in chiave deontologica sia dell’articolo 27 comma 3 della Costituzione della Repubblica Ovvero, Della Lungimiranza Del Costituente’ (2005) 70 Rassegna penitenziaria e criminologica 4 Paola Rudan, Jeremy Bentham, ‘La trasparenza e la disciplina sociale della costituzione’ (2016) 31 ,Giornale Di Storia Costituzionale 50 5 Michel Foucault, Sorvegliare e punire: La nascita della prigione (Einaudi 1993) 9596: ‘Alla constatazione che la prigione fallisce nel ridurre i crimini, bisogna piuttosto sostituire l’ipotesi che la prigione è riuscita assai bene a produrre la delinquenza, tipo specifico, forma politicamente o economicamente meno pericolosa - al limite utilizzabile - di illegalismo; a produrre i delinquenti, ambiente apparentemente marginalizzato, ma controllato dal centro; a produrre il delinquente come soggetto patologizzato. Il successo della prigione: nelle lotte attorno alla legge e agli illegalismi, specificare una «delinquenza»’. 6 Piermaria Corso, Manuale della Esecuzione Penitenziaria (6ª edizione, Monduzzi Editore 2015). 7 Sentenza numero 15 della Corte costituzionale della Repubblica Italiana, 7 marzo 1962 8 Corso (n 6) 7.
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Italiana9 sia dei principi salienti della sentenza Torreggiani10, cercando di conciliare il principio retributivo con quello rieducativo in un’Europa sempre più orientata verso la piena umanizzazione della pena e dello stesso soggetto. La mia ricerca mira principalmente ad analizzare il primo capitolo del Manuale della Esecuzione Penitenziaria con l’aggiunta di fonti autorevoli rilevanti nell’ambito penitenziario quali pubblicazioni e rassegne penitenziarie. Successivamente si cercherà di individuare le modalità nonché le ragioni circa le problematiche di tipo teorico e pratico determinate dalla rieducazione del reo; quest’ultimo sarà messo in luce attraverso un approccio comparatistico rispetto a modelli carcerari prettamente rieducativi come quello finlandese e scientifico, mediante l’analisi della Costituzione e delle sentenze di caratura internazionale, avendo come punto di riferimento il caso Torreggiani. Infine, vale citare ancora Foucault e una sua finale considerazione circa lo scopo rieducativo della pena tratta dall’opera Sorvegliare e Punire: L’operazione penitenziaria, se vuole essere una vera rieducazione, deve totalizzare l’esistenza del delinquente, fare della prigione una sorta di teatro artificiale e coercitivo dove quell’esistenza verrà riconsiderata dal principio alla fine. Il castigo legale verte su di un atto, la tecnica punitiva su una vita; essa, di conseguenza, deve ricostituirne l’infimo e il peggio nella forma del sapere, deve modificarne gli effetti o colmarne le lacune, per mezzo di una pratica costrittiva. Conoscenza della biografia e tecnica dell’esistenza raddrizzata. L’osservazione del delinquente ‘deve risalire non solo alle circostanze, ma alle cause del crimine; cercarle nella storia della sua vita, dal triplo punto di vista della organizzazione, della posizione sociale e dell’educazione, per conoscere e constatare le pericolose tendenze della prima, le incresciose disposizioni della seconda, ed i cattivi antecedenti della terza. Questa inchiesta biografica è parte essenziale dell’istruttoria giudiziaria per la classificazione delle penalità, prima di diventare una condizione del sistema penitenziario per la classificazione delle moralità. Deve accompagnare il detenuto 9 ‘Le pene non possono consistere in trattamenti contrari al senso di umanità e devono tendere alla rieducazione del condannato’. 10 Sentenza della Corte Europea dei Diritti dell’Uomo del 8 gennaio 2013 - Ricorsi nn. 43517/09, 46882/09, 55400/09, 57875/09, 61535/09, 35315/10 e 37818/10 - Torreggiani e altri c. Italia
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dal tribunale alla prigione: qui il compito del direttore è non solo di raccoglierne, ma di completarne, controllarne e rettificarne gli elementi durante il corso della detenzione’.11
2. Il finalismo risocializzante della pena detentiva La pena detentiva, mediante il principio di legalità tutelato dall’art.25 comma 2° della Costituzione, ha come ragione d’essere il necessario adempimento all’‘atto motivato dell’autorità giudiziaria nei soli casi e modi previsti dalla legge’ come sancito dallo stesso articolo 13 comma 2° Cost, attuando così l’effetto afflittivo della stessa pena senza trascurare il suo scopo polivalente.12 Il divieto alla violenza fisica e morale13 sul soggetto ha fatto sì che il legislatore costituzionale, in una sentenza della Corte costituzionale14, accentuasse il principio che il senso di umanità deve controllare qualunque eccesso della afflittività della pena. L’umanizzazione della pena è particolarmente sottolineata nell’articolo di maggiore interesse, ovvero l’articolo 27 comma 3° Cost: ‘Le pene non possono consistere in trattamenti contrari al senso di umanità e devono tendere alla rieducazione del condannato’. Da un lato la norma sancisce che la pena restrittiva della libertà personale ha come scopo l’inviolabilità del senso di umanità e la retribuzione del reato proporzionalmente misurata alla gravità del fatto e personalità del reo, e dall’altro rinnova l’impegno dello Stato per facilitare il rientro del soggetto nella società che lo aspetta a vivere tranquillamente e a reinserirsi nel modo meno traumatico possibile.15 Il senso di umanità è quindi il punto di partenza come simboleggiato dall’art.1 della legge n.354 del 1975: ‘il trattamento penitenziario deve essere conforme ad umanità e deve attuare il rispetto della dignità della persona’.16
11 Foucault (n 5) 86. 12 Arianna Zanirato, ‘La Funzione Rieducativa Della Pena E Le Alternative Al Carcere’ (Tesi Laurea Magistrale, Università degli studi di Pavia 2013) 13 Articolo 13 (4°) della Costituzione della Repubblica Italiana (1948) 14 Sentenza n. 12 della Corte costituzionale della Repubblica Italiana, 4 febbraio 1966 15 Corso (n 6) 2. 16 Legge 26 luglio 1975, n.354. Norme sull’ordinamento penitenziario e sull’esecuzione delle misure privative e limitative della libertà.
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2.1 L’articolo 27 comma 3° della Costituzione e l’umanizzazione della pena. L’articolo 27 comma 3°, oltre a puntare sulla tendenza alla rieducazione e al reinserimento sociale, parla in termini concreti della pene non contenenti in ‘trattamenti contro il senso di umanità’. Di considerevole rilievo è l’articolo 3 della CEDU che quantifica teoricamente il trattamento contrario al senso di umanità, riaffermato nella sentenza Carcasio e nella condanna della Corte EDU per la mancata assenza del reato di tortura nell’ordinamento italiano.17 Traguardo inderogabile della pena, l’inclusione del meccanismo rieducativo nella Costituzione fu frutto della ricerca ‘nel terreno costituzionale, la ‘filosofia’ della pena’18 risultando in una funzione nettamente di interesse più sociale che individuale. Da segnalare, infatti, la transizione concettuale del circuito penitenziario non più come ‘luogo dell’ozio, del vuoto e dell’isolamento’, bensì come ‘spazio vuoto di diritto’ dove il soggetto va lasciato crescere senza pressioni dal mondo esterno, e attraverso l’esistenza dell’art. 27 terzo comma, sfruttare il valore aggiunto della libertà ristretta mediante un programma di arricchimento personale che spegne le spinte regressive19, un canale di sfogo attraverso lo sport e varie attività culturali come pure mediante la realizzazione nelle opportunità lavorative come ribadito recentemente dal Presidente della Repubblica Sergio Mattarella.20 La teoria della vera finalità della pena fu oggetto di discussione nei lavori preparatori della Commissione dei 75, nel tentativo di costituzionalizzare una teoria univoca21, sottolineando l’importanza del verbo ‘tendere’: ‘non si è voluto risolvere la questione delle finalità della pena. La pena ha – secondo alcuni – un fine di intimidazione; secondo altri, un fine di prevenzione; secondo altri ancora, deve avere soltanto il fine della rieducazione del colpevole. Si è voluto evitare di accettare nella Costituzione una di queste teorie, trattandosi di materia di Codice penale. Ecco perché si è usata la parola: «tendere»; perché si è 17 Anna Maria Flick, ‘I paradossi del carcere’ (2015) 331 Rassegna penitenziaria e criminologica 18 Giovanni Fiandaca, ‘Il 3° Comma Dell’‘(Art. 27’ in G. Branca and A. Pizzorusso (ed), Commentario della Costituzione: Rapporti civili. Art 27-28’ Zanichelli 1991) 19 Corso (n 6) 5–6. 20 Mattarella: ‘Il carcere deve rieducare con umanità’ (La Repubblica: 7 giugno 2016) <https://www.repubblica.it/cronaca/2016/06/07/news/mattarella_il_carcere_deve_ rieducare-141469155/> 21 Giorgia Oss, Certezza della pena e trattamenti rieducativi: un contrasto insanabile? (Tesi Laurea Magistrale, Università degli studi di Trento 2009)
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voluto dire, in un senso altamente sociale ed umano, che una delle finalità della pena in tutti i casi deve essere la rieducazione del condannato’.22 Negli anni sessanta, con la diffusione dell’interpretazione polifunzionale della pena per motivi di soddisfacimento alle esigenze contingenti23, vi fu un tentativo di proporre una flessibilità della pena: ‘tra le finalità che la Costituzione assegna alla pena, da un lato quella della prevenzione generale e difesa sociale, con i connessi caratteri di afflittività e retributività, e, dall’altro quelle di prevenzione speciale e rieducazione, che tendenzialmente comportano una certa flessibilità della pena in funzione dell’obiettivo di risocializzazione del reo, non può stabbilirsi a priori una gerarchia statica e assoluta che valga una volta per tutte ed in ogni condizione. Il legislatore può, cioè, nei limiti della ragionevolezza, far tendenzialmente prevalere, di volta in volta, l’una o l’altra finalità della pena, ma a patto che nessuna di esse ne risulti obliterata’. Da qui, si desume l’intenzione di non escludere una funzionalità all’altra seppure chiaro sia la prevalenza che verrà affidata al finalismo rieducativo.24 Tale principio, non inteso in termini esclusivamente assoluti25 e dipendente dal modus di esecuzione26, vincola il legislatore di ‘tenere costantemente di mira, nel sistema penale, le finalità rieducative e di disporre tutti i mezzi idonei per realizzarle’.27 Distaccandosi dalla logica custodialistica definita da Rocco come ‘l’utile funzione eliminatoria’ di emarginare l’autore del reato, la Corte – attraverso la ratio dell’art. 27 comma 3° cost. – appoggiò la filosofia rieducativa, intravedendo così il rientro in società del soggetto dopo l’espiazione della pena.28 Ritornando all’uso del verbo ‘tendere’ nel lessico dell’articolo costituzionale, la funzione rieducativa prende corpo nell’autodeterminazione del soggetto.29 22 Segretariato Generale, Camera dei Deputati, ‘La Costituzione Della Repubblica Italiana Nei Lavori Preparatori Dell’Assemblea Costituente’ (1948) Volume VI, 181 23 Zanirato (n 12) 34. 24 ibid 36. 25 Sentenza numero 167 della Corte costituzionale della Repubblica italiana, 22 novembre 1973 26 Sentenza numero 67 della Corte costituzionale della Repubblica italiana, 8 maggio 1963 27 Sentenza numero 12 della Corte costituzionale della Repubblica italiana, 4 febbraio 1966 28 Corso (n 6) 8-9. 29 Ida Nicotra, ‘Pena e reinserimento sociale ad un anno dalla ‘sentenza Torreggiani’. Diritto Penitenziario e Costituzione’ (2015) 2(15) Rivista Costituzionalismo <ttp://www. antoniocasella.eu/archica/Nicotra_2014.pdf>
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Essa spiana la strada verso il recupero sociale del reo, il carattere preventivo speciale che rafforza lo scopo enunciato in una miriade di sentenze costituzionali. Vi è un bagaglio linguistico variopinto, ma che si riferisce allo stesso concetto in alcune sentenze come nel riferimento al ‘reinserimento nell’ordine sociale’ della sentenza n.168 del 1972, il ‘riadattamento alla vita sociale’ della sentenza n.204 del 1974, passando al ‘ravvedimento...recupero sociale’ e alla ‘risocializzazione’ delle sentenze n.271 del 1998 e n.257 del 2006.30 Il ‘recupero sociale dello stesso’ menzionato nella sentenza n.225/1975 della Corte costituzionale, venne facilitato con l’ampia introduzione di modalità espiative ‘extracarcerarie’ grazie all’ammodernamento del regolamento penitenziario verificatosi con la creazione dell’ordinamento penitenziario l.n.354/1975 e con i nuovi regimi di esecuzione come l’istituto di semilibertà o affidamento in prova al servizio sociale, aventi lo scopo, soprattutto, di facilitare la rieducazione del reo.31 Con l’umanizzazione della pena e susseguente influenza dell’articolo 4 della Carta dei Diritti Fondamentali dell’Unione Europea32 sull’ordinamento nazionale, le finalità rieducative ponevano nel detenuto il carattere di soggetto dellesecuzione della pena.33 Autoresponsabilizzando il soggetto attraverso la dialettica istituzione/detenuto, rafforzava il tenore dell’articolo 27 comma 3 in quanto indice dell’obbligo reciproco del soggetto di rispondere all’impegno costante dello Stato di vegliare sull’idoneità degli strumenti rieducativi.34 Forte del contratto sociale instauratosi tra il detenuto e l’istituzione, l’articolo 3 della raccomandazione R(87) 3 DEL 12 febbraio 1987 postulava lo scopo del trattamento penitenziario nel ‘salvaguardare la loro salute e dignità e, nella misura in cui lo permetta la durata della pena, di sviluppare il loro senso di responsabilità e incoraggiare quelle attitudini e competenze che potranno aiutarli nel reinserimento sociale, con le migliori prospettive di vivere senza violare la legge e di provvedere ai propri bisogni dopo la dimissione’. Si potrebbe desumere il carattere inderogabile delle finalità rieducative della pena ‘tra la più pregna di significati e possibilità’ e nelle parole del giurista Giuliano Vassalli ‘[tale principio] già largamente presente nel codice Rocco, 30 S Magnanensi and E Rispoli, La Finalità Rieducativa Della Pena E L’Esecuzione Penale (2008) http://www.antoniocasella.eu/archica/Magnanensi_Rispoli_2008.pdf 31 Corso (n 6) 11. 32 Carta dei Diritti Fondamentali dell’Unione Europea (2000) 2000/C 364/01: ‘Nessuno può essere sottoposto a tortura, a pene o trattamenti inumani o degradanti’. 33 Corso (n 6) 13. 34 ibid 14.
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entra poi a vele spiegate nel nostro sistema coll’art.27 della Costituzione repubblicana, nel quale il fine della rieducazione è iscritto addirittura come obbiettivo principale, oltre che inderogabile, della pena’.35
2.2 Il sovraffollamento carcerario: il caso Torreggiani Il caso Sulejmanovic come precursore della vicenda Torreggiani causò il monito dell’atteggiamento preventivo da parte della Corte europea per i diritti dell’uomo circa la violazione dell’articolo 3 della ‘Convenzione europea per la salvaguardia dei diritti dell’uomo e delle libertà fondamentali in trattamenti ‘inumani e degradanti’36 nei confronti del carcerato. Sulejmanovic, un detenuto bosniaco in Italia dal 2002 al 2003, incarcerato presso Rebibbia, dovette scontare la pena per due mesi e mezzo in uno spazio ristretto di 2,70mq, un numero che non rispecchiava lo standard minimo di 3mq per detenuto con maggiore infrazione, sempre dell’articolo 3, nell’impedire lo svolgimento di un’attività e nel lasciare il detenuto rinchiuso nella propria cella.37 Secondo il Giudice Sajò, non vi era dubbio che ‘la flagrante assenza di uno spazio personale di cui ha sofferto il ricorrente’ costituisca un trattamento inumano. Il ricorrente è stato detenuto in condizioni estremamente difficili per un periodo relativamente lungo a causa dell’improvvisa sovrappopolazione del carcere. Nel caso di specie, non è tanto la mancanza di spazio in cella a costituire di per sé un trattamento inumano o degradante. Le condizioni non erano tali da comportare immancabilmente o probabilmente un danno per la salute mentale e fisica del ricorrente o per la sua integrità...[in tal modo costituiva] un contrasto con le regole raccomandate dal Comitato europeo per la prevenzione della tortura e delle pene o trattamenti inumani e degradanti (CPT)’.38 Inoltre, per due volte il detenuto aveva chiesto di lavorare all’interno dell’istituto, richiesta che fu respinta ingiustamente, data l’opportunità lavorativa tutelata dalle regole penitenziarie europee approvate dal Consiglio 35 Giuliano Vassalli, ‘Funzioni e insufficienze della pena’ (1961) Rivista Italiana di Diritto e Procedura Penale 318 36 Convenzione per la salvaguardia dei diritti dell’uomo e delle libertà fondamentali (Convenzione europea per la salvaguardia dei diritti dell’uomo, così come successivamente modificata) (ECHR) art. 3: ‘Nessuno può essere sottoposto a tortura né a pene o a trattamenti inumani o degradanti’. 37 Zanirato (n 12) 79. 38 Sulejmanovic c. Italia [2009] Corte Europea dei Diritti dell’Uomo 22635/03
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d’Europa e dagli articoli 15 e 20 della legge n.354 del 1975 ‘che prevedono il diritto al lavoro in carcere al di fuori dei casi d’impossibilità oggettiva’.39 Malgrado i tentativi di interventi urgenti per il contrasto della tensione detentiva determinata da sovraffollamento delle carceri con la l.n. 9/201240, la sentenza Torreggiani c. Italia del 8 gennaio 2013 rappresenta un punto di riferimento nonché un ultimatum sulla piena osservanza dell’art.3 in materie di sovraffollamento. Il verificarsi dell’ennesima condanna da parte della Corte EDU fu motivato dalle condizioni carcerarie inumane dei ricorrenti negli istituti di Busto Arsizio e Piacenza in quanto, simile al caso precedente, a disposizione vi era una cella con spazio inferiore a tre metri quadri ciascuno, evidenziando l’inadeguatezza strutturale nel funzionamento difficoltoso del sistema penitenziario italiano.41 L’istituzione carceraria non può essere veramente rieducativa se il sovraffollamento pone dei limiti tali da minare la dignità del soggetto, il cui cammino verso la propria emenda42 diventa così un punto interrogativo e non più una certezza come garantito dall’articolo 27 comma 3 cost. Mentre da una parte trovare un programma soddisfacente di sport, lavoro e istruzione è di ‘cruciale importanza per il benessere dei detenuti’, dall’altra la Corte si pronunciò sul fatto che ‘i detenuti non possono essere lasciati semplicemente a languire per settimane, a volte mesi, chiusi nelle loro celle, e questo indipendentemente da quanto siano buone o meno le condizioni materiali all’interno delle celle’.43 Come principio di base vi era uno sforzo coerente di identificare le radici del sovraffollamento nell’analisi delle categorie dei reati, approcciando la questione della criminalità attraverso gli atteggiamenti e le preoccupazioni della comunità esterna.44 La sentenza, oltre ad affermare l’illegalità di una esecuzione disumana e degradante45, suggeriva una considerazione del carcere come extrema ratio. La Corte offriva così una lettura in chiave analitica considerando la libertà ristretta quale ‘una sanzione o una misura di ultima istanza e a prevedere un insieme 39 ibid 3,7. 40 L.n. 9/2012, Conversione in legge, con modificazioni, del decreto-legge 22 dicembre 2011, n. 211, recante interventi urgenti per il contrasto della tensione detentiva determinata dal sovraffollamento delle carceri. 41 Zanirato (n 12) 80. 42 Corso (n 6) 16. 43 Torreggiani (n 10). 44 ibid 5. 45 Maria Laura Fadda, ‘Misure di sicurezza e detenuto psichiatrico nella fase dell’esecuzione’ (2013) 2 Rassegna penitenziaria e criminologica 34
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appropriato di sanzioni o misure applicate nella comunità, eventualmente graduate in termini di gravità’.46 Con l’introduzione di misure indirizzate a risolvere il problema del sovraffollamento, quale, tra l’altro, la riduzione della popolazione carceraria, facilitato dalle sentenze Torreggiani e della Corte costituzionale n.279 del 2013, il legislatore ha voluto conferire un senso al rimprovero della Corte EDU. L’impegno dello Stato italiano verso la diminuzione dei flussi in entrata e aumento in uscita, dava rilievo alla liberazione anticipata speciale, e la creazione di ‘una combinazione di ricorsi’, nel contempo garantendo una tutela costituzionale dei diritti penitenziari47; ciò servendo da monito per l’osservanza incondizionata del principio basilare del trattamento ‘umano’ come parte integrale dello scopo rieducativo. I rimedi risarcitori della legge n.117 dell’11 agosto 2014 per i detenuti vittime di carcerazione degradante48, seppur necessari per i fini legalistici, non bastano se il soggetto non è messo al centro del progetto risocializzante e reso partecipe, perché ‘Libertà’, come afferma Giorgio Gaber, ‘è partecipazione’ – nella fattispecie, partecipazione nell’opera di rieducazione.49
2.3 Alternative al carcere e reinserimento sociale ‘L’elemento fondante del trattamento carcerario e delle misure alternative...è quello della messa alla prova attraverso una concessione di fiducia alla persona, per un percorso di recupero dei valori persi assieme al senso della legalità che sono alla base della commissione del reato’.50 L’obiettivo di contenere il fenomeno di sovraffollamento passa anche dall’attuazione di ‘pene detentive non carcerarie’ come indicato dalla legge n.67 del 28 aprile 2014 con la ‘sospensione del procedimento con messa alla prova’. Da qui si riavverte la necessità di un trattamento extracarcerario, di un’educazione all’esterno dell’istituto penitenziario’, considerando in 46 Roberta Palismano, ‘Realizzazione di un sistema in probation’ (2015) 1 Rassegna penitenziaria e criminologica 95 47 Nicotra (n 29) 14, 17. 48 Corso (n 12) 28. 49 Vassalli Giuliano, ‘Il dibattito sulla rieducazione’ (1982) Rivista Italiana di Diritto e Procedura Penale 465 50 Ministero della Giustizia, ‘Volontariato e Giustizia’ (Conferenza Nazionale, Roma 2000)
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tal modo il detenuto come ‘persona’.51 Oltre al rafforzamento del carcere come luogo di riforma, la speranza di spianare la strada alla rieducazione è affidata anche alla ricerca di nuove alternative al carcere52, e non soltanto a determinati scopi esclusivamente anti-sovraffollamento. L’ordinamento penitenziario del 1975, insieme ad altri interventi settoriali come la l.22 del giugno 2000 (n.193, norme per favorire l’attività lavorativa dei detenuti), la l.8 del marzo 2001 (n.40, avente misure alternative alla detenzione a tutela del rapporto tra detenuti e figli minori) nonché le modifiche del 19 dicembre 2002 rivolte alla legge in materia di liberazione anticipata53, segnalarono un ricorso al trattamento oltrecarcerario. La risocializzazione avviene efficacemente nel caso in cui, il suo carattere preventivo viene raggiunto tramite sanzioni che non rinnegano la ragion d’essere penitenziaria, garantendo un’integrazione tangibile piuttosto che un’emarginazione malaugurante dopo l’espiazione della pena con la consapevolezza della difficile convivenza tra un sistema penale accentrato sulla pena detentiva e l’istanza della ‘socializzazione recepita’.54 La funzionalità della alternativa in detenzione, in un certo senso, dipende molto dal connubio intervento giuridico-aiuto sociale.55 Una misura meno afflittiva con scopo umanitario56, quale la detenzione domiciliare, fu battezzata dalla sentenza n.350 del 2003 avente ‘aspetti più vicini e congrui alla ordinaria finalità rieducativa...non essendo più limitata alla protezione dei soggetti deboli prima previsti come destinatari esclusivi’. Considerata una modalità adatta per un soggetto che deve scontare gli ultimi diciotto mesi in prigione, la detenzione domiciliare va intesa come la concessione dell’espiazione di una pena all’interno di una struttura abitativa o di cura e accoglienza la cui utilità viene chiamata in causa automaticamente per i delitti condannati per un periodo non superiore ai tre mesi.57 Il successo della finalità rieducativa non include però ‘una brusca ed automatica sospensione...[senza sufficiente ragione]...di un percorso risocializzativo e riabilitativo’.58 In scenari già verificati, l’idea di far evitare al condannato un’esperienza prettamente criminogena nel carcere fu motivata dal presagio 51 52 53 54 55 56 57 58
Oss (n 21) 44. Zanirato (n 12) 2. Corso (n 6) 24-25. Luciano Eusebi, La Pena in Crisi (Morcellania 1980). ibid 91. Magnanensi, Rispoli (n 30) 12. Nicotra (n 29) 15. Magnanensi, Rispoli (n 30) 12.
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di Franz Von Liszt, il quale bocciava l’inutilità delle pene detentive brevi in quanto provocano all’ordinamento giuridico ‘danni più gravi di quelli che potrebbero derivare dalla completa impunità del reo’.59 La concezione della pena detentiva come ricorso ultima ratio60, metteva al centro delle sanzioni alternative alla detenzione recidiva, il principio di sussidiarietà, il quale consentiva l’effettiva restrizione della libertà in carcere in casi dettati dalla proporzionalità di gravità penale.61 Il carattere pecuniario dell’alternativa alla detenzione, con applicazione sospensiva o sostitutiva62, mira alla piena risocializzazione del soggetto attraverso gli istituti come l’affidamento in prova a servizi sociali a quattro anni di reclusione dopo il periodo di detenzione con un programma di volontariato di rilievo sociale come previsto dall’articolo 47 ord. penitenziario63 e la semilibertà dall’art. 50 che prevede tale sottoposizione in pene di reclusione non superiori a sei mesi del soggetto non affidato in prova al servizio sociale64, trattamento di reinserimento svolto gradualmente65 come tracciato dalla sentenza n. 100 del 1997.66 Altre alternative al carcere che meritano considerazione sono la liberazione condizionale, che con i requisiti giusti consente l’espiazione di una pena al di fuori della prigione con libertà vigilata tendendo così al ‘recupero sociale del condannato’, e l’istituto di grazia, che secondo la sentenza n.200 59 Emilio Dolcini, Carlo E. Paliero, Il carcere ha alternative? Le sanzioni sostitutive della detenzione breve nell’esperienza europea (Giuffrè 1989). 60 Zanirato (n 12) 141. 61 Nicotra (n 29) 14. 62 Zanirato (n 12) 141. 63 Nicotra (n 29) 15: ‘Come autorevolmente auspicato dal Presidente della Repubblica, nel messaggio rivolto alle Camere lo scorso 8 ottobre, si tratta di attività socialmente utili allo scopo di agevolare da subito il percorso di reinserimento sociale del reo, evitando l’ingresso in carcere’. 64 Legge 1975 (n 16) art 50(1): 1. ‘Possono essere espiate in regime di semilibertà la pena dell’arresto e la pena della reclusione non superiore a sei mesi, se il condannato non è affidato in prova al servizio sociale’. 65 ibid art 50(4): ‘L’ammissione al regime di semilibertà è disposta in relazione ai progressi compiuti nel corso del trattamento, quando vi sono le condizioni per un graduale reinserimento del soggetto nella società’. 66 Sentenza numero 100 della Corte costituzionale della Repubblica Italiana, 7 aprile 1997: ‘La sottoposizione del beneficio della semilibertà alla condizione della previa espiazione in carcere di un periodo di pena, sia pure - in deroga alla regola generale dell’art.50, comma 2, primo periodo - non determinato nella sua durata, appare coerente con la scelta di base operata dal legislatore quando ha configurato tale misura alternativa di solo parziale decarcerazione, e non può dunque mettersi a raffronto, ai fini di un giudizio di ingiustificata disparità di disciplina, con i presupposti dell’affidamento in prova, che può essere disposto solo quando si ritenga che il regime extracarcerario ‘contribuisca alla rieducazione del reo e assicuri la prevenzione del pericolo che egli commetta altri reati’ (art.47, comma 2, ordinamento penitenziario)’.
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del 2006, ha come obiettivo l’attuazione di ‘valori costituzionali consacrati nel terzo comma dell’art. 27 Cost., garantendo soprattutto il senso di umanità, cui devono ispirarsi tutte le pene, non senza trascurare il profilo di rieducazione propria della pena...un atto che non sia di mera clemenza, ma che – in armonia col vigente ordinamento costituzionale favorisca l’emenda del reo ed il suo reinserimento nel tessuto sociale’.67
3. Il diritto di punire, e l’obbligo di rieducare Sin dal secolo scorso, rimane tuttora acceso il dibattito sulla cosiddetta giustificazione della pena e la sussittenza delle teorie delle pena; ossia l’idea retributiva e di prevenzione generale e speciale - prestando una funzione polifunzionale all’utilità della pena stessa. I due, seppur legati da un rapporto dialettico, riscontrano il tenore dell’articolo 27 comma 3 della Costituzione che si schiera inequivocabilmente a favore della prevenzione speciale della ‘tendenza alla rieducazione del condannato’ materializzabile in quanto lo detiene e lo risocializza nell’auspicata neutralizzazione della sua spinta delinquenziale.68 Come osserva Padre Agostino Gemelli nelle sue ricerche criminologiche, ‘la pena ha in se stessa una efficacia preventiva. E lo Stato ha il diritto di punire solo in quanto lo richiede tale scopo, né più, né meno’.69 La funzione della pena, di fronte al dibattito tra l’aspirazione retributiva e quella rieducativa, sembra per certi autori destinata a rimanere in perenne crisi.70 In alcuni casi, il carattere prettamente afflittivo della pena, avendo termine a prescindere dal pieno verificarsi del recupero sociale, indica il monito che la rieducazione, importante com’è, non può essere sempre vista come l’unico metro di giudizio.71 Al contempo, la polifunzionalità della pena non deve fare a meno del peso che assume la rieducazione nell’art. 27 Cost.72
67 Sentenza numero 200 della Corte costituzionale della Repubblica Italiana, 3 maggio 2006. 68 Dolcini (n 3) 69-70. 69 Agostino Gemelli, ‘Il progetto preliminare di un nuovo codice penale dal punto di vista della psicologia e della antropologia criminale’ in M.W., Osservazioni intorno al Progetto preliminare di un nuovo Codice Penale (Milano 1927) 28. 70 Eusebi (n 54) 11. 71 Vassalli (n 49) 463-464. 72 ibid
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3.1 Carcere come extrema ratio La legge Gozzini del 10 ottobre 1986 (n.663) fu di vitale importanza in relazione all’impegno di riaccendere l’evoluzione della pena prendendo le distanze dalla pena detentiva come fine univoco e aderendo alle aperture della comunità esterna tramite un programma di progressivo reinserimento sociale73 rispetto ad una società pluralista.74 L’esperienza del carcere acquisice in tal modo una concezione di misura extrema ratio nella fase esecutiva penale diametralmente opposta al trattamento rieducativo di natura extra moenia75 svolto al di fuori della stessa struttura carceraria. Collegate con quest’ultimo principio sono le misure alternative alla detenzione come simbolo della rieducazione penale che illustra la personalità extrema ratio dell’afflittività della pena come giustificazione dell’ultimo rimedio per la tutela costituzionale76 della società. Il problema del sovraffollamento, ben rappresentato nella questione Torreggiani, induceva a concepire il carcere come extrema ratio, durante la fase cautelare-processuale e nell’ambito sanzionatorio in necessità di altre misure77; una privazione della libertà come ‘sanzione di ultima istanza [a prevedere] un insieme appropriato di sanzioni o misure applicate nella comunità, eventualmente graduate in termini di gravità’.78 Definito da tanti come discarica sociale in quanto desocializzante, il modo più efficace nel rispondere alla pericolosità sociale di un tossicodipendente o recidivo è la costruzione del rapporto tra il mondo interno ed esterno del carcere attraverso il volontariato come opera risocializzante della pena.79
3.2 Trattamento rieducativo come extra moenia Le misure alternative alla detenzione, una componente fondamentale emanata dalla legge di riforma penitenziaria del 1975, rendevano fattibile l’espiazione della pena extra moenia, ovvero, al di fuori dell’istituto 73 Corso (n 6) 21. 74 ibid 16. 75 ibid 21. 76 Nicotra (n 29) 14. 77 78 79
Palismano (n 46) 95. Torreggiani (n 10), Flick (n 17) 355-356.
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penitenziario, l’affidamento in prova al servizio sociale e la semilibertà.80 Il Tribunale di Sorveglianza, in cui viene riposta la competenza esecutiva, provvede alla verificazione di tali misure alla fine della loro espiazione afflittiva in regime ordinario. Nel compito di contenimento della pericolosità sociale e della risocializzazione del soggetto, questi gode dei benefici garantiti dal regime extra moenia quale limitazione della propria libertà in un modo decisamente meno retributivo di quello carcerario e più contributivo in chiave riformatrice.81 L’affidamento in prova al servizio sociale stabilito dall’art. 47 dell’ordinamento penitenziario, raffigura lo spirito della misura extra moena nel garantire – in pene detentive con espiazione non più di tre anni – una possibilità di scontare la sentenza fuori dal carcere favorendo il contatto con la società in cui deve reinserirsi attraverso il servizio sociale. La semilibertà, invece, è una extra moenia sui generis considerato che il soggetto viene rilasciato alcune ore fuori dal carcere ‘per partecipare ad attività lavorative, istruttive o comunque utili al reinserimento sociale’.82 Da segnalare l’imposizione da parte del Tribunale di Sorveglianza di un certo numero di ore prescritte al di fuori del carcere al soggetto83 col preciso scopo di responsabilizzarlo positivamente, incoraggiandolo all’autoaffermazione in relazione al concetto di empowerment, come valore aggiunto del finalismo risocializzante della pena. Infine, un altro istituto da menzionare è la detenzione domiciliare (art. 47-ter) svolta nella residenza del condannato o luogo di privata dimora oppure in un ‘altro luogo pubblico di cura, assistenza ed accoglienza’ per soggetti come donna incinta e persona in condizioni di grave salute senza l’allontanamento da tale luogo, eccetto quando giustificato.
3.3 Retribuzione e rieducazione in ottica comparatistica Per poter capire meglio l’impostazione penale della funzione della pena e su quale teoria si basa - quella di retribuzione e di reinserimento sociale 80 Zanirato (n 12) p.70. 81 Franco Della Casa, Ordinamento Penitenziario Commentato Secondo Volume (CEDAM, 4ª edizione, Padova 2011) 677 82 Legge 1975 (n 16) articolo 48. 83 Zanirato (n 12) 71.
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vale studiare da vicino alcuni sistemi legali europei, i quali verranno analizzati in maniera comparatistica. Il Criminal Justice Act inglese del 2003 prevede un equilibrio tra l’approccio afflittivo nei confronti del condannato attraverso la forza deterrente della pena, ma al contempo offre un’adeguata rieducazione e risocializzazione del condannato con meccanismi di emenda sociale dando rilievo alla difesa della società collettiva. Il giudice, che gode di un’ampia discrezionalità nelle misure sanzionatorie, si occupa della prevalenza finalistica sulla base di un esame caso per caso.84 Simile al sistema penitenziario italiano, la prevenzione speciale mira alla rieducazione del condannato grazie all’intervento sociale e psicologico, distinguendo in maniera positiva colui che non ha commesso altre infrazioni in precedenza, da un recidivo.85 Abbracciando lo scopo triangolare della pena con le funzioni retributive, generalpreventive e specialpreventive, il sistema inglese invoca la giusta proporzione tra il reato e la pena come aspetto fondante del richiamo retributivo, il cosiddetto just desert86 – nasce così in un certo senso un parallelismo con il principio beccariano della proporzionalità della pena. L’art. 25, 2°c della Costituzione spagnola decreta che ‘l’educazione avrà per oggetto il pieno sviluppo della personalità umana nel rispetto dei principi democratici di convivenza e delle libertà fondamentali’.87 Ciò rappresenta un punto di avvicinamento tra i due ordinamenti dato che tale tenore rispecchia considerevolmente l’art. 27 comma 3 della Costituzione italiana. Di stampo progressivo, il sistema penitenziario spagnolo, contenente l’art 1 della legge penitenziaria iberica, sancisce l’obiettivo rieducativo come fine principale del trattamento penitenziario – un dato conciliabile con il primo articolo della 1.354/1975 italiana.88 Un aspetto particolare è l’istituto del cosiddetto periodo di sicurezza in quanto attua la preclusione al terzo grado del condannato alla reclusione superiore ai cinque anni fino al 50% dell’espiazione della pena in carcere, sottolineando così la certezza dell’esecuzione della pena detentiva.89 84 Giulia Calafiore, ‘L’ergastolo: profili, disciplina, alla luce di un’analisi interna e comparata’ (Tesi Laurea, Università’ degli Studi di Trento 2010) 85 ibid 145. 86 H. L. A Hart and John E Gardner, Punishment and Responsibility: Essays In The Philosophy Of Law (Oxford 2008) 163 e ss 87 Constitución española (1978) Articolo 23 (2°). 88 Calafiore (n 84) 169. 89 ibid 171.
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Malta, come crocevia tra principi di common e civil law, ebbe una storia, in ambito penitenziario, segnata dall’ascesa dei principi di ‘pena dell’animo’ e di ‘riabilitazione del soggetto’ sopra la mera funzione deterrente e retributiva della pena, ed una metamorfosi afflittiva della punizione psicologica più che fisica, un cambiamento ideologico verificatosi solo dopo la conclusione della seconda guerra mondiale. Storicamente infatti, lo scopo del carcere si accentrava molto su una funzionalità univalente quale retributiva ed afflittiva, tenendo il modello inglese come il punto di riferimento principale.90 I Regolamenti della Prigione91 parlano chiaro nella considerazione dei principi basilari e in relazione all’obiettivo del trattamento penitenziario: ‘Lo scopo è quello di instillare nel condannato un senso di disciplina e responsabilità e, fin quando sia possibile, permettergli di riformarsi durante la stessa espiazione della pena, secondo la legge, con la dignità e il rispetto dovuto alla persona, educandolo sull’impatto della spinta criminogena nei confronti di vittime, famiglie e altre comunità, e, una volta scontata la pena, di facilitarne il reinserimento nella società’. ‘La restrizione della libertà personale, nel tenere un soggetto in prigione, è una forma di punizione e le condizioni di tale restrizione insieme al regime carcerario non dovranno essere aggravate eccetto in situazioni di isolamento giustificato e di mantenimento della sicurezza, del buon ordine e della disciplina’.92 Infine, da non trascurare è il modello finlandese come un ordinamento penitenziario particolarmente rieducativo. In primis, la costituzionalizzazione della libertà personale ristretta deve essere emanata da un atto del Parlamento che mira a tutelare il soggetto da trattamenti contrari alla dignità umana. L’anno 2000 regalava alla Finlandia una costituzione importante relativa ai diritti fondamentali del condannato, la cui restrizione avveniva soltanto mediante il Parlamento osservando i principi della Convenzione internazionale dei Diritti Umani.93 Di fondamentale rilevanza è l’impegno di ‘avviare il condannato verso una nuova vita senza deliquenza sviluppando le varie competenze di vita e l’inserimento nella società col preciso scopo di prevenire l’ulteriore commissione di reati’. Lo Stato deve provvedere opportunità e attività rieducative adeguate, 90 Sandra Scicluna, ‘The Prison in Malta: 1850-1870 and 1931-1951’ (Tesi Laurea, Università di Leicester, Dipartimento di Criminologia 2004) 91 Prisons Regulations (1995) Legge S.L.260.03 della Repubblica Maltese 92 ibid articolo 3(1)(a)(b). 93 Tapio Lappi-Seppälä, ‘Imprisonment and Penal Policy in Finland’ (2009) Scandinavian Studies in Law 1999-2012, 342. < http://www.scandinavianlaw.se/pdf/54-17.pdf > accessed January 2017.
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come pure la riorganizzazione del carcere, effettuare investimenti mirati nel programma di riabilitazione e incoraggiare iniziative di volontariato nel tentativo di contenere il problema della recidiva e del sovraffollamento. Quest’ultimo aspetto si inquadra nella nuova forma di libertà anticipata mediante la libertà vigilata (probationary liberty) per cercare di ridurre il numero dei carcerati.94 Nonostante le difficoltà riscontrate dal sovraffollamento in Finlandia, la rivista statunitense The Atlantic, in un articolo del 2013, lodava il sistema penitenziario scandinavo all’avanguardia rispetto alla popolazione carceraria che rappresenta la percentuale mondiale più bassa. Inoltre si segnala la ‘progressione della sentenza mirata a far ritornare il soggetto in comunità’: ‘Non esiste punizione più efficace di quella che in nessun momento annuncia l’intenzione di punire’.95
4. L’evoluzione storica del principio rieducativo 4.1 Sfondo della giurisprudenza costituzionale Nella sentenza costituzionale n.12 del 4 febbraio 1966, la questione della legittimità delle pene pecuniarie fu giudicata non idonea al perseguimento di un fine rieducativo. Nel concepire lo scopo rieducativo, uno deve rifiutare di fare ragionamenti in ‘senso esclusivo ed assoluto dovendo [il principio] agire in concorso di altre funzioni della pena’.96 Oltre che ‘disporre tutti i mezzi idonei per realizzarla’, il legislatore è chiamato a considerare altre ratio della pena che ‘al di là della prospettiva del miglioramento del reo, sono essenziali alla tutela dei cittadini e dell’ordine giuridico contro la delinquenza, e da cui dipende l’esistenza stessa della vita sociale’. Il buon esito della funzionalità del fine rieducativo è anche legato dall’applicazione corretta del ‘suo regime di esecuzione’.97 Nella sentenza n.264 del 7 novembre 1974, la Corte tiene a precisare che ‘la funzione (e fine) della pena non è soltanto il riadattamento dei delinquenti, purtroppo non sempre conseguibile. A prescindere sia dalle teorie 94 ibid 345. 95 Doran Larson, ‘Why Scandinavian Prisons Are Superior’ The Atlantic (24 September 2013) <http://www.theatlantic.com/international/archive/2013/09/why-scandinavianprisons-are-superior/279949/> accessed January 2017. 96 Sentenza (n 14). 97 Sentenza numero 22 della Corte costituzionale della Repubblica Italiana, 11 febbraio 1971.
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retributive secondo cui la pena è dovuta per il male commesso, sia dalle dottrine positiviste secondo cui esisterebbero criminali sempre pericolosi e assolutamente incorreggibili, non vi è dubbio che dissuasione, prevenzione, difesa sociale, stiano, non meno della sperata emenda, alla radice della pena’.98 L’ergastolo, seppur in contrasto prima facie con il fine rieducativo99, fu ribadito con la modifica della legge n.1634 del 25 novembre 1962 in quanto la liberazione condizionale poteva essere concessa ai condannati all’ergastolo per faciltarne il reinserimento nel ‘consorzio civile’. L’istituto della liberazione condizionale, come segnalato dalla sentenza n.264 del 1974 ebbe ‘un peso e un valore più incisivo di quello che non avesse in origine; rappresenta, in sostanza, un peculiare aspetto del trattamento penale e il suo ambito di applicazione presuppone un obbligo tassativo per il legislatore di tenere non solo presenti le finalità rieducative della pena, ma anche di predisporre tutti i mezzi idonei a realizzarle e le forme atte a garantirle’. Il principio della colpevolezza del fatto fu enunciato come parte integrale di colui che è partecipe nel percorso rieducativo in quanto ‘non avrebbe senso la rieducazione’ di chi, non essendo almeno ‘in colpa’ (rispetto al fatto), non ha certo ‘bisogno’ di essere ‘rieducato’.100 L’individualizzazione del trattamento penitenziario non può essere separato dalla finalità rieducativa101 come dichiarato nella sentenza n.50 del 1980. Infine, la sentenza n.138 del 2001 dichiarava che il soggetto deve disporre dei mezzi adeguati per adempiere alle obbligazioni civili dando un senso concreto ad una rieducazione attiva, ‘dimostrando solidarietà nei confronti della vittima, interessandosi delle sue condizioni e facendo quanto è possibile per lenire il danno provocatole, anziché assumere un atteggiamento di totale indifferenza, non può non avere un particolare peso nella verifica dei risultati del percorso rieducativo’.102
98 Sentenza numero 264 della Corte costituzionale della Repubblica Italiana, 7 novembre 1974. 99 Giuseppe Frigo, ‘La funzione rieducativa della pena nella giurisprudenza costituzionale’ (Seminario Madrid,2011) <http://www.cortecostituzionale.it/documenti/convegni_seminari/ RI_Frigo_Madrid2011.doc> 100 Sentenza numero 364 della Corte costituzionale della Repubblica Italiana, 23-24 marzo 1988. 101 Magnanensi (n 30) 9. 102 Sentenza numero 138 della Corte costituzionale della Repubblica Italiana, 9 maggio 2001.
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4.2 Riforme dell’ordinamento penitenziario Dall’impostazione mens legis dell’articolo 27 comma 3 della Costituzione, si capisce, prima della riforma penitenziaria, che l’espiazione extracarceraria auspicava l’applicazione completa della liberazione condizionale e l’ammodernamento dello stesso regolamento, e poi – a seguito della riforma dell’ordinamento penitenziario, la Corte costituzionale n.8/1979 dell’l.n.354/1975 con gli istituti dell’affidamento in prova al servizio sociale, semilibertà e la stessa liberazione anticipata, favorisce la rieducazione del soggetto.103 Con il verificarsi delle riforme del 1975, la fine rieducativa della pena, il carattere della pena divenne di ‘ultima e risolutiva’ ‘prevalenza’ sull’esigenza retributiva’.104 La riforma, rispettando i principi inderogabili del trattamento rieducativo, contatto con l’ambiente esterno e reinserimento sociale nell’art.1 comma 5° l.26 luglio 1975 n.354 e l’inizio della modificazione atteggiamentale che in sé ostacola una costruttiva partecipazione sociale105, ribadì tali principi nell’insieme dell’ordinamento penitenziario. Dalle norme sull’ordinamento penitenziario e sulla esecuzione delle misure privative e limitative della libertà (l.26 luglio 1975 n.354) e dall’approvazione del regolamento di esecuzione scaturì una serie di modifiche nell’ambito penale e processuale penale, oltre a responsabilizzare lo Stato nella continua lotta contro l’eversione dell’ordine sociale, e la delega per il nuovo codice di procedura penale della l.3 aprile 1974 n.108. Corso osserva che l’allineamento della riforma penitenziaria attraverso regole avanzate nel trattamento del soggetto, suggerendo una promozione dell’evoluzione giuridica, era, in un certo senso, caratterizzato dalle esigenze dovute all’emergenza terrorismo e dalla valenza di difesa anticipata assunta dal carcere, togliendo tra l’altro spazi di discrezionalità al giudice a discapito dell’inquirente.106 Il periodo di emergenza come offuscamento della prevalenza del fine rieducativo nell’eseguimento delle indagini processuali, ebbe una via d’uscita con la legge del 29 maggio 1982 n.304 delle misure per la difesa dell’ordine costituzionale con accento sulle condizioni del soggetto all’interno delle misure alternative alla carcerazione preventiva. La legge Gozzini107 103 Corso (n 6) 11. 104 ibid 12. 105 ibid 17. 106 ibid 20. 107 Legge 10 ottobre 1986, numero 663. Modifiche alla legge sull’ordinamento penitenziario e sulla esecuzione delle misure privative e limitative della libertà.
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segnalò un passaggio nel sistema penitenziario dalla funzione ordinaria ratio all’extrema ratio del carcere, ovvero passando dalla fase esecutiva solo con il mancato obiettivo riposto nel trattamento extra moenia, al di fuori dal carcere onde la pena espiata si svolge attraverso meccanismi di progressivo reinserimento sociale.108 Last but not least, la Carta approvata il 5 dicembre 2012 parlava in primis della collocazione del ‘garante’ tra quei ‘soggetti che operano all’esterno dell’istituto ai quali il detenuto può rivolgersi’, ma più significativamente poneva l’accento sopra la ‘sensibilizzazione pubblica del tema dei diritti umani e la finalità rieducativa della pena’.109 Essa può essere raggiunta efficacemente con una riduzione controllata della popolazione carceraria. La legge del 23 dicembre 2013 n.146 riguarda ‘misure urgenti in tema di tutela dei diritti fondamentali dei detenuti e di riduzione controllata della popolazione carceraria’. La sentenza mirava soprattutto ad affrontare la drammatica situazione del sovraffollamento carcerario, motivo per cui l’Italia era stata condannata con la sentenza pilota dalla Corte Europea dei diritti dell’uomo.110
5. Considerazioni Finali 5.1 Il problema della risocializzazione del reo oggi Il punto nodale riguarda il problema, da sempre vigente, della collocazione soggetto-società, ossia quello relativo alla rieducazione efficace e a lungo termine del condannato rispetto alla nozione stessa della pena e alle modalità di esecuzione. Gli effetti di prisonizzazione e l’impoverimento sociale come antitesi del decantato obiettivo della rieducazione e soprattutto del reinserimento nel tessuto sociale, come spesso previsto da Foucalt e da altri studiosi, potrebbe essere alimentato dallo stesso ambiente e meccanismo in cui il soggetto deve, per fini retributivi e partecipativi, scontare la sua pena. Come si fa, allora, a tradurre la certezza del legislatore mediante la legge e l’inderogabilità dell’art.27 comma 3 della Costituzione, in un contesto sociale pragmatico composto da soggetti in grado di rivalutare alcuni concetti imprescindibili? Ed è proprio in tale contesto che con gli ostacoli che si presentano davanti alla possibilità di assicurare l’idoneità del trattamento, si 108 109 110
Corso (n 6) 17. ibid 28. Torreggiani (n 10).
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rivela necessaria una politica penitenziaria più attenta.111 Un dato di fatto risaputo è la difficoltà che riscontra il programma rieducativo nel momento in cui il sovraffollamento carcerario permane al punto di sacrificare il principio rieducativo per motivi di necessità dettati dal senso di sicurezza. La potenziale soluzione è l’opportunità concessa ai detenuti di svolgere, per la maggior parte della giornata, attività extra moenia all’interno della propria cella. Le condanne rispettive del 2009112 e 2013113 evidenziano l’impossibilità di un carcere realmente rieducativo con condizioni di vita inumane e indignitose relegando il trattamento ad uno tutt’altro che individualizzato, serio e mirato.114 Un altro ostacolo di stampo qualitativo è rappresentato dalla presenza straniera nella popolazione detenuta in quanto pone determinate difficoltà nel superare barriere linguistiche e culturali. Pertanto, di notevole importanza si rivela la figura del mediatore culturale all’interno della struttura carceraria. L’accesso alle misure alternative da parte di un soggetto extracomunitario è contestato in primis dai mancati requisiti come la disponibilità di un domicilio.115 Mentre il principio della finalità rieducativa deve essere applicato indistintamente, al di là di ogni barriera etnica e nazionale, come ribadito dalla Corte EDU e dalla Carta dei Diritti Fondamentali dell’Uomo, l’ostacolo maggiore si presenta nel momento in cui il soggetto straniero verosimilmente116, superata la fase carceraria, non potrà risiedere in modo stabile nello Stato italiano per deficit legali.117 Nonostante lo scopo della pena continui a rimanere una tematica di ‘pressante attualità pratica’,118 la parabola discendentale dell’ideale rieducativo ha fatto sì che emergesse una nozione ‘neoretribuzionistica’119, ovvero la prevenzione speciale con il retribuzionismo funzionale portato a centrare la risocializzazione del soggetto. 111 Zanirato (n 12) 77. 112 Sulejmanovic (n 38). 113 Torreggiani (n 10). 114 Zanirato (n 12) 80. 115 ibid 81. 116 Il soggetto extracomunitario, non essendo domiciliato o non avendo un permesso di soggiorno nel paese in cui sconta la pena, è impossibilitato a continuare a vivere in Italia nella fase post-penitenziaria. 117 Zanirato (n 12) 81. 118 Vincenzo Mongillo, ‘La finalità rieducativa della pena nel tempo presente e nelle prospettive future’, in Critica del Diritto: Rassegna di dottrina giurisprudenza legislazione e vita giudiziaria, (2009) 1(1)(2)(3)(4), 175 http://www.antoniocasella.eu/archica/Mongillo_2009.pdf 119 ibid 184.
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Se la ‘paura della criminalità’ provata dalla società esterna condiziona l’imprescindibilità dell’obiettivo rieducativo120 già ribadito numerose volte mediante l’applicazione costituzionale, allora c’è da chiedersi veramente se tale principio sia destinato a rimanere una mera utopia. L’attuale difficoltà è legata all’inadeguatezza strutturale, che poi va ad incidere sull’eventuale reinserimento alquanto ‘inadatto’ in quanto non sufficientemente valorizzato in termini di autoresponsabilità all’interno dell’istituto penitenziario. Il carcere, piuttosto che munire il soggetto della necessaria sicurezza per affrontare situazioni pericolosamente sociali, assume un ruolo controproducente con la ricaduta criminogena evidenziata dal 70% dei detenuti aventi già precedenti detentivi.121 L’indebolimento della funzione special-generale, seppur ostacolata dall’introduzione di misure alternative (l.354/1975), dimostra quanto le condizioni detentive possano determinare122 l’aumento o la totale neutralizzazione dell’aggressività sociale del soggetto che lo potrebbe ricondurre, come un circolo vizioso, alla capacità di delinquere ponendo delle serie domande sull’efficacia e sulla vera funzione del carcere.
5.2 Il futuro della prevenzione speciale Il problema del sovraffollamento carcerario è un dato di fatto, segnalato dallo stato di emergenza nel 2010, ‘cronicamente emergenziale ormai da decenni’123; il nocciolo del problema, ossia i deficit strutturali, non possono essere risolti con misure ad hoc emergenziali. La funzione preventiva speciale della pena, garantita dal principio rieducativo, deve guardare al futuro rendendosi conto del fatto che i risultati stentano a dare i risultati sperati. Un’autentica ‘riorganizzazione interna e ponderata del sistema sanzionatorio’124 urge come una risposta convincente d’innanzi alla condanna della Corte EDU del 2013. Una rivalutazione mass mediatica dell’afflittività della pena potrebbe, in un certo senso, influire sul futuro della funzione di prevenzione speciale e della rieducazione del soggetto. Attraverso una reimpostazione pragmatica del valore rieducativo che intende intervenire 120 ibid 176. 121 Francesco Cascini, ‘Il carcere – I numeri, i dati, le prospettive’ (2010), 50-59 Questione Giustizia, < https://www.francoangeli.it/riviste/Scheda_rivista.aspx?IDArticolo=38552> . 122 Zanirato (n 12) 87-89. 123 ibid 89. 124 Teresa Travaglia Cicirello, ‘Carcere e misure alternative tra manovre legislative ed interventi ‘riparatori’ della Corte Costituzionale’ (2011) Rassegna penitenziaria e criminologica 1648
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rispetto alle lacune rieducative, si potrebbe minimizzare l’involontario impatto nocivo e al tempo stesso diversificare, nel segno delle misure alternative (compreso il contatto con il mondo esterno), il trattamento penitenziario. Dall’altro canto, la società deve essere partecipe, in modo positivo, nel riscatto sociale del condannato; vale quindi di concepire un carcere con una fisionomia trattamentale e non meramente custodiale125 e soprattutto di cercare protezione nella piena efficacia rieducativa e special-preventiva piuttosto che nella effettiva afflittività della pena.126
125 Maria Grazia Galletta, ‘La rieducazione in carcere: un sogno possibile?’ (Psicoterapia. it) < http://psicoterapia.it/rubriche/print.asp?cod=10727> 126 Zanirato (n 12) 89-91.
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Mark A. Sammut Amabile Bonello’s Essay on the Public Law of Malta
Dr Mark A. Sammut, LL.D., M.Jur., M.A., (Melit), LL.M. (Lond), GradDipMgt (LSE), PGCHist (Oxon), has studied at the University of Malta (Law, Translation Studies), University of London (Legal History and Legal Theory), London School of Economics (Historical Sociology), and University of Oxford (Historical Studies). He is a member of the Malta Historical Society, Royal Historical Society (London), and European Society for Comparative Legal History, and a Fellow of the Society for Advanced Legal Studies (London). He has written or co-written a number of books on law, history of law, history, and politics, among which Il-Liġi, ilMorali u r-Raġuni (with Professor Giuseppe Mifsud Bonnici), Malta at the European Court of Human Rights 1987–2012 (with others), and Essays on Maltese Legal History and Comparative Law.
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1. Introduction
I
n 1868, Amabile Bonello published an essay called Diritto Pubblico di Malta, ‘The Public Law of Malta’. In Bonello’s essay, the legal theory is more implicit than explicit. Even though Bonello himself claims that his ‘little work’ was the first Maltese treatise on Public Law,1 it is, in fact, the attempt of a layman to discuss the Constitutional law of his homeland, not for the formulation of a legal theory as much as for the formulation of political reasons to back one of the numerous requests made to London, the Empire’s Metropolis, for self-government. But as in Constitutional law there is no clear-cut line of demarcation between political history (convention, description, ‘wisdom of the ages’) and abstract legal thinking (statute law, prescription, ‘artificial reason of law’), this essay is fascinating for the legal historian. For the political historian, the interest lies in the very fact that the essay was written. The text, or so it seems to the present author, was meant to hearten the Maltese, the implication being that there was only lukewarm support for constitutional reform. This study’s objectives are to offer a translation of Bonello’s essay2 as well as some background to both author and essay. As far as I can establish, this will be the first time that a translation of this essay is being published.
2. Translation When there is a serious case in which positively a private benefit must or can be sacrificed in favour of a public benefit, then it is necessary to recall the good family man, who frugally has his grain ground and removes something from the bread that he gives to his family, in order to save the seeds for the coming year, to avoid that they go through the horrors of hunger. Unfortunately, it is the sacrifice of a real but smaller need of particular individuals, which out of necessity is done for their better need. Romagnosi My homeland was never deprived of that self-government that 1 ‘... il mio desio di delineare i contorni del nostro Diritto Publbico ... sul quale non comparve ancora nessuno trattato’ – Diritto Pubblico di Malta, Tipografia del Portafoglio Maltese, Malta, 1868, p. 21.
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as ambassadors to the Viceroy and then to the Emperor, to examine the form of the concession and, should it be found to derogate from the homeland’s freedom, to obtain a different one or else contest it. During the Council of 16 May 1530, the Council debated the form of the oath to the Grand Master, laying down that if the Religion should leave the Island, the Island would return to the Crown. The following were present: the Magnificent Leonardo Calava chief of the city, the nobles Vassallo, Xerri, Zammit, Callus, Xeberras, Cumbo, etc, etc, and the representatives of the casals,8 notably De Cappella (that is from the Casal Naxaro) Francesco Muscat, Antonio Tinense, and Gio. Micallef, De Cappella Birchircara, Lorenzo Zammit, and Gio. Mansun, etc, etc. It was concluded that the oath be taken by the capitano and the jurats on behalf of all the inhabitants. When the Order’s commissioners arrived to take possession of the country, the jurats did not take the oath in the name of the people, until the commissioners had9 vowed in the name of the Order to observe all their privileges10 in the future. But even after this, the Universitas sent Ambassadors to Syracuse (where the Order had settled at that time) for the ratification of said stipulation and the Grand Master and his entire Council ratified the procedure of their commissioners and vowed strictly to respect the privileges. 4. Following this agreement, the Order took over Malta, and each Grand Master took possession of the former capital city in the name of the people, having first vowed to respect all the privileges that the Maltese enjoyed since the time of the Aragonese kings. And even though the Religion did not really religiously observe the word given, the freedoms were evidently not abrogated, and the councils were convoked on numerous occasions. Let us mention the council meeting of 20 January 1591, which decreed that, since the Viceroy had not sent grain, then all the grain found in the harbour was to be bought, and then sold at a moderate price to the people. This demonstrates that at the time of my forefathers, the representatives of the people exercised the sublime right and majestic11 obligation to provide for the needs of the public. 5. Municipal affairs, even under the Order’s rule, were administered by both 8 “Casals” is the term used by Samuel Taylor Coleridge – see Barbara E. Rooke (ed.), The Collected Works of Samuel Taylor Coleridge: The Friend, Vol 4: II (Routledge & Kegan Paul Ltd, London/Princeton University Press, Princeton NJ, 1969), p. 360. 9 The flow of the text suggests that here the author meant ‘avessero’ not the word which he actually used, namely ‘abbiano’. 10 Here the author uses ‘privilegi’ not ‘franchigie’. 11 In the sense of “(belonging to the) sovereign”.
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the jurats and the Universitas, both directly and indirectly through the holders of public office. The jurats of Mdina governed the City, managed the Hospital, etc, and had jurisdiction over various cases belonging to their office, as well as the right to decide at appellate stage the civil cases appealed from the Curiæ Capitanalis. The Universitas of Valletta took care of the oil, coal, meat, and grain, maintaining the prices moderate even if on the free market they were costlier; cleaned and illuminated the streets; oversaw the cleanliness of the markets, the fair weight, etc, through jurats and subordinates to whom it paid a salary; provided supplies and other necessities to the Hospices and prisons, etc. Succinctly put, it had all the attributes of a municipality. There was a similar magistracy on Gozo. The last jurats of the Capital were Dr Giuseppe Bonnici, Alessandro Patrizio Spiteri, Leopoldo Zahra Glinchan,12 and Dr Giuseppe Muscat. This magistracy and Valletta’s were abrogated in 1818. 6. When the Island was ceded to the French Republic with the Convention signed on 12 June 1798, Article 7 of said Convention expressly laid down that the Maltese ‘will conserve the belongings and privileges they possess’. And yet the Maltese, unhappy with the measures taken against their rights by the French, organised the general revolt of the countryside on the 2 September 1798 and two days later, that is on the 4 September, re-established the Popular Council, composed of the generals, the battalion chiefs, and the representatives of the people elected by all the heads of family. The entire country was governed by that Council, save for Valletta and the three maritime Cities. That Council established and controlled the taxes, appointed deputies for public health, interned on Comino the wrongdoers and those suspected of collaborating with the French, ordered a national loan, appointed customs officers, took measures for provisions, authorised the representatives to collect monies whereby poor women could be supplied with spinning wheels, etc – in brief, it managed all the affairs of the Island. In the meantime, the Maltese defeated the French sorties and blockaded the fortifications from the land side. A few English and Neapolitan troops arrived, together with Portuguese and English vessels to blockade the fortifications from the sea side. The forts then capitulated and when the English and the Neapolitans occupied Valletta, it was agreed that the ancient 12 According to the Baron Azopardi, the surname is ‘Zahra Clinchant’ – see, Raccolta di Varie Cose Antiche e Moderne Utili ed Interessanti Riguardanti Malta e Gozo, Malta, 1843, p. 96.
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freedoms13 and laws of Malta would be preserved (Sir A.J. Ball’s letter to William Winsham, Secretary of State, 28 February 1807). Furthermore, General Pigot published in February 1801 a proclamation whereby he declared himself to be the representative of His Britannic Majesty on Malta and Gozo and assured the Maltese Nation of the King’s protection and the full possession of its Religion, its property, and its Liberty. The Royal Commissioner Charles Cameron14 in his proclamation of 15 July 1801, addressed the following words to the Maltese Nation: ‘Charged by His Majesty, the King of Great Britain, to conduct all the affairs (except the military) of these islands, I embrace with the highest satisfaction, this opportunity of assuring you that His Majesty grants you full protection, and the enjoyment of your dearest rights’.15 News reached Malta of the Treaty of Amiens, according to which the Order had once again to take possession of Malta; a congress was held on the 9 November 1801 that elected a deputation to bring to the fore the opposition of the Maltese and their wish to remain united with Great Britain. The representatives, though elected by all the heads of family, considered that they could not carry out an act of such importance without the consent of the entire people. Consequently, they issued this Notice: ‘The lieutenants of the Governor and the Representatives of the people have deputised the Marquis Don Mario Testaferrata, Filippo Castagna, Emanuele Ricaud, Don Pietro Mallia, and Michele Cachia to travel to London and inform His Majesty of the situation... etc. Such a deputation is of interest to the entire Nation, and the said Representatives wish that it be approved by the entire Nation. Thus, these presents are meant to give notice of it to all, so that whosoever intends to oppose it should within three days hand any representation to the Notary of the Curiæ Capitanalis of Mdina if from the countryside, and as regards the four Cities to the Notaries of the Grand Court of Valletta. Once said deadline lapses, said deputation shall be considered as approved and the deputies acknowledged as such, to whom can be truly trusted the interests of the Maltese Nation. Valletta 16 November 1801.’16 The 13 Or ‘privileges’. 14 Royal Commissioner is the term used by Bonello: ‘Commissario Regio’; Cameron was Royal Civil Commissioner. 15 This part would seem to paraphrase the line of argument found in Giorgio Mitrovich’s The Cause of the People of Malta; Now Before Parliament, Effingham Wilson, London, 1836, pp. 7–11. 16 Translated by the present author who could not find a contemporary translation.
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entire people ratified this procedure, as can be gleaned from the following two documents: 1. We the undersigned Magnificent Notaries17 of the Grand Court of Valletta... Confirm that with regard to the notice mentioning the Deputies to be sent to London, that has been affixed in public places, nobody has appeared before us to protest or make other declarations, this 20 November 1801. Notary Emanuele Zarb; Notary Alessando Patrizio Spiteri. 2. I the undersigned Magnificent Notary of the Curiæ Capitanalis of Mdina confirm that the public notice regarding the deputation for London was affixed on 16 November 1801 in all the casals of Malta, inviting anybody who opposed such election, commission and departure to appear within three days in this court and bring forth said opposition, and that I was empowered to receive any such opposition until the lapse of said day, and that until today nobody has appeared to make any opposition. This 23 November 1801, Notary Calcedonio Bonello.– This is the demonstration of the great doctrine of public law, namely: The representatives and mandatories of the people cannot decide vital questions without the approval of their mandators, that is to say without the consent of the people. Since the election and the mission of the deputation were accepted by the entire Nation, the deputies formulated a Representation addressed to His Majesty the King, (a) and the memorial on the National rights. (b) I add an excerpt from these in order to elucidate our Public law: (a) Excerpt from the Representation: ‘The Maltese were the first who took up arms against the French... The foreign troops were solely auxiliaries... During the blockade, the Maltese lost more than 20,000 souls. The British army had not a single soldier killed... The expenses of the war by land were defrayed by the Maltese; and, in order to enable them to do this, they mortgaged the lands of several villages. The Maltese therefore demand the possession of their Island by right of conquest from the French, who conquered it from the Order... As to the pretensions of this Order to the Island, it is our duty to assert, that it was ceded by the Emperor Charles the Fifth, in quality of fief... As to the landed property which that Order has acquired in 17
‘Magnificent’ is the traditional title applied to a notary in Malta: Manifk; Manifku Nutar.
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Malta, it is contrary to the stipulations. The University,18 the Monte di Pietà, and other institutions belong solely to the Maltese, are the property of individuals, and never did belong to the Order. Whatever pretensions the Knights of the Order of Saint John might have to the Island, they had forfeited them by an act much more conclusive than that of conquest, by the most unworthy treason to their own body, violating the sacred law of religion, honour, and the statutes of the Order... By this act, according to their own laws, they cease to be members of the Order, are degraded with infamy... But the Maltese have other pretentions to the sovereignty of their own Island. Without recurring to the maxim of some writers, that ‘when the throne becomes vacant, the right of nominating the Sovereign devolves to the people,’ the Maltese found their right to independence in having twice purchased Malta, and paid the stipulated price to the Kings of Spain and Sicily. King Alphonsus (to whose alto dominio, or suzerainty, our ancestors voluntarily submitted after having purchased the Island) in his diploma of the 27th of November 1397, declared that Malta formed a portion of his dominion; and in case any of his successors alienated it from the crown, under whatever title, whether as a government, or perpetual or temporary rectory, to any person whatever, even though he should be of the most exalted blood of the reigning Sovereign, Malta was to be preserved ‘conjunctam semper tanquam membrumæ: Regie Corone, &c.;’ permitting the Maltese, in case of a contrary conduct, to resist ‘manu forti pro quo in nullum crimen, delictum, vel in inobedientiam incurrere reputentur, et aliquatenus conseantur.’ This was confirmed by King Ferdinando on the 4th of January 1489; the Maltese consider it as their Magna Charta, and confident they are, that a charter so dear to the English, will never be ravished from them, by that nation. With these privileges, Malta remained annexed to the crown of Sicily; and her inhabitants were treated by the King of Spain as a free people, until the reign of Charles the Fifth, who ceded the government to the Order of Saint John of Jerusalem... After a long negotiation, the Maltese submitted, but under the express condition, that they should enjoy their privileges for 18
Universitas.
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ever, and be considered as vassals, and annexed to the crown of Sicily; and that if the Order of Saint John should remove to another residence or establishment, Malta should return, as before, under the King of Sicily. They elected their Sovereigns, the Kings of Sicily, and governed their Island themselves. Placing a full reliance in the sincerity of the British government, and in the faith of the British nation, the Maltese were more desirous of becoming subjects of the King of England, and of enjoying all the advantages of free subjects of a Monarch who is the father of all his people, than to assert and maintain their own entire independence; but never did they suspect, nor can they now for a moment believe that, violating all the laws of justice, divine and human, they are to be forcibly delivered up by their auxiliary allies, as a conquered people, or as vile slaves, sold for a political consideration to other masters, to masters whose tyranny, extortion, and sacrilege, have rendered them the execration of every virtuous mind, and to whom, whatever horrible calamity may ensue, the Maltese nation while never submit... And it can be expected, that such a people will deliver up their privileges and their liberty to such masters? They may be free, they may perish in the attempt, but never will the Maltese submit!19 ‘At whose hands will Divine Justice demand their blood? Upon whose head will the vengeance of Heaven fall; that vengeance which our fathers invoke, together with our innocent children, our venerable clergy, our wives, and our violated daughters?20 Oh Britain, that so far has been the envy and the terror of tyrants, protector of freedom and of the oppressed! May your head that radiates glory never been struck by the thunder of the infallible hand of justice of he who gives and takes back crowns!21 His Britannic Majesty has never declared himself in any public act, or in any of the manifestations of his generals, our Sovereign. Never has he made use of any other title than that of Protector, however ardently the Maltese were desirous of being united with his subjects! We conceive it totally superfluous to enter into a detail of the indignities which the Maltese have received at the hands of 19 Translation borrowed from Cobbett’s Annual Register, Vol. III, from January to June 1803, Cox and Baylis, London, July 1803, pp. 674–677. 20 Ibid., p. 677. 21 The present author’s own translation, as Cobbett omits this part.
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the Order. What those men were, and what must have been the situation of their Government, may be conceived from this single fact – every one of them had betrayed his own order. To deliver up the Island of Malta to the Order would be the same as to deliver it over to the French.’22 (b) Excerpt from the memorial: ‘The existence of the liberty of Malta to oppose the alienation and transfer to other powers was acknowledged by the same Order in the instructions given to two Ambassadors sent to Charles the Fifth on the 8th of October 1530, one of whom was a Knight of the Order and the other was a Maltese gentleman elected by the Council to represent to that Monarch that the Maltese had only adhered on condition that they should suffer no alteration of their privileges. ‘When the Treaty of Amiens was officially communicated by the deputies of the Maltese Nation, the Popular Council made the following Declaration on the 15th of June 1802 on the rights of the inhabitants of the Islands of Malta and Gozo. ‘We, the Members of the Congress of the Islands of Malta and Gozo, and their dependencies, by the free suffrage of the people, during the siege elected, to represent them on the important matter of ascertaining our native rights and privileges (enjoyed from time immemorial by our ancestors, for which, when encroached upon, we have shed our blood to regain them23), and of fixing a constitution of government, which shall secure to us, and our descendants in perpetuity, the happiness24 of Freedom and the rights of just law, under the protection and Sovereignty of the King 22 Corbett, p. 677. 23 Here Bonello modifies the original text which refers to the ancestors having shed their blood. 24 Bonello uses ‘felicità’ – I think this should be rendered as “happiness” rather than “blessings”, bearing in mind the Enlightenment ‘understanding of the first principles of law by which the natural world is governed, the idea that those first principles were discoverable by humans, and the belief that to pursue a life lived in accordance with those principles was to pursue a life of virtue, with the end result of happiness, best defined in the Greek sense of eudaimonia or human flourishing’ – see C. N. Conklin, ‘The Origins of the Pursuit of Happiness’, Washington University Jurisprudence Review, 7 Wash. U. Jur. Rev. 195 (2015), pp. 195–262, passim.
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of a free people, His Majesty the King of the United Kingdom of Great Britain.25 After along and mature deliberation, we make the following declaration, binding ourselves and our posterity for ever, on condition that our now acknowledged Prince26 shall, on his part, fulfil and keep inviolate his compact with us.27 ‘1st. That the King of the United Kingdom of Great Britain28 is our Sovereign Lord, and his lawful successors shall, in all times to come, be acknowledged as our lawful Sovereigns. ‘2nd. That His said Majesty has no right to cede these Islands to any power. That, if he chooses to withdraw his protection, and abandon his sovereignty, the right of electing another Sovereign, or of governing these Islands, belongs to us, the inhabitants29 alone, and without control. ‘3rd. That His Majesty’s governors or representatives of these Islands and their dependencies are, and shall ever be, bound to observe and keep inviolate30 the constitution, which with the sanction31 of said Britannic32 Royal Majesty, or his representative or plenipotentiary, shall be established for33 us, composing the General Congress elected by the people, in the following proportion, viz: ‘The Cities: Notabile and Casal Dingli 14 members, Valletta 12, Vittoriosa 4, Senglea 4, Cospicua 4. ‘The Casals:34 Birchircara 5, Attard 2, Lia and Balzan 3, Curmi 12, Naxaro 4, Gargur 3, Musta 5, Zebbug 8, Siggieui 4, Luca 3, Gudia 1, 25 Bonello omits ‘and Ireland’. 26 Bonello omits ‘and Sovereign’. 27 Translation borrowed in its entirety from The Appeals of the Nobility and People of Malta, to the Justice, Public Faith, and Policy, of the British Government, for the Fulfilment of the conditions upon which they gave up their Island to the King, namely, their Ancient Rights, under a Free Constitution, Henry Reynell, London, 1811, pp. 52 et seq. 28 Bonello again omits ‘and Ireland’. 29 Bonello omits ‘and aborigines’. 30 Appeals uses ‘inviolable’. 31 Bonello omits ‘and ratification’. 32 Appeals uses ‘British’. 33 Bonello uses ‘per’, ‘for’; Appeals ‘by’, ‘da’. 34 Bonello omits ‘or Burghs’.
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Zurigo 4, Micabiba 2, Crendi 2, Zabbar 3, Tarxen 2, Asciach 1. ‘Total 104 members. ‘4th. That the people of Malta, Gozo, and their representatives in Popular Council assembled, have a right to send letters, or deputies, to the foot of the throne, to represent and to complain of violation of rights and privileges, or of acts contrary to the constitution of the government, or of the spirit thereof. ‘5th. That the right of legislation and taxation belongs to the Consiglio Popolare, with the consent and assent of His Majesty’s representatives.35 ‘6th. That His Majesty, the King, is the protector of our holy religion, and is bound to uphold and protect it as heretofore;36 and that His Majesty’s representatives have a right to claim such church honours, as have always been shown to the regents of these islands. ‘7th. The interference, in matters spiritual or temporal, of no other temporal Sovereign shall be admitted in these islands; and reference, in spiritual matters, shall only be had to the Pope, and to the respective generals of the monastic orders. ‘8th. That freemen have a right to choose their own religion. Toleration of other religions is therefore established, as a right; but no sect is permitted to molest, insult, or disturb those of other religious professions. ‘9th. That no man whatsoever has any personal authority over the lives, property, or liberty of another. Power resides only in the law;37 and restraint, or punishment, can only be exercised in obedience to law.’38 35 Bonello omits ‘without which the people are not bound’. 36 Bonello omits ‘and without any diminution of what has been practised since these islands have acknowledged His Majesty as their Sovereign to this days’. 37 Bonello omits the emphasis (expressed through italicisation) found in the Appeals version. 38 Bonello again omits the emphasis (expressed through italicisation) found in the Appeals version.
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On that same day, the representatives sent to Governor Ball an address in which they declared that: ‘since the remotest times, much before the arrival of the Order in Malta, the Maltese could convoke a Popular Council. This Council kept functioning fully even under the reign of the Order, but over time its strength was weakened and in the year 1775 it was completely extinguished. This caused the rights of the Maltese to be scorned with impunity. From then onward, the full force of despotism felt, and the Maltese could not impede the fatalities that happened, and the misfortunes suffered. For these reasons, the Maltese want to restore it... The utility of the exercise of this right for the Maltese would be huge as demonstrated by those times in which it functioned... The Maltese thus pray to be free to make use of this right, not because they do not have the full faculty of doing so, but because in these circumstances they consider necessary this Government’s participation by granting immediate approval if it is so ordered by the Court. Upon the Order’s return to Malta, the same right would already be in place allowing the Maltese to enjoy the advantages and, should the Order not return, the Maltese would receive their real rights. For if the Order does not return to Malta, as it currently seems to be the case, and there would be the need to make new arrangements for the future state of these islands, we pray you in the name of our Nation, justice, humanity, and all divine and human laws, to use all your credit for the consideration of the rights of the Maltese by which they have been authorised by their former Sovereigns to give their consent to any change in their Government. This consent cannot be neglected without violating justice; and this we do not expect from a just Government.’39 The Treaty of Amiens not having come into effect, and for this reason, neither the rules established by it with regard to Malta, Lord Melville declared in Parliament40 on 24 May 1803:41 39 The full version of this letter, without Bonello’s omissions, can be found in Azopardi, op. cit., pp. 253–255. 40 House of Lords. 41 It seems that Lord Melville spoke on 23 not 24 May – see Corbett, under Parliamentary Debates, pp. 1662–1663 et seq.
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‘That the British Government and the inhabitants of Malta establish between themselves the form of Government of the Island; and that they be protected by a British garrison...’.42 But since this was not carried out, in 1811 a Petition was sent to His Majesty the King in Council, in which the Maltese demanded the restitution of their ancient sacred rights, violated by the latter Grand Masters of the Order of St. John—enjoyed by us during the siege of Valletta—expressly stipulated when, with unlimited confidence, we delivered up our islands to the King’s officers— afterwards taken from us — and again solemnly promised us in the name of the King, by his representative, Sir Charles Cameron. Thus, the Maltese demanded the following: 1st. A free representation of the people, or Popular Council. 2nd. Independent tribunals. 3rd. A free press. 4th. Trial by Jury, as in England, and according to the ancient usage, the right of appeal from the sentence of the Judges of the Popular Council.43 5th. A constitution which shall unite the spirit of our ancient, free, and only legitimate government, with that of the English constitution.44 The petitioners’ parting shot: ‘For the purpose of securing our ancient rights, we elected for our Sovereign His Majesty the King of Great Britain. In the name of justice, of humanity, of all laws, human and divine, and by the lives of twenty thousand persons lost during the siege of Valletta, we beg you to employ all your credit and energy to have the rights and privileges of the Maltese taken into consideration. According to these rights, our ancient Sovereigns could not impose on us any form of government without our own consent—a consent which cannot be dispensed with without the violation of justice, and which violation we are far from expecting from a government so cordially elected by us.’45 The local Government declared the petition as an act of partisanship, etc, but still had to send it to the Metropolitan Government and then propose the measures required in the circumstances. These Commissioners received memorials from various distinguished persons, of which I shall transcribe the following excerpts: Monsignor F. Onorato Bres, Maltese, wrote to the Royal Commissioners 42 I have been unable to find these words. What I have found instead is this: ‘... the people of Malta, under a form of government agreeable to their wishes, were now established under the protection of Great Britain’ (Corbett, p. 1663). 43 In Mitrovich, op. cit., one finds: ‘either in the manner practised in England, or according to our own ancient usage, which was an appeal in every case from the sentence of the Judges to the Consiglio Popolare’ (p. 19). 44 Translation borrowed from Mitrovich, pp. 18–19. 45 Ibid.
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on 8 July 1812: ‘The illustrious late Lord Melville proposed that the British Government and the inhabitants of Malta should establish between them the Government of the island... Undoubtedly, gentlemen, the enlightened will accept to consult with the inhabitants – those, that is, who are honestly attached to their homeland, to Great Britain, and not the wicked egotists who, by sacrificing their country, seek to enrich themselves... Since nothing can be agreed upon unless there is agreement on the principles, the first writing that I have the merit of addressing to you deals with the principles that have to be adopted when establishing the constitution and laws of Malta, and it goes without saying that these should be liberal principles, and not restricted and advised by miserable politics. Putting aside the general arguments, there is no need to highlight that men always try to conserve the enjoyment of their existence, honour and wealth, and to make sure of this they try to sacrifice as little as possible their natural freedom in favour of civil society. An equitable, just and free Government seeks to acquire in every way the goodwill and the loyalty of the governed. The despotism and arbitrariness of he who has authority produce discontent among the subjects, who seek every opportunity to free themselves of the oppression and such opportunity, sooner or later, presents itself. These truths are certainly not unknown to personalities hailing from a country where a constitution reigns that, despite the shortcomings that one expects it might have, is the freest and the best that currently exist in Europe – it follows that I do not need to digress on this. Then again, I am convinced that you are endowed with such healthy morality that you do not consider just elsewhere that which in your country you deem iniquitous. Undoubtedly, in England you look at arbitrariness and oppression with the greatest horror, and consider them as a moral plague... Thus, when you propose the laws for the Maltese, I am convinced that you will adapt the principles of freedom; to encourage you in this praiseworthy determination, I will propose three very valid reasons. In establishing the form of Government of Malta, you should follow 95
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the principles of freedom, 1st. Because Malta always had a free Government; 2nd. Because you cannot in any way consider Malta as a conquered country; 3rd. Because it is mostly in England’s interest that this island have a fair Government, and free.’ Having the Monsignor made these three points: Moreover, the Maltese have to have their votes heeded because England has granted her colonies a form of Government similar to her own, that is to say a free Government... ‘Is Malta less important for Great Britain than Jamaica? Why should Malta be denied what was granted to Jamaica? As a matter of fact, Malta has the right to demand to be treated better than Jamaica, because she was not conquered and she enjoyed a free Government in the past. From what I have said you can clearly gather that Malta can never be regarded as a country conquered by England, and that justice does not allow the imposition of a servile yoke on the forelimbs of the Maltese. You have to see that all the wrongs they have suffered be righted, giving them back the freedom which they regained with much sacrifice... The Maltese request a free Government and ask for nothing other than the conservation of their ancient privileges which endowed them with this benefit. It has never been praiseworthy to take away privileges from subjects, and it was always a dangerous and unattractive principle, because men are very much attached to their privileges which they consider as their fundamental law, constitution and Magna Charta. When they see that they have been deprived of these privileges, they abhor the Government, and often seek how to shake it. We clearly remember how when Joseph II took away their privileges from the Flemish, the House of Austria lost the low countries. And for the same reason, it did not receive from Hungary in the last wars the same help that in the days of Maria Theresa saved the Austrian Monarchy. I tell you this because I assure you on my honour that I am very attached to Great Britain and I am very much committed that England should forever conserve Malta, being Malta so useful to her, and therefore wish to avoid the great grief of my fellow citizens in seeing that the Sicilians, thanks to the English, enjoy a free constitution and free laws, whereas my fellow citizens are deprived of such good...
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Do they not desire to return under the dominion of His Majesty the King of the Two Sicilies, as was the case prior to 1530? What honour does this bring to England? Gentlemen, remember that you belong to a generous Nation. Therefore you have to reflect before you propose the form of Government that suits Malta, whether it is more expedient to adopt liberal principles, not only for the happiness of a people, but also to conserve for the British Empire this highly important parade ground.46 Or to follow opposite principles with the very probable danger of losing, sooner or later, the possession of Malta. If you, Gentlemen, are, as I am convinced, endowed with a modicum of good sense, you cannot hesitate even for a moment on this latter alternative; and I would have won the case I’m pleading.’ The same Prelate, in another letter dated 24 August 1812, wrote to the same Commissioners: ‘It is the honour, or rather the duty, of everyone to seek the good of the society in which they live – said Mr Laing, the Public Secretary at the orders of His Excellency the Royal Civil Commissioner in the Notification printed last 24 July... Whoever thinks deeply on civil society recognises that there can be no better guarantor of the good of any State than the Council of the representatives of the Nation freely chosen by the same... Had the Maltese never enjoyed the privilege of having the Popular Council then undoubtedly the Most Clement Sovereign would grant it. How could it be otherwise? A Prince who does not have the insane and iniquitous desire to oppress, to tyrannise over his subjects, knowing that he was constituted by the Most High God to seek their happiness, how can he ever obtain their happiness if he does not establish the way to bring to the throne common representations? How can this be done without a Popular Council? ... Our August Sovereign should grant the Maltese this Council; because he is not an Asiatic or African Sovereign, accustomed despotically to rule his subjects, but the King of a free people that always upheld principles liberal and never oppressive. Thus, it is natural for him to want the good of his subjects in whichever part of the world they might be. It was for this very reason that the Maltese chose him for their Sovereign. But how can he ever learn whether his beloved subjects of Malta are oppressed or happy, without the Popular Council? Any private supplication would either not reach the throne or 46
‘Piazza’, clearly a synecdoche.
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else it would be given an unfavourable interpretation, branding it as the product of partisanship... The Maltese have the right to expect this benefit from His Majesty as effect of His Royal protection of which a foremost Minister of His Majesty said: The attachment, loyalty, and good conduct of the people of Malta and Gozo had entitled them to whatever protection it was in His Majesty’s power to grant. So far I have spoken about the hypothesis that Malta never had the privilege of this Council. What will be said if it can be proven that she did enjoy such privilege? Would it not be a great injustice if Malta were currently to be denied this privilege should its past exercise be proven after His Majesty’s Representatives repeatedly solemnly promised to the Maltese the enjoyment of their privileges?...’ The Monsignor then shows how the First Lord of the Treasury, Count Liverpool, during the negotiations on the Peace of Amiens, declared that the Popular Council could be restored, having already existed on this Island; and continues:‘Undoubtedly, His Excellency the Count Liverpool cannot have in 1803 proposed to restore in Malta the National Council as beneficial to the Maltese and in 1812 deem that the Maltese should not have this privilege again. His eminent virtues, his inward greatness, and the sublime nature of his ideas keep him from changing his mind because in 1803 he believed that the Order should regain Malta while in 1812 at the Court of St James’s it was resolved to conserve her forever united to Great Britain’. The Prelate then shows that His Majesty had recognised the legality of the Popular Council, since the Envoys nominated by the Popular Council to remonstrate against the restoration of the Order in Malta submitted a memorial to His Majesty that was then sent to Amiens, communicated to Bonaparte, and mentioned in the protocol of the Peace Congress of Amiens (Pièces officielles aux préliminaries et au traité d’Amiens, p. 166) and later, Lord Hobart, Minister at the orders of His Majesty, sent to the Popular Council’s deputies an official copy of the Peace Treaty of Amiens. The Marquis Testaferrata and other distinguished citizens insisted with the Commissioners that the Popular Council be once again established, and on the other freedoms of the country. The dates referred to serve as evidence that Malta always had, not only in 98
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virtue of the natural law but also of positive terms, self-government. Neither was she conquered, but united to the Kingdom of the Two Sicilies as a free people, accepted the Order according to conditions and (once the French had been evicted) spontaneously united with Great Britain as was expressly acknowledged by the Malta Government Gazette of 27 June 1814 that, publishing the principal articles of the Treaty of Paris of the 30 and 31 May of that same year with regard to Malta, said: ‘The island of Malta and its dependencies shall belong in full right and sovereignty to his Britannic majesty. – The Maltese may well congratulate themselves upon the fact that, in virtue of this treaty, Malta and its Dependencies belong from this date to Great Britain, she being then in possession of the Islands, due to the voluntary donation made her of them by the Maltese in 1802.’47 This spontaneous union was also mentioned in the House of Commons on 7 June 1836 by Mr A.W. Beauclerk: ‘It should be recollected that we did not acquire that Island by our own troops. The brave Maltese gave themselves up to our protection, on conditions, which had been broken through.’48 (These words were reported by the Gazzetta di Malta on 13 June 1836, No. 1333). It is worth summarising the rights which the people exercised in virtue of said self-government: (a) It had its Council, the members of which, as we have seen, at the time of the blockade, were elected by all the heads of family, that is by suffrage almost universal. The representatives exercised legislative power, managing all the affairs of the island. (b) The Universitates were Municipalities. (c) Judicial power was in the hands of the natives; the citizens could not be summoned before foreign judges, not even before the Sicilians during the union with the Kingdom of the Two Sicilies; the Judges were elected. All this can be gathered from the Representation of the Jurats of Mdina and of Valletta, 47 Translation borrowed from William Hardman, A History of Malta during the Period of the French and British Occupations 1798–1815 Part II, Longmans, London, 1909, p. 647. 48 Translation borrowed from Anon., Important Notices of Malta and Gozo, Anglo-Maltese Printing Press, Malta, 1846, p. 13.
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of February 1809, presented to the Commissioner, of which I transcribe the more important points: The Magistrates of Mdina and of Valletta present to Your Excellency the reasons and rights with which the Maltese Nation is endowed to oppose any attempt that threatens to transfer cognisance of a certain type of legal action concerning Commerce to the Vice-Admiralty court or any other court composed of foreigners. – When the Royal House of Aragon acquired sovereignty, the Maltese obtained the privilege of being exempt from summons outside their homeland in their cases at first instance. – In 1455, the Maltese obtained that the citizens would elect an Appeals Judge, and since his jurisdiction was limited, it was extended in 1458 to all types of cases. In 1429, it was established that all ministers who exercise administrative and judicial authority always be Maltese, in 1438 that they be elected by the citizens, in 1466 that they be nationals who reside on these Islands, in 1458 and 1475 that the Governor,49 the then-Prime Minister of the Island, hail from the principal citizens, and that the way elections of officials was done be invariable. These privileges conserved their force under the Government of the Order. Since it was inevitable to take to the Council of the Order the legal actions of the members of the Hierosolymitan Order and of the Treasury, all the Judges of the Maltese courts would join the members of said Council on all occasions to judge the cases in which Maltese parties were involved, whether as plaintiffs or accused, and having a casting vote like the Lords of the Council. – The Maltese Nation is convinced that His Majesty is determined to increase rather than decrease their Nation’s privileges as repeatedly affirmed in the proclamations of the Royal Commissioner Cameron and of General Pigot published on 15 February and 23 July 1801 and in the letter of General Pigot of 14 February 1801. (d) With regard to the Executive Power, King Alfonso undertook in 1438 that the officials and office-holders of Malta and Gozo would be freely elected by the citizens. A rescript of 17 49
Capitano della Verga, the Ħakem.
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January 1466 laid down that the same person could not occupy more than one office. The Jurats and the Governor were bound to obey all the resolutions of the Popular Council... King Alfonso permitted with his reply to the letter sent by the Universitas on 6 June 1441, to not obey illegitimate ordinances. – The people partook of the executive power even through various committees, that administered different branches of the public service... As to communal affairs, there were in each casal since ancient times, Connestabili who oversaw public order, quelled quarrels, helped the criminal official, represented the people before the Governor and the Jurats. They were first nominated by the Jurats and then elected by the people. (e) Public finances were under the direction and the control of the representatives of the people. (f) The Council exercised the right and duty to provide for public needs; as I have outlined above in many examples. (g) The representatives, as we have seen, sent Envoys even to Sovereigns, and received the Envoy of the Russian Emperor, the Chevalier Italisky, with whom they exchanged diplomatic correspondence; on occasion they therefore administered foreign affairs. (h) The Popular Council had the right of superior surveillance. – Furthermore, the Jurats of Mdina reviewed the works of the Governor and his judge as well as the work of the Jurats who left office; as transpires from the following document: ‘I, Stefano Sillato, usher of the office of the Jurats, declare that I have published banns on 2 September 1573 that whoever intends to move complaints or accusations against the Jurats, the Governor, and the Judge who were in office during the past year, has to appear before the Three Jurats now sitting on the Court bench.’ These rights naturally nourished the sentiment for freedom, that has always been dear to the Maltese, as they abundantly proved on all occasions. 101
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I cannot, unless I overstep the limits of this short work, enumerate all the cases in which my forefathers stood up as a single man to defend their liberties that had been passed from one generation to the next. Suffice it to mention but two: 1st. The resistance mounted when the Order tried to dismantle Mdina – to abolish the ancient Universitas; the resistance was so widespread that even the women took part in it, and the Order was forced to abandon the enterprise; 2nd. The confrontation with the French for which General Ball addressed these words to the Maltese: ‘That circumstance gave me the opportunity to witness your bravery and the public virtues you deployed in defending the sacred cause of liberty. The pen of history will describe on its eternal tables better than I the illustrious example of heroism that you showed before a stunned Europe.’50 (Ball’s address when he was presented a sword of honour.) As we have seen, the Maltese always requested their rights. When their legitimate requests expressed in 1811 were not granted, in 1836 they presented, through Mr Ewart of the House of Commons, a popular petition asking for freedom of the press, a municipal body, a popular council analogous to the one that had existed, etc... We all know the great commitment in the promotion of this petition shown by the Baron Camillo Sceberras, gloriously remembered, Mr Giorgio Mitrovich, and other meritorious and distinguished citizens; as well as the results of that step and the reforms introduced in 1849. It is therefore not necessary to argue at length that those reforms were insufficient. For this reason, in 1864, the population made a new popular petition with which it requested self-government, requesting a Council that was truly efficient, to which would be entrusted (in addition to ordinary lawmaking functions) the treasury and public property... In reply to this petition, the Metropolitan Government ordered that great consideration should be shown to the opinions of the Elected Members of Council in matters of local and domestic interest, and that above all, no vote of money should be pressed against the majority of the Elected members,51 that with regard to consolidated expenses, a draft local bill be submitted for the approval of the Crown, and that necessary information be supplied on the way to 50 Translated by the present author. 51 Though Bonello does not quote directly, he is here reporting in Italian the following text originally written in English from ‘great consideration’ to ‘of the Elected members’ – from the letter of Secretary of State for the Colonies Edward Cardwell to Governor John Gaspard Le Marchant, 19 September 1864. See Hilda I. Lee, Malta 1813–1914: A Study in Constitutional and Strategic Development, Progress Press, Malta, 1972, p. 140.
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establish municipal institutions. But it also declared that the requested reform of the Council was not necessary, since it gave enough space for the representatives of the people to exercise all the control that was convenient on the public administration. In this reply, nothing is clearly explained. Except the opinion of the Minister for the Colonies52 that there is no real necessity to reform the current Council. – This reply rejects the fundamental point, and equivocates with regard to all the other points. But this negation, and this equivocation, serve only to make more evident the need for radical reform and our right to obtain it: just like the shadow makes the light stand out. Clearly, all the efforts of the reactionaries have been fruitless. The reaction serves only to invigorate those against whom it is directed. Public opinion may be scorned, oppressed, targeted and insulted, but it will all rebound and damage whoever despises it. At times, the people observes temporary silence, giving the impression that it will no longer be anxious, and yet it moves. The people today is quiet. But it will raise its voice again before the House of Commons of Great Britain. The people will say: This land is mine; my forefathers bought it, when it was given as collateral by the Kings of the past, with their money. I redeemed it when it was oppressed by the French; these institutes of public charity are pious foundations of our dear ancestors; public money is the product of our sweat and blood and no part of it can be taken away from our disposition, our control, as this is not admitted by the sacred law of property that embraces the faculty to dispose both of belongings as well as of their fruits, and it is not admitted by the constitution and the popular sentiment of England. The entire administration concerns our affairs, and the disposition of the affairs of others without those others’ consent is a violation of the law. The people will say: Our requests do not overstep our rights that we have possessed since time immemorial. Our requests do not offend in any way the interests of the British Empire. On the contrary, they augment the moral form of its people, for whom the highest prestige is that of being the standard-bearers of freedom. Freedom does not suffer oppression; thus, England freed with great sacrifice the slaves in her Colonies, and the immortal Abraham Lincoln followed suit in the United States. The people will say: We have not been conquered, we united ourselves with the British Monarchy out of our free will, and it promised to maintain our sacred rights. Can the Great English Nation forget the word it gave? 52
Secretary of State for the Colonies.
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A people understands a people... The representatives of Great Britain will listen to our legitimate reclamations, and our plebiscite will be heeded and carried out with the help of the very same Metropolitan Government that now considers it inopportune. La lumière va son train, et le soleil achève sa course (Bossuet). Yes, our longed-for rights will triumph. But we must be united, steadfast and perseverant in our requests. This is our sacred duty, so much for the present so as not to be considered pusillanimous and forgetful of our duty, as much as for the future so that posterity will not accuse us of ignominy, of having been degenerate sons of the ancient Maltese, unable to regain in this century of light53 that National Freedom that our beloved forefathers succeeded in establishing in the murkiness of the dark Middle Ages. – If, by any chance, there is anybody who believes himself not bound to employ his energy for this purpose, because the country is small and the population not big, I tell him that it has often happened that small peoples pushed for civilisation more than the big ones, and that the law, which is the basis of our progress and prosperity, is so common to all of humankind that if the freedom of a people, no matter how small, or even of a single individual, is harmed, then the rights of the all of humanity suffer. It thus follows that the defence of the law is the main concern of everybody who feels human dignity... I therefore felt bound to add with this somehow defective publication to the elucidation of our freedoms. I will deem myself fortunate if I have managed to push forward the sentiment of Common Liberty, and if I have managed in my intent to outline our Public Law as limpidly as the task requires. I will be satisfied if this my little work motivates those who have more preparation and energy for the cogitation of this subject on which no treatise has yet appeared (!), I will be fully satisfied if I would have sufficiently fulfilled the role of whetstone, which serves to sharpen, but itself does not cut.
53
[‘Secolo di luce’.]
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3. Who was Amabile Bonello? Born on 31 November 1836 in Valletta, son of Ferdinando Bonello and Concetta née Mattei, Amabile was sent at the age of five to live with a relative in Tripoli, Libya, to learn the rudiments of business. He returned to Malta in 1848, and studied Italian, English and “business studies”.54 At 19 years old, he was employed as a clerk with a company, but continued studying parttime with the Hungarian “Fulvery Agos”55 who not only knew Latin but had also written ‘numerous works of public law’.56 Bonello was also the editor of L’Emigrazione Maltese (1867–1877), a paper aimed at encouraging Maltese emigration to North Africa.57 He died on 19 January 1878, having drowned off the coast of Sliema after having spent the evening dining with friends.58
4. The political context in 1867 Malta In 1849, Malta was granted a new Constitution that had two main characteristics: (i) decision-making powers were retained by the Crown Colony Government, while (ii) an elective principle was introduced.59 The Maltese were dissatisfied as, to borrow Hilda Lee’s words, they considered that ‘[t]he Governor retained all the absolutism that had been possessed prior to 1849, only […] that his actions were cloaked under the semblance of a representative institution’.60 54 Cenni Biografici in Memoria dell’Amico e Patriota Amabile Bonello, Tipografia del Risorgimento, Malta, 1879, pp. 3–4. 55 According to my Hungarian sources, neither is “Fulvery” a Hungarian name nor “Agos” a Hungarian surname. Possibly the surname was “Akos”. 56 Cenni Biografici, p. 4. The present author has managed to find no such work penned by “Fulvery Agos”. 57 Arnold Cassola, The Literature of Malta: An Example of Unity in Diversity, Minima Publishing, Malta, 2000, p. 198. Bonello’s ideas on emigration were supported by Mikiel Anton Vassalli’s son M.A. Vassalli Formose de Fremaux – M.A. Vassalli Formose de Fremaux, Suggestions in Accordance With Mr. Amabile Bonello’s Project of Emigration in the Coasts of North Africa, Malta, 1867, passim. 58 Cenni Biografici, pp. 7–8. I am not being frugal with the details – these are the only biographical highlights supplied by his closest friends, the paucity of which necessarily raises more questions than it answers. 59 J.J. Cremona, The Maltese Constitution and Constitutional History Since 1813 (2nd ed.), PEG, Malta, 1997, pp. 13–14. 60 Lee, p. 136.
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In January 1864, a petition was sent to the Secretary of State for the Colonies demanding constitutional reform (more control and decisionmaking powers with regard to local matters) and the appointment of a Civil Governor.61 Among the reactions received by the Metropolitan Government was Governor Le Marchant’s: ‘[t]hese islands from many circumstances are necessarily precluded from a form of constitution embodying a Representative Legislature, or what is commonly called “responsible government” and are unsuited to it’.62 In December 1865, newly-appointed Governor Storks was sent by the Colonial Office to Jamaica to investigate the manner in which the rebellion there had been quelled. On his return, Storks established District Committees in Malta and Gozo, that were to be elected by the people but would have only a consultative function and no power to spend public money. Secretary of State Cardwell doubted ‘whether the Maltese population [were] ripe for any executive powers’.63 Before the expiration of his term, Storks increased the salary of an official, raising the ire of the Maltese elected Council members, five of whom resigned in protest, though the resignations ‘produced only slight excitement’.64 Though the new Governor, General Patrick Grant, ‘concluded that this was a practical proof of the indifference of the Maltese on the issue’,65 the press kept campaigning for a Civil Governor and for a new petition to the House of Commons. This was the historical moment in which Bonello wrote his essay. The Maltese Petition was eventually presented, promoting, to quote Lee again, 61 Ibid., p. 137. 62 Ibid., p. 138. It seems that Le Marchant held these ideas in general. For instance, while occupying the post of Governor of Newfoundland, Le Marchant strongly opposed the colony’s request made in 1851 for responsible government. He asserted that the Newfoundland ‘still lacked the social structure, the political cohesiveness and a large enough assembly (then possessing only fifteen members) in which parties or political groups, not sectarian rivals, would compete for power, control the civil service, govern in the interests of the whole community, and retire from office (without ruin to themselves) when defeated’ – John Manning Ward, Colonial Self-Government: The British Experience 1759-1856, Macmillan, London, 1976, p. 314. 63 Lee, pp. 141–142. 64 Ibid., p. 142. 65 Ibid.
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the claims made earlier in the 1830s for the establishment of a Congresso Popolare. [...] They requested the appointment of a Civil Governor, and a reform of the constitution to enable the elected members to exercise a preponderance in questions concerning public expenditure, public property and all other matters of local and domestic policy.66
5. Bonello’s thesis Bonello’s essay is clearly meant to keep the morale high. The implicit main thrust of the argument seems to be that, even though the 1800 capitulation articles made no mention of a representative Council, the ancient constitution of Malta – that had been constantly observed by successive sovereigns, even though it had been trampled upon by the last Grand Masters – had envisaged such a Council. Bonello tries vividly to outline the unwritten, autochthonous constitution of Malta, based on the representation of the will of the Nation, a constitution that for centuries had permitted self-government to the Maltese. It is beyond the compass of the present study to discuss the self-governing polities of Christendom, that is Medieval Europe. Of more direct pertinence would be the following excerpt from an anonymous 1817 publication pointing at an English scenario similar to Bonello’s Medieval Malta: Long before the revolution settlement, it was the constitution of England, that laws should be made not merely by act of parliament; for in that case any assembly convened by the king and called a parliament, might have made laws binding on the people: but they were to be made with the common consent of the whole commonalty of the land by act of parliament; and then they had the only constitutional sanction of any law, not tacitly adopted and acquiesced in by the people themselves, and by general use and approbation become an indisputable custom. Bearing this in mind, we may better understand the celebrated declaration of the rights and liberties of the subject, which has often been called the foundation and main support our constitution, although, in fact, it was but an imperfect recital of previously established laws, 66
Ibid.
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which had in former times been more explicitly and unequivocally declared.67 Was Bonello implicitly but wittingly referring to this English political history/“mythology”? Or was there a common Europe-wide past and Bonello was merely referring to the Maltese past (whether fact or mythology68) sincerely believing that the Maltese case had been unique? It is difficult to say from the essay. What we can say for sure is that ‘the appeal to consent is orthodox common law doctrine, which can be traced back as far as Glanvill and Bracton, and even behind that to the Justinianic code’.69 In other words, the Maltese were presenting an argument that had to resonate with their English interlocutors, and, in my estimation, it did. But the Colonial Office was more preoccupied with strategic and military matters than legal history and theory. Indeed, following the 1869 petition, the new Secretary of State wrote, ‘I presume the theory respecting the Government of Malta is this – that in its peculiar circumstances the Crown must have extensive powers, for the safety of the place, and of its garrison – but that in local matter that do not [impair] Imperial interests the greatest attention should be paid to the wishes of the representatives of the Maltese population’.70
6. Romagnosi The quotation opening Bonello’s essay is from Gian Domenico Romagnosi’s71 Introduzione allo Studio del Diritto Pubblico Universale,72 and 67 Anon., Common consent, the basis of the Constitution of England; or, Parliamentary Reform considered and tried by the tests of Law and Reason, Thomas and Joseph Allman, London, 1817, p. 23. Interestingly, the frontispiece of this book carries a quotation in Italian from Fra. Paolo (Sarpi). 68 Victor Mallia-Milanes in ‘The Genesis of Maltese Nationalism’ in Victor Mallia-Milanes (ed.), The British Colonial Experience 1800-1964: The Impact on Maltese Society, Mireva, Malta, explains: ‘To the public mind, these “rights” were believed to have been traditionally invested in such national institutions as the Consiglio Popolare and the Università. The basis of this “belief” may, indeed, be partly or wholly mythical; nonetheless, in terms of pure popular psychology, what matters is not whether such beliefs correspond to historical truth [...] but whether they are genuinely embedded in emotional reality’ (p. 13). 69 Gerard J. Postema, ‘Classical Common Law Jurisprudence (Part II)’, Oxford University Commonwealth Law Journal, Summer 2003, 1–28, pp. 22–23. 70 Lee, p. 143. 71 1761–1835. 72 “Introduction to the Study of Universal Public Law” (1805).
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it is doctored. Before analysing it, a few lines on Romagnosi’s philosophical thought. Romagnosi’s “universal public law” is wider than our contemporary notion of “Public law”: it includes the civil law as well as links to politics and morals; it is a mixture of positive public law and natural law. He seeks to demonstrate that the ultimate end of collective human life is “happiness”, achieved only through the multilateral perfection of society.73 Derived from neither Montesquieu nor Britain (which he considered too aristocratic), and not even from Napoleon, Romagnosi’s model – government to represent the landowners, educated citizens, and members of the military – contemplated a series of constitutional organs, such as a Legislative Council, a Senate, and a Protectorate (a constitutional arbiter). For Romagnosi, the Sovereign is higher ‘in law and in fact’ to each citizen but not to ‘the united body of the nation’, in which lies ‘the ultimate constitutional guarantee’.74 The quotation75 is a doctored version of the response to question §261:
73 Carla de Pascale, ‘Romagnosi, Gian Domenico’ in A. Clericuzio, S. Ricci (eds.), Il contributo italiano alla storia del Pensiero – Filosofia, Istituto della Enciclopedia Italiano, 2012 (online edition) 74 Gian Paolo Romagnani, ‘Romagnosi, Giovanni Domenico’ in Dizionario Biografico degli Italiani Vol. 88, Treccani, Rome, 2017. 75 Gian Domenico Romagnosi, Introduzione alla Studio del Diritto Pubblico Universale in Scritti sul Diritto Filosofico di G.D. Romagnosi, riordinati ed illustrati da Alessandro de Giorgi, Frascona-Barbera, Palermo, 1814, p. 101.
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Romagnosi’s original
Bonello’s version
Allorché pertanto avviene il caso, in cui giustamente il privato vantaggio attuale possa venire sacrificato al pubblico, egli rassomiglia a quello di un buon padre di famiglia, il quale con economia fa macinare il suo grano, e toglie alcuna cosa del pane che dà alla propria famiglia per salvare la semente dell’anno venturo, affinchè non provi gli orrori della fame. In breve = egli è un sacrifizio d’un reale ma minor bisogno degl’individui particolari, che per necessità vien fatto ad un loro maggior bisogno.
Allorché avviene il grave caso, in cui positivamente il privato vantaggio deve o possa venire sagrificato al pubblico, in allora è uopo ricordare il buon padre di famiglia, il quale con economia fa macinare il suo grano, e toglie alcuna cosa del pane, che dà alla propria famiglia per salvare la semente dell’anno venturo, affinchè non provi gli orrori della fame. Purtroppo egli è un sacrifizio d’un reale ma minore bisogno degl’individui particolari, che per necessità vien fatto ad un loro migliore bisogno.
When there is thus a case in which it is fair that a present private benefit can be sacrificed in favour of a public benefit, this recalls the case of the good family man, who frugally has his grain ground and removes something from the bread that he gives to his family in order to save the seeds for the coming year, to avoid that they go through the horrors of hunger. In brief = it is the sacrifice of a real but smaller need of particular individuals, which out of necessity is done for their greater need.
When there is a serious case in which positively a private benefit must or can be sacrificed in favour of a public benefit, then it is necessary to recall the good family man, who frugally has his grain ground and removes something from the bread that he gives to his family, in order to save the seeds for the coming year, to avoid that they go through the horrors of hunger. Unfortunately, it is the sacrifice of a real but smaller need of particular individuals, which out of necessity is done for their better need.
Romagnosi explains that, ‘according to nature, never – except when fairness so necessitates – should the private good be really sacrificed for the public good’.76 By “fairness”, he means that for the individual to be expected to sacrifice his private interest for the public, the public interest should also 76 Ibid. ‘In ultima analisi dunque mai e poi mai può avvenire che, salva la giustizia, si possa effettuare il caso in cui il bene privato si possa realmente immolaro al pubblico, perchè l’interesse personale debba cedere nel volgare significato al pubblico’.
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be a private interest, but understood as deriving from public (as opposed to) private relations.77 Bonello shifts Romagnosi’s cautious reasoning, from choice (‘can’) to obligation (‘must’, ‘necessary’, ‘unfortunately’). He further shifts Romagnosi’s quantitative comparison (‘smaller’‘greater’) to a qualitative one (‘smaller’‘better’). As Bonello’s motivation is clearly rhetorical, its analysis lies beyond the scope of the present study.
7. Conclusion Bonello’s essay is an interesting aspect to Maltese constitutional history. The legal historian could find it useful for any light it casts on Malta’s medieval “public law”; his political colleague, for the further glimpse it affords on the “emotional reality”78 in which a segment of 19th-century Maltese society couched its self-perception, its perception of its past, and the use of its past – whether real or imagined79 – as a tool for the negotiation of the future.
77 Ibid. ‘... per la sola ragione e causa, in cui sia di maggiore interesse privato che il bene dell’individuo, derivante dai rapporti pubblici, venga preferito a quello che deriva dai rapporti puramente privati’. 78 The felicitous phrase used by Mallia-Milanes, supra. 79 Probably more real than imagined.
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Andrea Zammit Pro-Italianism, treason and conspiracy in wartime Malta A judicial inquiry into deportation and capital punishment as imperial deterrents
Dr Andrea Zammit is a University of Malta alumnus and currently forms part of the civil and commercial law department of the legal firm IURIS Malta in Valletta. Zammit successfully graduated with a Bachelor of Laws and Master in Advocacy degree from the University of Malta in 2018. In 2016, he spent a semester of studies abroad at the prestigious Universita’ degli studi di Urbino Carlo Bo, where he defended a paper titled ‘Il valore risocializzante della pena detentiva sottolineato dalla sentenza Torreggiani e l-ART. 27(3°) Cost.’. His Bachelor’s thesis purported to be a judicial inquiry into the main deterrents used by the British colonials as a means of containing Pro-Italianism in wartime Malta. Besides being a practitioner, Zammit is also into research ranging from legal history to the Theory of Law, as well as other subjects which pertain to the studies of history, philosophy and the arts.
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1. Pro-Italianism, Internment and Deportation: 1939- 1945 1.1 Historical overview and the juridical implications.
‘W
ithin the course of the last few days the Authorities have found it necessary to restrict the movements of certain persons in these islands as a safeguard against any conscious or unconscious action which might endanger public safety’. So read the editorial commentary of the Malta Daily Chronicle of the 1st of June 1940, a Colonial manoeuvre criticised by internee Dr. Herbert Ganado as mere juridical novelty.1 The spirit of the Habeas Corpus in barring State arrests, if made within forty-eight hours a subject, was not hauled into Court. It was expediently set aside under the transference of power from the British Parliament to the Governments in interning, on the slightest suspicion, British subjects - without a legal process, an accusation and founded proof – shattering the reassuring degree of liberty nurtured by those incriminated through sui generis offences.2 The 1939 Emergency Powers Regulation Act flagged under the canons of legality, was to be coupled by Ordinance No.1 of 1942 advocating deportation of the internees. Notwithstanding a legal victory of the latter in successfully exposing the illegality of such a measure, the Maltese authorities were impotent in raising juridical objections to the Governor3 whose delegated mission was that of representing the interests of Britain in Malta as a fortress Colony with the menace of fascistisation looming over its seas4 while particularised miscarriage of justice ensued within. The abnormal circumstances of the Second World War ushered in an internal politico-cultural struggle culminated by the language question and removal of Italian language from the law courts in August 1934.5 The British were adamant in maintaining new regulations on a rigid press law6 entailing pre-publication guarantees and sanctions of an accusatory nature levelled against personages like Enrico Mizzi, whereby lamentations followed that mere criticism of Colonial authorities was tantamount to a seditious intent.7 1 Herbert Ganado, Rajt Malta Tinbidel, Vol.II (Interprint Malta 1977) 213. 2 Ibid 201. 3 Max Farrugia, L-Internament u l-Eżilju Matul l-Aħħar Gwerra (PIN Malta 2007) 3. 4 Reno Borg, Malta u l-Faxxiżmu (SKS Malta 1991) 107. 5 Carmel J. Farrugia, Polluted Politics: Background to the Deportation of Maltese Nationals in 1942 (Midsea 1995) 23-24. 6 Ibid 16. 7 Carmel J. Farrugia, Polluted Politics: Background to the Deportation of Maltese Nationals in 1942 (Midsea 1995) 25.
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Whilst pleas of ‘Constitution worthy of such a name’ by the politically vociferous in 1938 were ‘indecorously’8 requited with the MacDonald Constitution of 1939, the major proponent, Mizzi, had already been courtmartialled in 1918 for seditious articles published in Italy9 in 1940, interned for his ‘hostile origin and association’, and in 1946 having been accused of fascist subsidisation10. The assimilation of Mizzi’s unflinching apology of Malta’s ‘italianità’ with incriminating fascism was an ace in the hole of Strickland’s followers11 who succeeded, through the incitement of the press12, in blacklisting the Maltese as ‘Quislings’ and ‘traitors13’ to the knowledge of Security Officer Colonel Ede, as the fire of invasion continued to fuel opportune Colonial actions.14 Three days following Strickland’s decisive proclamation in the Council of Government on the 7th of May 1940, fifty-four internees were informed of their arrest by virtue of Section 18(1c) of the Malta Defence Regulations of 1939 between the 11th and 31st May 194015. Two years later, on the 31st of January 1942, Enrico Mizzi and other forty-eight Maltese from St. Agatha internment camp were officially informed by the Governor of their immediate deportation as a justification of the public safety and defence of Malta. With no formal accusation hinging on their forced exile and denied of their right to institute judicial proceedings, the hostile climate had been spurred by the fear-mongering of the press and the island’s defencelessness: all these did not bode well for the observance of the Rule of Law and speediness of justice. This was evidenced by the Court of Appeal’s pronouncement on the inoperability of the Deportation Ordinance No.1 of 1942, which proved to be futile as repatriation was delayed until the 8th of March 1945.16 8 Ibid 26 9 Austin Sammut, The Court Martial Of Enrico Mizzi, 1917 (Midsea Books 2005) 59. 10 Joseph M Pirotta, Enrico Mizzi’s Political Integrity: Fact or Fiction?, (Malta Historical Society 1986) Enrico Mizzi’s Political Integrity: Fact or Fiction 93-94. 11 Ibid 96. 12 Ray Bondin, Deportation, 1942: The Internment and Deportation of Maltese Nationalists (Rama Publications 1980) 28-34. 13 Carmel J. Farrugia, Polluted Politics: Background to the Deportation of Maltese Nationals in 1942 (Midsea 1995) 65: ‘On 22 May the editor of The Times of Malta instigated the Special constabulary to: ‘organize themselves quietly and without fuss into anti-Quisling specials... and help to wipe out those who by their subversive activities are traitorously helping the enemy to strike at our homes.’ 14 Ibid 26. 15 Ibid (n 12) 40. 16 Ibid (n 10) 92.
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1.2 Colonial Ratio decidendi challenged by the principle of legality Sir Ugo Mifsud’s address to the Council of Government on the 9th February 1942 chiefly encapsulates the essence of the principle of legality, no punishment without crime – directed towards the British pursuance of Ordinance No.1 which advocated deportation of Maltese nationals. The memoirs of the deportees attempt to unofficially surmise the ratio decidendi of the British in interning a person as per 18(1c) of the Malta Defence Regulations, 1939 for ‘the public safety and defence or in view of [his] hostile origin or association’ and deporting insofar ‘[his] continued detention in Malta [was] inexpedient.’ Constitutionally, the internment of prominent figures and divestment from high tenure, as seen in the case of Chief Justice Sir Arturo Mercieca, was not legally permissible unless proof of judicial misconduct was presented based on the principle of ‘quamdiu se bene gesserint’17, a criterion which was inadequately qualified by the accusation of ‘pro-Italian sympathies18’. While the British government acted in ‘a spirit of self-preservation’ ‘to remove not as penalty but for safety’,19 the ‘good reasons’ divulged by Sir Harry Luke were never judicially intimated to the internees in a statutorily clear manner other than in axioms product of a common expediency rhetoric. The internees’ petition on February 1942 emphasising that the Malta Defence Regulations had never contemplated deportation but only internal internment ‘in such place...as the Governor may, from time to time determine’ was met with disapproval as he is was ‘unable to vary his decision’.20 Internally, Malta had witnessed a constitutional regression throughout the climatic phase of the 1930s. Concurrent legislation by Order in Council, had bestowed upon the Governor the new reserved power of unfettered discretion in validating any motion as if it were passed by the Council if held expedient in the interests of public order21, thereby restraining the liberties of a given sector in Maltese society. The ultimate victory against the principal foe can arguably be remembered in history as a pyrrhic one for Great Britain, 17 Translation of Security of Tenure principle: ‘As long as he shall behave himself well’. 18 Arturo Mercieca, Le Mie Vicende. Note Autobiografiche. (1st edn, Tip Lux Press 1984) 306. 19 Carmel J. Farrugia, Polluted Politics: Background to the Deportation of Maltese Nationals in 1942 (Midsea 1995) (n 5) 74. 20 Bondin (n 12) 83. 21 J. J Cremona, The Maltese Constitution And Constitutional History Since 1813 (Publishers Enterprises Group 1997). 39-41.
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for the Island Fortress had succeeded in remaining impregnable but inside its own walls, the fortitude of the principles crystallised in the 1802 Declaration of Rights were shackled.34 On line of principle, if the sanctity of such principles permeating from binding instruments is to be shrouded absolutely, then it should follow that such ‘absoluteness’22 of rights cannot fall secondary to the expeditious measures of the maintenance of safety and good order, without fulfilling due requirements consonant with the declared rules authoritatively laid down by the Courts of Justice.23 Sir Anthony Mamo gives a learned elucidation on the principle of legality and limitations by territory; both of which relate to the question so far discussed. To wit, ‘no act or omission can be considered as a criminal offence unless it has been so declared by the law of the State and no punishment can be inflicted which is not prescribed by the law’24, reiterated by Sir Ugo Mifsud25 as well as Cesare Beccaria’s assertion that ‘the place of punishment should be the place of the commission of the offence and no other’.26 An understanding of Sir William Blackstone’s analysis in his ‘Commentaries on the Laws of England’ puts the British government in Malta’s policy into perspective. ‘To bereave a man of life, or by violence to confiscate his estate, without accusation or trial, would be so gross and notorious an act of despotism, as must at once convey the alarm of tyranny throughout the whole kingdom; but confinement of the person, by secretly hurrying him to jail, where his sufferings are unknown or forgotten, is a less public, a less striking, and therefore a more dangerous engine of arbitrary government. And yet sometimes, when the state is in real danger, even this may be a necessary measure. But the happiness of our constitution is, that it is not left to the executive power to determine when the danger of the state is so great as to render this measure expedient’.27 Recourse to the ‘bulwark’ of human liberties, the Habeas Corpus Act, is 22 William Blackstone, Wilfrid Prest and Ruth Paley, Commentaries On The Laws Of England (Oxford University Press 2016). 130-135: ‘the personal liberty of individuals... without imprisonment or restraint, unless by due course of law…to refuse or delay to bail any person bailable, is an offence against the liberty of the subject by the common law; as well as by statute and the habeas corpus act.’ 23 Sir Anthony Mamo, Mamo Notes on Criminal Law (GħSL) 18. 24 Ibid. 25 Debates of the Council of Government, 9th February 1942: ‘deportation is a very grave penalty, and it means, therefore, the consequence of a crime.’ 26 Ibid. 27 Blackstone (n 22) 135.
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therefore a litmus test determining the legality of detention, a contestation reproduced in 1942 Debate in the Maltese Council of Government. The latter does not settle the rapprochement between expediency and legality; rather it demarcates the fundamental differences rendering the task of identifying the substantive reasons for the underlined deprivation of liberty as an uphill struggle.28
2. Deportation, the legal battle and Human Rights infringed The principal thesis of the deported internees was that deportation was a punishment and there could have been no punishment without the proven existence of a committed crime, on further admission of the British that in point of fact no crime was committed nor was a charge preferred.29 Thus, internment was construed to be a preventive measure however being unequivocally challenged by the very notion of nulla poena sine crimine. Ordinance No.1 of 1942 was, notwithstanding AG Dr Lewis Galea’s argument that the Governor had the power to deport since Uganda was to be considered an enlargement to the British colonial outpost of Malta, vitiated by its ultra vires character as pronounced by the Court of Appeal in the historic judgement.30 Professor J.M. Ganado observes that the existence of a defect in law cannot be subject to presumption and an interpretation of the law, which is being therefore impugned, must exclude vitia in legal provisions. The Court of Appeal had established that the law warranting deportation, had been enacted by a non-sovereign legislature unable to legislate with extra-territorial effect31; an interpretation which restricted the remit of the Governor in solely making arrangements32: ‘The Malta Defence Regulations, besides concerning itself solely with these islands, do not give power to the authorities to exert the jurisdiction beyond territorial limits as the deportation or transfer of the plaintiffs must necessarily involve the Head of Government’.33 The internees had already been exiled to Uganda prior to 28 David D. Cole, ‘In Aid Of Removal: Due Process Limits On Immigration Detention’, SSRN Electronic Journal <http://scholarship.law.georgetown.edu/facpub/68> accessed 17 April 2017. 1099 29 Ganado (n 1) 331-333. 30 Guido Abela et vs Major Walter L Bonello et [1942] Court of Appeal (Civil), 8/42. 31 J.M. Ganado, Prolegomena Notes (GħSL) 40-41. 32 Sergio Grech, L-Avukat Herbert Ganado: Bejn Storja U Miti (Horizons 2015) 47. 33 Bondin (n 12) 88.
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the actual pronouncement of the Court, uninformed of the situation34, and the internees’ legal feat35 – although proving their point that deportation was illegal - was ‘despotically’ disregarded.36 When notice of deportation, Area Order No.40, was attached on the notice-board of St. Agatha internment camp, Rabat on 31st January 1942, Enrico Mizzi along with forty-eight other internees were officially notified of their own deportation as the Governor exercised his emergency powers for the public defence of Malta.37 This inevitably had a domino effect on the internees’ battle in Court. On the 3rd of February 1942 the internees filed a case before the First Hall of the Civil Court instituted against Major Walter L. Bonello, Commander of the Internees, and Sir Edward St John Jackson, Lieutenant-Governor of Malta, whereupon deportation was challenged. Judge Dr A.J. Montanaro Gauci opined that deportation order, although signed by the Commander who enjoyed no right of interning or deporting, was a ‘simple notice’ and therefore not ultra vires or illegal. Subsequently, the Court declared that the Governor’s rights to intern and deport – owing to their ‘enormous difference’- were not mutually inclusive, refuting ‘the argument that the action was being done in special times’.38 However, on the 9th of February 1942 the Lieutenant-Governor proposed to the Council of Government that in view of the lacune de droit of the Defence Regulations an ‘Ordinance to Empower the Removal from Malta of persons lawfully detained therein’ be advanced for the purposes of ‘defence and security’.39 Sir Ugo Mifsud staunchly opposed the Bill and delivered a ‘strong’ speech on the affront of the Emergency Powers Act (on which the Malta Defence Regulation was modelled) to the spirit of the British constitution and the ‘birth-right of every British citizen and subject’.40 Inspired by Humanitarian ethos, Sir Ugo Mifsud, whilst observing the risks of deprived legal assistance suffered by an exiled subject, made reference to the collective commitment for the defence of Human Rights.41 The seventeen Members of the Council for the Bill with the exception of Dr. Borg Olivier, voted in favour for the Bill which propelled the new case presented on the 10th of February 1942. The 34 35 36 37 38 39 40 41
Grech (n 32) 47. [1942] First Hall (Civil), 50/42. Ganado (n 1) 334. Pirotta (n 10) 93. Bondin (n 12) 91. Ibid 92. Ibid Ganado (n 1) 336.
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internees reiterated their thesis on the inoperability of the illegal deportation ordinance by making reference to George Micallef vs A. Mifsud L.P. by virtue of which the Court of Appeal affirmed that ‘it is not within the competence of the Governor thus indirectly to give validity to a law that is null and void.’ The legal saga was characterised by continuous cut and thrust with the Court conceding the Governor’s authority in using the Ordinance to effectively transfer the plaintiffs to any contemplated country ‘ad quinas’ on the one hand and the following appeal of the 12th February in which internees corroborated that such rationale contradicted the foundations of British Constitution and the individual liberty ‘consecrated by the Magna Carta’.42 The adjournment of cases protracted over the span of four months was an embodiment of procrastination of justice for those who had fought amidst the trials and tribulations of the Second World War. The 4th of May classification of the Order of Deportation under the auspices of Uganda regulations brought to an end the legal battle with the sentence of the Civil Appeals Court presided by Dr George Borg, Judges Dr A. Camilleri and Dr W. Harding on the 5th of May 1942. The Court of Appeal declared that Section 3(1) of Ordinance I of 1942 did not empower the Governor to deport British subjects from Malta but only make arrangements insofar as that such deportation occurred through expressed permission of an Imperial statute, and in such a case needed to be satisfied ‘intra vires’.43 Section 3(2) allowing extraterritoriality, was invalid and any Order of Deportation beyond the territorial limits of Malta was null and void. The Court pronounced itself emphatically on the latter, through references of deportation from America over its seas sanctioned as ‘illegal’, stressing that legislation for the upkeep of ‘peace, order and good government’ required sound discretion44. No colony, such as Uganda, could have passed legislation repugnant to British parliament and by default no colony could have extended its authority beyond its territorial waters and therefore could not materialise, through arrangements with the British Government in Malta, the deportation of the Maltese.45 Whilst the conditions of deportation in Uganda meant a blow to the human rights of the internees principally insofar as sanitary maintenance was concerned and the illegality of deportation was carried through to the 42 43 44 45
Bondin (n 12) 97. Ganado (n 1) 431. Bondin (n 12) 102. Ganado (n 43).
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end for ensuing three years46 in spite of the decision of the Court of Appeal, the ‘grand injustices destined to remain in history’ were manifested mostly in circumstances when the War had almost finished and to the dissatisfaction of the internees, another Christmas in the trenches had to be endured.47 The troubling time for Malta did not only extend to the undermined independence of its judicature48 but, more significantly, the conditions suffered by the Maltese and the repression of their fundamental rights – from parity of arms in a Court of Law to right of expeditious repatriation.
3. Inquiry into the Legal Validity of Colonial Measures, Malta Defence Regulations and Ordinance No 1 of 1942 The vocation to achieve the desired Imperial ends through ‘legal channels’49 shapes a conflict between Law and legality. Internment was not merely the exercise of the Court’s discretion; it was rather within the leverage of Security Officer Colonel Ede to proceed without a chargeable offence and legal process.50 The ‘warrant of arrest for no specific reason’51, as described by internee Herbert Ganado, emanated from Governor’s power delegated to the Police Commissioner – which authority was ‘in virtue of Section 18(1c) of the Malta Defence Regulations of 1939’ preventively52 pursued for the ‘public safety and defence of the islands’ without the filing of a solemn indictment. Legal advices were the juridical medium through which the Governor brought the Emergency Powers Regulation into being as invoked in the Council between 1939/40. L.A. Number 577/40 issued on the 22nd of November 1940 advanced by Lt Governor St John Jackson laid down that it was legal for the Governor to make coercive regulations for the good governance of internment camps and maintenance of the detainee’s discipline such as solitary confinement for seven days and detention at Corradino Civil Prison for twenty-eight days53, a transition repudiated by the internees as this seemed to put them 46 47 48 49 50 51 52 53
Bondin (n 44). Herbert Ganado, Rajt Malta Tinbidel, Vol III (Interprint Malta 1977) 115. Farrugia (n 3) 518. Bondin (n 12) 60. Ganado (n 1) 195. Ganado (n 1) 200. Ibid 332. Farrugia (n 3) 313.
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on a par with an indicted criminal without having been accused nor found criminally liable.54 Although the general precepts of the Habeas Corpus Act guarantee that provisional measures by the Police ought to be referred to the Judiciary within forty-eight hours, and a contrariu sensu this constitutes unlawful detention, the British Parliament, on strength of events precipitated by war, empowered Governments to intern suspected individuals without trial, charge and evidence.55 Such detention legally emanated from the Malta Defence Regulations 1939 but it was an Order in Council which circumvented the irremovability of judges quamdiu se bene gesserim in the unprecedented case of Sir Arturo Mercieca, hence enfeebling the Maltese Court without its then Chief Justice and in absence of proven misconduct appertaining to his independence subject to guarantee: a cornerstone of British liberty.56 While it was possible for the Government to intern persons in Malta through the Malta Defence Regulations, the question of its legality was not dwelt upon by the Courts.57 Deportation, contrary to the AG Dr Lewis Galea’s view that it was rather transference of a British subject to another Colony (Uganda)58, has to be contextualised in the sense that the Malta Defence Regulations did not empower Governor to act beyond his conferred powers. The order of Deportation was hence declared illegal by the Court of Appeal which had overturned the previous decision of the First Hall Civil Court.59 Sir Ugo Mifsud’s speech is perhaps a fundamental exposition of the illegality of deportation: the English Parliament had passed the Emergency Powers Act allowing the Executive to exercise right of arrest and detention even without a trial but such a law did not authorise the right to extradite or exile British subjects. When the newly published Malta Defence Regulations containing a clause warranting deportation, were enacted in August 1939 - contemporaneously the British Parliament disapproved of, and deliberately annulled, the same clause in the Emergency Powers Act – hence the Malta regulations had to be amended accordingly. Similarly, deportation was a serious punishment implying the commission of a crime which had never been proved against 54 55 56 57 58 59
Bondin (n 12) 46. Ganado (n 1) 201. Mercieca (n 18) 308. Farrugia (n 3) 77. Ganado (n 1) 332. Ibid 333.
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the internees nor formally charged.60 Section 3(1) of Ordinance I of 1942 never expressly contemplated deportation orders but rather ‘arrangements’ with Great Britain or any other colony subject to legitimacy of Imperial law bearing no repugnancy to parliamentary law. The Court reiterated its view that it was unable to pronounce itself on the legality on the basis of another Colony’s Defence Regulations. Ordinance I of 1942 did not bestow unto the Governor any power to deport a British subject outside the territorial waters of Malta, and any further Order of deportation under such ordinance was declared null and without effect.61 The foregoing premise gave rise to the logical conclusion that the Order delivered by the Governor on extraterritorial deportation was ultra vires;62 nevertheless, the Colonial authorities – after having hastily green-lighted deportation despite the active consideration of the Courts seised of the matter - furthered the illegality of the measures and bypassed the Court’s judgment.63
4. Capital Punishment as a Corollary to Treason and Conspiracy 4.1 The Rex v Carmelo Borg Pisani case (1942): The constitutive elements of the case: in-depth analysis of sentence The case Rex v. Carmelo Borg Pisani was decided on the 19th of November 1942. The Criminal Court had been composed under the 1939 Malta Defence Regulations, more precisely according to Article 70(4)64: the “Criminal Court shall be composed of three judges and shall sit without a jury”, a requirement brought about by the enactment of Government Notice 471 of 1940.65 Borg Pisani, the young art student who had resided in Italy prior to the outbreak of the war, had made a public will on the newspaper of Malta in which he relinquished his participative arbitrium to the failed espionage mission on his home country in aid of Fascist Italy.66 In the Bill of Indictment, Borg Pisani was 60 61 62 63 64 65 66
Farrugia (n 3) 78-79. Ganado (n 1) 431. Mercieca (n 18) 348. Farrugia (n 3) 82. Laurence Mizzi, Għall-Ħolma Ta’ Ħajtu (Bugelli 1983) 86. Mizzi, Mixlija b’Konġura u Tradiment (PEG 1996) 212. Ganado (n 47) 19.
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charged with the commission of a crime against the security of the British government, perpetrated in a country contrary to his own nationality, in which he partook in seditious conspiracy (konġura) aimed at subverting the Royal Government in Malta and the King himself while aiding and abetting the declared Enemy of Britain through travaux préparatoires ‘in furtherance of a common design’.67 Seditious conspiracy, as contemplated by the Court, entailed the adherence of ‘those British subjects to the Comitato d’Azione Maltese87, hence the consummation of the offence of conspiracy in the sense intended by law’. The Court furthermore rejected Borg Pisani’s line of defence: ‘if a conspiracy is formed, and a person joins it afterwards, he is equally guilty with the original conspirators.’ This did not exonerate him from the criminal liability sanctioned by Article 56 of the Criminal Code. The charges ascribed to Borg Pisani were therefore three-fold; firstly, that the Maltese-born British subject undermined the security of, and subverted, the Government of His Majesty the King through preparatory acts amounting to seditious conspiracy; secondly, that he directly conspired and took up arms with a foreign power against the Royal Government and thirdly, ‘with intent to help the enemy [attempted] to conspire with any other person to do, any act which [was] designed or likely to give assistance to the naval, military or air operations of the enemy, to impede such operations of His Majesty’s forces or to endanger life’. The constitutive element of the crime of seditious conspiracy lies in the ‘agreement of two or more persons to do any unlawful act or to do a lawful act by unlawful means’,68 encapsulated in Article 58 of the Maltese Criminal Code, and the offence is complete though no further act is done in pursuance of the agreement, therefore there must be (i) the act of agreement (ii) the persons agreeing (iii) the purpose agreed upon.69 The raison d’être of the Committee was that of assisting the Italian government to subvert the British colonial administration of Malta and hence invade the islands as read in light of Article 57 of the Code. Although Borg Pisani denied active participation with the Committee’s manifestations, the ‘common design’ unifies the marginalised with the agent participants of the conspiracy as explained in Rex v. Blake and Rex v. Shellard.70 On such grounds, the publications in the newspapers, radio transmissions and Committee exhibition were all referable to the accused as they had been collusively 67 68 69 70
Mizzi (n 65) 212-214. Mizzi (n 65) 163. Mamo, Mamo Notes on Criminal Law Vol II (GħSL) 19. Mizzi (n 65) 164.
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made ‘in furtherance of a common design’. Borg Pisani self-defensively owed his religious adherence to the cause of Fascist Italy in personal necessity, yet ‘an act which amounts to an offence cannot be justified by mere personal necessity’. Demonstratively, not only did he declare his readiness to enrol in the Armed Forces, but effectively he became an Italian soldier. As argued by Halsbury in his Laws of England, ‘A British subject adheres to the King’s enemies if...he makes a declaration of willingness to take up arms on their behalf’.71 Thus, enmity is a criterion defined by public belligerency.72 The charges of ‘overt-acts of treason’ were cumulatively enlisted in his enrolment in the San Marco Italian regiment and the continuing service till September 1941: the period which marked Italy’s hostility with Britain, and in the great scheme of things this ultimately had a bearing despite Borg Pisani’s non-combative character of a soldier in the reparto artisti. The scope of the Axis armed forces was precisely that of subverting British governments in their colonial possessions and therefore, the mere act of participation in the regiment, even in non-combatant sectors, amounted to an attempt of subversion. An inference of the intent to facilitate the naval, military or air operations of the enemy and thus undermining those of His Majesty was drawn on the night between the 17th and 18th of May 1942 whereby the accused, duly ranked as Second-Lieutenant departed from Sicily on a high– speed motorboat with Lt Ungarelli to a remote area of Ras id-Dawwara cliff on a mission to leak strategic information to the enemy through radiotelegraphy with all the perils such mission carried with it73. Borg Pisani’s explanation of his sudden disinterest in the mission as soon as he reached Malta was weak since the execution of his mission had been interrupted by force majeure of strong seas on the third day. Borg Pisani’s line of defence was based on the presumption that the existence of extenuating circumstances which might have desisted him from completing the crime. The Criminal Court reasoned that there are different canons of interpretation in evaluating the outcome to a voluntarily abandoned on the one hand and an impeded crime due to the verification of fortuitous events on the other. His Majesty’s Criminal Court convicted the artist-soldier of the aforesubstantiated charges on the sole exclusion of taking up arms with a foreign power against the Imperial government resting its case on the provisions of Articles 56(1)(3), 57(1) & (2), 5(3) of the Criminal Code and Article 27 of 71 72 73
ibid 166. Mamo (n 69) 10. Mizzi (n 64) 170.
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the amended Malta Defence Regulations of 1939. Borg Pisani had been sentenced to death for the first – and only recorded instance in Maltese criminal history in the ambit of high treason.74
4.2 The Lord Haw-Haw case: a comparative study The fait accompli of the Borg Pisani affair falls into parallelism with the trial of William Joyce,75 an American born radio broadcaster and holder of a British passport who, merely a fortnight after Britain and France’s joint declaration of war on Germany, entered the German Broadcasting Service with the purpose of disseminating propaganda on radio programmes, hence aiding Nazi Germany in its psychological war against Britain.76 Caught in flagrante in the borders of Denmark, Joyce was brought to Britain, charged with High Treason (contrary to the Treason Act, 1351) ‘in that he, being a person owing allegiance to His Majesty the King, adhered to the King’s enemies elsewhere than in the King’s realm’, this while enjoying the privileges and immunities curtailed by a counterfeit British passport which had expired on his last broadcasting service dated 2nd July 1940.77 The brevity of his absence from the realm was no excuse as ‘aid and comfort to the King’s enemies outside’ ‘by purporting to become naturalised as a subject of Germany’78 amounted to a treasonable act. The defining principle revolved around whether possession of a British passport by a non-British subject ipso facto imposing Sovereign obligations, and receipt thereof, translated to effective extension of his allegiance when he was no longer in Britain but at the helm of the enemy’s Propaganda: hence Joyce’s defensive argumentation of his status of alien. Yet the Court opined that the argument of the cessation of a duty of allegiance outside the confines of the protection of law held no water. Jurisdictionally, the crime of treason could have been indistinctively committed both within and without the realm. An ‘alien’, through retention of a passport, was amenable to trial in Britain for crimes committed overseas and therefore a British subject is obliged by his general duty of allegiance regardless of the existence of a passport.79 Notwithstanding the proceedings instituted by Court of Criminal 74 75 76 77 78 79
ibid 172. R. v. William Joyce, 1945 2 All ER 673. Mizzi (n 64) 137. John W. Hall, Trial Of William Joyce (W Hodge & Co 1946). 18. ibid 45. ibid 32-234.
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Appeal80, the Criminal Court reaffirmed its foregoing position in its patois: ‘If such alien, seeking the protection of the Crown, and having a family and effects here, should during a war with his native country, go thither, and there adhere to the King’s enemies for purposes of hostility, he might be deal with as a traitor. For he came and settled here under the protection of the Crown; and though his person was removed for a time, his effects and family continued still under the same protection’.81 On a comparative note, Borg Pisani – a British subject - had availed himself of the protection granted by British passport to prove his renunciation of his ties with Great Britain and similarly of his British citizenship.82 Borg Pisani openly disdained his status of a British subject yet legally this could not amount to a renunciation of his British subjection. Author Lawrence Mizzi postulates that a distinction of ‘moral’ and ‘technical’ subjection could have spared the death penalty to Borg Pisani; indeed a distinction raised by the AG Sir Hartley Shawcross in the Baillie Stuart case whereby ‘technically he was still a British citizen in 1939 whereupon he worked in cahoots with Germany during enmity with Britain but morally he was no longer a British subject since 1938’83 revealed the difficulties of trying the accused on grounds of ‘High Treason’.
4.3 Major differences between combatant and non-combatant sedition arising from the Conspiracy Trials 1946-1947 in juxtaposition with the Borg Pisani affair Linked with the trial of Borg Pisani, are the Conspiracy Trials held between 1946 and 1947 dealing with seventeen pro-Italian Maltese who decided to remain in Italy throughout the war for varying reasons just like Borg Pisani. A telling number of the accused militated in the Comitato d’Azione Maltese, and – owing to its seditious implications – the seventeen ended up accused of treason; the very same ratio legis of the two out of three charges levelled 80 81 82 83
Joyce v D.P.P. [1946] A.C.347. Hall (n 77) 250. Mizzi (n 64) 53. ibid 141.
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against Borg Pisani.84 The seventeen came from every walk of life and accusations varied from enrolment in Italian army without taking up arms to other accusations involving combatants who notwithstanding their ranking of Second Lieutenants in the overseas 1941 Siege of Tubruk against the British had no intention to ‘fight against [their] compatriots’.85 On paper, the acts done by Ivo Leone Ganado were manifestly graver in comparison to Borg Pisani’s ‘passive contribution’ within the Armed Forces of Mussolini without taking up arms. The seventeen accused –facilitated by return to normal times and change in the Court’s introspection - were acquitted of the same substantial imputations levelled against Borg Pisani on strength of a unanimous verdict.86 Notwithstanding the commonality of the constitutive factors, viz. whereas Borg Pisani was caught in flagrante at the height of the Second World War, receiving no sympathy from Maltese society as a whole and adjudicated both secretly and speedily with three judges intent in satisfying the dispositions of the Law87 a contrariu sensu, the seventeen availed themselves of repatriation at the epilogue of war, with normalisation of relations between Britain and Italy and with a nation back on its feet after half a decade of national hardship. Herbert Ganado admits that the trial by jury was an effective instrument introduced by the British to resolve those juridical conundrums springing from the significant cases of disloyalty against the British Crown in Malta’s 150 years of history88. Significantly, he observed in his autobiography: ‘Legally, the accused were guilty because the facts had been proven. However, the Maltese sentiment began to conceive mostly the human elements of the case. The jurors, who are none other than common people of the country just as the accused, out of a non-legalistic mentality […] decided not to find them guilty. In the likelihood of trials being presided over by judges only, the accused would have been convicted since legally; there was the presence of a crime89’ The first trial of the years 1946-1947 was indicative of the strong position held by the Prosecution in conflict with the Defence in an atmosphere 84 85 86 87 88 89
ibid 124. ibid. ibid 125. ibid. ibid. Ganado (47) 241.
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characterised by ‘tension’, as recalled by Albert Ganado, and knowledge of the fact that the death penalty was at stake for doctor Albert Xerri De Caro and priest Paolo Ignazio Chetcuti, accused in solidum90 for their adherence to the Comitato, an entity which specifically required the consignment of British passports and participation in seditious conspiracy. Xerri de Caro had been also accused of writing a propagandistic article in support of the enemy ‘and within his realm’ and on such basis the AG advocated the death penalty under the tenor of Article 56(1)(c) and 5(c) of the Criminal Code. ‘Against the two accused there lies a serious imputation of attempt to subvert the Government, a crime known as alto tradimento or high treason’.91 Xerri de Caro, having enrolled in the Armed Forces of Italy as a doctor, could not contend his line of defence as the Prosecution opined ‘regardless of his quality, combatant or non-combatant, there is always a crime’. Nonetheless, Defence Counsel Flores availed himself of Article 56 (i.e. aiding the enemy and attempt to subvert) arguing there was sufficient proof of the fact that the accused had never been charged of aiding a foreign power as his mission was that of a doctor in Soriano del Cimino. Similarly, the consignment of passports and culpable adherence to the Committee had to be construed in the context of voluntariness or coercion, whether attained morally or violently; as further exercise of judgment by the Jury. Both Xerri de Caro and Chetcuti were cleared of the charges and released.92 Perhaps the case of Leone Ganado,93 owing to the juridical similitude with the Borg Pisani incident and the difficulty in reaching judgment as well as the benefits propounded by British liberalisation giving rise to institute of the trial by Jury, merits a closer look. The charges were a verbatim rerepresentation of the foregoing sentences, chiefly symbolised by R. v. Borg Pisani judgment. His allegedly active belligerent participation as a volunteer in a Fascist militia and as a soldier who served in the invasion of Cephalonia on May 1941 first and at ‘the important navy base of Italy’ La Spezia then with subsequent apprehension of courses helping him climb the ranks as a sotto capo manipolo in the battery of Venice. On September 1942, the accused ventured to Northern Africa and took up arms against the garrisons of His Majesty the King in the campaign of Tobruk, whereby he intercepted radio and telephonic communication concerning the 8th army and translated them in Italian. He was also accused of having assumed fictitious names such as 90 91 92 93
R. v. Xerri de Caro, Chetcuti [1946] H.M. Criminal Court. Mizzi (n 65) 29. ibid 53-55. R. v. Ganado, Cortis, Vassallo, Gonzi [1947] H.M. Criminal Court.
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Leonardo Gallardo during his years of service in the Italian army. Prima facie, the accusations were serious yet the principles of Art. 27 of the Malta Defence Regulations accentuating intention to help had to be a point in favour of the seventeen who had not been in Malta when Regulations were issued. Defence advocate Dr Magri had underlined Ganado’s intention to specifically serve in the battalions of Russia to avoid committing ‘treason against his own people’ and his enrolment was not an exercise of his discretion but on fear of execution by shooting; and therefore, he was obliged to respect a superior order. Leone Ganado, like his other ten compatriots, was found not guilty of the charges.94 The Prosecution in all cases advocated the death penalty much to the dismay of the general Maltese sentiment. At the dawn of the first verdict which absolved the seventeen, a Labour Party newspaper editorial lauded ‘the dignity and sobriety of the Courts…our jurymen were completely free and unfettered in coming to their decision by any possible reaction from the people one way or the other.’ Their release in a modicum time was a stark contrast to the affairs of the interned Maltese who had been exiled to Africa for five years without charge and trial;95 an important transition in the evolution of Imperial deterrents.
5. Effectiveness of imperial philosophicalperspective
deterrents:
a
juridico-
5.1 Carmelo Borg Pisani, a British subject and the death penalty: the right deterrent? Prior to the outbreak of the war, Borg Pisani sent a letter to the American Embassy in which he renounced British subjection and ties with the Crown through the previously possessed passport, thereby modifying his status of nationality.96 The incomparable nature of the two cases lies in the fact that William Joyce usurped a fraudulently acquired British passport which authenticated his right to protection and travel to the Enemy’s realm with the sole scope of ‘naturalisation as a German subject’.97. The only treason trial in Maltese history was a defining moment for the independence of the Maltese 94 95 96 97
Mizzi (n 64) 206-208. Mizzi (n 65) 21. Mizzi (n 64) 53. Hall (n 77) 25-45.
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judicature in spite of the conflicting political inclinations.98 The Maltese Criminal Court seised of the Borg Pisani affair had been composed of three Maltese Chief Justices: Borg, Ganado and Harding - the possibility of a lighter penalty other than the death penalty was close to null. On the other hand, the presence of nine jurors in the Conspiracy Trials was a determining factor. The amended 1939-40 Ordinances specifically decreed the death penalty in cases of seditious conspiracy leaving the accused with few legal leeway. Detractors of an immediate trial argue that the case of Borg Pisani, a prisoner of war, should have been dealt after the war as the Maltese judiciary was obliged to judge from a purely legal viewpoint suspending interpretation of ‘legal’ versus ‘moral’ treason test, a ratio decidendi applied in the Baillie Stuart UK case. The Court had abstained from sentencing the 1947 conspirators to death although provisionally required to examine it in light of the same causa of Borg Pisani’s decision.99 Legally, there was no other effective deterrent than the death penalty for Borg Pisani albeit his case continues to attract controversy as morally he bore no allegiance to the British Crown given that he confided to the American Embassy and cooperated with the Imperial authorities upon capture.100
5.2 Internment and deportation without formal accusation and trial: Imperial expediency as the malaise of human rights in a ‘fortress’ Colony We are told that when laws no longer conform to justice and human rights, their own legitimacy is dissipated. Law should not only be subordinate to the whims of the State but in concordance with an embodiment of natural law in human rights which is not an exclusive emanation of the State, and therefore surpassing the positive law of the State, and binding the latter in recognition.101 Although human rights was a fledgling, if not a totally extraneous concept at the height of the Second World, the actions of the British in Malta would be, prospectively voided by the overarching observance to Human Rights 98 Anthony Zarb Dimech, ‘The Maltese Judiciary In Wartime Malta’, The Malta Independent (2010) <http://www.independent.com.mt/articles/2010-03-27/news/the-maltese-judiciary-during-wartime-malta 272293/> accessed 20 August 2019. 99 Mizzi (n 65) 215. 100 Mizzi (n 64) 141. 101 David Attard, The Maltese Legal System Volume One (Malta University Press 2013) 14.
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in the ECHR, particularly Articles 5 and 6 of the Charter. By what token of the Rule of Law did the British pursue their Colonial policy when two fundamental freedoms were repressed? The question must be linked with a speech delivered by then Governor Sir Thomas Maitland on January 2nd, 1815: ‘British rule is of course equally binding upon all; I am limited and restrained in my authority, the judges are limited and restrained in theirs; the law of the land is the only fixed and invariable point to which they are to look. The King’s intention is [...]to introduce such ameliorations in the proceedings of the Courts of Law as would secure to everyone the certainty of speedy and effective justice and to make such improvements in the laws themselves as past experiences or change of circumstances which might render necessary or advisable.’ Fundamentally, while the executive realm ‘ought to be prevented from undue interference with judicial proceedings’,102 the sole Rule of Law was being expediently taken into the British’s own hands, in name of public defence of the ‘fortress colony’, with the enactment of Defence Regulations hindering the fundamental human rights of the internees.103 Internationally, the relationship between the British Empire and human rights had been prejudiced by a federalist approach in minimising the ‘rights’ rhetoric which possibly could have ‘licensed’ sedition within the Empire.104 In an attempt to ensure the attainment of justice, a Dworkinian model of integrity can be contemplated in settling the rights of citizens and the judge’s decision ‘constrained by the political history of his community’ based on the principles of justice and fairness.105 In wartime Malta, the Courts had pronounced themselves clearly on the insufficiency of ‘special times’ as an excuse and that the Order of deportation was invalid and without effect as no British subject could have been deported outside the territorial limits of Malta. But the court sentence was conveniently set aside and, outside Maltese shores fundamental human rights continued to be infringed also on a national scale; as PN supporters were arbitrarily barred from being employed with government following 102 Ganado (n 31) 18-19. 103 Farrugia (n 5) 83. 104 Kevin Grant, The British Empire, International Government, And Human Rights (2013)11HistoryCompass<http://onlinelibrary.wiley.com.ejournals.um.edu.mt/doi/10.11 11/ hic3.12069/full> accessed 20 April 2017. 105 T. R. S. Allan, Dworkin and Dicey: The Rule of Law as Integrity’ (1988) 8 Oxford Journal of Legal Studies. 266.
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a departmental prohibition on 7th December 1942.106 The internment and subsequent deportation of Maltese were merely precautionary measures but their effects impinged on a wide range of fundamental rights such as right to a fair trial and no crime without punishment, right not to be deported as protected by the Habeas Corpus Act, right of an adequate defence in Court and also right to work without suffering political discrimination. Verily, ‘a black blot which will always remain in British colonial history’.107
6. Deontological assessment of the death penalty in Malta. 6.1 Influence of Beccaria rooted in Maltese juridical forma mentis When the Maltese Grand Master De Rohan nominated Neapolitan jurist Giandonato Rogadeo to reform Malta’s laws in spirit of Catholic enlightenment, thirteen years had passed from the publication of Cesare Beccaria’s Dei Delitti e Delle Pene. In 1777, Rogadeo – being a strong proponent of capital punishment - attacked Beccaria’s work for its ‘highly pernicious’ content meriting an outright ban.108 He defended capital punishment as the efficient instrument of curbing the delinquent tendencies: ‘There is no cultured nation whose code of laws does not recognize the death penalty as the most suitable punishment for particularly atrocious crimes.’109 ‘The Romans’ opportune use of this deterrent illustrated their learnedness and the title ‘barbarous’ conjured by the downfall of the empire was not due to enforcement of death penalty but owing to their little knowledge of their own law, hence a parallelism displaying its necessity and proving wrong those who think themselves as lovers of humanity and advocate its abolition’.110 As an antithesis to Beccaria, Rogadeo slams pardoning as ‘abusive’ and claims the amendment of unjust laws should not deprive them of their rigour as a guarantor to public security. Used sparingly, the death penalty would serve as a deterrent to society while judges had to inform the Supremo 106 107 108 109 110 427
Farrugia (n 3) 734. ‘Patria’ [Maltese newspaper] 21 December 1950. Frans Ciappara, Enlightenment And Reform In Malta (Midsea Books 2006) 64. ibid 66. Giandonato Rogadeo, Ragionamenti del Cavaliere Giandonato Rogadeo (Lucca 1780)
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Magistrato di Giustizia before enforcing sentences.111 Rogadeo’s vexations were indicative of the how Beccaria’s influence had seeped into Maltese juridical thought as propounded by the Vitruvian currents of eighteenth century enlightenment.112 In 1844, Scotsman Andrew Jameson was commissioned to revise the Draft Criminal Code of Malta.113 The British authorities were reluctant in forgoing the death penalty, in view of the Maltese judicial endorsement of Beccaria’s proportionality and efficacy of punishment principles, hence Jameson’s approach towards ‘the tacit abolition of capital punishment’114 in his Report on the Proposed Code.115 Although Jameson is adamant with abandoning the death penalty, the influence of Beccaria is acknowledged by his syntax and continuous references to his philosophy, pointing out the inconsistency ‘which can display a sentimental sympathy with those who forfeit life, but can feel no compunction for the lingering death of perpetual imprisonment or the withering spectacle of mind and body destroyed by long confinement’ dwelling upon the object of punishment and certainty preferable to severity doctrines. Beccaria’s principles could not jump the hurdles set by British government yet: ‘The reason given by the learned Commissioners in their first report for retaining capital punishment, as being in conformity with the principles and rules of other continental codes is unsatisfactory. The true reason is the necessity of the punishment. Perpetual imprisonment offers too many chances of escape or mitigation of its terrors. It is too remote. Its real severity cannot be apprehended by passion… those who from a mistaken and false humanity argue for its abolition, overlook the numerous cases of atrocious crime which are prevented by the dread of it. By new code it is properly retained for only the highest crimes: wilful homicide, high treason etc.’
111 Ciappara (n 108) 66. 112 Matthias Ebejer, A Penultimate Crisis: The Order Of St. John, Malta And The French Revolution (Hons. History dissertation, University of Malta 2012) 38. 113 Douglas Gourlay, Andrew Jameson and the Origins of the Criminal Code of Malta (Melita Historica, Vol. XV, no. 2 2009) 109-134. 114 Mark A Sammut, The History of the Criminal Code: British vs. Natives, again. <http://mhs.eu.pn/mh4/201208.html> (accessed 20/08/2019). 115 Andrew Jameson, Report on the Proposed Code of Criminal Law for the Island of Malta and its Dependencies, Malta: Government Press 1844.
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6.2 First glimmers of ideological opposition against capital punishment: 1860-1938 The question of capital punishment first met its formal opposition in 1850 by Sir Adriano Dingli and Monsignor Leopoldo Fiteni,116 and in 1909 by Sir Arturo Mercieca.117 Dingli’s proposed amendment to abolish death penalty was, however, rejected in view of the binding customary practice of the penalty widely applied in the British Empire.118 Thus, Malta could be no exception to the rule. Its first limb regarding the publicity evoking terror rather than setting example was however attacked on the basis of the retrograde and atrocious process not ‘in conformity with the dignity of the human person’ as the Church’s Catechism played its own part.119 Pressure to implement penal reform throughout the first decades of British administration coupled with an increasing compassion towards convicts, marking society’s introspection towards delinquents, brought about the abolition of public punishment.120 Dr. Pullicino’s motion in the Council of Government convened on 22nd January 1869 to abolish public executions seconded by Dr. Torreggiani and Dr. Sciortino reveals important aspects. Public executions had ‘a diametrically opposed effect to what the law implied by punishing the guilty not through its publicity but the certainty of punishment in which there lies the whole efficacy of the penal framework.’ As observed by Dr. Pullicino, ‘the public nature of capital executions was no longer compatible with the mildness of the customs of modern society’.121 The 1909 Council of Government debate is also symbolic of Malta’s desire to keep abreast with times challenged by the prerogatives of the Colonial government. Sir Arturo Mercieca unsuccessfully pleaded a limitation of the capital punishment to the most serious crimes,122 at a time when the death penalty lacked the essential element of proportionality while Salvatore Cachia Zammit, aware that Malta was subservient to Britain, appealed for a ‘cautious’ infliction of this punishment as ‘Christian justice is corrective not 116 Sammut (114) 135. 117 Albert Borg Olivier de Puget, Historical and Sociological Aspects of Capital Punishment (LL.D Thesis, University of Malta 1958). 91. 118 Marie-Josette Farrugia, The humanisation of the criminal code: the death penalty: 18541971. (LL.D. Thesis, University of Malta 2013). 28. 119 ibid 54-57. 120 ibid 58. 121 Debates of The Council of Government, 22nd January 1869, 10- 20. 122 Farrugia (n 118) 65.
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vindictive’.123 Significant was Mr Azzopardi’s view favouring total abolition of the death penalty not being ‘the most efficient form of punishment’ replaceable by forced labour. On December 1938, following the Gozitan Trial of Wenzu Grech, a debate led by his defence lawyer Carmelo Mifsud Bonnici questioning the abolition of capital punishment was organised by the Literary and Debating Society in Bormla.124 This evidenced the change in public sentiment in spite of its continued enforcement for the next thirty years.125
6.3 The legal ‘death’ of the death penalty: Act XXI of 1971 as the gamechanger of Article 55 Criminal Code Parliamentary opinion had still been typified by the division of the 1970 concerning the problem of capital punishment in Malta which was about to be heralded as Republic. The jury system, hailed as one of the crowning British juridical inventions ever, was still being disputed in Maltese Parliament on the grounds that in the case of murder, judges need not apply capital punishment upon return of a majority verdict.126 New members in Parliament, such as Dr Guido De Marco, strongly advocated abolition of capital punishment and condemned it with the ‘same vigour as abortion as the right to life [had] to be cherished’127 but it was still conceived of as a deterrent in 1966.128 In September 1971, the Labour government accepted an Opposition motion to amend and abolish the death penalty, in spite of Dr Buttigieg’s insistence. This was in light of ‘fewer executions’ contemplated by the 1968 Resolution 23 of the United Nations, which was to be retained in cases of crimes against the State ‘as the nation did not have the luxury to welcome 123 Debates of The Council of Government, 15th April 1909, 1035- 1104. 124 ‘Malta Daily Chronicle’ (Maltese newspaper) 17th December 1938. 125 Farrugia (n 118) 66. 126 Ganado (n 31) 20. 127 Department of Information Malta, ‘ADDRESS BY H.E. PROF. GUIDO DE MARCO, PRESIDENT OF MALTA, ON THE OCCASION OF THE CONFERMENT BY THE UNIVERSITY OF MALTA OF THE DEGREE OF DOCTOR OF LITERATURE HONORIS CAUSA ON H.E. THE PRESIDENT OF MALTA’ (2001) <http://www.doi-archived.gov.mt/EN/press_releases/2001/03/pr0358.asp> accessed 20 August 2019. 128 Guido De Marco, The Politics Of Persuasion (Allied Publications Limited 2007).
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such change’,129 a claim lambasted by Dr. Ugo Mifsud Bonnici.130 The House, resolving itself into Committee, issued amendments which annulled Clause Two: ‘Whosoever, for political reasons, shall take away the life of the Governor General, the Prime Minister, any Minister or other Member of Parliament shall, on conviction, be liable to the punishment of death’; substituted ‘death penalty’ with ‘life imprisonment with hard labour’ in Clause Three on insurrections; and sub-clause (c) now contained the premise ‘aiding the enemies of the State of Malta in any other manner whatsoever against the State of Malta’.131 Prime Minister Mintoff thus declaredly accepted t h e amendment suggested by the Opposition to abolish death penalty ‘for murder’ ‘without exception’. The promulgation of Act XXI on 4th October 1971 officially abolished capital punishment from the Criminal Code except in offences committed by the Armed Forces of Malta and traitorous aid toward the enemy during wartime. It was only in May 2002 that Malta’s ratification of Protocol No. 13 of the ECHR on the abolition of Death Penalty in all circumstances132 completely drew the red curtain for capital punishment in Malta,133 leaving us with the present rendering of Article 55 of the Criminal Code: ‘Whosoever shall take away the life or the liberty of the President of Malta, or shall endanger his life by bodily harm, shall, on conviction, be liable to the punishment of imprisonment for life.’
129 Farrugia (n 118) 99. 130 Parliamentary Debate of 14th September 1971. 131 Farrugia (n 118) 103. 132 Council of Europe, Protocol 13 to the European Convention on Human Rights and Fundamental Freedoms on the Abolition of the Death Penalty in All Circumstances, 3 May 2002, ETS 187, <http://www.refworld.org/docid/3ddd0e4c4.html> accessed 20th August 2019. 133 Jeremy Buttigieg, Capital Punishment: Is It a Deterrent? GĦSL Law Journal 2013 <http://lawjournal.ghsl.org/viewer/49/download.pdf> accessed 20 August 2019.
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139
Kevin Dingli Legal implications arising from the Decision of the Maltese Court of Appeal in the Bright Star (ex Trading Fabrizia) case - a case for the establishment of an Admiralty Court in Malta, for the reconsideration of according executive title status to the Maltese ship mortgage and for the introduction of a Convention on the International Recognition of Judicial Sales of Ships.
Dr Kevin F. Dingli is the Managing Partner of Dingli & Dingli Law Firm. he graduated as Doctor of Laws from the University of Malta in 1981 and undertook postgraduate studies in shipping law at University College London, obtaining a Master of Laws with distinction in 1982. He has practiced extensively in the maritime law field over the past 38 years. He is a former President of the Malta Shipowners’ Association as well as a former Vice-President of the Malta Maritime Law Association. He has delivered presentations in various fora both locally and overseas, and was involved in the drafting of important amendments to the Merchant Shipping Act in relation to mortgages as well as to the Code of Organisation and Civil Procedure in relation to ship arrest. Amongst other publications, Dr Dingli co-authors the Malta section of ‘Getting the Deal Through Shipping’, ‘Getting the Deal Through Ship Financing’ as well as of ‘Ship Arrests in Practice’. He is a Deputy Registrar of the International Merchant Maritime Registry of Belize as well as of the Jamaica Ship Registry.
id-dritt
T
he Maltese Ship Registry, being the largest in the European Union and ranking the sixth largest worldwide accounting for 110,000,000 deadweight tonnage 1, owes much of its success to the great level of legislative protection which our Merchant Shipping Act2 in combination with the Code of Organisation and Civil Procedure3 offers to ship financiers, thereby encouraging them to support the Malta flag as the shipowner’s flag of choice for his ship. In particular, as part of the security package sought by them in consideration of making facilities available to a shipowner, such financiers would invariably demand that a mortgage is executed and registered in their favour on the particular or on a related Maltese ship. Legislative protection alone is however not enough, because ultimately no matter how convinced one might be that the position at law is securely cast in stone, much will also depend upon judicial interpretation and therefore on the extent to which the financier’s standing is backed by the Courts. In any event the mortgagee’s rights are not necessarily absolute, because as was for instance held by Brandon J in the ‘MYRTO’4, if the ship is employed under a charter-party in such a manner as not to impair the security of the mortgagee and the owner is both able and willing to perform such contract, then the mortgagee is not entitled to interfere with the performance of such contract by exercising his rights under a mortgage whether by taking possession or selling or arresting the ship in an action in rem. Malta has not had a dedicated Admiralty Court for many a long year, in fact not since 1892, when the jurisdiction hitherto exercised by the Vice Admiralty Court established in 1863 was transferred initially to the Commercial Court5 and subsequently, on the abolition of that court in 19956, to the First Hall of the Civil Court. This notwithstanding, the various judges presiding over the Commercial Court and today the First Hall of the Civil Court, though many a time unable to boast of any academic or practical specialisation in the field of maritime law prior to their elevation to the Bench, have generally succeeded 1 2 3 4 5 1863. 6
UK Department for Transport – Shipping Fleet Statistics : 2018. Merchant Shipping Act, Chapter 234 of the Laws of Malta. Code of Organization and Civil Procedure, Chapter 12 of the Laws of Malta. [1977] 2 Lloyd’s Rep. 243. In virtue of the Imperial Parliament statute entitled The Vice-Admiralty Courts Act In virtue of Act XXIV of 1995.
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in applying relevant principles of maritime law correctly, thereby upholding the system in spite of all difficulties. However, one particular decision recently handed down by our Court of Appeal no less, has to my mind seriously questioned whether we are being sufficiently well-served by the current state of play, and re-opened the discussion as to whether it is not high time for Malta to re-introduce a dedicated and specialised Admiralty Court. This concerned the bulk carrier Bright Star (formerly named Trading Fabrizia) (the ‘Ship’) which until 5 June 2017, when its registry was closed by the Registrar-General of Shipping and Seamen in Malta7, had been entered in the Maltese Ship Registry and had a mortgage (the ‘Mortgage’) registered against it in favour of an Italian company by the name of Jebmed S.r.l. (the ‘Mortgagee’), also entered in the same Registry. The law provides that upon such closure of registry as directed by the Registrar General, the registry of the particular ship shall be considered closed except so far as relates to any unsatisfied mortgages or privileges entered therein. The special action8 was instituted against the Mortgagee by the Ship itself as represented by its new owners Bluefin Marine Limited (the ‘New Shipowner’) in whose favour legal title to the Ship has been adjudicated and transferred in virtue of a judicial sale of the same Ship in Jamaica under the authority of the competent Jamaican Court9. Through this action, the Ship sought to revoke an Executive Warrant of Arrest of Sea Vessels which the Mortgagee had issued against it on the 19 June 2018. This pursuant to the 7 In virtue of the powers vested in the Registrar-General to direct closure of registry of a ship under Article 29 of the Merchant Shipping Act for any of the reasons indicated therein, after having given the registered owner and any registered mortgagee notice in writing of his intentions to do so unless the cause for such closure is remedied within the period of one month. 8 Rikors Nru 653/2018 JRM fl-atti tal-mandat esekuttiv ta’ arrest ta’ bċejjeċ tal-baħar numru 998/2018 fl-ismijiet : Marlon Borġ bħala mandatarju f’isem is-soċjeta’ estera Jebmed S.r.l. –v- M.V. Bright Star ġa’ M.V. Trading Fabrizia bin-numru tal-I.M.O. 9481960 – determined by the Court of Appeal on 8 February 2019. 9 Although it was observed by the First Hall of the Civil Court that the proceedings were instituted by the Ship itself, the Ship was in reality represented by the New Shipowner because although an action in rem is brought against the ship concerned, yet any embracing of the personality theory was forever done away with by our Courts since the first “Poker” case (Advocate Kevin F. Dingli noe vs Sebastiano Pizzimenti noe., determined by the First Hall of the Civil Court on 11 July 2001), where it was held that such an action is effectively directed against the owner of the ship. The procedural theory does not admit of a ship having a separate and distinct legal personality from that of its owners.
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provisions of Article 281 of the Code of Organisation and Civil Procedure10 which allows the person against whom an executive act has been issued to make an application to the court issuing the executive act concerned praying that the same executive act be revoked for any reason valid at law. In its Decree on the aforementioned Application delivered on the 12 July 2018, the First Hall of the Civil Court rejected the demands of the Ship essentially on procedural grounds which go beyond the scope of this juristic article, but of particular note, the Court very correctly held that it was not open to an applicant acting under the special provisions of Article 281 of the Code of Organisation and Civil Procedure to seek to impugn the validity of the respondent’s executive title, for which purpose separate ad hoc proceedings were required to be instituted in the ordinary manner. The Ship entered an appeal from this decree, and it is precisely the decision delivered by the Court of Appeal in regard to this appeal which is of academic interest in the field of maritime law. By way of further factual background to the case, prior to her aforementioned arrest in Malta, the Ship had previously been in Jamaica where she had been arrested both by the Mortgagee, as well as by other maritime creditors. The Mortgagee had also instituted an action in rem on the merits of its Mortgage claim before the competent Court in Jamaica, in regard to which Capitalease S.p.A. as registered owner at the time (the ‘Shipowner’) had entered a defence and a counterclaim seeking damages for wrongful arrest. After having invoked the jurisdiction of the Jamaican Courts first to arrest, and then to sell the Ship, the Mortgagee then appears to have had a change of heart and in fact petitioned the same courts for a declaration of entitlement to possession as mortgagee under the Mortgage, thereby seeking to vary an order for appraisement and judicial sale which had already been issued by the Jamaican Courts. This petition was in fact rejected by the Jamaican Courts as such request, if upheld, would prejudice the position of the Shipowner which had protested the lawfulness of the arrest of the Ship by the Mortgagee and had counterclaimed against it, a matter which could only be determined following a trial on the merits. Furthermore, a declaratory judgment by the Maltese Courts11 upholding the 10 Chapter 12 of the Laws of Malta, with particular reference to sub-section (1) of Article 281 thereof dealing with how executive acts may be impugned, whether in whole or in part. 11 Rikors Ġuramentat Nru 247/2017 Dr Ann Fenech kif debitament awtorizzata bħala mandatarja għan-nom u in rappreżentanza tas-soċjeta’ estera Jebmed Srl –vs – Capitalease S.p.A.,
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Mortgagee’s statutory entitlement to take possession of the mortgaged Ship ‘to the extent that this is possible in the circumstances of the case’, handed down at a time when the Ship was already under arrest and therefore under the authority of the Jamaican courts, was held not to be enforceable at common law or by any relevant statutory provisions in the jurisdiction of Jamaica and was therefore discarded by the Jamaican Courts. On an aside from the main focus of this article, considerable surprise may be expressed even in as far as concerns the aforementioned latter judgment. This is because, apart from the fact that the exercise of the Mortgagee’s statutory rights12 qua mortgagee inter alia to take possession of the Ship absolutely did not require a judicial endorsement, so that the action was on the very face of it frivolous and vexatious to start off with; in the opinion of the writer, the Maltese Courts were ab initio bereft of any jurisdiction to entertain the action. The Ship was not physically present within Maltese territorial waters and therefore, within the jurisdiction of the Maltese Courts. On the very contrary at the relevant time, the Ship was not only physically to be found within the jurisdiction of another sovereign state, namely Jamaica, but as an arrested ship was also under the authority of the competent courts of that other sovereign state. The fact that the Mortgage was a Maltese registered mortgage ought not to have had any bearing at all on this reality. Nevertheless, the Court apparently had no qualms in accepting to hear the case, even though the qualification which it then made in its judgment upholding the Mortgagee’s demand to take possession of the Ship ‘to the extent that this is possible in the circumstances of the case’ is in itself revealing of certain doubts which the Court itself seems to have been grappling with when coming to issue its judgment on the matter. As is customary in international maritime law when a ship is sold under the authority of a competent court in the jurisdiction where she lies and is arrested at the instance of unpaid maritime creditors, the Ship was adjudicated in favour of the New Shipowner by the competent Court in Jamaica, free from all encumbrances and the interest of the Mortgagee passed on to the proceeds of sale – USD10,600,000 at that – which were duly paid up and deposited in the Court Registry of Jamaica. In fact on 16 January 2018 the Jamaican Court issued in favour of the New Shipowner: rappreżentata lokalment mir-resident aġent tagħha is-soċjeta’ Maltija Camco Limited: determined by the First Hall of the Civil Court on the 1 June 2017. 12 The rights of the mortgagee are listed in Article 42 of the Merchant Shipping Act – Chapter 234 of the Laws of Malta.
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(i) a Bill of Sale stating that ‘the ship above particularly described has been freed from all liens and encumbrances and debts whatsoever’, as well as (ii) a Certificate of Sale stating that ‘the ship was sold to Bluefin Marine Limited … free of all mortgages, liens and encumbrances whatsoever’. This notwithstanding, at a later point in time whilst the Ship now renamed Bright Star and registered in the ownership of the New Shipowner under the laws of Liberia stopped temporarily in Maltese waters in order to take on bunkers during the course of her employment on a voyage under charterparty from a port in Russia to a port in Venezuela, she was arrested by the Mortgagee in virtue of the aforementioned Executive Warrant of Arrest of Sea Vessels. The Mortgagee asserted to be still in possession of its Maltese Mortgage which had been rendered executable in virtue of a judicial letter which the Mortgagee had filed against the Shipowner before the First Hall of the Civil Court on the 23 February 2017, soon after the Ship had been arrested in Jamaica. Maltese law specifically provides that ‘…where a ship has been sold pursuant to an order or with the approval of a competent court within whose jurisdiction the vessel was at the time of the sale, the interest of the mortgagees as well as of any other creditor in the ship shall pass on to the proceeds of the sale of the ship’13. Furthermore, in another related context, where the purchaser of a ship is not a person who is qualified to own a Maltese ship, upon obtaining knowledge or on being given notice of such a fact and, in the case of a sale pursuant to an order or with the approval of a competent court, upon receiving copies of the proceedings of the sale certified to his satisfaction, ‘the registrar shall make an entry thereof in the register and the register of the ship shall be considered as closed except in so far as relates to any unsatisfied mortgages entered therein and where the ship is sold free from encumbrances, the interest of any registered mortgagees or any other creditors shall pass on to the proceeds of the sale of the ship’14. 13 Merchant Shipping Act, Chapter 234 of the Laws of Malta, Article 37D(1) second proviso. 14 Ibid, Article 28A dealing with closure of registry of a Maltese ship on its sale pursuant to a court sale or a sale by a mortgagee in possession.
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This notwithstanding, in virtue of a decision delivered on 8 February 2019, the Court of Appeal whilst upholding the entitlement of the Ship to question the continued existence, as against the validity of the Mortgagee’s executive title, refused to recognise that the legal effect of a judicial sale of the Ship under the authority of the competent Court in Jamaica was to confer valid legal title in the hands of the New Shipowner as purchaser, free from all encumbrances. The Court of Appeal consequently upheld the validity of the Executive Warrant of Arrest of Sea Vessels in respect of the Ship on grounds that according to it the Mortgagee was still in possession of a valid executable executive title. The Court of Appeal reached this decision on the grounds that in its view, the aforementioned legislative disposition contained an implicit condition to the effect that in order for a judicial sale to clear a ship from a mortgage, it must be shown that the ‘interest’ of the particular mortgagee actually passed on to the proceeds of sale. Furthermore, the Court of Appeal went on to hold that the interest of the Mortgagee did not pass on to the proceeds of sale of the Ship since: (i) under Jamaican law, the Mortgage was not immediately enforceable as an executive title but the Mortgagee was required to have its claim upheld on the merits before the Jamaican Courts, where the Mortgage itself was only of probative value; and (ii) according to the Court of Appeal, the Mortgage did not enjoy any cause of preference under Jamaican law. The Court of Appeal was factually incorrect to assert that the Mortgage did not give rise to any cause of preference under Jamaican law. In point of fact, relying on the landmark decision of the Privy Council in the ‘HALCYON ISLE’15, the Jamaican Courts would have applied the established conflict of laws rule to the effect that questions of ranking priority are matters to be determined by Jamaican law as the lex fori16; and under the Shipping Act 15 [1980] 2 Lloyd’s Rep. 325 at p. 330. 16 But any question as to who is entitled to bring a particular kind of proceeding in an English Court, like questions of priorities in distribution of a fund, is a question of jurisdiction. It too under English rules of conflict of laws falls to be decided by English law as the lex fori. Their Lordships therefore concluded that, in principle, the question as to the right to proceed in rem against a ship as well as the priorities in the distribution between competing claimants of the proceeds of sale in an action in rem in the High Court of Singapore falls to be determined by the lex fori, as if the
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of Jamaica (1998), a mortgage enjoys an exceptionally high priority ranking only subsequently to claims for wages and masters’ disbursements made on account of the ship17. Unfortunately, no proof of Jamaican law on the cause of preference issue was produced before the Maltese Court either by the Mortgagee (on whom rested the onus probandi certainly in this respect to positively demonstrate that the implicit condition referred to by the Court of Appeal had not in fact been satisfied) or for that matter by the New Shipowner (who ought to have had every interest to demonstrate to the Court that the interest of the Mortgagee had in fact passed on to the proceeds of sale), even though it was still arguable that in the absence of proof of foreign law on this particular point the Maltese courts ought to have assumed that Jamaican law was equivalent to Maltese law and consequently assumed that the Mortgage did in fact enjoy a cause of preference under Jamaican law. Quite apart from that, however, the main point of contention in regard to the decision of the Court of Appeal lay in the fact that the Court failed to apply established principles of private international law to the effect that all issues relating to the enforcement of rights in a foreign jurisdiction are procedural matters which as such are exclusively reserved to the law of that jurisdiction as the lex fori. It is a unique feature of Maltese law, not replicated anywhere else to the author’s knowledge, that a mortgage enjoys the status of an executive title18 and is therefore equated to a final decision of a Court of Law, even though it first requires to be rendered executable by filing a judicial demand against the mortgagor19 accompanied as appropriate by an affivadit20. Maltese law events that give rise to the claim had occurred in Singapore. 17 The Shipping Act, 1998, (Jamaica), Article 84A (Priority of Registered Mortgages), in relation to Article 80 (Maritime Liens). 18 Merchant Shipping Act, Chapter 234 of the Laws of Malta, Article 42(2). A registered mortgage shall be deemed to be an executive title for the purposes of article 253 of the Code of Organization and Civil Procedure: (a) where the obligation it secures is a debt certain liquidated and due and not consisting in the performance of an act; or (b) where a maximum sum secured thereby is expressly stated in the instrument creating the security and such figure is recorded in the register for public notice. 19 Code of Organisation and Civil Procedure, Chapter 12 of the Laws of Malta, article 256(2). 20 Merchant Shipping Act, Chapter 234 of the Laws of Malta, article 42(4). In connection with the enforcement of any mortgage, not being a mortgage contemplated in sub-article (2), for the purpose of determining the amount certain liquidated and due or the
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cannot however expect that other jurisdictions equally elevate a mortgage to that level; and in compelling a mortgagee to substantiate his claim in an action in rem, as would be the case with any other maritime creditor enjoying a special privilege under our own law21, that is not to say that the law of other jurisdictions does not confer a cause of preference on a mortgage in procedures for the ranking of creditors on the resulting fund deposited in Court in the wake of a judicial sale of the ship. Furthermore, because as was mentioned above it is really a unique feature of Maltese law that a mortgage enjoys the status of an executive title, the interpretation of the Court of Appeal to the effect that the second proviso to sub-article (1) of Article 37D of the Merchant Shipping Act contains within it an implicit condition to the effect that in order for a judicial sale to clear a ship from a registered mortgage, it must not only be shown that the ‘interest’ of the mortgagee passed on to the proceeds of sale, but it must also be shown that such interest also includes the recognition of the mortgage concerned as equating to an executive title under the laws of the jurisdiction of the competent court under whose authority the ship was sold in a judicial sale, is particularly worrying for other reasons. If this interpretation continues to be endorsed, then serious problems might arise in the future when a foreign mortgagee comes to enforce its foreign mortgage as against a foreign flagged ship, physically present within Maltese territorial waters. Under Maltese law, a foreign mortgage shall be recognised as a mortgage with the status and all the rights and powers specified in the Merchant Shipping Act, notwithstanding the fact that it is not entered over a registered ship if inter alia: (d) such mortgage is granted a preferential and generally equivalent status as a mortgage under this Act under the laws of the country where the mortgage is registered22. actual sum due when the mortgage secures a future debt within an expressly stated maximum, in connection with any judicial sale of a ship, the mortgagee shall specify the sum due at the time of enforcement by means of an affidavit served on the mortgagor. 21 Namely under Article 50 of the Merchant Shipping Act (Chapter 234 of the Laws of Malta) regulating special privileges. 22 Merchant Shipping Act, Chapter 234 of the Laws of Malta, article 49.– dealing with the recognition of foreign mortgages.
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One of the most important rights accorded to a mortgagee under Article 42 of the Merchant Shipping Act is undoubtedly to the effect that a mortgage registered under the provisions of the Merchant Shipping Act and therefore a mortgage registered against a Maltese registered ship, enjoys ex lege the status of an executive title for the purposes of Article 253 of the Code of Organisation and Civil Procedure. From all of this and on the strength of the ratio decidendi of the Court of Appeal in the decision under critical review in this article, a very dangerous argument could very logically and easily flow to the effect that, since the foreign mortgage sought to be enforced in Malta does not constitute an executive title under its own constitutive foreign law, ergo its constitutive law does not grant it a preferential and generally equivalent status as a mortgage under Maltese law, with the disastrous consequence that it therefore cannot be recognised by the Maltese Courts ‘as a mortgage with the status and with the rights and powers specified’ in the Merchant Shipping Act. In the event that, for the reasons postulated above, a foreign mortgage not come to be recognised as a mortgage, ‘with the status and all the rights and powers specified in the Merchant Shipping Act’ and therefore as constituting an executive title for the purposes of Article 253 of the Code of Organisation and Civil Procedure, then a foreign mortgagee wishing to enforce its mortgage on a foreign flagged ship finding itself within the territorial jurisdiction of the Maltese Courts would have no other option open to it but to file a Precautionary Warrant of Arrest of Sea Vessels and to institute in support thereof within the prescribed period of twenty (20) days an action in rem against that ship on the basis of Article 742B(c) of the Code of Organisation and Civil Procedure setting out the Jurisdiction in rem of the Maltese Courts against ships or vessels23. Thus, it would be compelled to advance and prove its claim on the merits, with a view to securing in its favour an enforceable executive title prior to having recourse to the relevant executive acts culminating in the judicial sale by auction of the ship, just like any other maritime creditor whether privileged or otherwise would have to do. Although Malta is not a signatory to the 1993 Geneva Convention on 23 Save as otherwise expressly provided by law, the civil courts of Malta shall have jurisdiction in rem against ships or vessels in the following maritime claims: ... (c) any claim in respect of a mortgage, hypothec or charge on a ship or on any share therein.
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Maritime Liens and Mortgages24, one would of course at least have to hope that for purposes of upholding an action in rem pursuant to such foreign mortgages, the Maltese Courts would still accord recognition to the principle that foreign mortgages on seagoing vessels are to be recognised and enforceable in Malta provided such mortgages have been effected and registered in a public registry in accordance with the law of the State in which the ship concerned is registered25; and that procedures for the enforcement of such foreign mortgages are to be regulated by Maltese law as the law of the State where enforcement takes place26. One would also have to expect that the Maltese Courts would furthermore still allow such foreign mortgage claim to rank on the resulting proceeds of a judicial sale by auction in accordance with the ranking of maritime creditors provisions contained in the Merchant Shipping Act, which are in themselves to be considered as being separate and distinct from the ‘status, rights and powers’ accorded to a mortgage under the same Act. This also in full respect of the conflict of laws principle enunciated in the ‘Halcyon Isle’ to the effect that issues relating to ranking of creditors are procedural in nature and are therefore matters for Maltese law as the lex fori to attend to. To hold otherwise would not only be stretching things a touch too far, but would actually be to contemplate Armageddon and total oblivion of Malta as an attractive jurisdiction for ship arrest in the eyes of foreign mortgagees. In conclusion, and as was held in the ‘Acrux’27: If it became the practice of the Courts of one country not to recognise a valid title given by a competent Court of another country, there would be chaos. It was bound to redound to the prejudice of those who give credit to ships. It is in the interest of the shipowner whose ship has been sold by judicial auction, as well as in the interest of all maritime creditors having a claim against that ship, mortgagees included, that the sale of the ship concerned, 24 The 1993 Geneva Convention on Maritime Liens and Mortgages replaces the 1926 Brussels Convention on the Unification of Rules Relating to Maritime Liens and Mortgages. 25 This principle is enshrined in Article 1 of the Convention dealing with recognition and enforcement of mortgages, “hypothèques” and charges. 26 This principle is enshrined in Article 2 of the Convention dealing with ranking and effects of mortgages, “hypothèques” and charges. 27 [1962] 1 Lloyd’s Rep. 405.
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obtains the highest possible bid price. Exposing a bona fide buyer to the risk of challenge to his free and unencumbered legal title, whether in the courts of the ship’s previous flag state, or in any other court, would gravely prejudice those very interests. Perhaps in the over-zealousness of our Courts to protect the position of the mortgagee, practically at all costs, we have now gone a step too far, actually rendering a disservice unwittingly though that might be; and it might also be opportune to reconsider whether in equating a Maltese mortgage to an executive title, we have not elevated the mortgage to such a high pedestal as to give rise to extremely serious conflict of laws conundrums. By way of comprehensive rapportage, some hope of recovery from the shockwaves generated by the Court of Appeal’s decision may yet lie in the separate ad hoc proceedings which the New Shipowner together with the Ship filed against the Mortgagee on the 14 August 2018 before the First Hall of the Civil Court28. In that action, the Applicants are praying inter alia that the Executive Warrant of Arrest concerned be declared to be unenforceable against the Ship in terms of Maltese law, including the provisions of Article 37D of the Merchant Shipping Act which we have considered hereinabove 29. The Mortgagee is rebutting this demand inter alia on the basis that the decision of the Court of Appeal reviewed in this Article constitutes a res judicata, but this plea was rejected in virtue of a preliminary judgment handed down by the First Hall of the Civil Court on the 14 January 2020. The Court found that although the decision of the Court of Appeal was in the nature of a definitive decree, as distinct from an interlocutory one, proceedings under Article 281 of the Code of Organisation and Civil Procedure are summary in nature, intended only to investigate whether there was any irregularity or defect in the executive act and not in the executive title itself on the basis of which such executive act was issued. Although it was conceded that in its deliberations the Court of Appeal had admittedly gone beyond what was strictly required of it for the purpose of those particular proceedings, yet the Court considered that in the decisive part of its decree the Court of Appeal did not pronounce itself on the merits of whether the executive warrant of 28 Rikors Ġuramantat Numru 846/2018/MCH in the names Dr. Ann Fenech kif debitament awtorizzata bħala mandatarja għan-nom u in rappresentanza tas-soċjeta’ estera Bluefin Marine Ltd. reġistrata l-Liberia u tal-bastiment ‘MV Bright Star’ ġja’ ‘Trading Fabrizia’ bin-numru tal-IMO 9481960 –vs- is-soċjeta’ estera Jebmed SRL reġistrata ġewwa l-Italja. 29 At the time of submission for publication, these proceedings are still pending before the First Hall of the Civil Court which has however in virtue of a Decree given on the 26th June 2019 accepted to entertain the case on its merits.
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arrest was null, illegal or unenforceable in view of the provisions of Article 37D of the Merchant Shipping Act; and even had it done so it would have exceeded the parameters of Article 281 of the Code of Organisation and Civil Procedure. Although the ‘Bright Star’ saga seemingly drags on interminably, yet should the rejection of the tricky res judicata plea be finally confirmed by the Court of Appeal, if only to rectify an intolerable injustice which would otherwise result30, our Courts would undoubtedly be presented with a golden opportunity they cannot afford to miss of properly interpreting and applying the law on this fundamentally important issue. Paradoxically, however, the decision of the Court of Appeal in the ‘Bright Star’ case should serve as the casus belli for the urgent introduction of a convention on the international recognition of judicial sales of ships beyond that, which is already provided for in the above referred to Geneva Convention on Maritime Liens and Mortgages31 – a cause which has been actively spearheaded by the Comite’ Maritime International and is now in the hands of UNCITRAL.
30 The legal maxim res judicata pro veritate habetur is based on practical considerations seeking to avoid interminable disputes and does not have an absolute foundation in law. Thus it may possibly be set aside by a Court in appropriate cases where an intolerable injustice would otherwise be suffered (vide Grazio Mercieca LL.D. “Mezzi Straordinarji ta’ Impunjazzjoni tas-Sentenzi” pgs. 3 -4). 31 Vide Article 12 of the Convention dealing with the effects of forced sale.
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Peter Paul Zammit The Police Commissioner - An unregulated officer of the law?
Peter Paul Zammit is a warranted Legal Procurator, having graduated with a B. A. in Legal and Humanistic Studies in 2000. He served within the Police Force for 25 years retiring from active duty in 2009 and taking up private practice. In 2013 he was recalled to the Police Force and appointed as Police Commissioner. He resigned his commission in 2014 and again went into Private Practice
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1. Introduction
T
he present conundrum about the institution in office of a Police Commissioner is one fraught with hidden traps, shortcomings and legal vacuums. These obstacles do not include the myriad of political issues which, unsurprisingly, come as part of the package in such a discussion, and these are best left aside for now. There has been plenty of debate with regards to the manner in which such a position is to be filled. In my view, the question which should be of primary importance is not how to elect such an officer, as is being bandied about, but in effect what are the actual duties, rights and obligations that such an office carries. In common parlance, we need a job description. Looking at the present legal situation, we see that there is one duty assigned in the Police Act, and that the Police Force is under the direction of a Commissioner:
There shall be a Commissioner of Police, hereinafter referred to as “the Commissioner”, who shall be commissioned for leading and guiding the Force, as well as regulating the appointment, duties and discipline of the Force.1
2. The (chaotic) historical metamorphosis of the Police Force Unlike all other heads of departments within the Civil Service, and Government in itself, there are no established rules or procedures of governance related to the manner and conduct in which the Commissioner of Police should behave and act. The reason for this is an historic one, since such office has always been at the behest of either the Crown or the Prime Minister, and that back then, the Commissioner of Police was in effect the general factotum of all major national security issues, and many more besides. From then on however, things have changed and evolved in a myriad
1
Police Act (Chapter 163 of the Laws of Malta) Article 6(1)
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of ways. Nowadays, a number of security issues are handled in a different manner by diverse entities and are no longer directed or dependent by/on a single person, and as the powers have changed, so is the rest of the police force in dire need of further changes as well. As has occurred elsewhere, the national country’s police force has been morphed into an entity tasked with what are considered as the core policing requirements for the public peace and order. For comparison’s sake, let us take the police force’s role in the prosecution of crimes. Policing as still practised in Malta, being not just investigative but also prosecutorial, is a thing long left behind in practically the whole world. The need for a change in this regard is something that I have been personally advocating for more than two decades. Although repeatedly approved, too little to nothing has happened to make the requisite difference in the current structure of the Police Force. A separate Prosecution Service needs be set up, and this without any more delay. Immigration and port control in Malta are still basically a Police responsibility, but should it remain so? In the past, we used to argue about duplication of work. Now, we need to argue more on the basis of separation. The reasons for this are very simple: whilst the general Police duties deal with social crimes and contraventions, those dealing with immigration and port controls are often dealing with refugee and human situations, which are far from criminal in their core substance. One may also make the argument, one which is extremely valid in my judgement, that the aims of the officers responsible for these two crucial issues are very specific and tailored for the situation, and may require an understand, and a set of legal, material and emotional tools that are incompatible with what the core role of a police officer actually is. Also, while in theory we can suggest that a police officer can and should be trained sufficiently in confronting these situations in an equally level-headed and legitimate manner and conduct, in practice this is tantamount to structuring the recruitment branch of the police force in a way that produces new police officers with two hats, and two different settings, to be used in different circumstances: an impractical, laborious enterprise doomed to fail. In the present day, the Maltese police force is also still burdened with diverse licensing issues, be they firearm, explosive or simply hunting licenses. Again, there is no reason why the issuing of these licenses should remain the 159
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remit of the Police Force. The aforementioned roles of the Police Force are all remnants of regulations past. A look at the history of the organisation would clearly indicate how in the past, this used to be much worse. For example, when the Commissioner of Police was the sole licensing and regulatory authority for all commerce. Remnants of these scattered responsibilities and regulations are still found within the Code of Police Laws.2 Buildings and construction enforcement were, until a short time ago, still fully regulated under this Act, while serious health issues as well as the enforcement relating to the Court Registrar’s responsibilities are still therein contained. This is indicative of the generality of changes which need be made, included or removed accordingly in the job description of the Commissioner of Police.
3. The case for Reorganisation, Remodelling and Repurposing, and why it should start at the very top The first question that arises is: ‘What do we want the Police Force to do?’ Said question can be quickly followed by: ‘In what manner is this to be done, and what are the necessary controls that should be imposed on the police force in a democratic country?’ Policing in Malta needs to be legally defined in a manner to remove all the non-core policing factors out of the present structure, leaving the Police to effectively police. If there needs to be civilianisation of the numerous jobs within the Police Force, then this should be carried out. Other police forces, which are much bigger and more complicated than ours have gone through this process: so what is holding the Maltese Police Force from following suit? Other tasks which are presently the responsibility of the Police Force should also move to other departments and organs. Do we still need the issuance of the Conviction Sheet, as well as a person’s certificate of conduct, to be held by the Police, when the repository of the sentences is the court? Such changes may be contemplated by the present Administration, and rightly so,
2
Code of Police Laws (Chapter 10 of the Laws of Malta)
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but this should be done with caution. The process should be streamlined, ensuring that this is carried out in the interest of all concerned. Access to this data is of utmost importance in enforcement, so if one is intending to have proper enforcement, one needs ensure that the necessary information is available. This does not mean that the Police should lose the right of access to that data, because that would mean undermining their regulatory powers, and robbing it some of its necessary tools in proper policing. When we have managed to redefine and apply core police duties, then we can start to write down the job descriptions of all members of the force, including that reserved for the Commissioner of Police. This exercise was commenced quite a few years back, but then the sails lost the wind of change, and the gradual modernisation of the Police Force reverted to being a haphazard mess and individual, arbitrary decisions. The same liberation which opened the doors for a number of willing officers within the Police Force to attend University, and from a number of others to attend specialised training abroad, suddenly died down to a barely felt breeze, and the sails fluttered down to a ghostly appearance. Notwithstanding the fact that a few individuals have braved the opposition and managed to secure for themselves laurels of knowledge not provided for through the Police system, this is unfortunately the exception and not the rule, a trickle compared to the river needed. The redefinition of core policing duties will bring about a new form of administration, one based not just on, seniority, but on proper management and a system of planned progression, where the future commanders and leaders are moulded within the structure, in conjunction with universities and other forces. In doing so, we will be eliminating the present fear of being ousted from their jobs felt by senior officers, to one where capacity building and training the leaders for tomorrow is actively carried out. Building a strong police force need not be creating a police state. The rule of law requires that powers are curbed by obligations and effective remedies. The present Police Board set-up is a far cry from being an effective police overview tool and needs to be seriously revisited, from its legal foundations to its assigned executors and workings. A stronger, more concrete, more legally visible relationship of said board and the Commissioner of Police is also to be written whenever such a change is being considered.
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4. Wanted: A public job description and interview process Much has been advocated recently about the mode of procedure to fill in the post of Commissioner of Police. Is there truly such a need to reinvent the wheel? A quick look around other democratically recognised countries, and the system of political appointment to this post is commonplace. It is generally felt that this post, amongst others, cannot be of a different disposition than the current administration, or at least there needs to be a common ground on the way forward. The wellbeing of society and the said Police Force is a must to ensure the necessary trust in such workings. Therefore, what we need to clarify is the agenda of proposals being made and agreed to, between Government and the Commissioner of Police and the respect of the law and all persons in the carrying out of Police duties. Having had a precursory look at what needs be done a priori to appointing a Police Commissioner we need to go over how this is to be done. If, as is being proposed, the system of appointment becomes a committee hearing similar to that being tasked in the judiciary appointments (to which I agree) and this actual appointment is of a public nature, then remuneration and removal should be on the same par. It is thus suggested that the post becomes constitutionally protected and entrenched to ensure that the post is free from undue pressure and influence. After all, the power being wielded is considerable, and at par with judicial powers, as by law, he’s required to be: as a first guarantee of the rights of all persons in Malta, even before action is needed through the judicial system to repress, sanction or remedy any breach;3 The recent ECHR decision in Grace Gatt vs Malta4 points to irregularities practiced both in discipline and governance, within the Police Force and Government. This follows a myriad of decisions against Malta in HR issues, all pointing at serious shortcomings in policing. Some have been partially addressed, years after the incidents occurred, mostly also years after the sentence was delivered. This delay, while seemingly in the right step, has been a long, drawn-out journey, and a true representation of the famous maxim: ‘Justice delayed is justice denied.’ The reasons for the taking of the decisions subsequently impugned by
3 4
Police Act (Chapter 164 of the Laws of Malta), Article 4A Grace Gatt vs Malta App no. 46466/16 (ECtHR, 8 October 2019)
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these cases is not important in this case. What is important is that we have been for years emulating the ostrich and possum: Hiding our heads and playing dead is not meeting the social legal demands. Our dismal Human Rights record at the ECHR should make us all blush and bow our heads ashamedly. Those of us who hold our legal profession to heart know full well the extent of such decisions, from resisting with all our might the right to legal advice under interrogation, to failing to give due notice of rights to would be refugees. I believe this is the time to act, when the situation is at its lowest, the power that be needs to brush itself up and get moving. Being proactive is what the law requires, and this cannot be met if we simply play musical chairs, or we seek to appoint the most senior, but neither can the post of Commissioner of Police be filled without the job description being made available publicly. Let there be a public hearing, properly organised to weed out chaff from prospective applicants and helping to establish the best person for the job. I believe that like in all things, there are enough good people about who can give their tuppence worth of advice on the matter, and let it be recorded that advice was sought and advocated from all parts of society. If a white paper needs be set out, let us get on with it. The Venice Commission can and does give guidelines, but they are still that, guidelines: we need a fullbodied setup to get our act in order. As has happened in the amendments to the Criminal Code5 which introduced the greatest single administrative set of rules to police work, this can be repeated in properly outlining police procedure and administration, weeding where necessary and nurturing the good we already have. The first task is therefore to define the post, in as solid a legal manner as possible, with the second task being establishing guidelines for the public hearing of such appointments and the third task is in appointing an effective review mechanism to ensure transparency and accountability of the post. An interim measure would be to appoint a taskforce to head the necessary changes, take full control of policing and ensure the changes are carried out and given full effect. That being said, this does not need to stop there. This self-same task force should be charged with the continued development of
5
Criminal Code (Amendment) Act, Act III of 2002 <https://parlament.mt/me-
dia/1079/iii-of-2002-criminal-code-amendment-act.pdf> accessed 2 February 2020
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the force and thus ensure the continuity of change and development which in today’s world is ever so fast changing, while making sure that the winds keep blowing the sails.
5. Conclusion Malta is not unique to the world. What is close to unique is our small size. The advocated changes have already been progressed to by a multitude of other countries. And it should not be difficult to follow suit, albeit cutting the suit to our size ensuring we address the requirements of change and progress in full respect of human rights and the rule of law. Anything less will only be change for change’s sake; the tangible progress will slow down again, and in several years’ time, we will once again be banging at change’s door. Only this time, it would have been too late, and we would be facing an even bigger that the changes required would come at great a cost for our people, and for our country.
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Kevin Aquilina An Evaluation of the Diritto Di Cronaca under the Maltese Press Act
Kevin Aquilina is the Head of the Department of Media, Communications and Technology Law of the University of Malta. He holds a Doctorate of Philosophy in Law (Ph.D) from the London School of Economics and Political Science of the University of London, a Doctorate in Law from the University of Malta (LL.D) and a Masters in International Maritime Law from the International Maritime Organisation’s International Maritime Law Institute (LL.M). Professor Aquilina has held the office of Director General (Courts) and subsequently Chief Executive of the Broadcasting Authority. He drafted all broadcasting legislation between 1999 to 2013. Between 2011 and 2019, he was the Dean of the Faculty of Laws at the University of Malta. He also served as the Chairman of the Press Ethics Commission, Chairman of the Planning Appeals Board, Legal Advisor to the Planning Appeals Board, Member of the Environment and Planning Review Tribunal, Member of the Law Commission and Member of the Holistic Commission for the Reform of Justice Sector. Professor Aquilina has authored various books, written several reports for Maltese and foreign institutions, drafted many primary and subsidiary laws and published papers in edited books and articles in peer-reviewed journals, apart from various contributions to the print, broadcasting and new media.
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1. Introduction
W
e have inherited the notion of the diritto di cronaca in the Maltese Press Act,1 from the Italian legal system. Essentially, the term can be translated literally as ‘the right to report current affairs’. It actually means the right to publish correct news and current affairs (or information and ideas) on any matter in the public interest. This is not a unique concept found in the ius civile legal tradition as there are analogous notions to it in other legal systems. For example, the American legal system refers to ‘the right to publish public information’ whilst the European Court of Human Rights prefers to adopt the concept of ‘imparting information and ideas’ on all matters of public interest, provided that the information disseminated is true. Although these – and other expressions – may be considered similar, they are not necessarily identical and each one has its own nuances and vicissitudes. The purpose of this short contribution is to summarise selected judgments of the Maltese courts with a view to try to understand exactly the juridical nature of the institute of the diritto di cronica as applied in Maltese Press Act.
2. Select Maltese Press Law Judgments on the Diritto Di Cronaca 2.1 Introduction Maltese Press Law abounds with judgments referring to the diritto di cronaca, and, it is not possible to summarise all the court judgments on the topic. Hence, what will be considered in this short paper are selected judgments with the purpose of trying to arrive at the principal characteristics of the diritto di cronaca, for the latter right is not as simple and straightforward as the words themselves seem to imply. It has been developed by case law, originally in Italy, and then adopted in Malta. The diritto di cronaca is not specifically mentioned by these words (or their English or Maltese translation) as such by any Maltese law, including the defunct Press Act and the Media and Defamation Act, but it has been developed jurisprudentially. Indeed, it is thanks to the Maltese courts that this concept has been formulated, nourished and applied. Thus, although it derives from freedom 1 Press Act, Chapter 248 of the Laws of Malta (repealed by the Media and Defamation Act, Chapter 579 of the Laws of Malta).
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of expression and press law, these three words are not specifically inscribed in the Constitution or in ordinary law but, through the doctrine of necessary intendment, can be derived therefrom.
2.2 Select Judgments on the Diritto di Cronaca 2.2.1 Aquilina et vs Balzan et In Tony Aquilina and Tony Aquilina Limited vs Saviour Balzan and/or Matthew Vella,2 the Court quoted the Italian Court of Cassation3 which held that: ... il diritto di cronaca quale esimente della responsabilità per danni derivanti della lesion del diritto personale all’onore postula la ricorrenza delle seguenti condizioni:(a) la verità oggettiva della notizia pubblicata; (b) l’interesse pubblico alla conoscenza del fatto (cosi detta, pertinenza) (c) la correttezza finale dell’esposizione (cosi detta, continenza).
2.2.2 Galea vs Ghirxi In Advocate Dr. Louis Galea vs Frans Ghirxi, editor of the newspaper ‘The Horizon’,4 the defendant held that in his writing there were only facts which could be proved and an exercise of the diritto di cronaca as applied by Maltese and Strasbourg case law. However, the Court noted that in the instant case the defendant did not prove the facts referred to in his writing. The defendant had repeated what Ciro del Negro had told him even if 2 Aquilina Tony et vs Balzan Saviour et, Court of Appeal (Inferior Competence)1 November 2006, 317/2004/1 3 24 January 2004, number 747. 4 . 947/97 GV Galea Avukat Dr. Louis vs Ghirxi Frans noe, First Hall (Civil Court), 3 May 2002.
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such accusations had been categorically denied twice over by plaintiff. The defendant had not proved any alleged association of plaintiff with del Negro. The Court then quoted the House of Lords case Reynolds v Times Newspaper Ltd5 wherein it was stated that: ‘The communication of information, not misinformation, is the subject of the liberty of information. There is no human right to disseminate information that is not true’. The Court then found that the editor had defamed the plaintiff.
2.2.3 Sammut vs Caruana Galizia et In Notary Mark Sammut vs Daphne Caruana Galizia and Stephen Calleja,6 the Court of First Instance pointed out that journalists have the right to publish information and ideas on any matter of public interest as this was for the common good of society. Defendant Caruana Galizia was pleading justification and that she had the right to fair comment. The Court however noted that freedom of expression could not be extended to freedom to defame. The Court thus found against defendant Caruana Galizia whilst declaring the other defendant non-suited. The Court of Appeal quoted its own judgment of Tony Aquilina et vs Saviour Balzan et7 as to the diritto di cronaca and added the following quote from the Italian Court of Cassation:8 ... quest’ultima condizione va intesa sia come correttezza formale, sia come limite sostanziale, individuabile in ciò che è strettamente necessario per soddisfare l’interesse generale alla conoscenza di determinati fatti di rilievo sociale, e che va accertato in base ad un’indagine orientata verso il risultato finale della communicazione e vertente imprescindibilmente, in particolare, sui seguenti elementi: 1) accostamento di notizie, quando esso sia dotato di autonoma attitudine diffamatoria; 2) accorpamento di notizia che produca un’espansione di significati; 3) uso di determinate espressioni nella consapevolezza che il pubblico le intenderà in maniera diversa o addirittura contraria al loro significato letterale; 4) tono complessivo della notizia e titolazione. 5 Reynolds v Times Newspaper Ltd [1999] AC 127 (HL). 6 279/2005/1 Sammut Nutar Mark vs Caruana Galizia Daphne et, Court of Appeal (Inferior Competence), 9 January 2008. 7 317/2004/1 Aquilina Tony et vs Balzan Saviour et, Court of Appeal (Inferior Competence), 1 November 2006.. 8 Court of Cassation, 13 February 2002, No. 2066.
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The Court then rejected the appeal, confirming the judgment of the Court of First Instance.
2.2.4 Azzopardi vs Stagno Navarra et In Advocate Dr. Tonio Azzopardi v Karl Stagno Navarra, Joe Zahra and Paul Spiteri,9 the Court stated that Article 33(e) of the Press Act,10 contains three ingredients: (a) the connection with judicial proceedings; (b) the report has to be fair in so far as what took place in those proceedings; (c) the publication has to be bona fide. The Court then quoted Lord Gerald Strickland vs Dr. Carmelo Mifsud Bonnici M.C.A.11 where it was held that in the case of parliamentary reporting ‘tale resoconto … debba essere esatto e fatto in buona fede … per avere tale qualifica il resoconto deve essere imparziale e fatto con la esattezza che si deve aspettare da persone il cui ufficio è quello di dare al pubblico un giusto resoconto di ciò che ha avuto luogo’. The Court then referred to a judgment of the Italian Court of Cassation,12 wherein it was held that: ... costituisce legittima espressione del diritto di cronaca, quale esimente dalla responsabilita` civile per danni, la pubblicazione di un’interrogazione parlamentare dal contenuto oggettivamente diffamatorio, sempre che (e solo che) corrisponde al vero la riproduzione (integrale o per riassunto) del testo dell’ interrogazione medesima, essendo privo di rilievo, per converso, l’eventuale falsità del suo contenuto, che il giornalista non ha il dovere di verificare, pur avendo l’obbligo di riprodurlo in forma impersonale ed oggettiva, quale semplice testimone, senza dimostrare, cioè, con commenti o altro, di aderire comunque al suo contenuto diffamatorio ed abbandonare, così, la necessaria posizione di narratore asettico ed imparziale del fatto-interrogazione.13 9 826/1995/2 Azzopardi Tonio Dr. vs Stagno Navarra Kart et, First Hall (Civil Court) 11 October 2006. 10 Media and Defamation Act, Chapter 579 of the Laws of Malta, article 7(d) . 11 Lord Strickland Gerald vs Mifsud Bonnici Carmel Dr., Court of Appeal, 28 November 1930. 12 19 December 2001, No. 15999. 13 This same point was made previously in 775/2002/1 Caruana Albert Dr. vs Cauchi Gino, Court of Appeal (Inferior Competence) 23 June 200.
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If this were to be the case in the instant case, the journalist would not be in a position to hide behind the privilege contained in Article 33(e) but according to the general rules s/he would have to bring forth evidence of the truth of the facts, the public interest for the information and a correct formal exposition of facts. This did not happen in this case so much so that the defence of justification was not even pleaded. The Court concluded that: (a) the defendant referred to sic et simpliciter and without the addition of personal comments proper to what was stated by Olaf Cini in the proceedings brought against him in reply to questions posed to him by the presiding magistrate; (b) as the witnesses testified, the synopsis made in the report was fair in terms of Article 33(e) and of case law interpreting this provision; (c) the defendants were not obliged to verify with the court minutes and with the plaintiff to establish and determine whether what Olaf Cini stated was truthful; (d) even though what was reported went beyond the minutes of the court case, what Cini stated in court is reproduced faithfully and, therefore, qualified as a fair report; (e) all this implied that the defendants were exempt from any responsibility. Therefore, quoting Gatley,14 the Court concluded that ‘the publication without malice of a fair and accurate report of the proceedings before a judicial tribunal exercising its jurisdiction in open court is privileged’. The Court thus found in favour of defendants.
2.2.5 Causon vs Bondi In Mark Causon vs Lou Bondi,15 the Court quoted the Italian Court of Cassation which distinguished between the diritto di critica from the diritto di cronaca:16 ... il diritto di critica (da distinguersi dal diritto di cronaca che non si concreta in un giudizio soggettivo, ma nella sola narrazione dei fatti), allorchè implichi un giudizio di disvalore, idoneo ad incidere sulla reputazione e sul prestigio professionale della persona nei cui confronti la critica è rivolta, è condizionato, 14 Gatley Clement: On Libel and Slander, (7th edn, edition, Sweet & Maxwell 1974) para. 425 and para 648. 15 533/2005/1 Causon Mark vs Bondi Lou, Court of Appeal (Inferior Competence), 14 November 2007. 16 Cassation, 15 January 2002, No. 370.
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quanto alla legittimità del suo ezercizio, all’osservanza del limite della continenza, il quale viene in considerazione non solo sotto l’aspetto della correttezza formale dell’esposizione, ma anche sotto il profile sostanziale consistente nel non eccedere i limiti di quanto strettamente necessario per l’appogamento del pubblico interesse e postula che il giudizio di disvalore incidente sull’onere e sulla reputazione sia espresso non in termini assiomatici ma accompagnato da congrua motivazione.17 When the Court applied the above principles it did not result that the facts as reported in the Article had been invented. The defendant also pleaded that the enforcement notice served upon him did not refer correctly to his address but the development permission application report referred to his own application for sanctioning of excavated works which also referred to the said enforcement notice. Bearing in mind his political position, this meant that such persons ‘inevitably and knowingly lay themselves open to close scrutiny of their words and deeds by journalists and the public at large, and they must consequently display a greater degree of tolerance’.18 The Court thus found in favour of the journalist, reversing the judgment of the Court of First Instance.
2.2.6 Borg vs Bartolo In Joseph Borg vs Peter Bartolo,19 the Court held that although there is a diritto di cronaca recognised by law, this right did not entail the ‘right’ to defame with impunity another person.
2.2.7 Tabone et vs Azzopardi In Joseph Tabone and Maria Parnis vs Advocate Dr. Tonio Azzopardi,20 the defendant had stated during a television programme that when Paul 17 This quotation was also cited by the Court of Appeal in 51/2003/1 Caruana Curren Gianella Dr. vs Chetcuti Stephen et, Court of Appeal, 20 April 2005. 18 Lingens v Austria App no 9815/82 (ECtHR, 8 July 1986). 19 1747/2000/1 Borg Joseph vs Bartolo Peter, First Hall (Civil Court) 16 October 2002. 20 2201/1999/1 Tabone Joseph et vs Azzopardi Av Dr. Tonio, First Hall (Civil Court)17 November 2006.
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Tabone (the plaintiffs’ father) was killed, the magisterial inquiry referred to the deceased as having stated, before his assassination, that he was going to withdraw the machine which printed false money. The Court concluded that what the defendant stated during the programme amounted to diritto di cronica as it was based on the findings of the magisterial inquiry. The fact that no person was charged with the homicide of Paul Tabone did not diminish from the magisterial inquiry findings.
2.2.8 Galea vs Ghirxi In Advocate Dr. Louis Galea vs Frans Ghirxi,21 the Court held that for the diritto di cronaca to subsist, the following ingredients had to be satisfied: (a) there has to be an objective public interest to know the news (not rumours); (b) the fact which is reported has to be true that it has to correspond to reality; (3) the narrative exposition of the fact has to be objective and fair.22 In this case, the Court concluded that it was in the public interest to report this news and the reported facts were substantially true. However, the report as news was neither objective nor factual because the defendant had not verified the news with the plaintiff but relied only on one side to the story which alleged that plaintiff had abused his position. Hence the Court found against the defendant.
2.2.9 Galea vs Ghirxi In Advocate Dr. Louis Galea vs. Frans Ghirxi,23 the Court noted that the plaintiff’s photo was published in the defendant’s newspaper in connection with Ciro del Negro’s diary giving the false impression that the plaintiff was somehow involved in drug trafficking even if no evidence to that effect was produced. According to the Court, which found the editor guilty as charged, the newspaper did not exercise its right to communicate to the public information of a general interest as it is entitled to do but to manipulate that 21 947/1997/1 Galea Avukat Dr. Louis vs Ghirxi Frans noe, Court of Appeal, 19 April 2005. 22 This judgment was followed in Falzon Michael vs Ghirxi Frans in his own name and as editor of the newspaper ‘The Horizon’, First Hall (Civil Court) 29 March 1994. 23 275/2004 Galea Dr. Louis vs Ghirxi Frans, Court of Criminal Appeal (Inferior Competence) 28 April 2005.
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information with a view to defaming the defendant.
2.2.10 Abela vs Ghirxi In Dr., George Abela vs Frans Ghirxi24 the Court of First Instance held that the essential precept for a serious judgment in a free and democratic society which respects fundamental human rights of each person is that facts have to be reproduced accurately, preferably after serious and reliable verification. It is only at this stage that facts become sacred. A comment has to be distinguished from a fact. In this case the defendant limited his piece to espousing his own unilateral allegation notwithstanding the fact that defendant had sent him beforehand a letter in contradiction of the false allegation made against him by the General Workers Union. Yet the defendant failed to report the other side of the coin and reproduced only the false allegations. The defendant appealed on the basis that he had published only a press release of the General Workers Union without having added anything thereto and referred to his diritto di cronaca in reporting the said press release and in the exercise of press freedom in the public interest. The plaintiff replied that the dititto di cronaca could not translate itself into a repetition of defamation and that the report was very far from the truth. The Court noted that in the diritto di cronaca, the espoused facts had to correspond objectively to the truth, that had to be true facts in their entirety25 and have to be of public relevance. If they are not so, the plea of fair comment cannot even be contemplated.26 The Court then quoted the following passage from Gatley:27 ... every republication of a libel is a new libel, and each publisher is answerable for his act to the same extent as if the calumny originated from him. It is no defence to an action for such republication that the defendant received the libellous statement from another whose name he disclosed at the time of publication. Because one man does an unlawful act to any person, another is 24 240/2006/1 Abela Dr. George vs Ghirxi Frans, Court of Appeal (Inferior Competence) 28 November 2008. 25 See The Police vs Caruana Carmelo et, Court of Criminal Appeal, 15 August 1958. 26 See Fenech Angelo pro et noe vs Montanaro Anthony et noe, Court of Appeal, 21 January 1993. 27 Gatley Clement: On Libel and Slander, (7th edn, Sweet & Maxwell 1974) para 261, p. 263.
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not permitted to do a similar act to the same person. Wrong is not to be justified or even excused by wrong. The Court noted that none of the allegations made against the defendant published turned out to be true. Although the defendant published the letter that the plaintiff had sent him, the defendant did not carry out any research to establish whether the facts alleged in the General Workers Union press release were true. Indeed, it resulted to the Court that the press release was based on defamatory comments. As the Italian Court of Cassation stated: ... affinchè si configurebbe l’esimente putative dell’esercizio di diritto di cronaca è necessario che il giornalista usi legittimamente le fonti informative mediante l’esame, il controllo e la verifica dei fatti che nè costituiscono il contenuto, offrendo la prova delle cure e delle cautele da lui poste negli accertamenti svolti per vincere ogni dubbio e incertezza prospettabili in ordine alla verità sostanziale dei fatti”.28 The Court thus found against the defendant.
2.2.11 Agius vs Farrugia In The Hon. David Agius vs Aleks Farrugia and by decree dated 24 June 2008, Alfred Briffa was declared non-suited.29 The Court of First Instance held that to comment on facts, these facts had to be substantially true and verified as to their accuracy. The journalist is duty bound to carry out serious research before publishing. The Court concluded that the journalist was not exercising his right and duty to inform the public but went beyond this by publishing untrue things. The defendant appealed and the Court of Appeal quoted Franzioni who states that: ‘la conoscenza del fatto puo` avere rilevanza pubblica, o puo` essere di interesse pubblico che sia diffusa, il diritto di cronaca prevale sulla tutela della riservatezza’.30 28 Cassation, 23 July 1996. The court also referred to 1285/2000/1 Gulia Onor. Dr. Gavin vs Borg Dione et, Court of Appeal, 7 July 2006; Fenech Adami Onor. Dr. Eddie et vs Malta Labour Party et, Court of Appeal (Civil, Superior) 9 February, 2007 and the judgment of the Italian Court of Cassation of 2 October, 1992 Number 1703 and of 27 June, 2000 Number 8733. 29 73/2008/1 Agius David Onor. vs Farrugia Aleks et, Court of Appeal (Civil, Inferior), 25 June 2010. 30 Massimo Franzoni, Le obbligazioni da fatto illecito, Edizione Utet, 2004, p. 177.
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2.2.12 Papagiorcopulo vs Magro et In George Papagiorcopulo vs Jimmy Magro and Mario Vella in the name and on behalf of Rainbow Productions Limited and by decree of 15 June 2001, the words ‘Jimmy Magro and Mario Vella in the name and on behalf of Rainbow Productions Limited’ were substituted by the words ‘One Productions Limited’,31 the news item as broadcast during ONE TV’s news bulletin gave the impression that the defendant was guilty of corruption whilst what actually happened was that the Commission against Corruption had received an anonymous letter against the defendant alleging corruption in his behaviour. The television broadcasting station did not carry out any research about the allegation which it broadcast as gospel truth without investigating the matter. The Court found that the defendant had been defamed and that the diritto di cronaca had been abused. It is well known that the publication of information in the public interest is not sufficient by itself to exculpate a person unless it is accompanied by the truth of the facts mentioned in the Article. This requisite brings about the correspondence between the fact as happened and the fact as reported. The Courts do not require this requisite to be applied rigidly and do admit that a mistake might be committed. The essence and substance of the published information should be grounded on the veracity of the facts,32 however it might happen that: l’eventuale discrepanza tra il fatto narrato e quello effettivamente accaduto non esclude che possa essere invocata l’esimente, anche putativa, dell’esercizio di diritto di cronaca, quando colui che ha divulgato la notizia, pur avendo compiutamente adempiuto il dovere di controllo delle fonti da cui la ha appresa, abbia una percezione erronea della realtà.33 31 1699/1994/2 Papagiorcopulo George vs Magro Jimmy et noe, First Hall (Civil Court)29 May 2003. 32 On this point, Massimo Franzoni, as quoted in L-Onor George Pullicino v Felix Agius, Court of Appeal, Inferior Competence, per Mr Justice Philip Sciberras, 23 May 2008, held that: ‘Il requisito della verità, inoltre, ha ad oggetto l’essenza e la sostanza dell’intero contenuto informativo della notizia riportata, mentri i dati superflui, insignificanti ovvero irrilevanti, ancorchè imprecisi, non possono essere presi in considerazione, per ritenere valicati i limiti dell’esercizio del diritto di informazione ed escludere l’operatività della causa di giustificazione’. 33 Italian Court of Cassation, 24 September 1997, Number 9391.
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The appellate Court, however, concluded that no defamation was committed by the plaintiff because the principal facts indicated in the publication had been substantially proved. The defendant had also restricted himself within the narrow confines of publishing information in the public interest without adding value judgments which would have devalued the plaintiff’s character. The Court then ended the judgment by quoting the following Italian decision: In tema di diffamazione a mezzo stampa, la condotta del giornalista che, pubblicando il testo di un’intervista, riporti dichiarazioni del soggetto intervistato lesivo dell’altrui reputazione, non puo dirsi illecito quallora il fatto in se dell’intervista, in relazione alla qualità dei soggetti coinvolti, alla materia in discussione ed al più generale contesto in cui le dichiarazioni sono state rese, presenti indiscutibili profili di interesse pubblico all’informazione, tali da prevalere sulla posizione soggettiva del singolo, e tali da giustificare, per l’effetto, l’esercizio del diritto di cronaca.34 The Court annulled the judgement of the Court of First Instance and entertained the defendant’s appeal.
3. Conclusion From the above review of Maltese case law that applied and commented upon the diritto di cronaca, it can be concluded that this right is pleaded in court by way of defence to defamatory litigation basing itself very much on the veracity of the information disseminated. It is used as a plea intended to exempt from responsibility and from subsequent damages which may be liquidated by the court should responsibility for defamation be found. Further, it goes beyond simply the right to report current affairs and is a manifestation of freedom of expression. For this right to subsist, a number of elements have to be satisfied, these being: (a) true facts: the facts reported related to a news event or current affairs item must be substantially truthful. Dissemination of fake 34
Italian Court of Cassation, 25 February 2002, Number 2733.
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news, rumours or unverifiable information are not covered by this plea; (b) public interest: there has to be a public interest in knowing the fact that is being disseminated. A private interest cannot be considered for the purpose of raising such plea; (c) objectively correct exposition: the final exposition has to be accurate, done in good faith and impartial. The fact as reported has to be objectively correct; (d) when in doubt as to the correctness of the facts, always investigate the matter before going to printing/broadcasting/ disseminating them; (e) there has to be, as far as possible, a correspondence between the facts as happened and the facts as reported. Of course, this element does admit of the possibility that – at times – journalists do get a fact wrong here and there but, provided that they are acting in bona fede and that the published report is substantially true, the Court will not apply rigidly this element. Indeed, when the report is substantially fair and accurate, the Court has held that it is difficult to impute bad faith to the reporter.35 Not included in the diritto di cronaca are the non-existent: (a) ‘right’ to defame. (b) ‘right’ to manipulate facts; (c) ‘right’ to repeat a defamatory statement. The person gathering and disseminating news, current affairs, and public information and ideas, is usually a journalist, broadcaster or media person. But the plea can apply – in today’s digital world – to other persons not necessarily forming part of the journalistic/broadcasting/media professions such as web commentators, bloggers, etc., provided that all these categories of chroniclers – howsoever designated – compile truthful objective information of a public nature which is subsequently published, 35
Cassar Eugenio vs Agius Felix, First Hall (Civil Court) 4 March 1991.
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broadcasted or howsoever spread, divulged or communicated to the world at large. Bad use made of this right to publish news and current affairs, information and ideas on any matter in the public interest might lead to an action for defamation, breach of privacy, violation of professional, trade and/ or official secrecy, spreading of false news, and like offences/delicts. If the chronicler opts to exercise his/her diritto di critica, such exercise has to be based on facts which are objectively correct. The diritto di cronaca is a living remembrance of the influence that the ius civile has had on the Maltese legal system. Although today it might be in the process of being overtaken by new and all-encompassing concepts emanating from Human Rights Law where ‘a sanction imposed on a journalist is justified only in so far as it penalises those parts of his writings which have overstepped the limits of acceptable criticism’,36 it still continues to guide journalists in the performance of their reporting duties, emphasising the sacredness of facts and that fake and/or unverified information or ideas based on false facts is not tantamount to good quality journalism.
36
Perna v Italy App no 48898/99 (ECtHR, 25 July 2001).
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Therese Lia A comparison of the Hague Convention, and the Recast Regulation
Therese Lia is currently undertaking the Master in Advocacy (M.Adv) course at the University of Malta, and has developed a special interest in matters concerning human rights law and EU law.
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1. Introduction
J
urisdiction agreements1, meaning agreements as to which courts should decide any dispute which might arise between parties2, are one of the most important jurisdictional devices of modern times. This is because they enable persons, whether legal or natural, to plan where potential litigation will take place, thereby increasing legal certainty for the parties involved.3 Because of this, harmonised private international laws have entered into force to deal with their regulation, especially due to the legal difficulties4 which have arisen in their regard. Amongst such laws are the Hague Convention of 30 June 2005 on Choice of Court Agreements5, which entered into force on the 1st October 2015 and which enshrines the principle of party autonomy or consensual jurisdiction6; and the Recast Regulation7, which entered into force on the 10th of January 2015. Albeit these legal instruments being formally independent, in the drafting of each instrument, legislators took into account the other instrument in order to achieve coherence and in order to strengthen choice of forum agreements.8 Both the Convention and the Recast Regulation share a common aim; that is, of increasing legal certainty and predictability with respect to 1 Also referred to as forum-selection agreements or choice-of-court agreements. 2 Commission Staff Working Paper, Impact Assessment SEC (2010) 1547 final, 29. 3 ibid. 4 Such as in terms of third-party involvement. An example would include the issue as to whether Article 23 of Regulation (EC) No 44/2001 of 22 December 2000 meant that a jurisdiction clause in a contract between a manufacturer of goods and the buyer thereof could be relied on against a sub-buyer. (Case C‑543/10, Refcomp SpA v Axa Corporate Solutions Assurance SA and Others, (2010) [2013] 1 All ER (Comm) 1201). 5 Herein after referred to as the ‘Hague Convention’. 6 This means that no other court other than the chosen court should take jurisdiction. 7 Regulation 1215/2012 EU (2012) OJ L351/1. 8 This can be seen in how the European Commission in the Recast Proposal (European Commission, Proposal for a Regulation of the European Parliament and of the Council on jurisdiction and the recognition and enforcement of judgements in civil and commercial matters (Recast) COM (2010) 748 final, 9, sub 3.1.3) stated that such proposals reflect the Hague Convention solutions, as well as in the fact that with the latter Convention, the Conference stated that it ‘would favour a revision that aligns the Community rules with the 2005 Choice of Court Convention’ (Hague Conference on Private International Law, Letter to the European Commission of 13 July 2009, 4). Furthermore, the Hague Conference, in which the European Community played a prominent role, would have found it even more preferable to have an ‘integrated system’ in which the Convention’s regime would have been fully copied by the EU.
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jurisdiction agreements in international commercial transactions, as well as safeguarding the efficacy of jurisdiction agreements and ensuring their respect and enforcement in chosen courts.9 However convergences arise when a comparison is drawn between the operational systems of the two systems, their respective scopes of application, as well as the assessment of a jurisdiction agreement under their provisions.10 This is natural considering the fact that the nature of the respective instruments is different, one being a European Union Regulation and the other being an international treaty. In light of this, a comparison of the two instruments is important for their interpretation. This is because, them being interdependent, they could have potentially binding effects on each other when it comes to their interpretation. Because of this, this research will aim to draw a comparison between the two legal instruments on the following points: (A) Applicability and the definition of internationality in this regard; (B) Validity of the Agreement; (C) Public Policy Control; (D) Parallel Proceedings.11
2. Applicability 2. 1 The Hague Convention There are three limitations to the applicability of the Hague Convention. Firstly, it applies only to international cases. Secondly, whilst contracting 9 Other considerations in the Regulation include avoiding irreconcilable judgements as well as promoting the free movement of judgements in the Community. (Petr Břiza, ‘Choice-OfCourt Agreements: Could The Hague Choice Of Court Agreements Convention And The Reform Of The Brussels I Regulation Be The Way Out Of The Gasser-Owusu Disillusion?’ (2009) 5 Journal of Private International Law 537-563.) 10 Marta Pertegás, ‘The Brussels I Regulation And The Hague Convention On Choice Of Court Agreements’ (2010) 11 ERA Forum. 11 These are the points as drawn up by Matthias Weller, ‘Choice Of Court Agreements Under Brussels Ia And Under The Hague Convention: Coherences And Clashes’ (2017) 13 Journal of Private International Law.
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states have the possibility of extending its scope to cover non-exclusive choice of court agreements (Article 22), it applies only to exclusive jurisdiction agreements, meaning jurisdiction agreements depriving other courts of jurisdiction. Thirdly, it applies only to civil or commercial matters, which means that consumer and employment contracts, as well as carriage of goods (and passengers) by sea or other means12, are excluded.13 Such specific matters are excluded for varying reasons: either because of the existence of more specific international agreements, such as in maritime law; either because of significant precedents reproduced in the Convention14; or else because no agreement could be reached during negotiations.15 In addition to this, the Hague Convention rules are also temporally limited for they apply only to jurisdiction agreements concluded on or after the Hague Convention came into force in the country of the chosen Court.16 Regarding the first limitation, in Article 1(1) of the Hague Convention it is said that the Hague Convention applies ‘in international cases’. ‘International’ is defined in two different ways in Article 1(2) and 1(3) of the Convention: the former defines it for jurisdictional purposes; the latter defines it for the purpose of recognising and enforcing foreign judgments.17 In Article 1(2), it is stated that: …a case is international unless the parties are resident in the same Contracting State and the relationship of the parties and all other elements relevant to the dispute, regardless of the location of the chosen court, are connected only with that State. 12 This also includes maritime pollution, limitation of liability for maritime claims, general average and emergency towage and salvage. (Article 2(2)(g), Hague Choice of Court Convention). 13 Although insurance, and other areas of shipping law are not. 14 For example, the influence of the Brussels I Regulation on the tenancies of immovable property. 15 Andrea Schulz, ‘The Hague Convention of 30 June 2005 on Choice of Court Agreements’ (2006) 2(2) Journal of Private International Law 243-248 ; Paul Beaumont, ‘Hague Choice of Court Agreements Convention 2005: background, negotiations, analysis and current status’ (2009) 5(1) Journal of Private International Law 127-134 . 16 2005 Hague Convention on Choice of Court Agreements (the ‘2005 Hague Convention’). 17 Preliminary Draft Convention On Exclusive Choice Of Court Agreements Explanatory Report drawn up by Masato Dogauchi and Trevor C. Hartley (See: <https://assets.hcch.net/upload/wop/jdgm_pd26e.pdf>)
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What this means is that the rules of the Convention on jurisdiction will apply either if one or more of the parties are not resident in the State of the court seised, or if some other element relevant to the dispute (other than the location of the chosen court) has a connection with some other State.18 This makes it clear that a case is not international merely by designating a court located in one Contracting State, if the connections of the parties and legal relationship both belong to a different Contracting State. Similarly, according to Article 19 of the Hague Convention, a Court in a Contracting State may refuse to determine disputes with an applicable exclusive choice of court agreement if the only connection between that State and the parties is the location of the chosen court. However, as per Article 1(3) Hague Convention, where recognition or enforcement of a foreign judgment is sought, this would suffice to ‘internationalise’ the case. This is opposed to the Rome I Regulation19, according to which a combination of choice of law and choice of forum clause does not suffice to internationalise an otherwise domestic case. Even though the author submits that such clause is a relevant connection to another State20, this seems to give rise to an inconsistency when it comes to party autonomy, since for jurisdictional purposes, party autonomy is not enough to render the case an international one. The residence of the parties does not need to be permanent or otherwise qualified. In the case of a legal person, as per Article 4(2)(a) – (d), this will be deemed resident where it either has its statutory seat, where it was legally incorporated or formed, where it has its central administration, or where its principal place of business functions. As soon as one of these connecting factors is fulfilled in another State, the case is international.21
18 In other words, the Hague Convention requires the parties to be resident in different (Contracting) States or requires the legal relationship to be otherwise international beyond the choice of a foreign Court. 19 Regulation (EC) No 593/2008 of the European Parliament and of the Council of 17 June 2008 on the law applicable to contractual obligations (Rome I) (2008) OJ L 177. 20 Paul Beaumont, ‘Hague Choice Of Court Agreements Convention 2005: Background, Negotiations, Analysis And Current Status’ (2009) 5 Journal of Private International Law. 21 Matthias Weller, ‘Choice Of Court Agreements Under Brussels Ia And Under The Hague Convention: Coherences And Clashes’ (2017) 13 Journal of Private International Law.
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id-dritt 2.2 Recast Regulation Recital 3 Brussels I Regulation and Recital 5 Brussels I bis Regulation refer to the ground of competency for the enactment of the respective Regulations, those being Article 65 EC22 and Article 81 TFEU23, which require an international subject of the secondary law. On this basis, the Recast Regulation should not apply where a dispute involves no foreign element or where the foreign element only involves another part of the same country. 24 In contrast to the Hague Convention, the Brussels Regime considers a case to be international as soon as the parties choose a foreign court. Whilst it is not perfectly clear if a foreign element is established merely because the parties have chosen a foreign court or because the dispute could otherwise be litigated before a foreign court, in view of the cited judgements25, the author’s view is that the former is sufficient. Article 25 of the Brussels Recast provides that a Member State court acquires jurisdiction where it has been so chosen in a jurisdiction agreement between the parties, regardless of their domicile. This includes non-exclusive agreements. A lot of emphasis is thus made on party autonomy, which is not coherent with the Rome I Regulation26 or the Hague Convention.27 However, the author submits that if party autonomy was not emphasised in such a way the scope of the Brussels Regime would be narrowed, and this might be contrary to the intentions of the Recast legislators to extend the territorial scope of the EU jurisdiction agreement.28 On the other hand, rendering party autonomy decisive in making an otherwise domestic case international might 22 Treaty establishing the European Community (Nice consolidated version) (2002) OJ C325. 23 Consolidated version of the Treaty on the Functioning of the European Union (2012) OJ C326/49. 24 See the Jenard Report, pp.8, 37-8; the Schlosser Report, p.123, as well as Case C-281/02 Owusu v. Jackson (2005) ECR I-1383 at (25), and the opinion of AG Leger at (102); the opinion of AG Darmon in Case C-318/93 Brenner and Noller v Dean Witter Renolds Inc (1994) ECR I-4275 at 4282. 25 Provimiv Aventis Animal Nutrition SA (2003) EWHC 961 (Comm) at (74)-(75), (2003) 2 All ER (Comm) 683 and British Sugar plc v Fratelli (2004) EWHC 2560 at (34) – ratio, (2005) 1 Lloyd’s Rep 332. 26 This reads that ‘where all other elements relevant to the situation at the time of the choice are located in a country other than the country whose law has been chosen, the choice of the parties shall not prejudice the application of provisions of the law of that other country which cannot be derogated from by agreement’. 27 Articles 19 and 20, Hague Choice of Court Convention. 28 See Recital 39, Preamble of the Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (2012), OJ L 351.
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enable parties to abuse of jurisdictional party autonomy.29 Furthermore, despite its clash with the Hague Convention, it is to be noted that a clash might be necessary here due to the fact that the Recast Regulation needs to comply with Article 81 TFEU (judicial cooperation in civil matters).30 Since under Article 25 of the Recast, as opposed to the former Brussels I Regulation, it is no longer required for one party to be domiciled in a Member State, the only requirement now is that the parties choose a court located in a Member State, be it two third-state parties in the same third State or in different third States, be it parties in different Member states or in the same Member State other than that of the chosen court. In Weller’s opinion and on the basis of the Lugano opinion31, the CJEU has made clear that a connection to any other state is enough and there does not need to be a connection to a Member State in particular. This is despite the fact that the justification of the Recast has been linked to improving the functioning of the internal market.32 This was confirmed in Owusu33, although in Coreck Maritime34, a different statement was made.35 According to the author, the correct view is that in a number of additional circumstances nonU defendants are caught within its provisions.36 29 Matthias Weller, ‘Choice Of Court Agreements Under Brussels Ia And Under The Hague Convention: Coherences And Clashes’ (2017) 13 Journal of Private International Law. 30 Article 81 TFEU, Consolidated version of the Treaty on the Functioning of the European Union (2012), OJ C 326. 31 Opinion 1/03 Lugano (2006) ECR I-1145, para 145 et seq. This stated: ‘the international nature of the legal relationship at issue need not necessarily derive, for the purposes of the application of Article 2 of the Brussels Convention, from the involvement…of a number of Contracting States. The involvement of a Contracting State and a non-Contracting State…would also make the legal relationship at issue international in nature’. 32 Paul Torremans et. al. (eds.), Cheshire, North and Faucet: Private International Law (15th edn, OUP 2017). 33 Case C-281/02 Andrew Owusu v N. B. Jackson (2005) ECR I-1383, para 26, in which it was stated: ‘The involvement of a Contracting State and a non-Contracting State, for example because the claimant and one defendant are domiciled in the first State and the events at issue occurred in the second, would also make the legal relationship at issue international in nature’. 34 C-387/98 Coreck Maritime GmbH v Handelsveem BV and Others (2000) ECR I-9337. 35 Here the CJEU stated: ‘Article 17 of the Convention does not apply to clauses designating a court in a third country.’ C-387/98 Coreck Maritime GmbH v Handelsveem BV and Others (2000) ECR I-9337 para. 19. 36 Luigi Mari and Ilaria Pretelli, ‘Possibility And Terms For Applying The Brussels I Regulation (Recast) To Extra-Eu Disputes Excerpta Of The Study Pe 493.024 By The Swiss Institute Of Comparative Law,’ [2014] Yearbook of Private International Law.
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3. Validity 3.1 The Hague Convention Validity refers to grounds for nullity ex lege, for example the lack of formal requirements which are directly dealt with in both instruments,37 as well as grounds for avoiding the agreement and the matters of formation and existence of the agreement, in particular the parties’ consent. The Convention applies when there is a jurisdiction agreement which fulfils the basic factual requirements of consent to exist.38 Which law should answer whether the agreement leads to the application of the Convention? Article 5(1) of the Convention39 provides that the chosen court is to hear the case unless the agreement is null and void under the law of the chosen State. The chosen court must hence rely on its domestic law, including choice of law rules to assess the material validity of the parties’ agreement. However, the non-chosen court is allowed to review whether there is a ‘manifest injustice’, meaning an agreement in which consent does not fulfil even the minimum standards. Whilst Brand and Herrup40’s opinion is that the lex fori should decide whether the agreement is applicable in terms of the Convention, in the author’s submission, this would be a rather complex test and the application of the Convention would then depend on standards beyond the Convention’s control. Like Pertegas, the author favours reference to the chosen court’s law in the case of a harmonised conflict rule concerning the substantive validity of the agreement as this would be better suited to determine the validity of the agreement.41 Moreover, this will ensure that situations wherein one of the parties intentionally institutes proceedings in a legal forum less inclined to consider a jurisdiction agreement valid, are avoided. The author considers how the provisions of the UPICC 201042 could provide an alternative solution 37 Art 3(c) Hague Convention; Article 25(1) Sentence 3 Recast Regulation. 38 Preliminary Draft Convention On Exclusive Choice Of Court Agreements Explanatory Report drawn up by Masato Dogauchi and Trevor C. Hartley. paras 94 et seq. 39 Article 5(1), Hague Convention states: ‘The court or courts of a Contracting State designated in an exclusive choice of court agreement shall have jurisdiction to decide a dispute to which the agreement applies, unless the agreement is null and void under the law of that State’. 40 Robert Brand and Paul Herrup, Hague Convention on Choice of Court Agreements: Commentary and Documents (Cambridge University Press 2008), 40 and 79. 41 Marta Pertegás, ‘The Brussels I Regulation And The Hague Convention On Choice Of Court Agreements’ (2010) 11 ERA Forum. 42 UNIDROIT Principles of International Commercial Contracts 2010.
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for, like the Convention, the UPICC 2010 is conceptualised for businessto-business relations and it is conceptualised as a global instrument. Whilst it is rarely chosen as applicable law for contracts in international business transactions, parties would most probably prefer its application to the application of a foreign national law by any non-chosen court of a Contracting State, since it provides more stability and legal certainty. It would also provide an autonomous standard for formal validity without giving residual control to a non-chosen court. Furthermore, referring all questions of substantive validity (except for formalities) to the transnational standard for the substantive validity of the UPICC 2010 instead of resorting to a choice-of-law rule would avoid the problem of a renvoi that would produce inconsistent and surprising results.
3.2 Recast Regulation The validity of the agreement was assessed differently under the Brussels I Regulation, which instead of providing for a choice-of-law rule for nullity, provided that upon the fulfilment of the formal requirements, there will be an indication of sufficient consent.43 Whilst the interaction between form and consent should have excluded any additional recourse to national law to assess consent, Member States still referred to national law and inconsistent results were still produced. Thus, the Recast Regulation tried to fix this problem by copying the choice-of-law rule for nullity and avoidance from the Hague Convention into the new Recast Regulation. The latter now deals with substantive validity without dealing with capacity, agency and binding effects on third parties which hadn’t been covered in the Convention. However, the Regulation did not make it clear if by referring to the law of the designated court including conflict of law rules44, this meant that the previous link between form and consent was extinguished. One may argue that if the legislators of the Recast 43 This was reaffirmed in the Case 24-76 Estasis Salotti di Colzani Aimo e Gianmario Colzani s.n.c. v Rüwa Polstereimaschinen GmbH (1976) ECR 1976 -01831 . This is a preliminary reference case, which stipulated in detail the formal requirements needed in order for the validity of the clauses conferring jurisdiction. 44 This is made clear in Recital 20 of the Recast Regulation which states that the question as to whether a jurisdiction agreement is null or void ‘should be decided in accordance with the law of the Member State of the court or courts designated in the agreement, including the conflict-of-laws rules of that Member State’.
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desired such a fundamental change, this would have been more explicit and without such an indication, it is assumed that the nexus still exists. If this assumption is made then the Hague Convention and the Recast Regulation would be contradictory, despite the latter’s provisions being taken from the Convention. It is suggested that the CJEU develop its own case-law as to the validity of the agreement rather than leaving this point to national law, which may vary and provide less legal certainty than before. Because of this lack of clarification, it is suggested by the author, using Weller’s research, to use the DCFR45 as the standard for the Brussels regime.
4. Public policy 4.1 The Hague Convention Article 6(c)(2) of the Hague Convention states that a court of a Contracting state (the non-chosen Court) shall dismiss proceedings, unless the jurisdiction agreement is contrary to the public policy of the state of the court seized.46 In addition to this, the derogated Court may be able to refuse recognition of the judgement by the chosen court on the basis of violation of public policy47 and on the basis of inconsistency of the foreign judgement.48 Courts often invalidate derogation established in jurisdiction agreements as soon as the danger of breach of their internationally mandatory rules arises.49 45 Draft Common Frame of Reference (DCFR) – Principles, Definitions and Model Rules of European Private Law, Prepared by the Study Group on a European Civil Code and the European Research Group on Existing EC Private Law (Acquis Group). 46 An example would be if the chosen court is expected or suspected to breach fundamental principles of antitrust law or the core principles of investor protection law of the lex fori of the derogated court. T Hartley and M Dogauchi, Preliminary Document No 25 of 23 March 2004, para 97. 47 Article 9(e)(2), Hague Convention. 48 Article 9(f), Hague Convention. 49 An example would be in Ingmar, Case C-381/98 Ingmar (2000) ECR I-9305, in which the CJEU held that a valid choice-of-law clause selecting the law of a third-State (California, US) must not result in depriving a European commercial agent from his rights under the Commercial Agents Directive. In this case, there was no additional exclusive choice-of-forum clause in favour of the Californian courts; however, the German Federal Court of Justice extended the implicit limitation of party autonomy and decided through an acte claire that the forum clause designating the court of a third State (Virginia) must be invalidated in order to ensure implementation of the Directive. This decision is consistent with older German law which has repeatedly
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In the author’s submission, it seems to be undermining the party’s effective access to justice to send the party’s case to the chosen court just to prove that the judgement violates the public policy of the lex fori of the derogated court. On the other hand, there cannot be an international mandatory rule allowing for the invalidation of the derogation of the courts of the state whose mandatory rules are in question50 and hence, public policy control of jurisdiction agreements must be a measure of last resort, applying in very restricted situations.
4.2 Recast Regulation The Recast does not provide any equivalent to Article 6(c) of the Hague Convention; because of mutual trust under the Recast Regulation, there cannot be the derogation of a Member State’s jurisdiction, even if this would amount to a public policy violation. In Trasporti Castelletti, the CJEU decided that ‘substantive rules…applicable in the chosen court must not affect the validity of the jurisdiction clause.’ However, though conflicting with Article 9 of the Rome I Regulation51, J Fetsch suggests that Member State courts pay attention to other Member States’ internationally mandatory rules since the latter would not be able to.52 The Recast Regulation seems to be shifted towards making the EU system of private international law more legally certain by excluding any interference from Member States’ national legal orders, which in the author’s submission, comes at the cost of taking care of legitimate fundamental regulatory interests of the Member States. As M. Weller suggests, the principal reliability of jurisdiction agreements and their residual control should be rebalanced – invalidated exclusive jurisdiction agreements in favour of courts in New York and in London since German investors would not be able to rely on mandatory German investor protection law in the selected foreign courts. 50 Matthias Weller, ‘Validity and Interpretation of International Choice of Court Agreements: The Case for an Extended use of Transnational Non-state Contract Law’ in Essays in Honour of Michael Bonell (International Institute for the Unification of Private Law (UNIDROIT), 2016, 393 et seq. 51 Article 9(3) Rome I Regulation allows giving effect to third State’s internationally mandatory rules only to a very limited scope; namely, to those at the place of performance of the contractual obligation in question. 52 Matthias Weller, ‘Internationally Mandatory Rules and EC-Treaty, Book Review of Johannes Fetsch, Eingriffsnormen und EG-Vertrag, Die Pflicht zur Anwendung der Eingriffsnormen anderer EG-Staaten’ (2003) Annual of German and European Law 566.
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either de lege lata through a reinterpretation of Trasporti Castelletti or de lege ferenda in the next Recast.
5. Parallel Proceedings 5.1 Hague Convention According to Article 6 of the Hague Convention, a court of a Contracting State other than that of the chosen court shall suspend or dismiss proceedings to which an exclusive choice of court agreement applies, even if no proceedings are pending. This is unless one of the exceptions in Article 6(a)-(e) applies.53 In the case that one of the exceptions applies however, the non-chosen court is free to base its jurisdiction on autonomous grounds of jurisdiction to adjudicate its proceedings. If parallel proceedings have been instituted, the non-chosen court is to suspend its own proceedings and also possibly dismiss its own case.54 Thus, the Hague Convention thus does not give to any court the right to establish the validity of the jurisdiction agreement; rather it puts both courts on an equal footing, giving each court the competence to decide for itself on the validity and scope of the jurisdiction agreement. The non-chosen court may, however, give priority to the chosen court on its own motion, if it decides it logical to do so, or else it may continue its own proceedings, going to the merits of the case if the jurisdiction agreement is found to be null and void. The author sides with Brand and Herrup55, who believe that by granting more autonomy to Contracting State Courts, the Convention’s coordination mechanism in a way accepts parallel proceedings, despite initially seeking to reduce parallel proceedings by harmonizing the standards for establishing the validity of the jurisdiction agreement. 53 These exceptions are if the agreement is null and void under the law of the State of the chosen Court; if a party lacked capacity to conclude the agreement under the law of the State of the court seized; if giving effect to the agreement would result in manifest injustice or would manifestly brief the public policy of the State of the Court seized; if for exceptional reasons beyond the parties’ control the agreement cannot reasonably be performed or if the chosen court has decided not to hear the case. These exceptions are modelled on the New York Convention though the exceptions of the Hague Convention may seem more complex, according to Hartley and Dogauchi. 54 Preliminary Draft Convention on Exclusive Choice of Court Agreements Explanatory Report drawn up by Masato Dogauchi and Trevor C Hartley. 55 UNIDROIT Principles of International Commercial Contracts 2010.
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5.2 Recast Regulation The Recast Regulation has strengthened the role of jurisdiction agreements, particularly in parallel proceedings. This has happened in two ways. Firstly, Article 31(2) establishes the principle that in exclusive jurisdiction agreements, the named court does not have to stay proceedings seised under Article 29, as usually would be the case. This helped to tackle the problem of parties commencing proceedings in another Member State to purposefully delay litigation and increase litigation costs. In fact, in the Proposal for the Recast the European Commission56 declared that since the Recast Regulation obliged the court designated by the parties in a jurisdiction agreement to stay proceedings if another court has been seised first. This used to enable litigants acting in bad faith to delay dispute resolution by first seising a non-competent court, thereby undermining legal certainty and predictability. Due to the criticism the CJEU judgement Gasser57 received58, which posed difficulties for commercial transactions59, an amendment of the lis pendens rule came about. Whilst the general mechanism for coordinating parallel proceedings in Article 29 of the Recast was not changed, the general lis pendens rule is provided with an exception in order ‘to avoid abusive litigation tactics’, and this applies where both a court not designated as well as a court designated in an exclusive jurisdiction agreement have been seized of proceedings for the same cause of action.60 In such a case, the court first seised should be required to stay its proceedings as soon as the designated 56 European Commission, Proposal for a Regulation of the European Parliament and of the Council on jurisdiction and the recognition and enforcement of judgements in civil and commercial matters (Recast) COM(2010) 748 final. 57 Case C-116/02, Erich Gasser GmbH v. MISAT Srl [2005] QB 1. 58 In this case the CJEU decided that Article 21 of the Brussels Convention cannot be derogated where the duration of proceedings before the Courts of the Contracting State in which the court first seised is established is excessively long. According to the CJEU, the court second seised is never better placed than the court first seised to determine whether the latter has jurisdiction as the jurisdiction would be determined by the rules of the Brussels Convention which are common in both courts (Para. 47). 59 Petr Břiza, ‘Choice-Of-Court Agreements: Could The Hague Choice Of Court Agreements Convention And The Reform Of The Brussels I Regulation Be The Way Out Of The Gasser-Owusu Disillusion?’ (2009) 5 Journal of Private International Law 537-563. As Fentiman observed this case is a product of a formal approach, ‘the one which prized (legitimately, if awkwardly), logic above consequences, theory above practice.’ Richard Fentiman, ‘Case note on Gasser’ (2005) 42 Common Market Law Review 241, 251. 60 Recital 22, Recast Regulation.
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court has been seised until the latter declares it has no jurisdiction,61 in order to ensure that the designated court has priority to decide on the dispute pending before it. 62 Secondly, through Articles 33 and 34, the Recast Regulation directly addressed the issue of parallel proceedings with third States, which has been causing problems since Owusu v. Jackson.63 Articles 33 and 34 establish a number of pre-conditions which must be satisfied before a stay of proceedings is permitted where it is ‘necessary for the proper administration of justice’ (as cross-referenced to recital 24). Whilst these Articles attempted to address uncertainty as to whether Member State courts possessed discretion as to whether to stay proceedings when, for example, proceedings were ongoing in a non-Member State, they have been criticised for being too narrow in scope. This is because these pre-conditions, which apply on the basis of domicile, or under special rules for persons domiciled in EU Member States in relation to contract and tort disputes, do not include discretion to stay where the Member State has jurisdiction under an Article 25 jurisdiction agreement, which should be the case in non-exclusive jurisdiction agreements.64 Thus, contrary to the Hague Convention, which grants full parallel powers to the courts, the priority is shifted under certain circumstances from the court first seized to the chosen court, reversing the lis pendens rule, according to Hartley.65 Whilst the author sides with Pertegas, who is in favour of priority being given to the chosen court, despite the possibility of this causing delays, the author is also of the opinion that in comparison to the Convention, the lis pendens mechanism of the Recast Regulation is deemed overly complex. This is because the prerequisites of such a priority criterion are too difficult to define. It is thus suggested that the priority is granted by a simple and formal criterion such as ‘first seised’ as in Article 29 Recast Regulation.66 Finally it is important to note in this regard that due to the Gothaer 61 Article 29(1), Recast Regulation. 62 This would increase the effectiveness of jurisdiction agreements and reduce abusive litigation in non-competent courts. European Commission, Proposal for a Regulation of the European Parliament and of the Council on jurisdiction and the recognition and enforcement of judgements in civil and commercial matters (Recast) COM(2010) 748 final, 3. 63 Case C-281/02 Andrew Owusu v N. B. Jackson (2005) ECR I-1383. 64 UCP Plc v Nectrus Ltd [2018] EWHC 380 (Comm), 21 February 2018. 65 Thomas Hartley, ‘The “Italian torpedo” and choice-of-court agreements: sunk at last?’ in Patrik Lindskoug et al (eds), Essays in Honour of Michael Bogdan (Juristförlaget, 2013), 95, 100. 66 Matthias Weller, ‘Choice Of Court Agreements Under Brussels Ia And Under The Hague Convention: Coherences And Clashes’ (2017) 13 Journal of Private International Law.
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Versicherung judgement67, Member States’ courts are bound by judgements of other Member States on jurisdiction agreements68 Whilst this does not affect the modified coordination mechanism in Articles 31(2) and (3) of the Recast, such judgement could displace the modified mechanism installed in Article 31 of the Recast Regulation as well as the general mechanism established in Article 29.
6. Conclusion It is to be concluded that the Hague Convention and the Recast Regulation are self-standing instruments in their respective norms. Whilst, due to their influence on each other, similarities are commonplace, the legal instruments also often clash69 at times. This can be observed in the similarities and divergences which were noted with respect to the points discussed, a conclusion of which is drawn hereunder.
67 In this case, proceedings were instituted at a Belgian Court, which decided that the jurisdiction agreement in place was exclusive and valid in terms of Article 23 of the Lugano Convention. Proceedings were then once again instituted in the German Courts, which was faced with the question as to whether the latter courts had to recognise the validity of the decision of the Belgian courts; whether they were bound by the findings on the jurisdiction agreement. The CJEU held that the judgment of a Member State which declined jurisdiction on the ground of the existence of a jurisdiction clause was res judicata and was thus binding on courts of other Member States. Article 32 must be interpreted to include such judgements, irrespective of how that judgment is categorised under the law of another Member State 68 C-456/11, Gothaer Allgemeine Versicherung AG and others v Samskip GmbH [2013] QB 548. 69 It is possible for them to co-exist and conflict, even though the Hague Convention is ratified by the EU. This is because Article 26(6) deals with the interface between the Convention and Brussels I. It states that the Brussels I Regulation prevails where both parties are resident in (a) European Union Member State and the other in a non-European Union State which is not party to the Hague Convention. Where one party resides in a EU state, and the other in a non-Member State but in a State party to the Convention, the Convention prevails. Explanatory Report by Thomas Hartley and Masato Dogauchi to the Convention of 30 June 2005 on Choice of Court Agreements (www.hcch.net).
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(A)
Applicability:
Both instruments are limited to disputes in civil and commercial matters with a number of specific exceptions, such as the validity of asymmetric jurisdiction clauses, which the EU rules are unclear on and which the Hague rules do not support. 70 Both of them only apply to exclusive choice of court agreements, though it is possible for contracting states to extend recognition and enforcement provisions of the Convention to non-exclusive jurisdiction agreements.71 In contrast to the Recast Regulation, the Convention does not apply to consumer contracts and contracts of employment. These are covered by the Recast but are afforded specific treatment through protective jurisdiction rules. Furthermore, the international element features in both legal instruments; however, party autonomy is given different weight in each legal instrument, resulting in different definitions of what constitutes ‘international’. (B)
Validity:
Both legal instruments require the validity of the jurisdiction agreement, for without consent it would be rendered null and void and without any binding force. In the Hague Convention, it is the chosen Court which decides as to validity. In the Recast, which copied the Hague Convention’s provisions, uncertainty as to the relationship between form and consent remains.
70 Christopher M V Clarkson and Jonathan Hill, The Conflict Of Laws (4th edn, Oxford University Press 2011). 71 C-456/11, Gothaer Allgemeine Versicherung AG and others v Samskip GmbH [2013] QB 548.
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Public Policy:
A clash occurs between the two instruments with regard to the question as to whether a non-chosen court may disregard the jurisdiction agreement on the basis that it would result in a violation of public policy. Contrary to the Recast Regulation, the Hague Convention expressly allows any court of a Contracting State derogated by the parties to continue its proceedings and disregard the jurisdiction agreement, despite the fact that giving effect to the jurisdiction agreement would be manifestly contrary to the public policy of the lex fori of the derogated court. This exception, which does not exist in the Recast, is founded on the basis of validity and lis pendens. (D)
Parallel Proceedings:
Contrary to the Hague Convention, which places the chosen and non-chosen courts on equal footing, the priority in the Recast is shifted under certain circumstances, from the court first seized to the chosen court. Finally, seeing as the EU is a signatory to the Hague Convention, EU policy-makers should ensure that coordination is ensured between the two instruments in order to ensure a coherent international legal order for litigants involved in disputes before the EU Courts.72 In this regard, Pertegas73 questions whether it is possible to place an integrated regime on the treatment of jurisdiction agreements by European courts, and in the author’s opinion whilst this might pose certain challenges from a legislative perspective74, there are several ways this could happen – through the transposition of the Convention’s operational system, and through the removal of the two legal systems’ convergences so that the two legal instruments could operate alongside each other, being just two. 72 See HCCH’s Response to the Commission’s report and green paper on the review of Regulation 44/2001 ‘concerning jurisdiction and the recognition and enforcement of judgments in civil and commercial matters’, available at http://ec.europa.eu/justice_home/news/consulting_public/news_consulting_ 0002_en.htm. 73 Marta Pertegás, ‘The Brussels I Regulation And The Hague Convention On Choice Of Court Agreements’ (2010) 11 ERA Forum. 74 For example with regard to the primacy of the Regulation with respect to insurance, consumer and employment contracts.
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Frances Camilleri-Cassar ‘Originality’ is of utmost importance in academic writing: what counts as original?
Dr Frances Camilleri-Cassar is the first woman appointed as Full Professor in the Faculty of Laws, University of Malta. Her research interests centre around gender, social policy, and equality law. She has published widely, and her most recent is a monograph entitled: Academic Research Methods for the Law Student: a practical guide, Faculty of Laws, University of Malta.
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1. Introduction
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cademic research is a critical process for asking questions. Sometimes, asking and attempting to answer questions involves a questionnaire, sometimes an in-depth interview, sometimes an experiment, and sometimes an entirely different and perhaps original method of research created by the researcher. However, what is a definition of originality in academic work? What is the relevance of originality? What is its importance, if at all? For example, originality in the assessment of a dissertation at the Faculty of Laws carries a substantially high fifty-five percent of the total marks. Additionally, law students are expected to submit their assignment through an electronic screening tool to detect plagiarism, and ascertain that the work carries an acceptable level of ‘originality’. Generally, the higher the similarity rate, the lower the originality, and vice-versa. Plagiarism is a serious breach of intellectual property rights, and can be severely penalised. In September 2017, the University of Malta published a Plagiarism Screening Policy for student assignments, dissertations and theses. So, what counts as ‘original’ in academic writing? The discussion that follows is precisely an attempt at answering that question.
2. What is ‘originality’? Originality is all about being creative, all about being innovative, and all about being novel when carrying out research, or when writing an academic piece of work, or even when embarking on a first attempt at drawing up a dissertation proposal. My experience of many years in academia has taught me that Malta’s educational system tends to stunt intellectual creativity in the young person, from a very early age. Free thinkers and critical thought may not always be understood, or even looked upon too kindly by educators. There seems to exist a non-verbal understanding in Malta’s age-old educational system where educators stick with a rigid pedagogy pertaining to the ‘jug and mug’ theory. Arguably, attempts by students at presenting innovative ideas that pull away from worn-out rules are oftentimes blunted or ignored, or what is worse, penalised for ‘excess’ in originality.
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For example, students studying languages in schools today are still examined on writing a summary of a comprehension, or a paraphrase of someone’s written work. What of writing skills that encourage originality such as a critical analysis of a written prose, or an assignment that stimulates thought for or against a topic pertaining to politics, or to religion, or law? Similarly, students at tertiary level are faced with a teaching-focused system of rote learning that concludes the semester with a written examination of hand-me-down lecture notes. Alternatively, a learning environment that encourages originality puts the onus on students to take responsibility for their own learning through their own research, and where coursework assignments play a more prominent role at assessment stage. I argue that this practice and style of learning is what gives space to student creativity, and a clear understanding of the concept of ‘originality’. There is some uncertainty around the choice of new topics for research, precisely because a student can come to grief if there is no supervisor to provide guidance on the subject matter. However, Finch and Fafinski1 claim that some universities take the view that the role of the supervisor is ‘to guide the process of the dissertation rather than to check the accuracy of its content, so it is immaterial whether or not they have expertise in the topic.’ Nonetheless, I still hold true that tertiary education must now pull away from the rote system, and guide students towards creativity and originality in their research and writing. For instance, the subject matter on the study-unit description of Child Trafficking Law, which I lecture, focuses largely on worst forms of child labour, and child sexual exploitation, and students taking my classes often ask whether or not they could select areas of research not covered in my lectures. One example was a request to research the law around trafficking in human organs, the provisions of which were added in 2016 under Section 248CA in the Criminal Code, Chapter Nine of the Laws of Malta. I find no problem at all when students choose to move quite away and beyond the topics listed in the study-unit description, and to discuss and share their research findings with their colleagues. For example, one of the most interesting subjects brought to the lecture room was precisely the subject of trafficking in children for use as child soldiers and suicide bombers, a current illegality that flies in the face of various treaties and protocols that 1
Emily Finch, Stephen Fafinski, Legal Skills (5th edn, Oxford University Press 2015) 328.
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prohibit the recruitment of children in conflict areas around the world.
3. Interdisciplinary research in legal scholarship? Traditionally legal scholarship was dominated by pure doctrinal research commonly called ‘black letter law’. Essentially, this type of research restricts itself to a textual analysis of the law, which focuses largely on statutes and court judgements, with minimal attention to the world and the societies that live within it. However, new generations of legal scholars and law schools internationally are either abandoning pure doctrinal analysis, or infusing it with interdisciplinary techniques and research approaches adopted from the humanities and the social sciences. Indeed, there seems to be consensus in the literature that interdisciplinary research broadens, as much as possible, the horizons of legal studying, whilst contextualising it in the society of which we all form part. This has helped to combine doctrinal analysis with empirical legal scholarship, for an understanding of why the law says what it says, and the way that it affects society2. For example, a study of constitutional law today may sound like old hat; however, a study of constitutional law from a comparative law perspective would entail a contrast of a number of constitutions on either a European level or worldwide. Here, originality is not about the Maltese Constitution per se, but rather in the comparison of Malta’s Constitution with the American, the Swedish or the Icelandic Constitution. Has there ever been a study that compares Malta with Iceland from a constitutional perspective? Another example of interdisciplinary research would be a comparison of research methods used in legal scholarship with methodological approaches and methods of research commonly used in the social sciences or the humanities. Whilst there are many writings on research methods, arguably, there is no study that compares legal research methods with research methods in other disciplines outside law. Here lies the originality of the study, and its contribution to academic knowledge. In line with current trends, the Faculty of Laws at the University of Malta has moved beyond the copy and paste of judicial methods of interpretation, and is now infusing scholarly legal research with techniques and approaches from other disciplines. Universities overseas have long moved on, and 2 Rob Van Gestel, Hans-Wolfgang Micklitz, Miguel Poiares Maduro, ‘Methodology in the New Legal World’ (2012/2013) European University Institute Working Papers page 5.
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are now teaching law students interdisciplinary research methods, other than traditional doctrine research. For instance, ‘law schools in the United Kingdom, the United States and elsewhere are offering new postgraduate programmes (such as socio-legal studies, feminist legal studies, critical legal studies and new approaches to international law) that encourage an interdisciplinary approach to the study of law’3.
4. Law in transition Law is a discipline in transition moving from a predominantly monodisciplinary dogmatic tradition towards multi-disciplinary and empirical research. However, there is very little literature on methods for scholarly legal research, apart from the books and articles on legal writing, on finding relevant sources, and on reading cases and statutes that are largely concerned with the technical skills needed for legal research. ‘Quite often the existing literature does not make a clear-cut distinction between scholarly legal research, and legal research performed by practising lawyers. One of the problems of many current books on how to do legal research is that they lack a level of sophistication, criticism, and self-reflection that is essential for scholarly legal research’4. Historically, legal scholarship relied heavily on ‘black-letter law’ focusing entirely on court judgements and statutes with little or no inference to society and the social construct often shaped by the law. By the early Seventies however, legal scholars began to pull away from doctrinal research and its narrow approach that merely seeks ‘order, rationality and theoretical cohesion’, and instead turned their attention to ‘law in context’ that looks primarily on society and its social problems. An example of a research question in this regard might be ‘to what extent is permitting plea bargaining, in cases of mass murder, perceived as an affront to the families of victims and their representatives?’ This research question would require a review of the implications of plea bargaining, together 3 Mike McConville, Wing Hong Chui, ‘Interview and Overview’, published in Mike McConville, Wing Hong Chui (eds.), Research Methods for Law (2nd edn, Edenborough University Press 2017) 5. 4 Rob Van Gestel, Hans-Wolfgang Micklitz, Miguel Poiares Maduro, ‘Methodology in the New Legal World’ (2012) European University Institute Working Papers page 20.
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id-dritt with doctrinal analyses of cases and statutes. However, this is not enough. The study would also require a qualitative approach to empirical research that includes in-depth interviews and written submissions produced by victim groups. Of course, the key focus of the research requires socio-legal methods that ‘violate the protocols of the black-letter approach […] the latter being clearly inappropriate for a number of identifiable reasons’5. Is legal research really so different from other social sciences or the humanities that it can do without generally accepted research methodologies? In the social sciences, there is consensus on how to draw up a research question, or how to use participatory observation, or in-depth interviews, all for the collection of unbiased and uncontaminated primary data. However, in law there are no accepted guidelines on, for example, how to undertake a proper literature review, or even how to write a case note. Malta’s Faculty of Laws has gone through significant transformations, and is facing challenges with no room for one dominant methodology for scholarly legal research. Today, law students are expected to add something new to the body of knowledge by engaging with empirical research. Law is and remains a social phenomenon. As the legal maxim runs: ubi societas, ibi ius: where there is society, there is law. Socio-legal research does precisely this: it contextualises the teaching of law to the society which it regulates. Is not law, first and foremost, a tool to solve societal problems?
5. Examples of originality Phillips and Pugh6 suggest it is easy to be original; however, is it? This section in the paper draws on a number of definitions of originality, and discusses examples of how to use different methodologies in crossdisciplinary research.
5.1 ‘carrying out empirical work that has not been done before.’7 5 Michael Salter, Julie Mason, Writing Law Dissertations: An Introduction and Guide to the Conduct of Legal Research (Pearson Education 2007) 112. 6 Estelle Phillips, Derek S. Pugh, How to Get a PhD: A handbook for students and their supervisors (2nd edn, Open University Press 1996) 61. 7 ibid.
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For instance, Article 19 sub-article 1 of the Marriage Act in Chapter 255 of the Laws of Malta lists a number of provisions where an action for the annulment of a marriage may be commenced by one of the parties to that marriage. Section 19(1)(a) provides that a marriage is void ‘if the consent of either of the parties is extorted by violence, whether physical or moral or fear’. The concept of violence is broad, and may be defined in many ways depending on the discipline and area of research interest; however, ‘fear’ provides ample ground for originality in a psycho-socio-legal context. For instance, an interesting research question would be: How is fear defined by legal jurists in cases of annulment of a marriage that has its basis precisely on fear? Apart from contextualising fear within a theoretical framework, the research study may also include empirical work by including one or two focus group sessions with spouses whose marriage has been annulled, precisely out of fear. As the subject matter is somewhat sensitive, one-toone in-depth interviews would prove more beneficial in the collection of ‘uncontaminated’ data that is rich and robust. How do the study participants perceive fear? Besides the definition given by legal jurists, the study would also seek an understanding of the definition of fear by those who have lived or are living the reality of fear. What induced the fear? Was it reverential fear, was it psychological fear, was it fear of physical violence, or threats? How is fear defined by the people who experienced the lived reality of fear? What were the circumstances that made the study interviewee submit to fear? What stopped the victim from fighting personal fear? Such empirical work that raises relevant research questions of fear from a legal perspective has not been done before, and here lies the originality of the study, and its contribution to knowledge in legal scholarship.
5.2 ‘making a synthesis that has not been made before.’8 Another definition to demonstrate what makes a study original is ‘making a synthesis that has not been made before’. For instance, Id-Dritt Volume No. XX published in 2014 by the Ghaqda Studenti tal-Ligi of the Faculty of Laws, contains various papers written by local academics on a number of subjects relevant to law students. However, one such paper in the publication is a synthesis of the provisions in the law that focuses largely on public interest 8
ibid.
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disclosure, or more colloquially, whistle blowing legislation. The paper is titled: ‘“No more heroes anymore?” The Whistleblowing Dilemma: Recent Developments and a fresh look at some Conceptual Issues’, and was written by David Fabri. Indeed, the study provides a fresh look to the study of legal research, as it synthesises all the provisions on public interest disclosure in Maltese law, which until then were dispersed all over the statute book. Moreover, Fabri provides a detailed illustration with concrete examples of whistle blowing legislation, which took place both in Malta and more so abroad. Hence, all the provisions on the subject matter are now found in one single document. This is another clear example of originality in academic writing.
5.3 ‘setting down a major piece of new information in writing for the first time’9 Originality also lies in ‘setting down a major piece of new information in writing for the first time’. For example, suppose a study raises a research question pertaining to a specific provision in the Maltese Constitution concerning the appointment of judges. One relevant case that comes to mind is the appointment of Advocate Andre’ Camilleri as Judge of the Superior Courts in 2002, and his subsequent resignation. At that time, this was the only case where a Maltese Prime Minister sought the advice of the Commission for the Administration of Justice in appointing a judge. However the Commission advised against the recommendation on the grounds that Camilleri had, it appeared, not practised law at the bar. In other words, the Commission interpreted the Constitution as requiring an advocate to have practised in court for twelve years before that advocate could be appointed a judge of the Superior Courts. But all this was nonsense as quite some time previously, the Constitution had been amended, and the requirement revoked. What the Commission did not appreciate was that what is constitutionally required are twelve years of professional practice in law, and it is irrelevant whether that practice is at the bar or in an office. Hence, an original study would involve research of the historical evolution of the Maltese Constitution, and contribute to knowledge with an original finding that the provision on the appointment of judges was wrongly 9
ibid.
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interpreted by the Commission for the Administration of Justice at the time. This is a research finding not recognised by the Commission, and which concludes that the Commission’s legal argumentation against the nonappointment of Camilleri as Judge of the Superior Courts was unsound. Hence, an original piece of academic work.
5.4 ‘adding to knowledge in a way that has not previously been done before’10 Another way of increasing the chances of originality in academic writing is by ‘adding to knowledge in a way that has not previously been done before’. For instance, the subject of treason and sedition has been written about in extant literature; however, analyses of the provisions of the law in question shed new light on their historical evolution, application and interpretation. One such example is the LLD thesis written by Kevin Aquilina in 1988 on ‘Treason and Sedition in Maltese Law’11. There is no doubt that in so far as this topic is concerned, there is quite a substantial amount of literature found in the UK, in Italy and also France on the subject matter. But there is no one single book which has analysed critically all the pertinent treasonable and seditious provisions of Maltese law, including relevant crimes from a case law perspective. Although there are innumerable books on English, Italian and French provisions on treason and sedition, there is no single book in Malta which focuses on Maltese crimes of treason and sedition. Hence the originality lies in the analytical study of each and every provision in Maltese law dealing precisely with treason and sedition.
5.5 ‘Bringing new evidence to bear on an old issue’12 Originality is evident also when ‘bringing new evidence to bear on an old issue’. Take the death penalty as an example. There exists substantial literature on the subject matter; however, instead of studying this topic from 10 ibid 62. 11 Kevin Aquilina, ‘Treason and Sedition in Maltese Law’ (LL.D. thesis, University of Malta 1988) 12 Estelle Phillips, Derek S. Pugh, How to Get a PhD: A handbook for students and their supervisors (2nd edn, Open University Press 1996) 61.
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the point of view of history of legislation, or comparative law, or even criminal law, a study of the death penalty may be approached from the point of view of the right to life, or as addressed by the European Convention on Human Rights’ Protocol13, which abolishes the death penalty altogether. So although the study delves into existing knowledge, an innovative perspective may still be introduced. Although Malta had abolished the death penalty with the ratification of the European Convention on Human Rights, the death penalty remains present in the Maltese Constitution. An example from Kevin Aquilina’s work is his thesis for the Degree of Doctor of Philosophy in Law14. The research dealt with a subject matter in criminal law that is quite extensively treated in the literature, and that is the United Kingdom Official Secrets Act. However, the research approach adopted by Aquilina was original and innovative in that it carried out a human rights impact assessment, in order to determine which rights and fundamental freedoms were breached by the enactment in the criminal laws of Malta.
5.6 ‘Continuing a previously original piece of work’15 A novel approach to a research study is that of ‘continuing a previously original piece of work’. One such example draws on the two volume book by Andrew Vella titled: Storja ta’ Malta Volume I16 published in 1974, covers the period from pre-history to the Great Siege of Malta, while Volume II17 published in 1979, discusses the period from the Great Siege to the French occupation. Vella could not finish his opus because, in the meantime, he passed away. Somebody had to continue this piece of work, and the task fell upon Henry Frendo who published Volume III18 in 2004, and covers the British period in Malta until the nineteenth century. Presumably, a fourth 13 Protocol No. 13 to the Convention for the Protection of Human Rights and Fundamentl Freedoms concerning the abolition of the death penalty in all circumstances (Vilnius, 3rd May 2002). 14 Kevin Aquilina, ‘An Analaysis of the Maltese Official Secrets Ordinance from the Perspective of the Human Rights and Fundamental Freedoms of the Individual’ (Ph.D. thesis, University of London 1996). 15 Estelle Phillips, Derek S. Pugh, How to Get a PhD: A handbook for students and their supervisors (2nd edn, Open University Press 1996) 61. 16 Andrew Vella, Storja ta’ Malta, vol 1 (Klabb Kotba Maltin, 1974). 17 Andrew Vella, Storja ta’ Malta, vol 2 (Klabb Kotba Maltin, 1979). 18 Henry Frendo, Andrew Vella, Storja ta’ Malta, vol 3 (Klabb Kotba Maltin, 2004).
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volume will be issued to cover the twentieth century or part thereof. Hence the originality of Frendo’s work lies in the fact that he continued a previously original piece of work through the publication of Volume III and possibly of a fourth volume as well.
5.7 ‘Looking at areas that people in the discipline have not looked at before’19 Another aspect of originality and a pioneering piece of work is ‘looking at areas that people in the discipline have not looked at before’. For example, the monograph by David Joseph Attard titled: The Exclusive Economic Zone in International Law20 and published in 1991 is the first book of its kind. In this sense, it is a landmark in the law of the sea. The same can be said of the monograph by Andrew Muscat titled: Principles of Maltese Company Law published in 200721, followed by a second edition in 201922. What is novel in these books is that they discuss an area of the law which has never been the subject of thorough review in previous academic writing, hence the originality in the work.
5.8 ‘Trying out something in this country that has previously only been done in other countries’23 Originality may be created through ‘trying out something in this country that has previously only been done in other countries’. For instance, a number of television programmes in Malta are often a copy and paste of other foreign television stations. Take the example of the Big Brother reality show, which was copied by Maltese television until the time when Endemol, 19 Estelle Phillips, Derek S. Pugh, How to Get a PhD: A handbook for students and their supervisors (2nd edn, Open University Press 1996) 62. 20 David J. Attard, The Exclusive Economic Zone in International Law (Oxford University Press 1991) 21 Andrew Muscat, Principles of Maltese Company Law (2nd edn, Malta University Press 2007) 22 Andrew Muscat, Principles of Maltese Company Law (2nd edn, Malta University Press 2019) 23 Estelle Phillips, Derek S. Pugh, How to Get a PhD: A handbook for students and their supervisors (2nd edn, Open University Press 1996) 61.
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the Dutch based media company that had the rights to this programme, sued the Maltese producers in Court. Leaving aside for the time being the law of copyright, the Maltese producers were, in this respect, original, albeit in breach of the law. They attempted to try out something in Malta that had previously only been done in other countries. I must add that at the end of the court proceedings, Endemol must have realised the deficit in Maltese creativity, and decided to give clearance to the production house - and perhaps even a handshake - and settled the dispute amicably. In short, the Maltese version of Big Brother was indeed something new in this country, despite the fact that the Big Brother programme had been losing currency in those foreign countries where it had been produced for many years.
5.9 ‘Taking a particular technique and applying it in a new area’24 Maltese Courts often apply existing techniques to new branches of the law. However, an example to demonstrate the definition of ‘taking a particular technique and applying it in a new area’ is a study by Kevin Aquilina titled: ‘Development Planning Legislation: The Maltese Experience’25 published in 1999. Malta’s courts of law apply, rightly or wrongly, techniques of interpretation to this branch of the law and, indeed, to evolving branches of the law. For instance, if in the law of civil procedure there is an institute of res judicata or of juridical interest, one finds that these two institutes end up being applied to another branch of the law, e.g. administrative law. At times, it makes sense to apply these civil law institutes to development planning law; however, at other times it might make more sense to apply different rules. The originality of Malta’s courts lies in the fact that by applying the principle of analogy, they extend civil law institutes to other branches of the law. Here lies the Courts’ originality.
5.10 ‘Using already known material but with a new interpretation’26 24 ibid. 25 Kevin Aquilina, Development Planning Legislation (Mireva Publications 1999). 26 Estelle Phillips, Derek S. Pugh, How to Get a PhD: A handbook for students and their supervisors (2nd edn, Open University Press 1996) 61.
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‘Using already known material but with a new interpretation’ is a type of originality that is very common in the literature and in the arts. This pertains to new interpretation of the meaning of a particular passage, or prose, or even an abstract painting by asking what did the dramatist, like Shakespeare for instance, have in mind when writing these lines in his sixteenth century play The Merchant of Venice? What did Picasso have in mind when he painted Girl Before a Mirror in 1932? What did Beethoven have in mind when he wrote his Symphony No.7 in 1811? Of course, one can try to extrapolate the artist’s thoughts from his own writings, paintings or music. However, this paper is not about the interpretation of paintings, or literature or music but rather about the study of the law. Yet, even in this realm of human knowledge, I can come up with a new interpretation of someone else’s work. For instance, I might disagree with commentators and critics on St Thomas Aquinas with regards to his understanding of natural law or the common good. And instead, I could put forth a new interpretation of the common good or natural law as understood by St Thomas Aquinas himself. Indeed, I can apply this approach in my research to any philosopher of law, and any theory propounded by any jurist.
5.11 ‘Showing originality in testing somebody else’s idea’27 Originality can assume different guises and can also consist in a combination of any of those listed in Phillips and Pugh the last of which is ‘showing originality in testing somebody else’s idea.’ For example, during his lectures, Kevin Aquilina claimed that when he was studying for a BA degree in Philosophy, he come across a philosopher by the name of Ludwig Wittgenstein whose writings were difficult to comprehend. However, Aquilina adds that the problem only lasted until he read a critical study of the philosopher’s books which made it then very easy to understand the philosophy of Ludwig Wittgenstein. Indeed, a good exposition of Wittgenstein’s works had made it possible to understand what seemed to be a complex and unintelligible task. By analogy, a commentary on a particular provision of a law or on a number of provisions may make it easier for the lawyer or law student to comprehend better what that provision is aiming at. This commentary can elaborate on the social purpose of the provision, or research which led to 27
ibid.
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the enactment of that provision, or it might be a simple codification of case law, in which case which judgment provoked that provision. An example of such a contribution is a publication by Tonio Borg titled: A Commentary on the Constitution of Malta28 published in 2016. Alternatively, it could be that the legal provision in question is incorporating into Maltese Law an international treaty or transposing an EU directive. Once again, it may be well worth it to look at the traveaux preparatoires or the draft directives, and any Commission or Parliamentary documents which shed light on the interpretation of that directive.
6. The Fundamental Importance of a Literature Review Earlier on, I signalled the importance of critical analysis, rather than, for instance, a paraphrase of someone else’s work. Indeed, critical capacity is an essential part of academic scholarship, and in any event, the literature review of texts and research reports is an essential first step in originality. This leads me to a brief discussion of the fundamental importance of a literature review, and its relevance in making one’s work truly original. A literature review is not just a descriptive list of available material or a set of summaries of existing knowledge as was taught to most at University. The purpose of a literature review is to develop an understanding of what already exists or has been established on a topic of interest or on a research question that stimulates thought, through a process of identification and interpretation of relevant legislation, cases and secondary materials in law produced by scholars and practitioners. More specifically, a literature review provides scope for a critical analysis of what has already been published, and it is through this rigorous analysis that an original treatment of an established topic can be developed. A literature review is based on primary sources which state the law, or on secondary sources which analyse law29. It is an account of what has been published by legal scholars and researchers on a chosen research topic. It follows the introduction to the research, and provides a framework to the 28 Tonio Borg, A Commentary on the Constitution of Malta (Kite Group 2016). 29 I. Dobinson, F. Johns, ‘Legal Research as Qualitative Research’, published in Mike McConville, Wing Hong Chui (eds.), Research Methods for Law (2nd edn, Edenborough University Press 2017) 34.
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study. The review builds around a specific research study, and is defined by a guiding concept around a problem question taking into account a range of real world realities and factual circumstances. Furthermore, it highlights the gaps in existing knowledge, thus providing a sound argument in defence of the choice of question, and demonstrates how the study will contribute to knowledge in the literature. A review is also an opportunity to showcase the ability to think critically and objectively about issues raised by previous research findings. This is what originality is all about. For instance, what other studies have there been around a chosen topic? Students at the Faculty of Laws are encouraged to avoid selecting an area in the law that has already been written about several times over, or alternatively, a topic that everyone else in the law course wants to investigate. As suggested earlier, originality carries a high mark in an exam. A literature review is not an annotated list describing or summarizing one piece of literature after another. It is usually work of rather low quality, and with little evidence of additional reading, when a study begins every paragraph with the name of the same legal scholar, or the same piece of legislation. Instead, work of exceptional quality and superior performance discusses readings that are critically evaluated and synthesized according to the guiding concept of the research question. This is why a literature review is of fundamental important in a research study because it helps identify areas of controversy, and raises questions that stimulate thought towards the creation of original academic writing.
7. Final remarks The aim of academic research and writing is not to replicate what has already been done; on the contrary, the aim is to contribute to academic knowledge in some way, no matter how small; something that helps further our understanding of the world in which we live. Interdisciplinary and empirical research are essential to an understanding of originality in scholarly legal writing. There still exists some scepticism against interdisciplinary research in law that has to do with old quarrels about whether or not law is a science. Old-time legal scholars claim that law is different from other sciences, however, they do not explain how and why, and what the justification is. 221
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They argue that multi-disciplinarians do not understand what it means for law to be a normative science, and multi-disciplinarians contend that legal scholarship merely defends personal views and opinion. Nonetheless, in today’s law schools, it is now accepted that legal research based only on narrative and the black letter approach, without any empirical content, is no longer encouraged, as was the position in the past. Smits30 poses a provocative statement when he suggests that legal scholarship is presently in the midst of an identity crisis. But is it? Controversies and debates aside, research findings in this paper suggest that non-doctrinal approaches represent a new avenue for studying law. Moreover, the merits and reliance of using interdisciplinary or socio-legal research generate empirical evidence to answer research questions, to solve societal problems, and to offer an opportunity for differentiation and originality in legal scholarship and academic writing. The more original a dissertation is the more praiseworthy it will be and, of course, the more will it be to the liking of the supervisors and examiners. One final remark: in recent years, there has been growing interest in gender as an important dimension in feminist legal studies. For example, what is the potential of feminist jurisprudence in developing methodologies that rely on women’s experiences and perspectives? To what extent do feminist methods in research challenge the foundational dimensions of male bias in law and legal institutions? Indeed, this area of research may be another approach to originality that could make significant contribution to currently sparse knowledge of the subject matter.
8. Acknowledgement I would like to thank Professor Kevin Aquilina for his comments and suggestions on this paper, as well as permission to apply examples he discussed during his lectures in Legal Research Methodology.
30 Jan Smits, The Mind and Method of the Legal Academic (Edward Elgar Publishing, Cheltenham 2012)
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Carmelo Gafà Daniele Gafà The merits or otherwise of the selection of ‘the last Habitual Residence of the Deceased’ as the principal connecting factor in the EU Succession Regulation - No. 650/2012 Dr Carmel Gafa’ (Doctor of Laws (Melit.), Notary Public of Malta, Diploma Business Law and Accountancy) graduated from the University of Malta in 1990 with a Doctor of Laws (LL.D) and a Diploma in Business Law and Accountancy. Dr Gafa’ subsequently obtained his warrant as a Notary Public and Commissioner of Oaths and is nowadays a highly respected member of the Maltese Notarial College. With over 30 years of experience in the field, Notary Dr Carmel Gafa’ LL.D nowadays manages Gafa’ Notaries and Associates, operating from offices located in the North and South of Malta, in Mosta and Paola respectively. Comprising a fullyfledged notarial firm, Gafa’ Notaries and Associates offers a multitude of notarial services, ranging from property transfers, wills and contracts to company incorporation, estate planning and matrimonial agreements. Dr Daniele Gafa’ (Master of Notarial Studies (Melit.), Bachelor of Laws (Hons.)) graduated from the University of Malta with a Master of Notarial Studies with merit, as well as a second-class upper Bachelor of Laws (Hons) degree. Having aspired to follow in his father’s footsteps, Dr Daniele Gafa nowadays practices as an Associate Notary at Gafa’ Notaries and Associates, under the tutelage of his father. Given their vast clientele, the firm employs several legal interns and secretaries, while also working with a multitude of professional entities, including banks, audit firms, architects and lawyers, ensuring that their clients are provided with the complete, professional service they so desire. Dr Daniele Gafa’ is certainly no stranger to the Malta Law Students’ Society (GħSL). Serving as Academic Officer during the 2016/17 term of office, while being elected President in the following year, Dr Gafa presently occupies a more supervisory role in the organisation, sitting on the Supervisory Board.
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1. Introduction Around twelve point three million (12,300,000) Europeans live in another European Union country and there are around four hundred and fifty thousand (450,000) international successions each year, valued at more than one hundred and twenty billion euros (€120,000,000,000). Currently different rules on jurisdiction and applicable law in the twenty-seven (27) European Union Member States are creating legal headaches for already grieving families… Today’s endorsement by the Council of new European Union rules will bring legal certainty to the thousands of families confronted with international successions. – European Union Justice Commissioner and Commission Vice President, Viviane Reding1
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eing a by-product of globalisation, particularly within the ambit of a modern European Union which has nowadays fully embraced the notion of freedom of movement, the issue of cross-border succession within the European Union may no longer be disregarded as a frivolous matter. The sheer monetary value of this phenomenon alone necessitates legislative attention, albeit the issue per se falling outside the European Union’s legislative competence. Intriguingly, the approach taken by the European Union in addressing the issue was similar to that adopted in other spheres of law wherein the European Union lacks the necessary competence to legislate. Rather than focusing on the virtually unattainable (not to mention, not necessarily desirable) task of homogenising substantive succession laws throughout the Union, EU legislators directed their attention rather to the unification (or the so-called ‘europeanisation’) of conflict of law rules in matters of succession.2 To this effect, on the fourth (4th) of July of the year two thousand and twelve (2012), the European Union took a giant’s step forward by adopting 1 ‘European Commission plans to ease legal burden for cross-border successions to become law’ European Commission (7 June 2012) <http://europa.eu/rapid/press-release_IP-12576_en.htm>. 2 A. Verbeke, Y.H. Leleu, ‘Harmonisation of the Law of Succession in Europe’ (2011) 472; K. Joamets, T. Kerikmäe, (2013), ‘The New Developments in the EU family law—Green Paper “Less Bureaucracy for Citizens: Promoting Free Movement of Public Documents and Recognition of the Effect of Civil Status Records”. Its Applicability in Marriage on the Example of Estonia’ 39.
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Regulation (EU) Number 650/2012 on jurisdiction, recognition and enforcement of decisions and acceptance and enforcement of authentic instruments in matters of succession and on the creation of a European Certificate of Succession; more commonly known and hereinafter referred to as the ‘Succession Regulation’. Binding on all twenty-eight European Union Member States bar three (namely Denmark, The Republic of Ireland and the United Kingdom), the Succession Regulation became applicable on the seventeenth (17th) of August of the year two thousand and fifteen (2015), effectively governing the ‘succession of persons who die on or after’ this cutoff date.3 From the very outset, even upon prima facie inspection, it becomes immediately evident that the Succession Regulation envisages an exhaustive, far-reaching and holistic upheaval of a previously unaddressed issue under European Union law. Its scope, in fact, was not limited to the conventional private international law elements of jurisdiction, choice of applicable law and recognition and enforcement of foreign judgements which have customarily manifested themselves in similar European Union legislative instruments. On the contrary, the Succession Regulation goes a step further than the traditional approach by addressing concerns which are specifically characteristic to succession disputes in particular. The conception of a European Certificate of Succession for instance demonstrates but one of a series of practical measures intended to eradicate existing administrative barriers.
2. Interpreting the term ‘Last Habitual Residence of the Deceased’ The notion of habitual residence is no newcomer to the field of private international law. First introduced in the year nineteen fifty-five (1955) by The Hague Conference on Private International Law, the connecting factor was subsequently incorporated into European Union legislation, firstly with regard to social security and labour law and later on in the sphere of judicial cooperation in civil matters. Perhaps lamentably so however, neither The 3 Regulation (EU) No 650/2012 of the European Parliament and of the Council of 4 July 2012 on jurisdiction, applicable law, recognition and enforcement of decisions and acceptance and enforcement of authentic instruments in matters of succession and on the creation of a European Certificate of Succession, article 83(1). (emphasis added)
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Hague Conference nor the aforementioned European Union Regulations which preceded the Succession Regulation laid down any precise definition or guidelines whatsoever as to the correct interpretation of the concept of ‘habitual residence’. This common thread is one which also persists to some extent in the Succession Regulation which similarly shies away from concisely defining the enigmatic notion. Some scholars have suggested that legislators’ persistence at leaving the connecting factor undefined might perhaps stem from the reasoning that as a factual criterion, a designation of habitual residence necessarily requires a close inspection of the contextual circumstances surrounding each situation. Contrary to connecting factors such as ‘domicile’ or ‘nationality’, ‘habitual residence’ is not a legal conception capable of being generically, accurately and succinctly defined, but rather, it is a factual one which necessitates a case-by-case approach. Jurisprudence of the Court of Justice of the European Union does offer some guidance in this respect, albeit in relation to the ‘Council Regulation (EC) No 2201/2003 of the 27th of November, 2003 concerning jurisdiction and the recognition and enforcement of judgments in matrimonial matters and the matters of parental responsibility’ in particular, hereinafter referred to as the Brussels II Bis Regulation. In its response to the landmark preliminary reference brought by Finnish Courts (Korkein hallinto-oikeus) in Case C-523/07 A4, the Court of Justice of the European Union reiterated that the connecting factors contemplated under European Union Regulations are to be given autonomous interpretations. Adhering to the same line of argumentation, this time in response to the preliminary reference brought by German Courts, in Case C-29/76,5 the Court of Justice of the European Union confirmed that such connecting factors are to be understood in the light of the objectives and spirit of the European Union legislative instrument in question, in a manner entirely distinct from any municipal Member State law definitions. With regard to the definition itself, the Court held that mere physical presence in a particular State in and of itself does not suffice for the determination of habitual residence, but rather, an analysis of all factual circumstances specific to each case must be taken into account. In so doing, the Court of Justice of the European Union went on to lay down a vast array of criteria which should be considered in establishing the habitual residence 4 Judgement of the Court of Justice of 2 April 2009. A. C-523/07. 5 Judgement of the Court of Justice of 14 October 1976. LTU Lufttransportunternehmen GmbH & Co. KG v. Eurocontrol. Case 29/76.
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of a child, for instance: the degree of integration in social and family environment, duration, regularity, conditions and reasons for stay in the territory of a Member State, child’s nationality, place and conditions of school attendance, linguistic knowledge, family and social relationships.6 Though the Court’s interpretation of the notion is specifically restricted in application to the Brussels II Bis Regulation, it does serve as a guideline in the absence of any further legislative clarification. Inspired by the findings of the Court of Justice of the European Union, by means of Recital twenty-three (23), the ground-breaking Succession Regulation became the first European Union legislative instrument to expressly, albeit not concisely, lay down a series of factual criteria to be taken into account in designating the final habitual residence of the deceased: … the authority dealing with the succession should make an overall assessment of the circumstances of the life of the deceased during the years preceding his death and at the time of his death, taking account of all relevant factual elements, in particular the duration and regularity of the deceased’s presence in the State concerned and the conditions and reasons for that presence. The habitual residence thus determined should reveal a close and stable connection with the State concerned taking into account the specific aims of this Regulation.7 Expounding upon the criteria stipulated in the preceding recital, Recital twenty-four (24) of the Succession Regulation goes on to explain that: In certain cases, determining the deceased’s habitual residence may prove complex. Such a case may arise, in particular, where the deceased for professional or economic reasons had gone 6 Rohova, I., Drlickova, K., ‘Habitual residence as a single connecting factor under the succession regulation’ [2015] SCIJLP 371. 7 Regulation (EU) No 650/2012 of the European Parliament and of the Council of 4 July 2012 on jurisdiction, applicable law, recognition and enforcement of decisions and acceptance and enforcement of authentic instruments in matters of succession and on the creation of a European Certificate of Succession, Recital 23.
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3. Choice of connecting factor Notwithstanding its comprehensive nature, the Succession Regulation has been subject to multiple criticisms, one of which revolves around a point of contention specifically idiosyncratic to conflict of law treaties: the question of connecting factors. By employing the notion of the last habitual residence of the deceased as its principal connecting factor (both with regard to the determination of jurisdiction9 as well as the applicable law10) applicable to the succession as a whole, the Regulation sets out with the ambitious objective of overcoming any residual obstacles to the free movement of persons by simplifying and homogenising the settlement of cross-border successions throughout the European Union.11 Nonetheless, legal scholars have once 8 9 10 11
ibid, Recital 24. ibid, Article 4. ibid, Article 21(1). Proposal for Regulation of the European Parliament and of the Council on Jurisdic-
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again re-opened the self-perpetuating discussion concerning the suitability of this criterion relative to its alternatives, with a vast spectrum of schools of thought existing in this respect. Setting off the debate with a chronological analysis of the selection process itself, by examining the travaux-préparatoires underlying and preceding the Succession Regulation’s promulgation, we may delve into the minds of European Union legislators, Member State opinions and scholarly reactions which ultimately galvanised this choice of connecting factor. For starters, in matters of family and succession law, the notions of habitual residence and nationality clearly lead the way with regard to widespread international acceptance12, so much so that the Green Paper on Succession and Wills suggested both notions as potential connecting factors.13 In their reply to the Green Paper however, several Member States and International Organisations endorsed the adoption of habitual residence over the use of nationality.14 As per the Explanatory Memorandum, in fact, consensus was reached that the concept of last habitual residence of the deceased at the time of death is not only the most widely entrusted connecting factor in municipal Member State private international law and international conventions alike15, but also better: …coincides with the centre of interests of the deceased and often with the place where most of his property is located, since it reflects the increasing mobility of citizens within the EU. Such a connection is more favourable to integration into the Member States of habitual residence and avoids any discrimination tion, applicable Law, recognition and enforcement of decisions and authentic instruments in matters of succession and the creation of a European Certificate of Succession, COM (2009) 154 final, 14 October 2009. 12 Boele-Woelki, K. ‘International Private Law in China and Europe: A Comparison of Conflict-of-Law Rules Regarding Family and Succession Law’, in Basedow, J., Pissler, K., Private International Law in Mainland China, Taiwan and Europe (Mohr Siebeck Tübingen 2014) 313. 13 Green Paper Succession and wills, COM (2005) 65 final, 1 March 2005, EU Publications Office (further cited as “Green Paper”), point 1 Introduction. 14 Max Planck Institute for Comparative and International Private Law. Comments on the European Commission’s Proposal for a Regulation of the European Parliament and of the Council on jurisdiction, applicable law, recognition and enforcement of decisions and authentic instruments in matters of succession and the creation of a European Certificate of Succession. RabelsZ, 2010, Vol. 74, p. 604. 15 Proposal for Regulation of the European Parliament and of the Council on Jurisdiction, applicable Law, recognition and enforcement of decisions and authentic instruments in matters of succession and the creation of a European Certificate of Succession, COM (2009) 154 final, 14 October 2009, point 4.3.
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regarding persons who are resident there without possessing the relevant nationality.16
4. Comparison vis-à-vis alternative connecting factors Ranging from conceptually tedious notions such as ‘domicile’, to legally straightforward ones such as ‘nationality’, the connecting factor selection process tends to result in a tug-of-war of sorts between the need for practicality, ease of determination and legal certainty on the one hand, and on the other, the essential prerequisite that the criterion be in and of itself ‘connecting’, i.e. establishing as genuine, well-founded and legitimate a connection with the State in question as possible.17 Of course intertwined in the latter requirement is the element of flexibility i.e. ascertaining that the selected concept is not so excessively fluid that the designated State of connection may alter from one moment to the next, yet not so undesirably rigid that a person may end up being associated with a State with which little or no connection persists. Focusing on the Succession Regulation in particular, this selection was indisputably fundamental to its success or otherwise since the legislative instrument envisaged a principal connecting factor which applied to successions in their entirety, both with regard to jurisdiction, as well as the applicable law. In fact, one of the central motives behind the endorsement of last habitual residence was that it was deemed to establish the most fitting connection vis-à-vis both movable and immovable property existing within the deceased’s estate. By focusing upon the aspect of ‘residence’, the Succession Regulation inherently promotes the principle of nondiscrimination, empowering EU citizens to take full advantage of their rights to free movement. Moreover, according to some authors, the stress on ‘factual circumstances’ (which is made demonstrably clear in Recitals 23 and 24) renders habitual residence far simpler to determine than, say, the notion of ‘domicile’, and consequently also far less prone to litigation. Regardless of its widespread approval, some schools of thought advocate 16 ibid. 17 Siehr, K., ‘General problems of private international law in modern codifications: De Lege Lata and De Lege Europea Ferenda,’ in P. Šarčević, P. Volken, A. Bonomi, Yearbook of Private International Law, (Sellier. European Law Publishers & Swiss Institute of Comparative Law, vol. 7, 2005) 32.
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in favour of the use of alternative connecting factors, identifying several shortcomings in the legally undefined conception of last habitual residence under the Succession Regulation. Angelique Devaux18, for instance, argues that a gap exists between theory and practice: by leaving the connecting factor so loosely defined, the Succession Regulation adopted an unstable connecting factor which is incompatible with the fundamental principle of legal certainty, hence precluding EU citizens from fully embracing their rights to free movement.19 Though the underlying purpose for leaving the term so vaguely defined was to ascertain its fluidity, requiring courts to decide upon the factual circumstances of each case individually, perhaps flexibility should not have been prioritised at the expense of legal certainty as this characteristic exposes the connecting factor to potential disputes. In agreement with this line of thought is Professor David Hayton20, who opines that homogenous interpretation necessitates an autonomous, express and concise definition under the Succession Regulation, in lieu of which interpretation of the notion becomes ‘indefinitely arbitrary’. This in turn renders uniform application across the 25 Signatory States virtually impossible. Moreover, Carruthers and Crawford suggest that as demonstrated by caselaw, the possibility of natural persons having multiple habitual residences, or none at all, contributes to the fragile, uncertain nature of this criterion.21 An especially prevalent connecting factor in Common Law jurisdictions is that of lex domicilii. The crippling issue with domicile is that its definition varies significantly from one state to the next, not to mention the dichotomy in its interpretation between Common and Civil Law traditions.22 In fact, albeit being utilized under the Brussels I Bis Regulation, the international popularity of lex domicilii has dwindled notably as the notion’s ambiguous nature precludes it from being applied harmoniously in intra-State legislative instruments. Moreover, contrary to habitual residence which is based almost exclusively on factual circumstances, central to any determination of 18 Devaux, A., ‘The European Regulations on Succession of July 2012: A Path Towards the End of the Succession Conflicts of Law in Europe, or Not?’ (2013) 232-233. 19 Ramaekers, E., ‘Cross-border Successions. The New Commission Proposal: Contents and Way Forward. A Report on the Academy of European Law Conference of 18 and 19 February 2010, Trier,’ (2011) 1–6. 20 Hayton, D. (2004), ‘Determination of the Objectively Applicable Law Governing Succession to Deceaseds’ Estates’ (2004) 365. 21 Crawford, E. & Carruthers, J., ‘Written Evidence—Letter from Professor Elizabeth Crawford, Professor of International Private Law, and Dr. Janeen Carruthers, Reader in Conflict of Laws, University of Glasgow,’ in: The EU’s Regulation on Succession: House of Lords, European Union Committee, 6th Report of Session 2009–10, (TSO 2010) 62–66. 22 O’Brien, J. Conflict of Laws. (2nd edn, Cavendish Publishing Limited 1999) 65 - 66.
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domicile is the question of ‘intention’; an intangible and elusive factor, often tedious to verify unless expressly communicated by the deceased prior to his demise. Moving on to lex patriae, though the legal conception of nationality varies from state to state, it leads the way with regard to practicality and ease of determination. Once the set of explicit criteria laid down under national law are satisfied, a person qualifies for citizenship which may be efficiently authenticated and verified by means of official documentation.23 Compellingly, the criterion of lex patriae traditionally constitutes the principal connecting factor in German conflict of law legislation in matters of succession, with the absence of any discretionary interpretation perhaps being the key impetus behind this selection.24 Regardless of its merits, Helin identifies several flaws inherent to this connecting factor. To begin with, part and parcel with the process of globalisation is an upsurge in individuals having multiple nationalities, a reality which would require supplementary regulation.25 Additionally, adopting lex patriae as a principal connecting factor would necessitate the approval of each Member State’s criteria for citizenship: an exercise undoubtedly bound for failure, especially when taking into consideration, for instance, certain alternative criteria for Maltese citizenship which caused such an uproar throughout the Union just a few years back. A third criticism which may be made in this regard is that the notion of nationality at times fails to reflect any genuine connection to the State in question. With the very essence of connecting factors being their ability to ‘connect’, would for instance a so-called ‘purchased’ nationality26 demonstrate so legitimate a connection between the deceased and his State of nationality, such as to entrust its Courts with administering succession?
23 Helin, M., Suomen kansainvälinen perhe ja perintöoikeus, (Talentum Media 2013) 57. 24 Traisci, F.P. Which Future for the European Law of Successions? In: Moccia, L. (ed.) The Making of European Private Law: Why, How, What and Who? (Munich: Sellier European Law Publishers, 2013), 166. 25 Helin, M., Suomen kansainvälinen perhe ja perintöoikeus, (Talentum Media 2013) 57-58. 26 Wolf Richer, Wolf Street, ‘These are the countries you can ‘buy’ citizenship to – and three are in the EU’ (Insider Inc, 18 March 2017) <https://www.businessinsider.com/buy-citizenship-to-these-countries-2017-3>.
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5. Conclusion In conclusion, notwithstanding its countless criticisms, by striking perhaps the most ideal balance between the element of ‘connection’ and the indispensable prerequisites of practicality, fluidity and ease of determination, the criterion of habitual residence has nowadays achieved widespread international acceptance, both within the European Union and beyond. On the one hand, the adjective ‘habitual’ inherently necessitates a certain degree of consistency, stability and durability to the residence, ascertaining that a genuine, well-founded and bona fide connection exists between the deceased and his Member State of residence. On the other, with more and more EU citizens opting to live outside their Member State of nationality, the fluid criterion of habitual residence fully embraces the socioeconomic realities of a modernised European Union. It lays down a factual, flexible and objective criterion which is more efficiently discernible than the conceptually tedious notion of domicile. Moreover, in an effort to eliminate any further possibility of forum-shopping (albeit admittedly a far-fetched one), the Succession Regulation also contemplates an escape mechanism of sorts under Article twenty-one, sub-article two (21(2)) and Recital twentyfive (25), thereby countering any risk of a purpose-built selection of habitual residence. Nonetheless, by leaving the notion so loosely defined, EU legislators seem to have opted for conceptual mobility at the expense of legal certainty: a choice which renders the Succession Regulation partially incompatible with the fundamental freedom of movement, particularly in the ambit of a Union encompassing some twenty-eight Member States. Though the criterion of last habitual residence constitutes the preferred connecting factor to serve the targets and aspirations of the European Union in settling cross-border successions, perhaps a legally-defined version of the concept would have better guaranteed its harmonious application and consistent interpretation throughout the Union.
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Shu-Chien Chen Toward a Neutral Corporate Tax for the Transportation Industry – Rethinking the Transportation Industry Formula of the Common Consolidated Corporate Tax Base Directive Proposal under EU Law
Shu-Chien Chen graduated from the National Taiwan University and passed the Taiwanese lawyer examination. Before moving to the Netherlands, Shu-Chien worked at Keelung Customs, Ministry of Finance in Taiwan as a legal officer. Later, she studied in Leiden University and Radboud University Nijmegen in the Netherlands and received LL.M degrees. Currently, she is a Ph.D candidate at Erasmus University Rotterdam (also in the Netherlands). She has been doing the Bluebook traineeship at the European Commission since March 2020.
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This paper explores how the Common Consolidated Corporate Tax Base (CCCTB) Directive Proposal under the EU law should be designed to allocate cross-border income earned from MNE taxpayers of the transportation industry. The transportation activity is mobile in nature, and thus creates the difficulty of designing the relevant tax law. Allocating sovereign States’ taxing rights on the cross-border income of the transportation industry is inherently disputed. The OECD Model Convention, as an important starting point for negotiating bilateral tax treaties, has established the ‘effective place of effective management’ (POEM) as the criterion for allocating the primary taxing rights to one single State, where a taxpayer‘s effective place of effective management (POEM) is found. It is an all-or-nothing rationale. Formulary Apportionment (FA) follows an opposite rationale other than the all-or-nothing mentality, by using a formula consisting of different weighting factors to allocate taxing rights for all jurisdictions involved. Taking the metaphor of cross-border taxable income as a pie, a formula would be a knife. At the subregional level, such as States of the US, FA is widely adopted. The CCCTB Proposal is the EU’s attempt to transplant FA from the US. Some jurisdictions also adopt a formula in their national corporate tax law for the shipping industry. To our surprise, the CCCTB proposal follows the POEM criterion established in the international tax regime and excludes the shipping and airline industry from its scope of application. Therefore, this paper further discusses if the shipping industry provision under the current CCCTB Proposal is still rational. This paper compares the CCCTB to experiences from OECD and US to seek an answer to this question. In conclusion, since the CCCTB has adopted formulary apportionment as its basic setting, it does not need to follow the traditional international tax regime’s approach of ‘POEM’ adopted by OECD, or the residence criterion adopted by the US, because neither of them can reflect the mobile (while highly-integrated) feature of the international transportation 242
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industry or address the old tax-planning scenarios. Instead, this paper argues that the CCCTB should include the transportation industry in the scope of application, and uses both ‘departure’ and ‘arrival’, being equally weighted, for the sales factor of the transportation industry. ‘ A page of history is worth a volume of logic Justice Oliver Wendell Holmes1
1. Introduction
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he international tax law regime has the main purpose of allocating taxing rights between sovereign States on cross-border economic activities; more specifically, the international tax law regime is based on the network of various bilateral tax treaties, aiming to eliminate ‘double taxation’, which occurs inevitably due to cross-border economic activities. The current international tax law regime is largely based on the work of the League of Nations carried out in the early 20th century,2 and later the OECD and UN also played an important role by providing bilateral tax convention models3 and commentaries to the States as the starting point in negotiating their own bilateral tax. The OECD and UN Model Convention have been updated regularly and have become a well-accepted starting point for many States. The US also has its own bilateral tax treaty model. These three popular models have much in common, especially regarding categories of income.4 1 New York Trust Co. v. Eisner, 256 U.S. 345 (1921) 2 The short history, see Reuven S Avi-Yonah, Advanced Introduction to International Tax Law (Edward Elgar Publishing 2019).. 3 Brian J Arnold, International Tax Primer (Kluwer Law International BV 2019)., 8.3-8.7; 4 According to IBFD International Tax Glossary: ‘The US Model Income Tax Convention is the model used by the United States as the basis for bilateral tax treaty negotiations. It is issued by the US Treasury Department and accompanied by a Technical Explanation that provides a detailed commentary for each article of the treaty. The current version of the US Model Income Tax Convention is dated 17 February 2016. The United States has also issued a US Model EState and Gift Tax Treaty, dated 20 November 1980, and accompanying Technical Explanation.’ The IBFD International Tax Glossary is published at the IBFD data base: tax research forum https://research.ibfd.org/#/ (a separate access required)
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There were three widely accepted principles5 established in the international tax regime, which is also reflected in the tax treaty models. First of all, the original aim of the international tax regime is to eliminate double taxation on cross-border activities. To achieve this aim, the OECD Model Convention has categorized 16 types of income, and the taxing right of each income has been decided in each Article and is attributed to ‘one State’. One scholar refers such approach as ‘the single taxation principle’.6 Secondly, the allocation of taxing rights to prevent double taxation has the residencesource dichotomy7; Third, as to allocate profits earned by a multinational corporate group to each subsidiaries/group members, the Arm’s Length Principle (ALP)8. See J.A. Becerra, Chapter 6: Interpretation and Application of Tax Treaties in the United States, Juan Angel Becerra, Interpretation and Application of Tax Treaties in North America (Second revised edition, IBFD 2013)., Books IBFD (accessed 10 Nov. 2019). 5 It should be noted that, these consensus or principles are not (yet) ‘customary international law’ in the public international law context. See Reuven S Avi-Yonah, ‘International Tax as International Law’ (2003) 57 Tax L. Rev. 483.. OECD’s commentary is often seen as influential ‘soft law’. See Alberto Vega, ‘International Governance Through Soft Law: The Case of the OECD Transfer Pricing Guidelines’ [2012] SSRN Electronic Journal <http://www.ssrn.com/ abstract=2100341> accessed 14 November 2019.; Allison Christians, ‘Hard Law, Soft Law, and International Taxation’ (2007) 25 Wis. Int’l LJ 325. 6 Reuven S Avi-Yonah, ‘Who Invented the Single Tax Principle? An Essay on the History of US Treaty Policy’ [2013] SSRN Electronic Journal <http://www.ssrn.com/abstract=2226309> accessed 14 November 2019.; Reuven S Avi-Yonah, ‘Full Circle? The Single Tax Principle, BEPS, and the New US Model’. The criticisms of the single tax principle, see Shaviro, Daniel, The Two Faces of the Single Tax Principle (November 2, 2015). NYU School of Law, Public Law Research Paper No. 15-47; NYU Law and Economics Research Paper No. 15-19. Available at SSRN: https://ssrn.com/abstract=2664680 or http://dx.doi.org/10.2139/ssrn.2664680; Julie Roin, Taxation Without Coordination (2002), http://papers.ssrn.com/paper.taf?abstract_id=302141 ; Mitchell A. Kane, Strategy And Cooperation In National Responses To International Tax Arbitrage, 53 Emory L.J. 89; Adam H. Rosenzweig, Harnessing The Costs Of International Tax Arbitrage, 26 Va. Tax Rev. 555. Most contributions from Single Taxation? (J.C. Wheeler ed., IBFD 2018) are critics too. L.E. Schoueri & G. Galdino, Chapter 3: Single Taxation as a Policy Goal: Controversial Meaning, Lack of Justification and Unfeasibility in Single Taxation? (J.C. Wheeler ed., IBFD 2018); F. De Lillo, Chapter 1: In Search of Single Taxation in Single Taxation? (J.C. Wheeler ed., IBFD 2018); Daniel Shaviro, The Two Faces of the Single Tax Principle (November 2, 2015). NYU School of Law, Public Law Research Paper No. 15-47; NYU Law and Economics Research Paper No. 15-19. Available at SSRN: https://ssrn.com/abstract=2664680 or http://dx.doi.org/10.2139/ssrn.2664680; E. Gil García, The Single Tax Principle: Fiction or Reality in a Non-Comprehensive International Tax Regime?, 11 World Tax J. (2019), Journal Articles & Papers IBFD (accessed 26 Sep. 2019). 7 Arnold (n 3)., Chapter 2 Jurisdiction to Tax 8 The basic ideas and introduction of the arm’s length principle are published at OECD website, see OECD (2017), ‘The Arm’s Length Principle’, in OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations 2017, OECD Publishing, Paris. DOI: https://doi. org/10.1787/tpg-2017-5-en Adam Biegalski, ‘The Arm’s Length Principle: Fiscalism or Economic Realism? A Few Reflec-
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However, since the international tax regime has been established almost for a century, it has been subject to aggressive tax planning and treaty abuses. Moreover, due to digitalisation, the old international tax regime now faces the even greater challenge of allocating taxing rights to economic activities. These three principles are now also being debated and reconsidered, especially by the OECD/G20 global campaign ‘Base Erosion and Profit Shifting (BEPS)’’s action plans.9 The BEPS reform focuses on not only ‘eliminating double taxation’, but ‘double non-taxation/Stateless income’10; The BEPS reform project also admits to the easiness of manipulating the form of ‘residence’ or ‘permanent establishment’11; besides, the BEPS reform project also re-assesses the current transfer pricing practices and proposes a reformed ‘Arm’s Length Principle’.12 In short, these long-standing principles are also being debated and facing reform. In the context of international tax reform, the EU has taken several actions as response. One of the most revolutionary actions is the Common Consolidated Corporate Tax Base (CCCTB) Directive Proposal. Being initiated since early 2000’s and first released in 2011 and withdrawn and re-launched in 2015, the CCCTB has now multiple policy paradigms.13 One the one hand, the CCCTB is intended to combat international BEPS problems; on the other hand, the CCCTB also aims at facilitating further integration of the EU internal tions’ (2010) 38 Intertax 177..; Luis Eduardo Schoueri, ‘Arm’s Length: Beyond the Guidelines of the OECD’ (2015) 69 Bulletin for International Taxation 690.. The literature overview of the arm’s length principle, see Stefan Greil, ‘The Arm’s Length Principle in the 21st Century – Alive and Kicking?’ [2019] SSRN Electronic Journal <https://www.ssrn.com/abstract=3379092> accessed 14 November 2019. 9 The official website of the actions https://www.oecd.org/tax/beps/ 10 The term is first used by Edward D. Kleinbard. See Kleibard’s work has explored the idea of ‘Stateless income’ extensively especially from the perspective of USA Multinationals, Edward D Kleinbard, ‘The Lessons of Stateless Income’ (2011) 65 Tax Law Review 99.;Edward D Kleinbard, ‘Stateless Income’ 11 Florida Tax Review 699. although this concept is popular after the BEPS actions, from the historical archive, such concept had been existing. According to Jogarajan’s research, experts in 1920 have been aware this issue. ‘The possibility of profit-shifting and double non-taxation had already been recognized by the 1925 Experts almost 90 years ago.’ See Sunita Jogarajan, Double Taxation and the League of Nations (Cambridge University Press 2018). 11 BEPS Action 7 ‘Preventing the Artificial Avoidance of Permanent Establishment Status’, reports and guidance see https://www.oecd.org/tax/beps/beps-actions/action7/ 12 Reflections on the Arm’s length principle, see J Scott Wilkie, ‘Reflecting on the ‘Arm’s Length Principle’: What Is the ‘Principle’? Where Next?’, Fundamentals of International Transfer Pricing in Law and Economics (Springer 2012).; Schoueri (n 8). 13 Niazi, Shafi U. Khan. ‘Re-Launch of the Proposal for a Common Consolidated Corporate Tax Base (CCCTB) in the EU: A Shift in Paradigm.’ Legal Issues of Economic Integration 44.3 (2017): 293-314.
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14 See The preamble of the CCCTB Directive proposal, ‘Alongside the anti-tax avoidance function of the CCCTB, the re-launched project would also retain its features as a corporate tax system which facilitates cross-border trade and investment in the internal market. ‘ available at https://ec.europa.eu/taxation_customs/sites/taxation/files/com_2016_683_en.pdf 15 Reuven Avi-Yonah, Nicola Sartori and Omri Marian, Global Perspectives on Income Taxation Law (Oxford University Press 2011) <http://www.oxfordscholarship.com/view/10.1093/acprof:oso/9780195321357.001.0001/acprof-9780195321357> accessed 14 November 2019.,p.4.; Carlo Garbarino, ‘An Evolutionary Approach to Comparative Taxation: Theory, Methods and Agenda for Research’ [2008] SSRN Electronic Journal <http://www.ssrn.com/abstract=1116686> accessed 14 November 2019. Grabarino esepcially mentions CCCTB as an example that the CCCTB Directive extracted the common function of the group taxation systems of different Member States.
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2. The Theoretical Framework of Addressing The Base Erosion And Profit Shifting (BEPS) Problems in the Transportation Industry 2.1 International Tax Reform Effort: Base Erosion and Profit Shifting Action Plans The necessity to conduct the international tax reform is obvious. As indicated above, the current international tax regimes and practices that have been developed since the early 20th century16 are now being heavily criticised for failing to levy corporate tax from giant multinational taxpayers ‘fairly’ in the current globalised and digitalised world.17 Such failure is systematic, due to incoordination, complexity and various mismatches of the current system, as well as the rapid development of technology and digital economy. Since 2013, OECD has been working on the BEPS project, i.e. tax reform campaign especially on multinational enterprise (MNE) taxpayers to address the systematic failures of the international tax regime. There are 15 action plans in the BEPS project.18 It reviews the most wellknown structural problems of the international tax regime and proposes practical suggestions. Since 2013, the BEPS project has been the center of international tax debates and cooperation and it is an ongoing project.19 Amongst these 15 actions, it pursues three policy goals: coherence, substance, and transparency. Coherence refers to actions eliminating problems definition or tax law disparities; substance refers to abuse of treaty provisions or the taxable nexus threshold (permanent establishment); transparency refers to multilateral procedures that can facilitate disputes resolution and information exchange for tax authorities. All these actions are mainly triggered by today’s digital economy. As to the administrative cooperation, Action 15 has created the Multilateral Convention to Implement 16 The early history of the international tax regime (and critical remarks), see Michael J Graetz, ‘The David R. Tillinghast Lecture Taxing International Income: Inadequate Principles, Outdated Concepts, and Unsatisfactory Policies’ (2000) 54 Tax L. Rev. 261.”plainCitation”:”Michael J Graetz, ‘The David R. Tillinghast Lecture Taxing International Income: Inadequate Principles, Outdated Concepts, and Unsatisfactory Policies’ (2000 17 Steven A Bank, ‘The Globalization of Corporate Tax Reform’ (2012) 40 Pepp. L. Rev. 1307. 18 An introduction of the BEPS project, see Yariv Brauner, ‘What the BEPS?’ (2014) 16 Florida Tax Review. 19 The BEPS Actions Reports since 2013 are available at <https://www.oecd.org/ctp/ beps-reports.htm>
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Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI).20 Although there are still criticisms and sceptical remarks on the BEPS project as well as resistance to the reform, it is undeniable that the BEPS project has initiated a comprehensive reform. Although such reform project appears to be triggered by ‘digital economy’, this reform is not limited to such economy.
Figure 1: Base Erosion and Profit Shifting Overview Source: OECD website 2014 (the number refers to the specific action)
20 The official website of MLI, <https://www.oecd.org/tax/treaties/multilateral-convention-to-implement-tax-treaty-related-measures-to-prevent-beps.htm>. The signatory SStates are continuously increasing until 2019/10/30. The history of a multilateral tax treaty, see DM Broekhuijsen, A Multilateral Tax Treaty: Designing an Instrument to Modernise International Tax Law (Kluwer Law International BV 2018).; criticism on the MLI for still being complex and uncertain, David Kleist, ‘The Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS—Some Thoughts on Complexity and Uncertainty’ (2018) 2018 Nordic Tax Journal 31.
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2.2 The EU’s Corporate Tax Reform in Response to BEPS: Common Consolidated Corporate Tax Base Directive Proposal To understand and analyse the CCCTB Directive Proposal and its development21, it is necessary to understand the CCCTB Directive Proposal in a broad context. The context involves failures of the current international tax regime as ‘Base Erosion and Profit Shifting (BEPS)’ recognised by OECD, as well as the EU internal market.22 In brief, CCCTB is the EU’s tax reform response23 to the failures of the current international tax regime and the BEPS campaign since 2013. The consensus to address BEPS problems has become also part of in the development context of the CCCTB.24 By a metaphor of ‘a pie and a knife’, a multinational enterprise (MNE) group active in different EU Member States can file their harmonised consolidated tax base from all qualifying group members from different EU Member States, and such consolidated tax base resembles a big pie, jointly contributed to by all group members; and the formula resembles a knife to divide the share/a piece of the pie which is apportioned to each group member. Intra-group transactions are regarded as ‘fiscally non-existent’/eliminated. Profits and losses from all group members are offset with each other.25 Therefore, each group member’s apportioned share of the taxable pie of the whole group would be calculated as: The consolidated tax base× ( (1/3 × (the member^’ ssales) / (group sales) + 1/3 × (the member^’ s assets) / (group assets) + 1/3 × (the member^’ s labour) / (group labour)) 21 Discussions prior to the 2011 version of CCCTB is released see Joann Martens Weiner, ‘Practical Aspects of Implementing Formulary Apportionment in the European Union’ (2006) 8 Fla. Tax Rev. 629. 22 Base Erosion and Profit Shifting problem is detrimental for EU Member States. Empirical data estimated that 40% of foreign profits are shifted to tax haven, and non-tax haven EU Member States are the ‘losers’ of BEPS scenarios. see Thomas R Tørsløv, Ludvig S Wier and Gabriel Zucman, ‘The Missing Profits of Nations’ (National Bureau of Economic Research 2018). 23 A short overview of EU’s responses to the BEPS until 2018, see the note deArnaud de Graaf and Klaas-Jan Visser, ‘BEPS: Will the Current Commitments and Peer Review Model Prove Effective?’ (2018) 27 EC Tax Review 36. 24 See the preamble of the 2016 CCCTB Directive Proposal. 25 The group loss-offsetting mechanism under the CCCTB, see Shu-Chien Chen, ‘The Strategy of Shifting-To-Losses: The Case of Common Consolidated Corporate Tax Base (CCCTB) in the European Union’ (2019) 2 UCPH Fiscal Relations Law Journal (FIRE Journal).
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Figure 2: The Common Consolidated Corporate Tax Base Directive Overview Source: The Author This Directive proposal uses a pre-determined ‘formula’ to apportion taxable income of MNE taxpayers. This legislative proposal is a tax reform effort at the EU level to provide all EU Member States a uniform consolidated (i.e. group) corporate tax base and a formula to divide their taxing powers on multinational enterprise (MNE) taxpayers’ income. It would replace the bilateral tax treaties between these EU Member States when being adopted. It should be noted that, although EU has more than 50 years history, 250
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corporate taxation is still rarely harmonised by EU legislations. When the CCCTB Directive Proposal is adopted unanimously by EU Member States, it would be a milestone also for the development of EU law as a whole. The approach that the CCCTB adopts is the so-called formulary apportionment (FA). Such approach has been widely used in State taxation in the US26 as well as Germany and Switzerland27. Formulary apportionment has several distinctive features from the traditional tax regime. For one, the FA approach does not pursue the ideal result of the ‘arm’s length principle’ (ALP), when allocating the taxing rights on income earned from MNE taxpayer groups as if these subsidiaries in a multinational group are independent from each other. The ALP now has been criticised for being deviated from economic reality, but the BEPS action plan still includes the ALP as its principle, though the essence of the ALP has been changed. Another feature of the FA system is that it does not follow the residence versus source dichotomy in the traditional international tax law regime. In the classic international tax regime, implemented by the OECD Model Convention, different types of income follow different allocation rules, either to the residence State or to the source State. It is an all-or-nothing rationale, and the State instead adopts a very broad sense ‘source’ concept28, and does not focus on ‘residence’ anymore, but focuses on weighting factors in the formula. 2.3 The International Tax regime and the Transpiration Industry: The place of effective management (POEM) has advantages as well as weaknesses Regarding taxation on income earned by international shipping and air transportation, the OECD Model Convention Article 8 provides that the exclusive taxing right is allocated to the jurisdiction where the taxpayer’s 26 Peggy B Musgrave, ‘Interjurisdictional Equity in Company Taxation: Principles and Applications to the European Union’ (2000) 2000 Taxing Capital Income in the European Union: Issues and Options for Reform, Oxford 46.; Peggy B Musgrave, ‘Principles for Dividing the State Corporate Tax Base’, The State Corporation Income Tax: Issues in Worldwide Unitary Combination, vol 1984 (Stanford 1984). 27 Stefan Mayer, Formulary Apportionment for the Internal Market, vol 17 (IBFD 2009).., Chapter 3. 28 For a formulary apportionment supporter, ‘all States’ can be source. See John A Swain and Walter Hellerstein, ‘State Jurisdiction to Tax Nowhere Activity’ (2013) 33 Va. Tax Rev. 209., at p.267.
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place of effective management (POEM) takes place. The more detailed provisions are elaborated and discussed in Section 3.2. Since BEPS problems concern multinationals, including the transportation industry, the OECD has also issued a public consultation to address and reform the old rules on allocating taxing rights on international traffic.29 Transportation industries, including land, shipping, and aviation industries have an inherent mobile nature, and have a long history as the development of international tax law.30 In fact, BEPS problems are not new to the transpiration industry. In fact, due to the inherent mobile feature of transportation activities31 and specific maritime law practice such as flag of convenience, tax planning issues are already detected for the transpiration.32 One scholar observes that nontaxation of shipping industry in the international level is as problematic as the shifting of intangibles.33 This is because, from the current international tax regime, it is quite easy to divide the transportation activities and ‘the place of management’ or ‘residence’ of a transportation corporate group. To adopt a formal criterion, such as POEM or residence, has become an invitation for a multinational taxpayer to conduct aggressive tax planning, and it is also contrary to the value creation alignment. However, even the tax reform advocates do not propose an innovative solution to the BEPS problems in the transportation industry.34 For example, Avi-Yonah and Oz’s proposal to the OECD Model Convention Article 8 still 29 OECD, Proposed Changes To The OECD Model Tax Convention Dealing With The Operation Of Ships And Aircraft In International Traffic, Public discussion draft, 15 November 2013 – 15 January 2014 30 Guglielmo Maisto, ‘The History of Article 8 of the OECD Model Treaty on Taxation of Shipping and Air Transport’ (2003) 31 Intertax 232. 31 A. Hemmelrath & L. Marquardsen, Chapter 1: Direct Taxation of Air Transport Activities in Guglielmo Maisto, Taxation of Shipping and Air Transport in Domestic Law, EU Law and Tax Treaties (IBFD PUBLICATIONS BV 2016). 32 Sang Man Kim and Jingho Kim, ‘Flags of Convenience in the Context of the OECD BEPS Package’ (2018) 49 Journal of Maritime Law & Commerce.; The tax planning data from Japanese multinationals of the shipping industry by using the flag of convenience (FOC), see Ryo Izawa, ‘Who, Me? Tax Planning and Japanese Multinational Enterprises, 1887–2019’.. 33 Richard J Vann, ‘Current Trends in Balancing Residence and Source Taxation’ [2015] Current Trends in Balancing Residence and Source Taxation (December 14, 2014). BRICS AND THE EMERGENCE OF INTERNATIONAL TAX COORDINATION, Y. Brauner, P. Pistone, eds, IBDF, The Netherlands. 34 Reuven S Avi-Yonah and Oz Halabi, ‘A Model Treaty for the Age of BEPS’ [2014] U of Michigan Public Law Research Paper 14.
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embraces the POEM criterion. Some scholars even mistakenly argue that BEPS actions apply only to Internet-based MNEs, and do not involve the traditional international transportation industry.35 It seems that many scholars are not willing to accept the fact that ‘the digital economy is no longer just a part of the economy, but is becoming the actual economy itself’.36 Digitalisation has made economic activities of MNE taxpayers more globally integrated, and also make it more difficult to allocate States’ taxing rights. Such difficulty applies to all the industrial sectors. Adopting the POEM criterion or the residence criterion does have the advantage of ‘simplicity’, because it is not necessary to worry about dividing taxing rights on transportation MNE groups with their various ticket offices or subsidiaries globally. However, such convenience will have the corresponding problem of disalignment of value creation or tax planning scenarios. This is directly contrary to the spirit of the BEPS actions. In the following Section 3, I will introduce the CCCTB as well as tax model conventions of the current international tax regime, focusing on the international transportation industry. While analysing these provisions, it is important to bear in mind that the popular POEM criterion is still quite formalistic, even though its name implies a ‘substantial’ element.
3. Transportation Industry in the Cross-Border Tax Regime: Mobility as the Inherent Difficulty in Allocating Taxing Rights 3.1 The CCCTB Directive Proposal: Carving Out the Transportation Industry It should be noted that the CCCTB Directive Proposal aims to harmonise the ‘corporate tax base’ of EU Member States, and therefore, it excludes some special tax regimes from application. As to the transportation industry, such special tax regime often refers to ‘tonnage tax’.37 However, not every EU 35 Kim and Kim (n 32). 36 This quote is from the keynote speech of Rita de la Feria in May 2017 at EESC, see <https://www.eesc.europa.eu/en/news-media/press-releases/eu-tax-rules-are-not-currently-prepared-digital-economy> 37 CCCTB Directive, Article 2(4). See also Ton Stevens, Taxation of Shipping Transport Activities (Including Tonnage Tax Systems), in Maisto, Taxation of Shipping and Air Transport in Domestic Law, EU Law and Tax
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Member State adopts a tonnage tax system, and not every shipping company is subject to such tonnage tax system. As long as a company is still subject to national corporate tax of an EU Member State, it is still subject to the CCCTB Directive, regardless of whether it forms part of a shipping industry or not. Therefore, the following discussions will not address the issues of the tonnage tax system, but the more fundamental question of ‘how to allocate taxing rights of income earned from the transportation industry’. As for shipping, inland waterways and air transport industries, Article 4338 provides a special formula. Article 43 provides:
3.1.1 Shipping, inland waterways transport and air transport The revenues, expenses and other deductible items of a group member whose principal business is the operation of ships or aircraft in international traffic or the operation of boats engaged in inland waterways transport shall be excluded from the consolidated tax base and not be apportioned in accordance with the rules laid down in Article 28. Instead, those revenues, expenses and other deductible items shall be attributed to that group member on a transaction-by-transaction basis and be subject to adjustments for pricing in accordance with Article 56 of Directive 2016/xx/EU. Participations in and by the group member shall be taken into account for Treaties (n 31).; Dennis Weber and Tonnage tax and EU law, in ibid. 38 It is comparable to Article 101 of 2011 CCCTB Directive Proposal: ‘‘The revenues, expenses and other deductible items of a group member whose principal business is the operation of ships or aircraft in international traffic or the operation of boats engaged in inland waterways transport shall not be apportioned according to the formula referred to in Article 86 but shall be attributed to that group member. Such a group member shall be excluded from the calculation of the apportionment formula’.’ Article 101 of 2011 CCCTB Directive Proposal has quite comprehensive different official language versions, including Maltese: ‘‘Artikolu 101 Tbaħħir, trasport bil-mogħdijiet interni tal-ilma u trasport bl-ajru Id-dħul, l-ispejjeż u elementi deduċibbli oħra ta’ membru ta’ grupp li n-negozju prinċipali tiegħu jkun it-tħaddim ta’ vapuri jew inġenji tal-ajru fit-traffiku internazzjonali jew it-tħaddim ta’ dgħajjes involuti fit-trasport bil-mogħdijiet interni tal-ilma, għandhom jitqassmu skont il- formula msemmija fl-Artikolu 86 iżda għandhom jiġu attribwiti lil dak il-membru tal-grupp. Tali membru tal-grupp għandu jiġi eskluż mill-kalkolazzjoni tal-formula tat-tqassim.’’ Avialble at <https://eur-lex.europa.eu/legal-content/MT/TXT/PDF/?uri=CELEX:52011PC0121&from=EN>
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the purpose of determining whether there is a group as referred to in Articles 5 and 6. As to the subjective scope, Article 43 applies to three industries: sea transportation; inland waterways transportation; and air transportation. Although the term ‘shipping’ or ‘operation of ships’ seems to have a broad definition, Article 43 refers to the water ‘transportation’ industry only. This interpretation can be more clearly found in the Dutch39 and French40 versions of Article 101 of the the 2011 CCCTB Directive. Only sea transportation, inland waterway transportation, and air transportation industries are in the scope of Article 43. Article 43 excludes the application of a standard formula from the taxable income earned by a group member whose principal business is sea, inland waterways transportation, or air transportation. In other words, if a CCCTB group consists of members conducting these water transportation activities as well as others, the group can only calculate the sharing formula based on group members not conducting sea, inland waterways, or air transportation activities. As for tax base from group members conducting these transportation activities, the tax base will neither be consolidated nor subject to the apportionment formula. The underlying reason or explanation of Article 43 was missing in the CCCTB working documents prior to 2011. CCCTB Working Document No. 60 does not even mention ‘inland waterways transportation’ nor ‘shipping’ as a type of special industry, but mentions merely the airline and ‘railway’ industry. However, in the end the railway industry is left out in the current text of Article 101. 39 The Dutch version of Article 101 of the CCCTB Directive: ‘Artikel 101 Zeescheepvaart, binnenscheepvaart en luchtvaart De opbrengsten, kosten en andere aftrekbare posten van een groepsmaatschappij waarvan het hoofdbedrijf bestaat in de exploitatie van schepen of luchtvaartuigen in internationaal verkeer of in de exploitatie van binnenschepen worden niet verdeeld volgens de formule van artikel 86 maar toegerekend aan die groepsmaatschappij. Een dergelijke groepsmaatschappij wordt uitgesloten van de berekening van de toerekening.’ 40 The French version of Article 101 of the CCCTB Directive: ‘Article 101 Transport maritime, transport fluvial et transport aérien Les produits, charges et autres éléments déductibles d’un membre du groupe dont l’activité principale consiste en l’exploitation de navires ou d’aéronefs aux fins du trafic international ou en l’exploitation de navires dans le cadre du transport fluvial ne sont pas répartis conformément à la formule visée à l’article 86 mais sont attribués à ce membre du groupe. Le membre du groupe concerné est exclu du calcul de la répartition.’
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In order to understand Article 43, it is necessary to read legislative history and discussions regarding Article 101 of the 2011 CCCTB Directive. In the 2012 Commission CCCTB room document,41 the Commission explains the rationale of the special formula for shipping, inland waterways transport and air transport:
3.1.2 ‘Shipping, inland waterways transport and air transport A group member whose principal business is the operation of ships or aircraft in international traffic or the operation of boats engaged in inland waterways transport shall be excluded from the calculation of the apportionment formula. The revenues, expenses and other deductible items shall be attributed to the group member instead. The provision is drafted in the lines of Article 8 of the OECD Model Double Tax Convention according to which the profits of these activities are taxable only in the Contracting State in which the place of effective management of the enterprise is situated. The shipping or air transport companies shall continue to be group members but do not consolidate their revenues with the other group members. Article 101 (of the 2011 CCCTB Directive) shall be read in conjunction with Articles 59, 78 and 79 (of the 2011 CCCTB Directive), as the revenues of these companies shall be determined on an arm’s length basis.’ Despite the explanation provided in 2012, there are unclear points. First, it is not clear how ‘the shipping or air transport companies shall continue to be group members but do not consolidate their revenues’. The 2012 Commission CCCTB room document reaffirms that ‘the international air and sea companies are still part of the group.’ Thus, via systematic interpretation of the CCCTB Directive, these transportation industry companies should still form part of the CCCTB group. It seems that the legal consequence of being part of the CCCTB group is to preclude tax treaty applications. Since these international air and sea companies still form the CCCTB group, the CCCTB Directive still applies, and national tax rules or tax treaties are not applicable. Secondly, the method of calculating the consolidation tax base of a consolidation group containing the transportation industry group member 41 Commission Services, ROOM DOCUMENT #2, Working Party on Tax Questions – Direct Taxation, 28 September 2012, not published, requested from the Council Register for Access for the documents.
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is not clear. As Simonis sharply asks,42 should the loss offsetting rules for the group still apply to these transportation group members? According to the Commission’s 2012 room document, the consolidation rules should not apply, and the revenue earned by these companies or losses generated by them, will not be consolidated with other group members either. Thirdly, it is unclear whether intra-group transactions between the transportation industry group members and another non-transportation industry group member should also be regarded as eliminated or not. These special group members are still part of the group, although their taxable incomes are not consolidated for the purpose of calculating other non-air or non-water shipping industry group members’ apportioned tax base. In this regard, the Commission’s 2012 explanation clarifies that Article 101 (of the 2011 CCCTB Directive) should be read in conjunction with Article 59, Article 78, and Article 79 (of the 2011 CCCTB Directive). That is to say, within a subgroup of non-transportation companies, intra-group transactions are regarded as eliminated. As to transactions between non-transportation companies and transportation companies, these transactions should be calculated and adjusted according to the arm’s length principle (see Article 78 and Article 79 of the 2011 CCCTB Directive, comparable to the current Article 56 and Article 57 of the 2016 CCCTB Directive). The arm’s length principle will only apply to the transactions between transportation group members with the non-transportation group members. In other words, the intra-group transactions are still regarded as nonexistent for transactions between non-transportation group members, whereas the transfer pricing rules regarding associated enterprises should apply to the transactions between transportation group members and nontransportation group members. It seems an illogical Statement because Article 59 of the 2011 CCCTB Directive has an inherent contradictory rationale with Article 78 and Article 79 of the 2011 CCCTB Directive. Article 59 regards intra-group transactions as invisible, whereas Article 78 and Article 79 refer back to the traditional transfer pricing rules. The only logical way to interpret the Commission’s 2012 explanation is not to treat the non-transportation group members in a consolidated sub-group, but treat the transportation group members as ‘separate entities’ for the purpose of consolidation and apportionment. The transactions in the sub-group of non-transportation 42 P. Simonis’ Commentary to the Common Consolidated Corporate Tax Base, in D WEBER, Proposal for a Council Directive on a Common Consolidated Corporate Tax Base (CCCTB)– Comments’ (2011) 4 Highlights and Insights on European Taxation, 5. June 2011, p. 68.
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group members are regarded as non-existent, but the transactions between the of non-transportation group members and the transportation group members should be subject to the arm’s length principle. The text of the new Article 42 is also consistent with this interpretation approach. Last but not least, it should be noted that Article 43, i.e. the formula for shipping companies, does not apply to shipping companies under the special tonnage tax regime, according to Article 2(4) of the 2016 CCCTB Directive. Furthermore, Article 43 is based on the OECD Model Convention’s Article 8, which does not include the tonnage tax.43 The 2012 Commission CCCTB room document affirms this perspective.44 The relation between Article 43 and other Articles of the CCCTB Directive can be illustrated as follows. An airline or water transportation group needs to follow different articles of the CCCTB Directive. According to Article 43, there will be a sub-group of all non-transportation subsidiaries which are subject to the sharing formula, and the tax base of the transportation member does not form part of the consolidated tax base, nor is it subject to the sharing formula. The transactions between the transportation group members and the non-transportation group member are not ‘intra-group transactions’, and need to be consistent with the arm’s length principle. In other words, the carving-out approach will create a sub-group with a group. Such approach might result in more complexities instead of the expected simplification by carving-out.
3.2 Developments of Taxing the Transportation Industry’s CrossBorder Activities: Puzzles of Formula versus ‘POEM’/Residence 3.2.1 OECD Model Convention Article 8 The transportation industry, including air transportation, shipping and land transport, enjoys the features of ‘remoteness’ and ‘mobility’. Therefore, the transportation industry is a typical and classical example of taxing cross43 See Guglielmo Maisto, ‘Article 8: International Transport and Other Operations’, Global Tax Treaty Commentaries (IBFD 2015). 44 The Commission Services, Room Document #2, Working Party on Tax Questions Direct Taxation, 28 September 2012, Proposal for a CCCTB Chapter XVI-Apportionment of the consolidated tax base, not published, requested from the Council Register of Access for the document.
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border activities. Tax authorities are also facing challenges of taxing MNE of the international transportation industry due to the increased frequency of cross-border transportation activities and multiple jurisdictions involved.45 Since this whole section asks the question “what rules are suitable for a transportation industry formula under the CCCTB?”, it is necessary to revisit the experiences in US taxation. I will first explore the relevant discussions in the field of international tax law and the ‘tonnage tax’, which is also a special type of tax for the shipping industry. As indicated above, in the field of international tax law, the method of allocating international transportation income has been decided in Article 8 of the OECD Model Convention as well as Article 8 of the UN Model Convention.46 They adopt the same criterion of the ‘place of effective management’ (POEM) for the taxation of profits from maritime and air activities for a bilateral tax treaty. The POEM criterion grants the exclusive taxing right to the State where effective management takes place.47 Article 8 of OECD Model Convention48 reads, Article 8 International Shipping And Air Transport 1. Profits of an enterprise of a Contracting State from the operation of ships or aircraft in international traffic shall be taxable only in that State. 2. The provisions of paragraph 1 shall also apply to profits from the participation in a pool, a joint business or an international operating agency. Setting aside the difficult question of where effective management takes place, it should be noted that the POEM criterion is an all-or-nothing approach, as like a typical tax treaty provision: only one State is granted/ 45 A. Hemmelrath & L. Marquardsen, Chapter 1: Direct Taxation of Air Transport Activities in Maisto, Taxation of Shipping and Air Transport in Domestic Law, EU Law and Tax Treaties (n 31). 46 I. Richelle, Chapter 6: Place of Effective Management versus Residence in ibid. 47 The overview of different ways of allocating taxing rights on international shipping industry, see Tatiana Falcão, ‘Taxing Carbon Emissions from International Shipping’ (2019) 47 Intertax 832. 48 The latest version of the OECD Model Convention, see <https://www.oecd.org/ctp/ treaties/articles-model-tax-convention-2017.pdf>
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assigned the taxing power, and there is no possibility of ‘sharing or apportioning’ by the POEM criterion. The POEM has its historical reasons49 for administrative convenience (i.e. needing not check the existence of a permanent establishment and avoiding technical difficulties50), but inevitably leads to possible non-taxation in the POEM State in some circumstances, such as in case of the tonnage tax system.51 In 2013, OECD experts suggested that POEM should be replaced by the residence State, but such suggestion might still face the risk that taxpayers choose a residence State merely as a registration State, and completely disconnect the possible source of transportation activities income. It seems that international tax law would continuously adopt the POEM or the residence rule in attributing international transportation income. Furthermore, the OECD Model Convention only covers air transpiration and water transpiration, not land transportation. There is no specific explanation regarding this omission in the OECD Model Article 8, but some national treaties have extended to transport by road vehicle or railway.52
3.2.2 UN Tax Model Convention Article 8 While the OECD Model Convention mainly represents developed countries’ perspective, the UN Tax Model Convention represents developing countries’ interests. The latter convention is also based on the consensus of the international tax regime, including the overview, categories of income, and other basic assumptions (such as residence versus source and the all49 This POEM approach can be traced back to 1925, but at that time experts also admitted that this is a mere compromise. Historical and archive analysis, see Jogarajan (n 10). , P.144 50 G.W. Kofler, Chapter 7: Article 8 OECD Model: Time for a Change? in Maisto, Taxation of Shipping and Air Transport in Domestic Law, EU Law and Tax Treaties (n 31)., citing Double Taxation and Tax Evasion – Report and Resolutions Submitted by The Technical Experts to the Financial Committee of the League of Nations (Document F.212, February 7, 1925), p. 31. ‘When an industrial concern carries on its activities throughout the whole world, the importance of the actual headquarters, or the ‘brain’ of the enterprise, becomes paramount; and, above all, very serious technical difficulties may be encountered in determining an apportionment of the profits. The representatives of the Maritime Sub- Committee of the League of Nations have asked how it is possible to determine the profits earned in each of the twenty or twenty-five ports at which a vessel belonging to a trans-Atlantic company may have loaded or discharged cargo, when ten or fifteen different countries have to be taken into consideration.’ 51 Ibid, Chapter 7: Article 8 OECD Model: Time for a Change? in ibid. , 7.2.3. 52 Ibid, at 7.3.3, these countries include Turkey, Bulgaria, Croatia, Russia and South Africa, Serbia, ibid, at footnote 84.
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or-nothing rationale indicated in introduction above). Article 8 of the UN Model Convention provides two alternatives; Alternative A represents developed countries’ interest more; Alternative B represents developing countries. Since 2011, there have been several updates pertaining to Article 8. In the 2011 version, the main differences between the alternatives lay in paragraphs 1 and 2 of Article 8. The remaining paragraphs are Roughly the same.53 In 2017, the UN issued the latest versions
53 Ibid, Commentary on Article 8, A. General considerations Table 1: UN Model Convention Article 8 shipping, inland waterways transport and air transport （2011） Article 8 (alternative A)
Article 8 (alternative B)
1. Profits from the operation of ships or aircraft in international traffic shall be taxable only in the Contracting State in which the place of effective management of the enterprise is situated.
1. Profits from the operation of aircraft in international traffic shall be taxable only in the Contracting State in which the place of effective management of the enterprise is situated.
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2. Profits from the operation of boats engaged in inland waterways transport shall be taxable only in the Contracting State in which the place of effective management of the enterprise is situated.
2. Profits from the operation of ships in international traffic shall be taxable only in the Contracting State in which the place of effective management of the enterprise is situated unless the shipping activities arising from such operation in the other Contracting State are more than casual. If such activities are more than casual, such profits may be taxed in that other State. The profits to be taxed in that other State shall be determined on the basis of an appropriate allocation of the overall net profits derived by the enterprise from its shipping operations. The tax computed in accordance with such allocation shall then be reduced by ___ per cent. (The percentage is to be established through bilateral negotiations.)
3. If the place of effective management of a shipping enterprise or of an inland waterways transport enterprise is aboard a ship or a boat, then it shall be deemed to be situated in the Contracting State in which the home harbour of the ship or boat is situated, or, if there is no such home harbour, in the Contracting State of which the operator of the ship or boat is a resident.
3. Profits from the operation of boats engaged in inland waterways transport shall be taxable only in the Contracting State in which the place of effective management of the enterprise is situated.
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of the Tax Model Convention54 and Article 8: Alternative B is especially is worth discussion, and it is different from OECD
4. The provisions of paragraph 1 shall also apply to profits from the participation in a pool, a joint business or an international operating agency.
4. If the place of effective management of a shipping enterprise or of an inland waterways transport enterprise is aboard a ship or boat, then it shall be deemed to be situated in the Contracting State in which the home harbour of the ship or boat is situated, or if there is no such home harbour, in the Contracting State of which the operator of the ship or boat is a resident. 5. The provisions of paragraphs 1 and 2 shall also apply to profits from the participation in a pool, a joint business or an international operating agency.
54 The full text of ‘United Nations Model Double Taxation Convention between Developed and Developing Countries’, available at <https://www.un.org/esa/ffd/wp-content/uploads/2018/05/MDT_2017.pdf > Table 2: UN Model Convention Article 8 shipping, inland waterways transport and air transport （2017）
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Model Convention Article 8.55 As Lennard indicated, ‘The background to
Article 8 (alternative A) 1.
2.
Article 8 (alternative B)
Profits of an enterprise of a Contracting State from the operation of ships or aircraft in international traffic shall be taxable only in that State. The provisions of paragraph 1 shall also apply to profits from the participation in a pool, a joint business or an international operating agency.
1. Profits of an enterprise of a Contracting State from the operation of aircraft in international traffic shall be taxable only in that State. 2. Profits of an enterprise of a Contracting State from the operation of ships in international traffic shall be taxable only in that State unless the shipping activities arising from such operation in the other Contracting State are more than casual. If such activities are more than casual, such profits may be taxed in that other State. The profits to be taxed in that other State shall be determined on the basis of an appropriate allocation of the overall net profits derived by the enter- prise from its shipping operations. The tax computed in accordance with such allocation shall then be reduced by ___ per cent. (The per- centage is to be established through bilateral negotiations.)
3. The provisions of paragraphs 1 and 2 shall also apply to profits from the participation in a pool, a joint business or an international operating agency.
55 Michael Lennard, ‘The UN Model Tax Convention as Compared with the OECD Model Tax Convention–Current Points of Difference and Recent Developments’ (2009) 29 Asia-Pacific Tax Bulletin 4.
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this alternative is that many developing countries lacked strong domestic shipping lines, and did not consider they should forego this revenue where the link to the economy was more than casual. The Commentary to the UN Model Convention explains that the phrase ‘more than casual’ means ‘a scheduled or planned visit of a ship to a particular country to pick up freight or passengers.’56 Therefore, Alternative B can sometimes be implemented as ‘freight tax’57, which focuses on transportation activities represented by freight, and not merely on the management of the shipping/airline companies. Although Alternative B is rarely used in practice58, it offers another justification to the allocation taxing rights on the transportation industry. 3.2.3 US Tax Model Convention Article 8 The US has their own model convention for them to negotiate their bilateral tax treaty, to represent their national interests.59 As to the structure and the basic assumptions, the US tax model convention resembles the OECD and UN tax model conventions.60 Article 8 61 paragraph 1 of US tax Model provides: 56 Ibid, p. 8. 57 International Chamber of Shipping (ICS), Comments on The United Nations Model Double Taxation Convention between Developed and Developing Countries, 2012, available and archived at UN website , <https://www.un.org/esa/ffd/wp-content/uploads/2014/09/8STM_ Letter-from-ICS-on-Article8-Transportation-ShippingAspects.pdf> 58 Alternative B is rarely used in practice, see Wim Wijnen and Jan de Goede, ‘The UN Model in Practice 1997-2013’ [2013] IBFD Bulletin for International Taxation., section 2.10. 59 For example, in response to OECD’s BEPS actions, in 2016 USA Model Convention released new measures ‘for the parties to unilaterally override the negotiated treaty rates in specified circumstances.’ See Allison Christians and Alexander Ezenagu, ‘Kill-Switches in the New US Model Tax Treaty’ (2016) 41 Brooklyn Journal of International Law. 60 For example, The comparison of early editions of USA and OECD Model Convention, Harry A Shannon III, ‘Comparison of the OECD and US Model Treaties for the Avoidance of Double Taxation’ (1986) 12 Int’l Tax J. 265. 61 This is based on the latest edition (in 2016) of USA tax model Convention. But the text of 2016 edition and 2006 edition are almost identical. It is not the change in 2016 edition. Therefore, the technical explanation of Article 8 of USA tax model Convention is still valid, since IRS has not (yet) released the corresponding technical explanation for the 2016 tax model convention. The full text of Article 8: ‘ 1. Profits of an enterprise of a Contracting State from the operation of ships or aircraft in international traffic shall be taxable only in that Contracting State 2. For purposes of this Article, profits from the operation of ships or aircraft include, but are not limited to: a) profits from the rental of ships or aircraft on a full (time or voyage) basis;
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Article 8 Shipping And Air Transport 1. Profits of an enterprise of a Contracting State from the operation of ships or aircraft in international traffic shall be taxable only in that Contracting State. As Guglielmo observed, the US tax model convention, ‘unlike the OECD Model Treaty, the exclusive right to tax is granted to the State of the enterprise operating the aircraft or ship. The OECD criterion of the effective seat of management is disregarded because it is unknown in the US tax system’.62 According to the technical explanation, the US convention has a broader definition of ‘residence’ than the OECD Model Convention, and thus, the ‘place of effective management’ under the US convention would fall within the definition of ‘residence’. Article 8 paragraph 1 explains how such exclusive taxing right works.63 Briefly speaking, the US convention heavily relies on the concept of a (broad) residence, and negates that ‘a ticket office’ could be a sufficient taxable nexus in a jurisdiction. Such interpretation by the US convention has been b) profits from the rental on a bareboat basis of ships or aircraft if the rental income is incidental to profits from the operation of ships or aircraft in international traffic; and c) profits from the rental on a bareboat basis of ships or aircraft if such ships or aircraft are operated in international traffic by the lessee. Profits derived by an enterprise from the inland transport of property or passengers within either Contracting State shall be treated as profits from the operation of ships or aircraft in international traffic if such transport is undertaken as part of international traffic. 3. Profits of an enterprise of a Contracting State from the use, maintenance, or rental of containers (including trailers, barges, and related equipment for the transport of containers) shall be taxable only in that Contracting State, except to the extent that those containers are used for transport solely between places within the other Contracting State. 4. The provisions of paragraphs 1 and 3 of this Article shall also apply to profits from participation in a pool, a joint business, or an international operating agency.’ 62 Guglielmo Maisto, ‘The’Shipping and Air Transport’Provision (Art. 8) in the Italy-USA Double Taxation Agreement’ (1995) 23 Intertax 146. ., at p.146 63 Ibid, explanation of Article 8: ‘Paragraph 1 provides that profits derived by an enterprise of a Contracting State from the operation in international traffic of ships or aircraft are taxable only in that Contracting State. Because paragraph 6 of Article 7 (Business Profits) defers to Article 8 with respect to shipping income, such income derived by a resident of one of the Contracting States may not be taxed in the other State even if the enterprise has a permanent establishment in that other State. Thus, if a U.S. airline has a ticket office in in the other State, that State may not tax the airline’s profits attributable to that office under Article 7. Since entities engaged in international transportation activities normally will have many permanent establishments in a number of countries, the rule avoids difficulties that would be encountered in attributing income to multiple permanent establishments if the income were covered by Article 7.’
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implemented in many bilateral tax treaties with the US. For example, the USItaly Income Tax Treaty (1995)64 as well as Article 8 of the US-Malta Income Tax Treaty (2008)65 both contain identical technical explanations.
3.2.4 The Preliminary Remarks From these three tax model conventions and their commentaries, we can observe that, no matter representing developed countries’ interest like OECD or developing countries’ interest like UN (until 2011) or US’s national interests, the provision that allocates taxing rights, is replying on the single criterion of ‘place of effective management’ (OECD and UN alternative A) or ‘residence’ (US). Such criterion is formalistic and interprets ‘operation’ of ships/aircraft, as the place where the head office/the seat of the enterprise taxpayer is located. Although such approach has a long history of practice, and it does have the advantage of ‘simplicity’ and ‘administrative convenience’, it is still just based on the fear of administrative burden and not based on a solid theory. It has an apparently not-so-logical feature of over-emphasising the management over the transportation activities. At the end of the day, these tax model conventions still follow the ‘allor-nothing rationale’ to allocate taxing rights to ‘one single State’ among all involved States. Such approach might still be the accepted approach in these tax model conventions but keeping it in a formulary apportionment system, such as the CCCTB, would make the CCCTB reform even more complicated.
3.3 National Examples: Australia and Hong Kong Instead of adopting the ‘all-or-nothing’ attribution rule of POEM, or the residence rule in the international tax law regime discussed above, some common law jurisdictions, including Hong Kong66 and Australia, have 64 The full text and technical explanation of USA-Italy income tax treaty is available at <https://www.irs.gov/businesses/international-businesses/italy-tax-treaty-documents> Maisto, ‘The’Shipping and Air Transport’Provision (Art. 8) in the Italy-USA Double Taxation Agreement’ (n 62). 65 The full text of USA-Malta Income tax treaty is available at IRS <https://www.irs.gov/ businesses/international-businesses/malta-tax-treaty-documents> 66 Cap. 112 Inland Revenue Ordinance ─ Section 23B Ascertainment of the assessable
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developed their own formulary apportionment provision in the tax law applicable for transportation industries in some circumstances. These examples are the Maritime Formula and the Calcutta Formula. 67 Although the name ‘maritime formula’ refers to ‘maritime’, such formula is also applicable to aircraft transportation industry. In Australia, for ‘non-treaty airlines… a non-treaty airline means an airline that is a resident of a country that does not have a tax treaty with Australia’.68 In Australia practice, when there is no tax treaty, Australia adopts its own source rule to limit its taxing rights on income of the airline industry, as follows: In Hong Kong, the national tax law adopts a source rule69 for assessable profits of a ship-owner carrying on business in Hong Kong. Such source rule is based on an assessed ratio of: (The Hong Kong aggregated profits) / (The worldwide aggregated Profits) As to the scope of ‘ship-owner carrying on business in Hong Kong’, it is defined as ‘(a) the business is normally controlled or managed in Hong Kong; or (b) the person is a company incorporated in Hong Kong.’70 In other words, Hong Kong tax law limits its own taxing right for the shipping industry by the ratio, even if the company is incorporated in Hong Kong; at the same time, it should be noted that Hong Kong’s most bilateral tax treaties follow the profits of a ship-owner carrying on business in Hong Kong, 23B(3): ‘Subject to subsections (4), (4AA) and (5) and section 26AB, where a person is deemed to be carrying on a business as an owner of ships in Hong Kong under subsection (1) or (2), as the case may be, the assessable profits of that person from that business for a year of assessment shall be the sum bearing the same ratio to the aggregate of the relevant sums earned by or accrued to that person during the basis period for that year of assessment as that person’s total shipping profits for the basis period bear to the aggregate of the total shipping income earned by or accrued to that person during that basis period for that year of assessment. (Amended 27 of 2018 s. 32)’ 67 International Air Transport Association (IATA), Guidelines For Taxation Of International Air Transport Profits, 2015, available at <https://www.iata.org/policy/Documents/taxation_intl_ air_transport%20profits_final.pdf> 68 Australian Government Australia Tax Office, Practice Statement Law Administration (General Administration), PS LA 2008/2 (GA), 2008 available at <https://www.ato.gov.au/law/ view/document?docid=PSR/GA20082/NAT/ATO/00001> 69 Cap. 112 Inland Revenue Ordinance ─ Section 23B Ascertainment of the assessable profits of a ship-owner carrying on business in Hong Kong, 23B(3); Falcão, T. (2019). Taxing Carbon Emissions from International Shipping. Intertax, 47(10), 832-851., footnote 55. 70 Cap. 112 Inland Revenue Ordinance ─ Section 23B(1).
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traditional international tax regime.71 Based on these actual examples, we can observe that a specific formulabased rule for the transportation industry not only has a long history in US State taxation (see Section 4) but also exists in a piece of tax legislation even in a non-FA jurisdiction as a practical technique to levy tax on inherently mobile income earned from this industry. Although the OECD Model Convention’s POEM criterion is still the starting point for many States, there are more practical approaches adopted in national tax laws that combine a formula or ratio to decide the taxing right on the shipping activities.
4. Formulary Apportionment Experience on The Transportation Industry in US State Taxation 4.1 An Overview of State Taxation Formula and Transportation Industry Formulas In US: Diversity with the Spatial or Time Dimension of Transportation As indicated in Section 3.1, the European Commission had been learning formulary apportionment experiences from State taxation in US while preparing the text of the CCCTB Directive Proposal. In other words, the CCCTB is a legal transplantation project from State taxation in US. Therefore, it is important to understand how the same legal problem is addressed. It should be clarified that the following discussions in Section 4 are within the scope of State taxation of US, where federal income taxation is governed by Internal Revenue Code as well as State taxation being freely levied by each State, provided that such State taxation does not infringe the US Constitution’s provisions72. There are imputation rules between State corporate income taxation and federal income taxation, which are not within the scope of this paper. Furthermore, signing an international tax treaty is also within federal competence, and therefore the US tax model convention 71 For example, the Hong Kong-Malta income tax treaty Article 8 (1) is identical with the OECD Model Convention. The full text may be found at <https://iconfinancemalta.blob.core. windows.net/libx-127-public/Double%20Taxation%20Treaties/Hong%20Kong.pdf> 72 For the general overview of the corporate taxation in USA, see JG Rienstra, ‘United States-Corporate Taxation’ [2015] IBFD database–Country surveys..; Richard D Pomp, State & Local Taxation (RD Pomp 2015). chapter 10.; Walter Hellerstein and others, State and Local Taxation: Cases and Materials (Tenth edition, West Academic Publishing 2014). Chapter 1.
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is governed by the federation, and thus it will ensure consistency of the whole US regarding eliminating international double taxation. As to State taxation in US, States have quite wide discretion, provided that a piece of State taxation does not infringe the federal constitution. One important provision of the federal constitution clause in US is the ‘Commerce’ Clause. The ultimate aim of the dormant Commerce Clause is to ensure that cross-border and domestic commerce have the same opportunities to flourish.73 For European readers, this is quite similar to the concept of internal market mandate under EU law.74 The Supreme Court of the US and Court of Justice of European Union have used them as similar approach to strike down unconstitutional State legislation.75 To pursue uniformity regarding levying tax on multistate business income, in 1957, the Uniform Division of Income for Tax Purposes Act (UDITPA) was adopted. UDITPA apportions the ‘business income’ according to a three-equal-weighted factor: property, payroll, and sales.76 UDITPA is a uniform act in the US that States77 can voluntarily join for the purpose of pursuing uniformity.78 In addition to UDITPA, other stakeholders also work on 73 See the commentary, Michael S Knoll and Ruth Mason, ‘The Economic Foundation of the Dormant Commerce Clause’ [2017] Virginia Law Review 309. The dormant commerce clause does not address the double taxation issue but has the mandate to ensure cross-border activities are not discriminated against by protectionist State legislation. 74 Scholars have seen the comparable function of the internal market mandate in the EU law and the commerce clause in USA. See for example, Georg Haibach, ‘The Interpretation of Article 30 of the EC Treaty and the ‘Dormant’ Commerce Clause by the European Court of Justice and the US Supreme Court’ (1999) 48 International & Comparative Law Quarterly 155. , pp. 155-167; Although the internal market is the European counterpart of the commerce clause, there are still differences, see Klaudia Galka, ‘Borderless Market Legislation Practice in EU and USA: Competence of Central Authorities in the Federal Model’ (2013) 4 MaRBLe <http://openjournals.maastrichtuniversity.nl/Marble/article/view/168> accessed 18 November 2019. 75 USA Supreme Court seems more lenient to States than CJEU while invoking the Commerce Clause, though, see Reuven S Avi-Yonah, ‘Federalism and the Commerce Clause: A Comparative Perspective’, The State and Local Tax Lawyer. Symposium Edition (JSTOR 2007). 76 Such three-factor formula is so-called the ‘Massachusetts formula’, Joann M Weiner, ‘Using the Experience in the US States to Evaluate Issues in Implementing Formula Apportionment at the International Level’ (1999) 83 OTA paper., at p.10. 77 The States joining the UDITPA can be found in Uniform Law Commission’s website. The enacting States are Alabama, Alaska, Arizona, Arkansas, California, Colorado, District of Columbia, Hawaii, Idaho, Kansas, Kentucky, Maine, Michigan, Minnesota, Missouri, Montana, New Mexico, North Dakota, Oregon, Pennsylvania, South Dakota, Texas, Utah, and Washington. See for more information:http://www.uniformlaws.org/LegislativeFactSheet.aspx?title=Division%20 of%20Income%20for%20Tax%20Purposes. 78 For the history and reform process of UDITPA, see Joe Huddleston and Shirley Sicilian, MultiState Tax Commission, The Project To Revise UDITPA, 2009, published at http://www.
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pursuing uniformity in the division of multiState taxable income. In 1967, a group of State tax administrators presented States ‘Multistate Tax Compact’, which copies UDITPA and establishes an inter-State agency ‘Multistate Tax Commission’ (MTC).79 For European readers, it is easier to understand MTC as a type of intergovernmental organisation like the OECD, not a supranational organisation like the European Union. Just like the OECD, MTC does have great de facto influence in States in US. MTC, as an intergovernmental State tax agency based on the Multistate Tax Compact80, issues soft laws for these States. Regarding the sharing formula, the MTC has recommended formulas for general corporations and corporations from specific industries. These recommendations are soft laws, but are developed by tax experts sent from all States. Therefore, States’ legislators and tax authorities would quite often follow these recommendations. A lower court in California even admitted the priority of Multistate Tax Compact as a legal source, even higher than the States’ enacted tax law, though not upheld by the higher court.81 Multistate Tax Commission lays down various detailed recommendations in the form of model regulations or model statutes on issues in State taxation. It is expected that the States will adopt MTC recommendations voluntarily and the phenomenon of path dependency will happen, and thus the States’ taxation will gradually converge and achieve uniformity. Since UDITPA/ mtc.gov/uploadedFiles/MultiState_Tax_Commission/Uniformity/Minutes/The%20Project%20 to%20Revise%20UDITPA.pdf. See also the more extensive version of the above-mentioned report, JOE B HUDDLESTON and SHIRLEY K SICILIAN, ‘Should UDITPA Be Revisited?’, The State and Local Tax Lawyer. Symposium Edition (JSTOR 2009). 79 See their official website of MultiState Tax Commission: http://www.mtc.gov. Not only public servants, but also practitioners from American Bar Association (ABA), actively engage in MultiState Tax Commission’s work, see Philip M Tatarowicz, ‘A History of the State and Local Taxes Committee and Its Most Recent Quarter Century of Work’ (2014) 68 Tax Law. 595. 80 As to the constitutional status of MultiState Tax Compact, see Robert M White, ‘The Constitutionality of the MultiState Tax Compact’ (1976) 29 Vand. L. Rev. 453. Natasha N Varyani, ‘A Contract Among States: Capturing Income of the World’s Multijurisdictional Taxpayers’ (2016) 1 U. Bologna L. Rev. 219. 81 The California case, Gillette Co. v. Franchise Tax Board 62 Cal. 4th 468 (2015), the Court of appeal reversed the trial court and ruled that California may not unilaterally change repudiate mandatory terms of the Compact. The California Supreme court reversed again the Court of Appeal’s ruling and ruled that MultiState Tax Compact is not reciprocal binding to States and MultiState Tax Commission’s regulations are advisory only, California legislation can preclude MultiState Tax Compact’s specific rule. Michigan court of appeals adjudicated on the same issue and concludes that MultiState Tax Compact is not binding to Michigan State legislation, see John A Biek, ‘Alternative Formulary Apportionment Under the MultiState Tax Compact’ (2013) 16 J. Passthrough Entities 41.
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Multi-state Tax Compact are soft laws82 and are not self-executing, States’ formulary apportionment rules are still in great variety.83 MTC and UDITPA are model laws, i.e. soft laws, and States are free to enact them into their State tax legislation. Therefore, as to the State income tax apportionment, not every State enacts UDITPA or MTC, and the States may have similar but different provisions that have the same functions. Since the 1980’s, there has been a trend of adopting the single/double weighted sales factor formula as its standard formula for levying multistate corporate tax.84 The main assumptions of the single sales factor formula are the such formula would be a ‘built-in’ incentive to attract in-State investments and administrative simplicity,85 because States assume that MNEs would be more motivated to increase their in-State labour or assets within the State .The economic effect of such built-in incentive has been criticised by more 82 Although it has been accepted that MultiState Tax Compact is only the model law for the participating member States, the taxpayers have started to claim their rights to choose the formula provided by MultiState Tax Compact, even if such a formula is not provided by the State law. Therefore, it is disputed whether MultiState Tax Compact is also a valid legal source for taxpayers. In California, the Gillette case deals with this issue. The California Court of Appeal affirms the taxpayer’s right to elect the MultiState Tax Compact, even if California law does not, but the California Supreme Court rejects the MultiState Tax Compact as a reciprocal binding agreement between States, so taxpayers cannot claim rights based on it. For the California Supreme Court ruling, see The Gillette Company, et. al. v. California Franchise Tax Board, Case No. S206587 (Cal. 2015). 83 For the history and problems of adopting UDITPA, see James Smith, ‘UDITPA Turns 50’ (2006) 25 J. St. Tax’n 13.. Smith mentions the serious problem of nowhere sales in combination with a heavily weighted/single sales factor formula and the importance that the States adopt a uniform rule. 84 The overview of States adopting the single sales fator formula, see TA Pereira, International Aspects of the CCCTB in Europe (Maastricht University 2014).; Mayer (n 27).at 3.2.5.1. a survey Federal Tax Administration, until 2018/01/01 https://www.taxadmin.org/assets/docs/ Research/Rates/apport.pdf; Jerome R Hellerstein and Walter Hellerstein, State Taxation (3rd ed, Thomson Reuters/Tax & Accounting 2015).at 9.2; Mark L Nachbar and Brian L Browdy, ‘The Single Sales Factor Apportionment Method Origins and Development’ (2008) 27 J. St. Tax’n 31. 85 Most supporters of the single sales factor cited the empirical data and interpretation from Austan Goolsbee and Edward L Maydew, ‘Coveting Thy Neighbor’s Manufacturing: The Dilemma of State Income Apportionment’ (2000) 75 Journal of Public economics 125. ; Austan Goolsbee and Edward L Maydew, ‘The Economic Impact of Single Factor Sales Apportionment for the State of New York’ [2000] New York, NY: The Public Policy Institute of New York State, Inc. Reuven Shlomo Avi-Yonah and Kimberly A Clausing, Reforming Corporate Taxation in a Global Economy: A Proposal to Adopt Formulary Apportionment (Brookings Institution Washington, DC 2007). There are also European authors advocating the single sales factor formula for the CCCTB, for example, M.F. de Wilde, Chapter 2: Some Thoughts on Fairness in Corporate Taxation in: Taxing Multinationals in a Global Market (IBFD 2017), Online 1 Books IBFD, at 6.4.5.2; Llopis, Estefanía López. ‘Formulary Apportionment in the European Union.’ Intertax 45.10 (2017): 631-641.
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recent data86, but such trend seems still continuous and lasting. In US State taxation, transportation industry formulas have a long history. In the early 20th century, there was a specific formula for the railroad industry.87 Such formula was in the form of ‘the unit rule’, which is actually the origin of the formulary apportionment, or unitary taxation in US State taxation. The Multistate Tax Commission (MTC) has several transportation industry formulas.88 MTC regulations provide three regulations for transportation industries, including airlines,89 railroad,90 and trucking.91 Special formulas for these three transportation industries have features in common. They all involve mobile activities, properties, and employees, and therefore various pro-rata calculation methods are applied to calculate their ‘in-State activities’, i.e. the numerator of all the weighting factors. There are still States adopting the special formula for the shipping industry.92 These State formulas are not uniform, and include one-factor,93 two-factor,94 and three-factor formulas.95 Among these formulas, the 86 See the replication of Goolsbee and Maydew’s work and negation, David Merriman, ‘A Replication of ‘Coveting Thy Neighbor’s Manufacturing: The Dilemma of State Income Apportionment’(Journal of Public Economics 2000)’ (2015) 43 Public Finance Review 185. 87 The early history of ‘the Unit Rule’ as one origin for current formulary apportionment, see Elcanon Isaacs, ‘The Unit Rule’ (1926) 35 The Yale Law Journal 838. 88 John A Wilkie, ‘Income Apportionment of Unitary Public Utility Corporations’ (1959) 15 Tax L. Rev. 467. 89 Multistate Tax Commission Recommendation Reg. IV.18.(e) Special Rules: Airlines. [Adopted July 14, 1983], published at http://www.mtc.gov/uploadedFiles/Multistate_Tax_Commission/Uniformity/Uniformity_Projects/A_-_Z/SpecialRules-Airlines.pdf. 90 See Multistate Tax Commission Recommendation Reg. IV.18.(f) Special Rules: Railroads. [Adopted July 16, 1981] , at http://www.mtc.gov/uploadedFiles/MultiState_Tax_Commission/Uniformity/Uniformity_Projects/A_-_Z/SpecialRules-Railroads.pdf. 91 See Multistate Tax Commission Recommendation Reg IV.18.(g) Special Rules: Trucking Companies. [Adopted July 11, 1986; amended July 27, 1989], http://www.mtc.gov/uploadedFiles/Multistate_Tax_Commission/Uniformity/Uniformity_Projects/A_-_Z/SpecialRules-Trucking.pdf. 92 The survey, see CCH TAX LAW EDITORS, U.S. MASTER MULTISTATE CORPORATE TAX GUIDE (2020). (CCH INCORPORATED 2019).,.There are 16 States adopting a special formula for the shipping industry. These States are Alaska, California, District of Columbia, Florida, Hawaii, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maryland, Michigan, New Hampshire, Oregon, Pennsylvania, South Carolina. 93 For example, Florida adopts a single revenue-mileage factor formula, Fla. Stat. Ann. § 220.151(2)(c). 94 Louisiana adopts a two-factor formula consisting the property and income, LA Rev Stat § 47:287.95C. 95 For example, Hawaii adopts a three-factor formula consisting of ‘revenue tons,’ ‘voyage hours,’ and ‘originating revenue’, Haw. Code R. § 18-235-38-06.01.
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weighting factors include the voyage-days factor96, voyage-hours factor, revenue tons factor,97 mileage factor,98 etc. All these factors aim to describe the mobile shipping transportation activities, which might be difficult for the standard formula to catch. These factors represent the different aspects of the shipping activities, including time, space, and quantity of shipping: the voyage-days factor employs the time element; the mileage factor employs the spatial element; and revenue-tons factor employs the measurement of cargos, the shipment element. All these factors are designed to describe the in-State shipping transportation activities. Adopting the time element in the weighting factor is a smart approach because there might be some difficulty in recording the mileage in the high sea and within the State’s water territory, and the time element factor, such as ‘port-days’ or ‘voyage days’, describes the shipping activities from another objective view. In any case, these special formulas are deigned to catch ‘shipping transportation activities’ within the State. 4.2 The Airline Industry: The Flight Departures Ratio Applies to The Three Factors A typical cross-border transportation would inevitably involve ‘departure’, ‘voyage’ and ‘arrival’. This is the nature of transportation. Regarding air transportation, the voyage part of the activity, is also called ‘overflight’. Due to the mobility of airline transportation and that several jurisdictions are involved, it could be argued which jurisdiction is justified to levy or to be apportioned taxable income on airline industries99 In practice, States in the US adopt different types of rules for apportioning the multiState taxable income of airline industries.100 Some States follow the MTC Regulation, and some adopt other various formulas, such as the singlegrow-receipts factor, a single factor flight mileage formula, or a traditional three-factor formula with variations in order to fit the mobile nature of the airline business. The MTC Regulation IV Section 18(e) uses the indicator ‘the aircrafts’ departure’ in all three factors instead of using mileage as a proxy in State taxation practice, in order reduce the problem of ‘no-where income’ in 96 California, Cal. Rev. & Tax. Code § 25101; Cal. Code Regs. tit. 18, § 25101(b). 97 For example, South Carolina, SC Code Ann. § 12-6-2310(6). 98 Florida, Fla. Stat. Ann. § 220.151(2)(c). 99 Oregon has argued for its taxing rights based on overflight, see Gordon, Elizabeth A. ‘The Sky’s the Limit: The Apportionment of Overflights and Property Taxation after Alaska Airlines v. Department of Revenue.’ Willamette L. Rev. 26 (1990): 711. 100 The overview explanation, see Hellerstein and Hellerstein (n 85)., 10.03[6][c].
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the airline industry.101 MTC Regulation IV Section 18(e) provides a three-factor formula consisting of property, payroll, and sales for the airline industry, but items that form the numerators of three factors are all adjusted by the special ratio based on ‘instate aircraft departures’, respectively. The precise ratio is calculated as: departures of aircraft of a specific type departing from the locations in this State ) / ( aircraft of a specific type departing from everywhere) It is based on the value of the departure flights (hereafter the flight departures ratio). It should be noted that the flight departure ratio from different types of aircrafts should be calculated differently. For example, 747 and 727 aircrafts’ departure ratio are calculated separately.102 The airline industry formula also has a special rule for the payroll factor. The payroll of non-flight personnel and flight personnel are calculated differently. With regard to non-flight personnel, compensation paid to such employees shall be included in the numerator fully. With regard to flight personnel (the air crew aboard an aircraft assisting in the operations of the aircraft or the welfare of passengers while in the air), compensation paid to such employees shall be included, but must be multiplied by ‘the flight departures ratio’. As to the sales factor, it is in fact a ‘transportation revenue factor’: All the transportation revenue derived from transactions and activities in the regular course of trade or business of the taxpayer, and miscellaneous sales of merchandise, etc., are all included in the denominator. However, passive income items such as interest, rental income, dividends, and the proceeds or net gains or losses from the sale of aircraft will not be included. As for the numerator of the sales factor, there is a special rule that distinguishes two types of items: (1) the in-State flight revenue is calculated as the total flight revenue multiplied by the abovementioned ‘flight departures ratio’; 101 Ibid, at pp. 10-18. 102 In the MTC’s airline industry formula, the departure ratio is formulated as ‘Departures of aircraft from locations in this State weighted as to the cost and value of aircraft by type compared to total departures similarly weighted’, which is not quite clear. In combination with the explanatory example attached in the MTC’s airline industry formula, it clearly means that different types of aircrafts’ departure ratio should apply to the aircrafts’ valuation in the property factor differently.
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and (2) the non-flight revenues attributed to the State is attributed to the geographic State. As to the property factor, the denominator of the property factor shall be the average value of all of the taxpayer’s real and tangible personal property owned or rented and used during the income year. The airline formula provides a special rule for the numerator of the property factor. In principle, the property factor shall include the taxpayer’s real and tangible personal property owned or rented and used in this State during the income year. However, the property factor of the MTC’s airline industry formula treats ‘aircrafts ready for flight’ differently. The ‘aircraft ready for flight’ shall be still included in the numerator of the property factor at ‘the flight departures ratio’.
4.3 Other Transportation Industry Formulas In US 4.3.1 The Railroad Industry In addition to the airline industry, the MTC Regulation IV further provides special formulas for the railroad industry and the trucking industry. The rationale for these two transportation industry formulas is to provide a fair apportionment result for the mobile transportation activities, especially when these transportation activities are conducted across States. For the railroad industry, its weighting factors are calculated by the special ratios. This is also because the railroad industry has mobile features, and some States even adopt the single-factor revenue miles formula.103 MTC Regulation IV Section 18(f) provides a three-factor formula with special ratios. According to MTC Regulation IV Section 18(f), the railroad industry formula,104 the property factor has some special items. As to ‘mobile or movable property’ such as passenger cars, freight cars, locomotives and freight containers, the included value in the numerator should be multiplied by the ratio of (in-State locomotive miles)/(everywhere locomotive miles) and (in-State car miles)/(everywhere car miles) respectively. 103 9. 104
For the overview explanation, see Hellerstein and Hellerstein (n 85)., 10.03 [2][a], p. 10Ibid.
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The payroll factor numerator has special rules for payroll for enginemen and trainmen performing services on interstate trains. The value of their compensation in the numerator should be calculated as the ratio of (their services performed in this State)/(their services performed everywhere) because their services on the interstate trains are performed both within the State and outside the State. The ratio is to decide the extent that the services are performed within the State. The sales factor of the railroad industry formula distinguishes ‘sales from hauling freight, mail, express’ and ‘sales from passengers’. The taxpayer’s receipts from hauling freight, mail, express and passengers purely in-State, i.e. originating and terminating within the same State, shall be totally included in the numerator of the sales factor. However, receipts from hauling freight, mail, and express while passing through/into/out of the State, should be included in the numerator at the ratio of (in-State miles traveled of such movement )/(total miles traveled of such movement from origin to destination). Moreover, the taxpayer’s receipts from transportation of passengers passing through/out/into the State shall be included in the numerator of the sales factor at the ratio of (inState passenger miles)/(total passenger miles).
4.3.2 The Trucking Industry For the trucking industry, MTC Regulation IV Section 18(g) also provides a special formula.105 The trucking industry formula has three weighting factors: property, payroll, and sales. Similar to the railroad industry formula, the trucking industry formula distinguishes the mobile property and nonmobile property. Mobile Property means all motor vehicles, including trailers, engaged directly in the movement of tangible personal property. The value of the taxpayer’s mobile property included in the numerator of the property factor, must be calculated at the ratio of (inState mobile property miles )/(the total mobile property miles). The payroll factor of the trucking industry formula also distinguishes personnel performing services both within and outside of the State (the cross-border personnel) and personnel performing services exclusively within the State (in-State personnel). As to the compensations paid to inState personnel, the value can be fully included in the numerator of the 105
Ibid, 10.03 [3].
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payroll factor. However, the value of compensation paid to the cross-border personnel must be calculated at the ratio of (in-State service performed based on mobile property miles )/(everywhere service performed based on mobile property miles). As to the sales factor, the trucking industry formula is very similar to the railroad industry formula. The taxpayer’s receipts of hauling freight, mail, and express originating and terminating within the State, i.e. the intra-State sales, is fully included in the numerator of the sales factor; whereas the mobile property miles traveled by such movements must be calculated at the ratio of (in-State mobile property miles traveled by such movements)/(the total mobile property miles traveled by such movements everywhere). These special ratios of the trucking industry and the railroad industry have one feature in common: The special ratios are applicable to the mobile items, and these ratios are decided by the type of mileage in each transportation industry.
4.4 Surface Travel, Flow-Through and Pass-Through are Less Relevant Proxies In State taxation cases regarding transportation industries, there are discussions about ‘surface travel’ and ‘pass-through’ jurisdiction. The core question is whether such pass-through transportation activities constitute nexus and justify apportionment of tax base. For the airline industry, there exists consensus that over-flights106 should not constitute nexus nor justify apportionment, because the mere fact of flying through does not avail to the public services or market of the jurisdiction, and this does not justify exercise of taxing right. As to the shipping industry, there are still diverse approaches107 regarding voyage on the high sea or voyage outside the water jurisdiction. Some States adopt the voyage days formula, so there will be ‘nowhere income’ from voyage on the high sea or nontaxable waters; other States adopt ‘the port 106 Hellerstein and Hellerstein (n 85). 10.03[6][b][i] Treatment of overflight or flyover time or mileage. 107 ibid. 10.03[5][a] Specialized Statutory and Regulatory Provisions
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day formula’, so voyage on nontaxable waters will not be considered anyway. As to land transportation and pipeline transportation, the answer is a bit more controversial. For example, prior to 2009, Illinois adopted108 ‘passthrough miles’ for motor carriers (land transportation) and the court also supported this formula. This is because motor carriers do have physical contact with the jurisdiction while ‘passing through’, even they do not stop for picking up or delivering. Just as Justice Black’s remarks on ‘a physic basis’ in the case Northwest Airlines, Inc. v. Minnesota109: ‘A State has a different relation to rolling stock of railroads than it has to airplanes. Rolling stock is useless without surface rights and continuous structures on every inch of land over which it operates. Surface rights the railroad has acquired from the State or under its law. There is a physical basis within the State for the taxation of rolling stock which is lacking in the case of airplanes.’ It seems true that land transportation activities do create some more connections to the pass-through jurisdiction than air transportation, and in some cases nexus and apportionment by the passthrough jurisdiction is justified. However, even from the perspective public benefits provision, when there is no stopping point to deliver or collect foods or passengers, in the pass-through jurisdiction, I am doubting if taxpayers of land transportation, could fulfill the factor presence nexus threshold, because they have no customers’ market (the sales factor) nor no service performing (the labour factor) in the pass-through jurisdiction. The only possible factor presence threshold would be the asset factor; but it would be hard to argue that vehicles could be attributed to the pass-through jurisdiction. As to the ground accommodating the rail tracks, highways, and pipelines, it is true that taxpayers make use of them by passing through, but I would argue that, without the related sales factor and the labour factor, it is hard to argue that, the ground accommodating the rail tracks, highways, and pipelines represent taxpayers’ capacity to mobilise these facilities. Therefore, in my view, transportation industry formulas should focus on the departure and arrival jurisdictions, and not on the pass-through 108 ibid. 10.03[3][b][v] Pass-through miles. 109 Comments on the case, PHILIP M ZINN, ‘The Requirements of’ Substantial Nexus’ and’ Fairly Related’ Under the Commerce Clause’, The State and Local Tax Lawyer. Symposium Edition (JSTOR 2007)., p.66
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jurisdiction. 4.5 The Final Remarks of the transportation industry formulas in US State Taxation In the context of State taxation in the US, the transportation industries need special rules for apportionment. It is not only because the standard formula is based on a manufacturing industry’s model, but also because these transportation industries by their nature involve a lot of cross-border services provision. The State formula aims to decide the taxability within the State, and thus there must be some indicators to estimate the reasonably attributable extent of these activities. In these MTC transportation industry formulas, various proxies in the form of a ratio are used for different industries to estimate their in-State activities. The airline formula takes the flights departure as a proxy; the railroad formula and the trucking industry take the mileage as the main proxy. Since the State formula is unilaterally applied to the taxpayers, these ratios are necessary to limit the States’ powers to apportion the tax base.
5. Comparison and Discussions: Tax Neutral Transportation Formulas should Reflect the Fluid Source of Departure and Arrival After comparing all-or-nothing approaches in the traditional tax regime and formulary apportionment approaches, we can draw several common implications, despite the existence of diverse approaches of allocating taxing rights on the international transportation industry. First of all, both the traditional international tax regime and the US’s State taxation formulary apportionment system are aware of the difficulty of ascertaining the source of income earned in the international transportation industry. In other words, the source is ‘fluid’. Their responses are different: the traditional international tax regime embraces administrative convenience and all-or-nothing rationale, so different tax model conventions all seek a single proxy, either ‘place of effective management’ or ‘residence’. For formulary apportionment system, there have been various formulas, using 280
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time or distance as the factor in the formula to transcribe the inherent mobile feature. There is also no consensus yet between States in US how such formula should be designed. In Section 3, I have demonstrated that in the field of international tax law regime, the approach of allocating taxing rights of the international transportation industry, is following the traditional all-or-nothing rationale and heavily relying on the POEM or residence criterion, As a result, one single State will have the exclusive taxing right. Such approach is not based on any solid theory, but administrative convenience. Although it seems easier to use such formalistic criterion, it may divide the real economic transportation activities and result of attributing the taxing right. Such approach is not compatible with the reform spirit of the Base Erosion and Profit Shifting Project. On the contrary, from the above-mentioned examples in Section 4, regarding transportation industry formulas developed by MTC and States in the US, it is common to apply an extra ratio to the weighting factor(s). Some are based on the spatial criterion (such as MTC’s railroad and trucking industry formula and mileage factor) and some are based on time criterion (such as the port-days formula or voyage days formula). The second reflection is that, the all-or-nothing rationale and formulary apportionment are not compatible, and adopting a hybrid approach can create more complexities. The main advantage of ‘administrative convenience’ actually disappears. For the current CCCTB Directive Proposal, it has a hybrid approach. As to the corporate tax, the CCCTB adopts a formulary apportionment system as its general setting; but its ‘carving-out’ approach for the transportation industry seems to be influenced by OECD’s approach mainly for the purpose of administrative convenience. This is only one side of the story about taxing the transportation industry. Formulary apportionment actually can also be an alternative to tax cross-border income earned transportation activities and has been used in practice, either in Hong Kong, Australia or at the State level in US. Since the CCCTB Directive Proposal has chosen formulary apportionment as the tax reform direction, it would be unreasonable to leave a backdoor for the transportation industry. As the third reflection, due to the transportation industry’s mobile feature, it is reasonable to adopt the sales factor, which equally weights 281
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the dimension of both arrival and departure as ‘the destination’, because both arrival and departure represents taxpayers’ response to the clients. Due to the inherent mobile feature of transportation activities, the income earned will inevitably the departure, voyage and arrival jurisdictions. From the perspective of benefit principle, the departure jurisdiction and the arrival jurisdiction provide main customer markets for MNE taxpayers. Therefore, both departure and the arrival jurisdiction should be understood as source as well as ‘the destination’ in the context of the sales factor, because the sales factor represents ‘the response to clients’ market’, and both departure and arrival jurisdictions are the transportation industry’s ‘clients’ market’. To sum up, the failures of the traditional international tax regime as well as Base Erosion and Profit Shifting problems are not limited to ‘digital economy’. In fact, there have been similar BEPS problems in the international transportation industry. Digital economy makes the old problems even more serious, and EU’s reform effort CCCTB is an ambitious and comprehensive attempt. While putting so much effort designing a EU-level formulary apportionment, completely carving-out the transportation industry from the CCCTB’s application scope would negatively offset the benefits of the tax reform. In conclusion, the current text of the provision on the transportation industry under the CCCTB Directive Proposal is counter progressive and unreasonable, and an amendment is necessary.
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Sean Portellli The scope of the ‘pure’ VAT exemptions and their interpretation by the CJEU, with particular reference to the services referred to in article 135(1)(g) of Directive 2006/112EC, as well as the provisions’ transposition into Maltese law.
Sean Portelli graduated from the University of Malta with a secondclass Bachelor of Laws (Hons) degree, and is currently reading for the Master of Advocacy at the same university. He is mainly interested in the financial and technological fields of law. Sean Portelli was elected to serve as Treasurer of the Malta Law Students’ Society (GħSL) during the 2019/20 term of office.
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This article analyses the exemptions provided for by the VAT Directive, these being categorised into two separate groups, concerning Articles 132 through to 134, as well as Articles 135 through to 137 of the VAT Directive, respectively. Moreover, in order to fully understand the applicability of the exemption provided for by the VAT Directive, the work examines the exemptions from the perspective of the Court of Justice of the European Union. Simultaneously, the work shall methodically scrutinise the caselaw of the Court of Justice of the European Union concerning Article 135(1)(g) of the VAT Directive, whilst further examining the transposition of the same into the Maltese legislative framework, under the VAT Act.
1. Introduction
I
t is indisputable to state that Value Added Tax (‘VAT’), is a general tax imposed upon consumption, that is indirectly applied by means of taxing the supply of goods or services for consideration, at every stage of production and distribution.1 The general nature of VAT indicates that every form of economic activity is to be included within its remit, without showing discrimination as to the nature of the taxable person that is involved in the supply of goods and services.
2. The Exemptions Prescribed by the VAT Directive From a practical point of view, the justification of VAT exemptions may be brought about through three distinct methods. Firstly, certain exemptions may be implemented so as to build upon VAT’s advancement. Secondly, certain goods and services deserve to be tax exempt. Thirdly, distinct categories of goods and services may prove too burdensome to tax. The application of an exemption carries, with it, certain consequences. In fact, any input tax which is attributed to an exempt supply cannot be deducted.2 1 Council Directive (EU) 2006/112 of 28 November 2006 on the common system of value added tax (2006) OJ l347/1 2 Ben Terra and Julie Kajus, ‘A Guide to the European VAT Directives, Volume 1’ (2006,
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The VAT Directive3 categorises exemptions without deduction into two separate groups. The first group concerns activities which are exempted in the interest of the general public, whilst the second group concerns other forms of exempted activities.4 The first group is covered by Articles 132 through to 134 of the VAT Directive, and it is comprised of, amongst others, medical, educative, sport, cultural, and social services. Such transactions are generally carried out by public bodies; however, the exemption also covers a number of the same transactions performed in the interest of the general public by either the private sector, or by the voluntary sector. 5 The second group is covered by Articles 135 through to 137 of the VAT Directive, and it allows for exemptions which include amongst others, insurance and reinsurance transactions, the leasing and letting of immovable property, banking and financial transactions, as well as investment funds.6 Such exemptions concern a varied array of transactions, which are mostly related to money and finance.7
3. The Exemptions from the Lens of the Court of Justice of the European Union In order to fully understand the applicability of the VAT Directive’s exemptions, it is fundamental to refer to the interpretations made, in the vast body of case-law of the Court of Justice of the European Union (the ‘CJEU’). Furthermore, due to the fact that exemptions are an exception to the general VAT rule that all supplies of goods or services are subject to VAT, they shall be interpreted very strictly. As a matter of fact, excluding what is included in the VAT Directive, there are no thorough definitions of the services covered, IBFD Publications) 3 Council Directive (EU) 2006/112 of 28 November 2006 on the common system of value added tax (2006) OJ l347/1 4 Ibid 5 European Commission, ‘Exemptions without the right to deduct’ <https://ec.europa.eu/taxation_customs/business/vat/eu-vat-rules-topic/exemptions/exemptions-without-right-deduct_en#fin_insur_services> accessed 19 April 2019 6 Ben Terra and Julie Kajus, ‘A Guide to the European VAT Directives, Volume 1’ (2006, IBFD Publications) 7 European Commission, ‘Exemptions without the right to deduct’ <https://ec.europa.eu/taxation_customs/business/vat/eu-vat-rules-topic/exemptions/exemptions-without-right-deduct_en#fin_insur_services> accessed 19 April 2019
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nor are there any unambiguous references made to definitions used in other sets of Community legislation or by any regulatory bodies. This lack of meticulousness has plagued tax authorities and commercial activities with problems in interpreting both the scope and the application of such exemptions. This phenomenon is illustrated in the growing body of CJEU case-law. Moreover, the CJEU has often been requested to fill in such voids, as well as to clarify the correct understanding of the current exemptions in the VAT Directive. Thus, an analysis of the CJEU’s interpretation on the exemptions provided in the VAT Directive, should essentially consider both the exemptions related to activities conducted in the public interest, as well as any exemptions related to money and finance, which shall be specifically dealt with later on. As aforementioned, activities in the interest of the general public, including, amongst others, the supply of organs, blood, and milk, as well as hospital and medical care, including other closely related activities are exempt from VAT. The Court, in De Fruytier,8 was tasked with determining whether Nathalie De Fruytier’s activity, in transporting human organs is exempt from VAT under Article 132(1)(d) of the Directive, as the Directive exempts the supply of human organs, blood and milk from VAT. The Court held that ‘the terms used to specify the exemptions in Article 132 of Directive 2006/112 are to be interpreted strictly, since they constitute exceptions to the general principle’9 which requires VAT to be charged on the supply of goods and services for consideration. The Court further held that ‘the requirement of strict interpretation does not mean that the terms used to specify the exemptions referred to in Article 132 should be construed in such a way as to deprive the exemptions of their intended effect’.10 The Court thus held that physically transporting the goods concerned from one location to another for hospitals or laboratories does not fit the notion of the supply of goods as prescribed by the VAT Directive, since the person transporting the goods is not disposing of them as the owner, and therefore, such an activity cannot qualify for the VAT exemption under Article 8 Case C-86/09, Future Health Technologies Limited v The Commission for Her Majesty’s Revenue and Customs [2010] 9 Ibid 10 Ibid
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132(1)(d). One may note that the Court has taken an active role in formulating guiding principles as a means to interpret the exemptions provided by the VAT Directive. The second group of exemptions has also been heavily dealt with by the Court. In Velvet & Steel, the Court had to determine whether Article 135(1)(c) of the VAT Directive included within its scope non-pecuniary obligations, such as the requirement to refurbish a property. The Court held that the exemption concerned the assumption of obligations, as well as the negotiation, assumption and management of credit guarantees, and any other form of security for consideration. Furthermore, the Court held that such transactions are essentially financial services. In light of this, the Court held that the assumption of an obligation to have a building renovated is not to be considered as a financial service in accordance with Article 135(1)(c) of the VAT Directive, and thus, it falls outside the remit of the provision. The Court further held that such an interpretation is reinforced by the purpose for which financial transactions are exempted from VAT, and such purpose is tied with lessening the burdens associated with the determination of the tax base, and of the amount of deductible VAT, as well as to prevent an increase in costs. Therefore, the Court decided that subjecting the assumption of an obligation to have property renovated to VAT does not create complications which require the transaction to be exempted, and thus such an obligation is subject to VAT.
4. The CJEU’s Interpretation of Article 135(1)(g) of the VAT Directive The EU’s common VAT system has, since the Sixth VAT Directives’ adoption, virtually exempted the most common categories of financial services, notably insurance and the management of investment funds. Such exemptions are linked with the general fact that the process of taxing financial services is burdensome, technical and extremely complex.11 Thus, this work shall give 11 Accompanying document to the Proposal for a Council Directive amending Directive 2006/112/EC on the common system of value added tax, as regards the treatment of insurance
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specific attention to Article 135(1)(g) of the VAT Directive concerning the exemption from VAT of transactions related to the ‘management of special investment funds’.12 Fiscale Eenheid13 centred around a management company providing portfolio management and property management services. The management company took the position that these services qualified for the VAT exemption, which was met by disagreement with Netherlands tax authorities, and thus, the case was submitted to the CJEU. The Dutch authorities questioned whether an investment vehicle which solely invests in real estate, could also meet the requirements of a qualifying investment fund for the purpose of the exemption, as opposed to a UCITS fund. The Dutch authorities further questioned whether property management qualifies as exempt fund management. The CJEU held that, if subjected to specific State supervision, real estate investment funds can qualify for the VAT exemption, however property management does not. The CJEU did not, however, define what the term ‘specific State supervision’ entailed. The ruling in Fiscale Eenheid is significant as it could either increase or reduce the VAT expenses of managing investment funds or pools. The Court ruled that investment funds, real estate funds, and other non-UCITS funds are entitled to the exemption provided under Article 135(1)(g) if they are subjected to specific State supervision. In GfBk Gesellschaft,14 the CJEU established that investment advisory services also fall within the remit of the VAT exemption provided in Article 135(1)(g) of the VAT Directive. The case concerned a German investment manager, GfBk Gesellschaft, which provided fund management advise as a service to the fund manager for consideration. However, the German tax authorities believed that the advisory services provided by GfBk Gesellschaft did not fall under the remit of the exemption for fund management. In its judgement, the CJEU held that management services which are and financial services [2008] SEC (2007) 1554 12 Council Directive (EU) 2006/112 of 28 November 2006 on the common system of value added tax (2006) OJ l347/1 13 Case C‑595/13, Staatssecretaris van Financiën v Fiscale Eenheid X NV cs [2015] 14 Case C‑275/11, GfBk Gesellschaft für Börsenkommunikation mbH v Finanzamt Bayreuth [2013]
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provided by a third-party manager fall within the scope of the exemptions provided by the VAT Directive, as the management of special investment funds is determined in accordance with the nature of the services provided, and not by the person that is either supplying or receiving the service. Thus, in order to determine whether the advisory services provided, fall within the scope of ‘management of special investment funds’15, the CJEU held that one must determine whether the said advisory service is ‘intrinsically connected to the activity characteristic of an [Investment Management Company], so that it has the effect of performing the specific and essential functions of management of a special investment fund’.16 The CJEU held that advisory services which concern investments in transferable securities provided by a third party to an investment management company fall within the remit of Article 135(1)(g) of the VAT Directive. In GfBk Gesellschaft, the CJEU also made reference to the Abbey National17 case, in which the Court had stretched the exemption to functions for managing collective investment undertakings such as those which are provided for under the UCITS Directive. However, in GfBk Gesellschaft, the Court’s decision went further, and added that the exemption also applies to investment advisory services, albeit the fact that they are not considered as core services under the UCITS Directive.18 The case in Wheels Common Investment Fund19 concerned the VAT Directive’s treatment of management fees that are charged to a pension fund. The facts of the case centred on pension schemes provided to a category of former employees. Fund managers were appointed so as to manage the fund’s assets. The CJEU was asked whether assets of a retirement pension scheme, and the investment fund through which they are collectively pooled, fit the requirements of the exemption under Article 135(1)(g) of the 15 Council Directive (EU) 2006/112 of 28 November 2006 on the common system of value added tax (2006) OJ l347/1 16 Case C‑275/11, GfBk Gesellschaft für Börsenkommunikation mbH v Finanzamt Bayreuth [2013] 17 Case C-169/04, Abbey National plc, Inscape Investment Fund v Commissioners of Customs & Excise [2006] 18 Case C‑275/11, GfBk Gesellschaft für Börsenkommunikation mbH v Finanzamt Bayreuth [2013] 19 Case C-424/11, Wheels Common Investment Fund Trustees Ltd and others v Commissioners for Her Majesty’s Revenue and Customs [2013]
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VAT Directive.20 The CJEU remarked that under the VAT Directive, Member States are given discretion to determine the meaning of the term special investment funds, however the Member State is restricted from choosing which category of fund is entitled to the exemption and which category is not.21 The power given to the Member State in this scenario is that of defining within its respective laws, the funds that fit into the remit of Article 135(1)(g). Thus, in Wheels Common Investment Fund, the CJEU took it upon itself to determine whether an investment fund under which assets of a retirement pension scheme are pooled, match funds which are indistinguishable from, or comparable to special investment funds. In its deliberation, the Court held that special investment funds are funds which are comprised of undertakings for collective investments in transferable securities as provided for by the UCITS Directive.22 Nevertheless, an investment fund under which the assets of a retirement pension scheme are collectively pooled must not be considered to be a collective investment scheme under the UCITS Directive. Thus, such a fund cannot be considered to be equal or identical to fund which constitute special investment funds. The CJEU, in its judgement, held that such a scheme, is a measure through which the employer complies with his obligation towards his employees, and thus, the fund pooling assets of the retirement pension scheme is not a special investment fund, and therefore is not VAT exempt.23 Reference should also be made to the case of ATP PensionService24, in which ATP provided services to pension funds. In its judgement, the CJEU had to determine whether a defined contribution pension scheme was to be regarded as a special investment fund in line with Article 135(1)(g) of the VAT Directive, and if such was the case, the CJEU had to also determine whether the services ATP provided should be considered as management. The CJEU provided that Member State discretion to define special investment funds, under Article 135(1)(g) was restricted by the principle of 20 Ibid 21 Ibid 22 Ibid 23 Case C-424/11, Wheels Common Investment Fund Trustees Ltd and others v Commissioners for Her Majesty’s Revenue and Customs [2013] 24 Case C‑464/12, ATP PensionService A/S v Skatteministeriet [2014]
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fiscal neutrality.25 Furthermore, the CJEU held that the defining element of a special investment fund is asset pooling, which in turn, allows for the diversification of the beneficiaries risks. ATP PensionService was contrasted with the decision in Wheels Common Investment Fund, under which the CJEU decided that a common investment fund which collectively pooled assets of a defined benefit pension scheme was not to be considered as a special investment fund, meaning that any supplied management services were not exempt from VAT. Moreover, the CJEU further provided that the VAT Directive did not dismiss the management of special investment funds from being separated into individual services, each of which having the ability to fall within the remit of the VAT exemption. Finally, in its judgement, the CJEU concluded that: pension funds such as those at issue in the main proceedings may fall within the scope of that provision if they are funded by the persons to whom the retirement benefit is to be paid, if the funds are invested using a risk-spreading principle, and if the pension customers bear the investment risk.26 The above case law is of paramount importance in the interpretation of Article 135(1)(g) of the VAT Directive, as it allows for increased workability in dealing with the VAT treatment of funds.
5. The Transposition of Article 135(1)(g) into Maltese Law The exemptions provided under the Value Added Tax Act (the ‘VAT Act’) are exceptions to the general principle that all supplies of goods or services are subject to VAT and, as the CJEU has reaffirmed, in multiple instances, such exemptions must be construed strictly. This infers that the exemption at hand is to solely apply to what it was intended to apply towards. Malta has implemented Article 135(1)(g) of the VAT Directive into the VAT Act, under Item 3(6) of Part 2 of the Fifth Schedule, as an exemption without 25 26
Ibid, para 42 Ibid
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credit. The effect of this is that goods and services purchased by consumers are untaxed, and thus, no VAT is charged on the value of the supply, and in turn, the supplier is not eligible to claim back any input VAT sustained in providing that supply, as businesses carrying out VAT exempt transactions are not eligible to recuperate input VAT. The VAT Act provides that ‘the supply of services consisting of the management of any investment scheme, provided that these services are limited to those activities that are specific to and essential for the core activity of the scheme’.27 Moreover, the VAT Act, also determines, for the purposes of the exemption, what fits the requirement of an ‘investment scheme’, and what category of service fits the requirement of ‘management services’. The VAT Act provides for four categories of ‘investment scheme’, notably, ‘collective investment schemes’, ‘retirement schemes’, ‘securitisation vehicles’, as well as ‘authorised reinsurance special purpose vehicles’. Thus, the concept of ‘investment scheme’ requires one to look at the legislation tied to the various schemes which fall under the exemption. For instance, let us consider ‘collective investment schemes’. In this case, the VAT Act makes reference to its definition under the Investment Services Act. Thus, if the ‘investment scheme’ satisfies the required conditions for a ‘collective investment scheme’, under the Investment Services Act, it will qualify for the VAT exemption under the VAT Act. This applies to the other listed forms of investment schemes under the VAT Act. Moreover, both the VAT Act and the VAT Directive fail to define the term ‘management’. However, it is implied, under the VAT Act, that ‘management’ includes within its remit, services, linked to the core activity of the scheme.28
27 ule 28
Value Added Tax Act, Chapter 406 of the Laws of Malta, Item 3(6), Part 2, Fifth SchedIbid, Item 3(6), Part 2, Fifth Schedule
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6. Conclusion Thus, as demonstrated above, the exemptions provided by the VAT Directive establish independent notions of EU law which aim to harmonise the various systems of VAT by attempting to lessen any deviations from the general rule that VAT is a wide-ranging tax imposed upon consumption, that is applied indirectly by taxing the supply of goods or services for consideration at every stage of production and distribution.
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Julian Bajada Pacta sunt servanda and smart contracts: is code law?
Julian Bajada joined Camilleri Preziosi Advocates in 2015 and was appointed as a Junior Associate in January 2019. Julian assists across the firm’s Corporate & Finance practice groups, contributing principally to the firm’s Capital Markets, Banking, Finance, Mergers & Acquisitions, and Financial Services Regulation practices, specialising in debt and equity issues on the main market of the Malta Stock Exchange, cross-border mergers and acquisitions, private equity investments, bank financing, corporate structuring, and advises both local and international clientele on general commercial and corporate law and regulatory matters. Julian has also assisted on a number of matters involving innovative technologies, such as distributed ledger technologies, digital banking and the wider Fintech space. During the course of his studies abroad, Julian was also engaged as an intern at the Cambridge Centre for Alternative Finance and was involved in a number of research-based and projectbased initiatives, collaborating with industry stakeholders and start-ups in the Regtech and Fintech industries. Julian was admitted to the bar in 2018, having graduated from the University of Cambridge with a Masters of Corporate Law (MCL. Cantab) (First Class), submitting a case study paper on “Legal Risk Management in Mergers & Acquisitions’. Prior to his studies abroad, Julian successfully completed the Masters in Advocacy (M.A. Adv) degree at the University of Malta, and the LL.B (Hons) degree at the same university, submitting a dissertation entitled ‘Pulling in the Crowd - Establishing regulatory framework for Equity Crowdfunding in Malta?’. He is also undergoing the final stages of his studies leading to the ACCA (Association of Chartered Certified Accountants) professional qualification. Julian was ranked as an ‘Advocate to watch’ in the Chambers & Partners Fintech Guide 2020. Outside his professional life, Julian is an avid sport enthusiast and is currently the Secretary General of the Malta Paralympic Committee, the national governing body for Paralympic Sport in Malta.
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The legal maxim ‘pacta sunt servanda’ embodies the bond between the parties to a contract, with the result that the ‘contract between the parties’ is equated to the ‘law between the parties’. This maxim reflects the default rule. There are exceptions, however, including, most notably, the essential elements for the validity of a contract, mandatory formalities, and limitations on what terms and conditions may be stipulated in a contract. The underlying rationale for such exceptions is rooted in socioeconomic considerations, including the objective of ensuring a level playing field in contractual bargaining as well as that of ensuring contractual terms are a true reflection of the parties’ intentions. Over time, technological innovation has challenged some of our legal system’s core tenets, evolving from the lex mercatoria to an age of lex cryptographia. The phenomenon of ‘smart contracts’ is one such disruptive technology, which has raised unique challenges and posed novel questions. Although the term is often misconstrued, or misused, smart contracts have left legislators, judiciaries and legal professionals scrambling to crack the code as to the proper legal treatment of smart contracts. In this publication, we will attempt to map out what is so smart about smart contracts and whether smart contracts are a natural evolution of traditional contractual arrangements, or a whole new form of contractual arrangements of their own right. The relationship between Maltese contract law and the law of smart contract code will be critically evaluated, in an attempt to answer the question: is code law?
1. Introduction: Pacta sunt servanda
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he point of departure rests in formulating a clear delineation between ‘contracts’ and ‘smart contracts’. Whilst diverging views exist amongst legal and technologist circles as to what constitutes a ‘smart’ contract, it is possible 298
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to find common ground by breaking down the term into its constitutive elements. The term ‘contract’ denotes a formal agreement or arrangement between two or more parties, setting out the terms and conditions which the parties agree are to regulate their relationship. Traceable as far back as biblical times, the art of negotiation owes much of its existence to the exigencies of international trade and commerce that necessitated a set of uniform and binding rules. In what later became known as the ‘lex mercatoria’, these unwritten rules and usages of commerce were moulded over time until they were formally crystallised into formal written agreements.1 Fast forward to the 21st century, and the concept of contractual rights and obligations that bond the parties thereto remains in principle, unaltered. This bond between the parties is personified in the legal maxim ‘pacta sunt servanda’, translated into ‘agreements must be honoured’. The sanctity of contract is now a universally accepted concept,2 with Grotius asserting that it lay at the centre of the international legal order,3 and Ulpian observing that ‘what is so suitable to the good of mankind as to observe those things which parties have agreed upon’.4 This bond has been expressly recognised as a standard of conduct for society, finding its way into International Law in Article 26 of the Vienna Convention of the Law of Treaties,5 and codified in Article 1.3 of the UNIDROIT Principles of International Commercial Contracts.6 Looking at Maltese law, this maxim is enshrined in Article 992 of the Civil Code (Cap. 16 of the laws of Malta), providing that: ‘contracts legally entered into have the force of law between the parties’, and further that they ‘may only be revoked by mutual consent of the parties, or on grounds allowed by law’. This provision has been elucidated by our Courts on many occasions, 1 Leon E Trakman, ‘From the Medieval Law Merchant to E-Merchant Law’ (2003) 53 U TORONTO LJ 265 2 Paul W Gormley, ‘The Codification of Pacta Sunt Servanda by the International Law Commission: The Preservation of Classical Norms of Moral Force and Good Faith’, (1969) 14 St. Louis ULJ 367 3 De Jure Belli ac Pacis, lib. III ch. 25, sec. 1. 4 Digest 2, 14, 7, para. 7 5 Vienna Convention on the Law of Treaties (adopted 23 May 1969, entered into force 27 January 1980) 1155 UNTS 331; ME Villiger, Commentary on the 1969 Vienna Convention on the Law of Treaties, 365; ‘Pacta sunt servanda lies at the heart of the Convention. It applies without exception to every treaty’. 6 UNIDROIT, UNIDROIT Principles of International Commercial Contracts, 2004, 2nd edn.
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pronouncing that: Il-prinċipju kardinali li jirregola l-istatut tal-kuntratti jibqa’ dejjem dak li l-vinkolu kuntrattwali għandu jiġi rispettat u li hi l-volontà tal-kontraenti kif espressa fil-konvenzjoni li kellha tipprevali u trid tiġi osservata. Pacta sunt servanda.7 …il-prinċipju jibqa’ l-istess, cioè dak tal-libertà kuntrattwali bilkorollarju tiegħu li l-eċċezzjonijiet għal dik il-libertà m’għandhomx jiġu estiżi lil hemm mil-limiti tal-liġi li tistabbilixxi l-eċċezzjoni... l-Art 992 tal-Kodiċi Ċivili li jagħti lill-kuntratti magħmulin skont illiġi s-saħħa tal-liġi stess, li hija l-aqwa liġi, cioè l-liġi tal-partijiet, il-mezz u l-miżura tal-indipendenza personali tagħhom fil-kamp kontrattwali, u li ma jistgħux jiġu mħassra ħlief bil-kunsens ta’ xulxin jew għal raġunijiet magħrufin mil-liġi.8 The message from our courts is loud and clear, the ‘contract between the parties’ is equated to the ‘law between the parties’. Moreover, our legislator has extended this notion of ‘contract is law’ to stretch beyond the execution of a contract to the performance thereof, to the effect that ‘contracts must be carried out in good faith, and shall be binding not only in regard to the matter therein expressed, but also in regard to any consequence which, by equity, custom, or law, is incidental to the obligation, according to its nature’.9
2. What makes a contract a contract? 2.1 Essential elements for the validity of a contract Apart from codifying, the cardinal principle that epitomises the binding nature of contract is stipulated in the Civil Code which sets out the parameters defining what constitutes a valid contract. Article 966 of the Civil Code prescribes four essential, and cumulative, conditions to the validity of a contract, namely: 7 Mark Calleja Urry et v Joseph Portelli et, Court of Appeal, 25/02/2011, Ref. No. 129/2006/1, citing Gloria Beacom et v Anthony Spiteri Staines, Court of Appeal, 5/10/1998. 8 Dr Giuseppe Maria Camilleri v William Parkey nomine, Court of Appeal, 07/09/1973. 9 Civil Code (Chapter 16 of the Laws of Malta), Article 993
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i. the capacity of the parties to contract; ii. the consent of the party who binds himself; iii. a certain thing which constitutes the subject-matter of the contract; and iv. a lawful consideration. In the absence of any one of the aforementioned elements, a contract will be deemed to be void ab initio, or in other words, inexistent. Elaborating on each essential element, our Civil Code sets out the juris tantum presumption that, unless subject to a legal disability from contracting, everyone is capable of contracting.10 Broadly speaking, persons who are under such legal disability include minors, interdicted or incapacitated persons and all such other persons whom the law forbids from certain contracts.11 In order for consent to be validly granted, it must be free from error, violence, or fraud.12 Insofar as the requirement for a certain subject-matter is concerned, the Civil Code provides that every contract must have as its subject-matter a thing which one of the contracting parties binds himself to give, or to do, or to forbear from doing, provided that the thing concerned is not extra commercium.13 Finally, a contractual obligation must be founded on a lawful consideration, with the result that a contract is invalid where it is made without a consideration, or founded on a false or unlawful consideration.14 The latter requirement applies, however, to the extent not expressly otherwise provided for under the Civil Code (or any other special law), such as, for instance, a donation made pursuant to Article 1737 of the Civil Code.15
2.2 Formalities for the validity of a contract In addition, a contract may be rendered invalid ex post facto where, albeit satisfying all the essential conditions for the validity of a contract described above, it fails to satisfy the prescribed formalities for the validity of the particular contract in question, to the extent that such formalities are 10 Ibid, Article 967(1) 11 Ibid, Article 967(3) 12 Ibid, Article 974 13 Ibid, Article 982(1) and (2) 14 Ibid, Article 987. In terms of Article 990 of the Civil Code, a consideration is deemed to be unlawful if it is prohibited by law or contrary to morality or to public policy. 15 Ibid, Article 1737(2) provides that a ‘donation inter vivos is a contract whereby the donor irrevocably and gratuitously transfers a thing to the donee who accepts it’.
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imposed by law on pain of nullity. By way of illustration, Article 1233 of the Civil Code set outs classes of transactions which, ‘shall, on pain of nullity, be expressed in a public deed or a private writing’.16 Similarly, Part III of the Notarial Profession and Notarial Archives Act (Cap. 55 of the laws of Malta, the ‘Notarial Act’) sets out the formalities relating to notarial acts, the non-satisfaction of which may render the act in question null or annullable.17 Importantly, the Notarial Act prescribes requirements relating to original notarial acts, whereby: ‘the original of every notarial act shall be written, typewritten or printed in dark, clear, easily legible and indelible characters, without blanks or spaces unless such blanks or spaces are lined, without abbreviations, corrections, alterations or additions in the body of the act and without erasures. Every original act shall have two margins, one on the right-hand side and the other on the left-hand side...’.18
3. Contracting 2.0 – moving away from ‘dumb contracts’ to ‘smart contracts’ 3.1 Automated enforcement as the defining feature of smart contracts The term ‘smart’, when associated with a contract, does not necessarily denote any intrinsic intelligence or human-like intuition with which the contract is endowed. Rather than falling within the Oxford English Dictionary of the term ‘smart’ (defined as ‘having or showing a quick-witted intelligence’), the term ‘smart’ refers to the means of enforcement of the contract. A contract is dubbed as smart where it is automatically enforceable by means of automated execution of its pre-programmed code, without any human intervention. In this sense, a smart contract is self-executing, selfsovereign and self-sufficient. Automation enables the seamless execution, performance and enforcement of the operative terms of a contract over its life cycle. In fact, some technologists prefer to use the term ‘smart agent’ rather than ‘smart contract’ to denote this autonomous enforcement.19 16 Ibid, Article 1233(1)(a) to (g) 17 Notarial Profession and Notarial Archives Act, Chapter 55 of the Laws of Malta, Article 40(1)(c), or (e), 18 Civil Code (Chapter 16 of the Laws of Malta), Article 30 19 Gabriel Olivier Benjamin Jaccard, Smart Contracts and the Role of Law (University of Geneva Department of Private Law 10 January).
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At this juncture, it would be useful to illustrate the impact of automated enforcement by hypothesising a very simple scenario. Take the situation where the parties to a contract have agreed that in consideration for the delivery of goods by party A to party B, party B shall pay party A the sum of €100 within two business days from the delivery of the goods to party B. Where a traditional contract is utilised, the payment of the consideration is ultimately dependent not merely on the actual delivery of goods to party B, but is further subject to the action taken on the part of party B to effect the payment to party A as and when it falls due. Conversely, if a smart contract were to be deployed, it would be possible to automate the payment of the consideration by way of embedding the payment thereof into the smart contract between the parties. For instance, the parties may make use of a trusted verification device through the use of IT (for example, monitoring sensors), that would verify the delivery and receipt of the goods, which in turn would trigger-off the automated (and immediate) payment of the consideration price, therefore, eliminating human intervention at the point of enforcement. Taking a more complex scenario, imagine a senior facilities agreement involving a syndicate of lenders, a security agent, a group of multi-national lenders and a diverse security package. With a traditional contract, there is often a delay between the default and the subsequent enforcement action taken by a security agent who is entrusted with carrying out the verification process and determining the action to be taken. On the other hand, with a smart contract, the enforcement may be expedited (or rather, made instantaneous), through the automated verification of the occurrence of the events of default and the corollary enforcement action to be taken, potentially saving significant time and expenses that would have otherwise been expended on the enforcement process.
3.2 Smart legal contracts or smart contract code? Although it is widely recognised that the defining feature of a ‘smart contract’ is the automated enforcement (or self-execution) thereof, a schism emerges between the terms ‘smart legal contract’ and ‘smart contract code’, depending on whether the question is posed to a lawyer or to a coder:20 20 International Swaps and Derivatives Association (‘ISDA’) and Linklaters LLP, ‘Whitepaper: Smart Contracts and Distributed Ledger – A Legal Perspective’ (2017), 4 <https://www.isda.
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a. in legal circles, the term ‘smart legal contract’ is used to denote the rights and obligations agreed to between the parties by virtue of a natural language written agreement that has been embedded into the code underlying the software utilised for the purpose of the automation of a process or processes. In other words, it refers to the translation of the natural language contract (the ‘legal contract’) into the computer language code (the ‘smart legal contract’). In this way, the legal contract and the smart contract are one and the same, just written in (or translated into) natural language and code language respectively; b. on the other hand, technologists deploy the term ‘smart contract code’ to refer to the self-executing code, so that the ‘contract’ and the ‘smart contract’ are two different things altogether. In this school of thought, the smart contract is merely the code that executes certain tasks of the wider legal contract using Boolean logic (in layman’s terms, ‘If X, then Y’ logic) to determine if pre-defined conditions are satisfied, and to run or perform such tasks in such case.21 Whichever school of thought one may subscribe to, one observes that the tasks performed by the smart contract are, in either case, of contractual and legal relevance and reflect the rights and obligations, whether wholly or partially, of the parties to the natural language contract. Secondly, it is useful to bridge the schools by depicting the possible variety of smart contracts across a scale from partial automation to full automation. Posited differently, we may categorise smart contracts into: (i) the ‘external model’ or the ‘hybrid model’, which postulates the separation between the two to the effect that only certain terms and conditions of the natural language contract are embedded into the code language contract, and, thus, having two contracts running in parallel, regulating different aspects of the overall relationship between the parties, albeit with the possibility of overlap between the two; and (ii) the ‘internal model’ (sometimes referred to as the ‘integrated model’), which suggests the existence of one single contract regulating the relationship between the parties, being the code language smart contract. org/2017/08/03/smart-contracts-and-distributed-ledger-a-legal-perspective/> 21 Christopher Clack, Vikram Bakshi & Lee Braine, ‘Smart Contract Templates: foundations, design landscape and research directions’, (2017), <https://arxiv.org/abs/1608.00771>. Boolean logic is sometimes referred to as ‘if/then’ logic or ‘if this then that’ or ‘IFTTT’ programming.
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The reality is, therefore, that there is a relationship between the ‘smart legal contract’ and the ‘smart contract code’, with the result that every smart legal contract can be said to contain one or more pieces of smart contract code, but not every piece of smart contract code necessarily constitutes a smart legal contract.
4. Smart contracts and Maltese law Having looked at the essential and formalistic elements for the validity of a contract, together with the salient aspects of smart contracts, we now consider the relationship between smart contracts and Maltese law, and examine whether the two sit well together.
4.1 Essential elements for validity of a contract revisited: a tech-first approach 4.1.1 Identifying the parties to a smart contract and the capacity to contract The first challenge is identifying the parties to the smart contract, and whether these are capable of contracting under Maltese law. Article 1A of the Civil Code defines the term ‘person’ as either natural persons or legal persons. In turn, Article 4 (d) of the interpretation Act (Cap. 249 of the laws of Malta), defines the term ‘person’ as including ‘a body or other association of persons whether granted legal personality, in accordance with the provisions of the Second Schedule to the Civil Code, or not’. The outcome is that, in the case of a smart contract entered into by and between one or more natural or legal persons, the smart contract may be said to have been made between parties recognised as such by Maltese law. That being said, the law is silent on contractual arrangements entered into autonomously where two or more smart contracts interact with one another and result in the conclusion of further contracts between them. These are sometimes referred to as ‘follow-on contracts’. Judicial doctrine 305
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on the subject is not harmonious. In England, there is authority implying that automated computer systems are incapable of binding parties through implied agency as they lack the consciousness of a human mind.22 The position is somewhat different in Australia, where section 15C of the Electronic Transactions Act 1999 provides that a contract formed by (a) the interaction of an automated message system and a natural person or (b) the interaction of automated message systems ‘is not invalid, void or unenforceable on the sole ground that no natural person reviewed or intervene’. Some international authorities suggest that the fact the parties themselves programmed the smart contract and, therefore, anticipated its capacity to enter them into follow-on contracts, means they must be taken to accept that they may be bound to those follow-on contracts.23 In the absence of an ad-hoc rule under Maltese law and, or any judicial pronouncement on the matter, it is yet to be determined whether follow-on contracts are valid and enforceable under Maltese law. A study on smart contracts must necessarily factor in the application of blockchain technology, the most commonly applied underlying platform for the use and application of smart contracts. Although various definitions have been posited, the common denominator appears to be that the term ‘blockchain technology’ is a ‘form of distributed ledger technology that enables the storage and processing of data using cryptography, whereby each transaction is stored on a ‘block’, with each block, in turn, being linked to the immediately preceding block, forming a ‘chain’ of unalterable blocks).24 When recording transactions on the blockchain, the parties to such transaction are actually represented by an address, which, on its own, may not prove sufficient for the purpose of identifying the proper counterparty, which is merely identified by reference to a sequential number. This is potentially problematic given that the fundamental element of having parties who are capable of contracting could be lacking, or, at least, cannot be verified by mere reference to the address, particularly where the generation of the address was not dependent on the underlying identification qualities of the natural or legal person to whom it has been allocated. 22 Software Solutions Partners Ltd, R (on the application of) v HM Customs & Excise [2 May 2007] EWHC 971 23 Chwee Kin Keong v Digilandmall.com Pte Ltd [13 January 2005] 2 LRC 28 (Singapore) 24 For further details on the various permutations of ‘blockchain technology’ and other ‘distributed ledger technologies’, see Cambridge Centre for Alternative Finance, ‘Distributed Ledger Technology Systems – A Conceptual Framework’, August 2018.
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4.1.2 Manifesting consent in the context of smart contracts The three constitutive facets making up the essential element of consent need to be examined separately, namely: (i) the offer and acceptance; (ii) the external manifestation of consent; and (iii) the validity of consent. Dealing with the first element, reference is made to Article 9 of the Electronic Commerce Directive (the ‘ECD’)25, which applies on both a B2B and B2C basis, requiring member states of the European Union to ensure that their legal systems allow contracts to be concluded by electronic means, and further that the legal requirements applicable to the contractual process neither create obstacles for the use of electronic contracts nor result in such contracts being deprived of their legal effectiveness on account of their having been made by electronic means. In this respect, the ECD defines the term ‘electronic contract’ as ‘a contract concluded wholly or partly by electronic communications or wholly or partly in an electronic form’. In turn, the term ‘electronic communication’ means ‘information generated, communicated, processed, sent, received, recorded, stored or displayed by electronic means’. In principle, therefore, the concept of a smart contract is compatible with the term electronic contract as defined under the ECD and thus should benefit from the statutory protection afforded to the conclusion of electronic contracts under the ECD, the terms of which have been transposed into Maltese law by virtue of the Electronic Commerce Act (Cap. 426 of the laws of Malta). The fact that the ECD does not purport to prescribe a specific form in which an electronic contract must be made, or a specific form as to the offer and acceptance thereof, further supports this position. In fact, electronic mail messages (emails) have been assumed by the English courts to be capable of constituting offers and acceptance and it would be surprising if the courts were to draw conceptual distinctions between such email messages and smart contract messages. Moreover, the English courts have accepted that the parties are free to stipulate what acts will constitute acceptance.26 The author maintains, therefore, that an offer and acceptance may be exchanged by way of signing-up to a smart contract using electronic means, whether in whole or in part, as long as the parties agree in advance that it constitutes an 25 Directive 2000/31/EC of the European Parliament and of the Council of 8 June 2000 on certain legal aspects of information society services, in particular electronic commerce, in the Internal Market. 26 Vide Holwell Securities Ltd v Hughes [1974] 1 WLR 155]
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offer and acceptance. In so far as the external manifestation of consent is concerned, the key consideration is the validity of the signature of the person appearing on the smart contract. In this respect, Regulation (EU) No. 910/2014 of the European Parliament and of the Council of 23 July 2014 on electronic identification and trust services for electronic transactions in the internal market and repealing Directive 1999/93/EC (the ‘eIDAS Regulation’) contains the legal framework for the recognition of electronic signatures. The seminal implication of the eIDAS Regulation is the distinction made between simple electronic signatures, advanced electronic signatures and qualified electronic signatures, to the effect that only qualified electronic signatures are recognised as having the equivalent legal effect of a handwritten wet ink signature.27 A qualified electronic signature is defined under Article 2 of the eIDAS Regulation as ‘an advanced electronic signature which is additionally created by a qualified signature creation device, and is based on a qualified certificate for electronic signatures’. In turn, the following terms are defined by the eIDAS Regulation: i. qualified certificate for electronic signature means a certificate for electronic signatures, that is issued by a qualified trust service provider and meets the requirements laid down in Annex I of the eIDAS Regulation; ii. qualified signature creation device means an electronic signature creation device that meets the requirements laid down in Annex II thereof of the eIDAS Regulation; and iii. an advanced electronic signature is one meeting the following cumulative requirements: (a) it is uniquely linked to the signatory; (b) it is capable of identifying the signatory; (c) it is created using electronic signature creation data that the signatory can, with a high level of confidence, use under his sole control; and (d) it is linked to the data signed therewith in such a way that any subsequent change in the data is detectable. In practice, smart contracts are signed-off through the use of private 27 Regulation (EU) No 910/2014 of the European Parliament and of the Council of 23 July 2014 on electronic identification and trust services for electronic transatctions in the internal market and repealing Directive 1999/93/EC (eIDAS Regulation), Article 25(2)
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key infrastructures (‘PKIs’). Accordingly, in order to be deemed to be legally equivalent to a wet ink signature, the private key through which the individual or entity ‘signs off’ on the smart contract must satisfy the criteria to classify as a qualified electronic signature, including the need to be issued by a recognised trusted service provider. Looking at the qualification requirements in Annex I and Annex II of the eIDAS Regulation, it is arguable that, in the context of blockchain-based smart contracts, a private key could well possess the necessary attributes to qualify as a qualified electronic signature and it is, therefore, possible to reconcile the two and satisfy the element of the external manifestation of consent. Nevertheless, a difficulty may still arise when dealing with the third constitutive facet of the validity of consent, that is, in verifying that such consent is free from error, violence or fraud. It would appear that, by itself, signing-off on a smart contract by way of private keys is not a watertight solution to ensuring that consent has not been vitiated. For instance, there can be no assurance that the private key was misplaced or misappropriated and therefore, that the person signing-off on the smart contract was unauthorized to do so. Furthermore, an intrinsic challenge arises in a purely integrated or internal smart contract model. In the absence of a natural language wrap-up contract, an issue may arise with regard to the complexity and opaqueness of the code language and whether this leaves room for interpretation as to whether consent may be vitiated on the ground of error. This challenge is best illustrated with reference to consumer contracts and the statutory protection afforded thereto under the Consumer Affairs Act (Cap. 378 of the laws of Malta), providing, at Article 47 (1) thereof, that ‘in any consumer contract, where all or some terms offered by a trader to a consumer are in writing, these terms shall be written in plain and intelligible language which can be understood by the consumers to whom the contract is directed’. In other words, even though a smart contract purports to provide an exante solution to enforcement, it does not do away with the possibility of an ex-post examination of whether consent has been vitiated. More importantly, smart contracts are simply not the answer to ensuring unvitiated consent at all times.
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4.1.3 Certainty of object and lawful consideration - universal and technologically agnostic The author’s view is that the requirements concerning the certainty of the subject matter and lawful causa would not, in principle, be adversely affected or negated by virtue of the fact that the contract is written in code language (whether in full or in part) and not in natural language. In fact, even though severely complex code may test the limits of certainty, it is equally arguable that even the best-drafted natural language contracts may sit on the edge of (un)certainty. Similarly, it is inconceivable that the technology deployed per se may give rise to an unlawful causa - it is how and for what purpose that technology is put to use which may give rise to an unlawful or illicit causa, but certainly not the technology in and of itself.
4.2 Formal requirements for validity of a contract revisited: archaic laws in need of a revamp? The author subscribes to the view that based on our law as it stands today; it may be innately challenging to reconcile the formal requirements for the validity of legal contracts under Maltese law with the concept of smart contracts. How can one reconcile the requirements for the validity of a public deed using code language alone? How can one satisfy the requirements concerning the rendering of verbal explanations in the presence of witnesses purely through code? How can one satisfy the requirement to record transactions where the means or format of such recording is prescriptive? How can one pass the tests of plain and legible language, or more importantly, the English language test using only smart contract code? Pausing on the latter question, our legal and regulatory framework is dotted with a variety of instances requiring documentation to be produced in a plain and easily legible format, or, going further, requiring that such document be produced in the English language. In addition to the language requirements for notarial acts as described in section II (i) above, similar requirements arise in the context of regulated financial markets. For instance, the Listing Rules issued by the Listing Authority under the Financial Markets Act (Cap. 345 of the laws of Malta) require a prospectus, which is itself a legally binding contractual document, to be drawn up in ‘Maltese or English or in 310
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a language customary in the sphere of international finance, at the choice of the issuer’. How can this requirement be compatible with the terms and conditions of a security token offering embedded purely in smart contract code without an English (or Maltese, or customary language as aforesaid) version, or translation of, that code language? If our law does not allow for unfettered freedom of choice of the contracting language, or if the definition of the term ‘language’ is not broad enough to include code language, our law may have to be revamped in order to expressly allow parties to enter into a contract written in code language. In the absence of such reforms, our law contains impediments to the deployment of a purely integrated smart contract model and necessarily requires the adoption, as a bare minimum, of an external or hybrid model, with the smart contract code running in parallel with the natural language contract, and the latter drawn up in compliance with the formal requirements for the validity of a contract, including but not limited to those formalities explored in this paper.
4.3 Is code law? Does dry code prevail over wet code or can the two co-exist? The terms of the recently enacted Malta Digital Innovation Act (Cap. 591 of the laws of Malta, the ‘MDIAA’) and the Innovative Technology Arrangements and Services Act (Cap. 592 of the laws of Malta, the ‘ITASA’) are a good indication of how Maltese law treats this pressing question. Firstly, the MDIAA defines a smart contract as: ‘a form of innovative technology arrangement consisting of: (a) a computer protocol; and, or (b) an agreement concluded wholly or partly in an electronic form, which is automatable and enforceable by execution of computer code, although some parts may require human input and control and which may be also enforceable by ordinary legal methods or by a mixture of both’. It is interesting to note that our definition encompasses the two schools of thought examined in section II (ii) above, that is, covering both smart legal contracts and smart contract codes. Perhaps the most important aspect of the definition opted for by our legislator is the flexibility as to self-execution in whole or in part, and the possibility of a combination of human intervention and traditional 311
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means of enforcement. Moreover, Article 8(4)(e) of the ITASA, dealing with the specific requirements for the certification of innovative technology arrangements thereunder, including smart contracts and decentralised autonomous organizations (‘DAOs’), provides that ‘the specific purposes, qualities, features, attributes, limitations, conditions, terms of service and behaviors or aspects of the relevant innovative technology arrangements and on the basis of which a user is invited to participate in, rely on or use the innovative technology arrangement are stated in the English language in an easily accessible and intelligible format… in case of conflict between the English language and the underlying code of the innovative technology arrangement, the English language shall prevail. Where the applicant wishes to use multiple languages for this purpose, in case of conflict between languages, the English language shall prevail’. Positioning Maltese law as an enabler for the hybrid smart contract solution model, where a smart contract is deployed in tandem with a natural language traditional contract (whilst still affording varying degrees of overlap between the two) is, in the author’s view, a reasonable solution to the predicament as to whether code is law. On the one hand, one might argue that this combined system inevitably eats away at the benefits and opportunities that smart contracts have to offer, reducing operational efficiencies and driving up costs. On the other hand, this model is commendable in that it takes cognizance of the socio-economic realities in which contracts are entered into, performed and executed. More on this in the next section, wherein the author will delve into how contractual arrangements cannot be seen in a vacuum and are, instead, necessarily a construct of the socio-economic, cultural and political norms within which they exist. By referring to the considerations of the English language requirements and ease of accessibility and legibility of contractual terms and conditions as a sine qua non requirement to the certification of innovative technology arrangements under the ITASA, the legislator appears to have been predominantly concerned with upholding consumer protectionist ideals, with the result that the dry code is deemed under Maltese law to prevail over the wet code. It is clear that the legislator’s forma mentis was preconditioned by existing consumer protection laws, including, in particular, the non-exhaustive indicative list of unfair contract terms set out in Article 312
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44(2) of the Consumer Affairs Act (Cap. 378 of the laws of Malta). In addition, consideration appears to have been given to the over-arching implications of Article 45(1) of the Consumer Affairs Act, which stipulates that when determining whether a term is unfair or otherwise, regard will be had to whether the term ‘causes the performance of the contract to be significantly different from what the consumer could reasonable expect’. In the author’s view, there is a striking resemblance between these consumer protection laws, the definition of smart contracts and the certification conditions under the ITASA. The legislator may have also been pre-occupied with the dilemma of bridging the gap between the statutory rights of enforcing precautionary warrants and executive warrants under the Code of Organization and Civil Procedure (Cap. 12 of the laws of Malta) and the concept of automatic self-execution through smart contracts. In practical terms, a kill-switch is necessary to effectively ‘freeze time’ and preserve the rights to which the claimant is prima facie entitled to preserve ex ante or to which the claimant is lawfully entitled to recover ex post facto. In light of the above definitions and requirements, the position under Maltese law would appear to be that code is not law. Instead, Maltese law appears to favour (or rather impose) the adoption of a hybrid approach to the relationship between legal contracts and smart contracts. This approach seems to be reflective of, and in the author’s view, seeks to encourage, the ‘Ricardian model’ of smart contracts. Put simply, the Ricardian model is a smart contract model based on deploying, in the first instance, a human-readable agreement that, once executed by the parties thereto, is subsequently converted into a machine-readable agreement to implement the terms and conditions of the human-readable agreement.28 The inclusion of the combination of automation and human intervention in the definition of a smart contract, together with the dry code supremacy clause are two strong indicators of this approach. Furthermore, this position is supported by the concept of the technical administrator under the ITASA and the inclusion of a kill-switch as part of the certification regime, to the effect that the innovative technology arrangement is required to ‘have in-built technology features, to enable the technical administrator to intervene in a transparent and effective manner in the event of - (a) a material cause of loss to any user; or (b) a material breach of law, so as to ensure that the cause of loss 28 Ian Grigg, ‘The Ricardian Contract’ (1995) <https://iang.org/papers/ricardian_contract.html>
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or breach of law is satisfactorily addressed to the best of his abilities and to ensure it does not occur or re-occur, and in case of unjustifiable failure by the technical administrator’.29 Another interesting ramification of the hybrid model favoured by Maltese law is the interplay between this model and the principles on the interpretation of contracts under our Civil Code. In particular, reference is made to the principle of referential interpretation under Article 1008 of the Civil Code, providing that ‘all the clauses of a contract shall be interpreted with reference to one another, giving each clause the meaning resulting from the whole instrument’. Will our Courts, in adopting such interpretation, make reference to the terms of the code language smart contract in addition to the terms of the natural language contract? In the author’s view, once it is established that the smart contract satisfies the essential and formal requirements applicable to all contracts, the proper application of the aforesaid Article 1008 would be that such principle ought to apply, mutatis mutandis, to hybrid contracts that are in part written in a natural language and in part written in code language. In addition, reference ought to be made to the principle of literal interpretation under Article 1002 of the Civil Code, providing that ‘where, by giving to the words of an agreement the meaning attached to them by usage at the time of the agreement, the terms of such agreement are clear, there shall be no room for interpretation’. The requirement to interpret code language by giving the terms such meaning as attached to them by usage may cause a fundamental shift in the skill set required by lawyers in the drafting and interpretation of contracts, moving towards hybrid lawyers who are proficient in both natural language and code language.
4.4 The relevance of the socio-economic context in which the law (and code) exists In legal theory, a divergence arises between legal purists and legal realists (or legal relationists). Under the former view, a literal approach to contractual arrangements is favoured, with strict adherence to the express terms and conditions of the contract, isolated from the realities in which they exist. By contrast, under the latter view, contractual arrangements cannot be 29 Innovative Technology Arrangements and Services Act (Chapter 592 of the Laws of Malta), Article(4)(d)(iii)
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evaluated in a vacuum and may only be fully understood within their social, economic, relational, political and cultural contexts.30 The legal realist perspective has long focused on how law unfolds in in vivo practice, highlighting how these practices may diverge significantly from ‘law on the books’ (Mertz 1999, Macneil 1978) to ‘law in motion’. This perspective is critical to understanding parties’ intentional inclusion of loosely drafted terms or wilful non-enforcement of contractual rights or claims for strategic purposes that are conducive to a stable and long-term contractual relationship. The seminal socio-legal treatise on this phenomenon is Stewart Macaulay’s 1963 study about what he termed ‘non-contractual relations’ in business.31 Macaulay interviewed businessmen about how they went about negotiating transactions and enforcing agreements. He found that his interviewees left many aspects of their contractual relationships vaguely planned, incompletely defined, or imperfectly resolved; in other words, few of the transactions in which these parties engaged were neatly rationalized in the way that the legal purist theory would foretell. Importantly, this was not for lack of sophistication among the parties.32 He observed that parties may (purposely) choose not to insist on a perfect ‘meeting of the minds’ on every term because they anticipate (and hope) that their relationship will extend beyond the contract at immediate issue. As Macaulay puts it, ‘[d] etailed negotiated contracts can get in the way of creating good exchange relationships [.] ... If one side insists on a detailed plan, there will be delay while letters are exchanged as the parties try to agree on what should happen if a remote and unlikely contingency occurs. In some cases they may not be able to agree at all on such matters and as a result a sale may be lost’.33 The key take-away of the realist theory is that there may be other means to formal enforcement of the terms and conditions of a contract, on the premise that such alternative means may, having regard to the particular facts and circumstances at hand, and assessed against the wider backdrop of the parties’ past, present and (potentially) future relations, be a more apt remedy to strict enforcement of the contract. For instance, put yourself in the position of the lead arranger and agent in the banking syndicate contemplated earlier 30 Karen E C Levy, ‘Book-Smart, Not Street-Smart: Blockchain-Based Smart Contracts and The Social Workings of Law’, Engaging Science (2017) 3 Technology and Society Journal 2 31 Stewart Macaulay, ‘Non-Contractual Relations in Business: A Preliminary Study’ (1963) 28 American Sociological Review 1 32 Ibid 7. 33 Stewart Macaulay, ‘Non-Contractual Relations in Business: A Preliminary Study’ (1963) 28 American Sociological Review 55
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in this paper. Having regard to the wider economic conditions prevailing at the time, and considering the historical and prospective relations with the lender, is it safe to say that the automatic and instantaneous enforcement of an event of default will be the best (and only) course of action at all times, without any reservations whatsoever? Will the ripple effect of calling an event of default and acceleration of the repayment of facilities have, on the balance of things, the best possible outcome? The crux of this issue is that not all circumstances lend themselves to easy translation into ‘if/then’ Boolean logic. For instance, what constitutes conduct that is undertaken in a ‘commercially reasonable manner’ or to the ‘satisfaction of the parties?’ These, and similar judgments calls, are inherently difficult to pre-program into code language and are necessarily dependent on a variety of factors and exigencies that are difficult to forecast and subsequently articulate in an all-encompassing and exhaustive manner, and translate into code language. Indeed, such judgment calls move away from the remit of smart contract technologies to the realm of artificial intelligence. The capabilities and limitations of the latter, together with its legal and ethical implications, however, falls beyond the scope of this paper. For our purposes, it will suffice to acknowledge that the realist theory sheds light on the practical drawbacks of the defining characteristic of smart contracts, that is, to the automatic selfenforcement of contracts.
5. From the lex informatica to the lex cryptographia? As talk of smart contracts marking a new age in the defining concepts of the law of contract gains traction, it is interesting to draw an analogy with the coming of age of the Internet and the ‘lex informatica’. The dawn of the Internet brought about an alternative normative system consisting of a particular set of rules and customary norms arising directly from the parameters imposed by the technical aspects of the network or technical infrastructure. This is what Joel Reidenberg (1992) coined as the lex informatica as a supplement to contractual norms for the regulation of online transactions through the establishment of technical norms, in addition to contractual rules. The impact of these norms is that, rather than relying on traditional law enforcement mechanisms, such as court orders or proceedings, online operators increasingly rely on technical norms as some kind of customary transnational 316
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rules applicable at the global level, in a consistent and predictable manner.34 In a similar fashion, the emergence of blockchain technology and smart contracts may cause a fundamental shift in the development of the lex informatica, moving us into an age of lex cryptographia, characterised by a set of rules administered through self-executing smart contracts that is made possible through the defining characteristics of blockchain technology, namely: cryptographically secured information, consensusbased transactions and decentralized network infrastructure. If we were to imagine a world in which these conceptual limitations are surpassed and contractual relationships can be engineered to the extent that every single possible permutation and outcome articulated into a preprogrammed code, our legal system perhaps could take the form of a system of algorithmic governance or a state of the rule of law by code, potentially resulting in a system that is highly prescriptive and deterministic; a system where people are, indeed, free to decide the particular set of rules to which they want to abide, but once that choice has been made, no deviation from these rules is possible any longer, save for under pre-programmed circumstances and subject to any pre-programmed conditions. These are the wider socio-legal implications that we ought to bear in mind as the use and complexity of smart contract technologies gathers ground.35
6. Concluding remarks Developing a legally enforceable smart contract solution is not merely a matter of putting together the right technology stack but requires a careful consideration of the legal requisites for the essential and formal validity for a contract to be upheld as such under Maltese law. The real transformative value of smart contracting lies in bridging the gap between finding ways to preserve enforceability in the traditional legal sense of ‘enforceable by a court’ (the first meaning of enforceability) while reaping the benefits of ‘automated self-execution’ (the second meaning of enforceability). First posited in the early 1990s by US lawyer and scientist Nick Szabo, 34 Aaron Wright & Primavera De Filippi, ‘Decentralised Blockchain Technology and the Rise of Lex Cryptographia’, 35 Ibid
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smart contracts have been heralded as ‘the technology most likely to change the next decade of business’.36 As our digital economy expands, we will increasingly rely on technology not merely as a facilitator of decisionmaking, but as a decision maker in and of itself. The deployment of smart contracts may transform various facets of our legal system. At the very basic level, the standout impact will be the shift from ex-post enforcement to ex-ante enforcement. The reality remains that a smart contract may still be challenged on the traditional grounds upon which a contract may be challenged under Maltese law and may be, therefore null ab initio or annullable. Smart legal contracts do not (and cannot) change this.37 Although Maltese law provides answers to some of the pressing questions surrounding the relationship between code and law, this paper has identified a number of gaps and illustrated how smart contracts and legal contracts are not yet wholly aligned under Maltese law. The fundamental question we should be asking ourselves is whether this merits a radical overhaul of our legal system or whether this is merely a case of tweaking our statute book to reflect the changing realities? Whichever route is opted for, the wise words of the learned judges in Chwee Kind Keon and Others vs. Digilandmail.com Pte Ltd (2005) 2 LRC 28, at paragraph 102 (High Court, Singapore) comes to mind: ‘the question is not ‘do traditional principles apply?’ but ‘how do they apply?’… continuing by stating that ‘it is axiomatic that normal contractual principles apply’. This logic should guide us in the concept of smart contracts and the next wave of contractual innovations and how this relates to our traditional concepts of law. The subject of smart contracts also raises a number of social, normative and ethical questions. Faced with the prospect of a move towards the hybrid model of smart contracting, the legal profession may itself be in for a shake-up of its own, where legal professionals will be required to act as the intersect between natural language contracts and code language smart contracts, potentially altering legal drafting techniques or forming new hybrid languages altogether in what is referred to by some observers as a ‘controlled natural language’.38 36 Don Tapscott & Tapscott Alex, ‘The Impact of the Blockchain Goes Beyond Financial Services’ (2016) Harvard Business Review 37 ISDA & LINKLATERS, ‘Whitepaper: Smart Contracts and Distributed Ledger – A Legal Perspective’ (2017) <https://www.isda.org/a/6EKDE/smart-contracts-and-distributed-ledger-a-legal-perspective.pdf> 38 Samer Hassan and Primavera De Filippi, ‘From Code is Law to Law is Code’ (2017) 17 Field Actions Science Reports 16
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To conclude, the author wishes to stress that the point of departure is anchored in the principle that the concept of pacta sunt servanda should be capable of application regardless of the form that the contract between the parties takes. In other words, the concept ought to be technologically neutral. This basic principle is rooted in the general notion of contract law that a contract may even be a verbal, that is, a wholly unwritten agreement. By extension, a contract may, so long as the essential requirements for the validity of a contract are duly satisfied, be written in natural language or code language, or a combination of the two. It is true, however, that a hybrid smart contract solution, which appears to be the favoured approach under Maltese law as it currently stands, may lend itself better to satisfying the requirements for the validity of a contract, whereas a pure smart contract, written wholly in code language, may face hurdles in satisfying the same requirements. That being said, where the terms of the smart contract are clear and unambiguous, and are a true and faithful manifestation of the mutual understanding of the parties, there is no reason to preclude the possibility of a smart contract qualifying as a contract in the legal sense of the term, thereby creating a bond between the parties, to the effect that the code between the parties is the ‘law between the parties’ or rather, ‘code is law’.
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Marc Dimech How could Distributed Ledger Technology and Smart Contracts bring about a paradigm shift in Consumer Rights legislation?
Marc E. Dimech has recently obtained his Bachelor of Laws (Honours) Degree. Currently sitting for the Master of Notarial Studies course at the University of Malta, Marc takes particular interest in contract, commercial and succession law.
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1. Introduction
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ive or take in the past two years, there has been a surge in two different, yet slightly intertwined, technological advancements that could, and probably will, bring about a paradigm shift in our law sometime in the near future. These technologies are Distributed Ledger Technology, also known as DLT in short, and Smart Contracts. These two groups, ‘which have also brought about the emergence of crypto-currencies, will be widespread and it will impact many industries’1, not only law. They are built in a way that would make obligations between two or more parties easier, not just from a practical point of view, but also from a legal perspective. Yet, this would also bring up a number of questions – do the advantages of these two types of technologies outweigh the risks? Are any risks, no matter how few or low level, too perilous, making these concepts’ existence from a legal point of view questionable, notwithstanding their countless advantages? If legislators were to implement such technologies in our law, how would the already existing legislations need to change to accommodate them? Thus, how would both Distributed Ledger Technology and Smart Contracts specifically affect consumer rights - should consumers be afforded more rights to protect their interests in case of implementation, or are their already existing rights by default reinforced? To understand this, it is pivotal that an in-depth explanation of how these two pieces of technology work is given, as this would serve to better understand in what way consumer rights are affected, if at all. Without background knowledge of how they work, an explanation of their effect would be pointless. An overview of Subsidiary Legislation 378.17, or ‘Consumer Rights Regulations’, will also be laid out. ‘The purpose of these regulations is to implement Directive 2011/83/EU of the European Parliament and of the Council...’2 In turn, this European Directive is the ‘Consumer Rights Directive’, which applies to the majority of contracts between traders and consumers, and 1 ‘Blockchain and Smart Contracts – An Introductory Legal Perspective’ <http://www. ils.com.mt/2017/10/blockchain-and-smart-contracts-an-introductory-legal-perspective/> accessed 1 September 2018. 2 Consumer Rights Regulations (2013), 1(2).
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its aim is to protect the latter by affording them certain rights, as they are not on the same playing field as traders when it comes to entering into an obligation. Thus, the law makes sure to safeguard consumers’ interests by regulating how these transactions are handled.
2. What is Distributed Ledger Technology? In Maltese Law, we find a definition of this term in the second article of the Malta Digital Innovation Authority Act, as well as in the second article of the Virtual Financial Assets Act. Both these acts describe this type of technology as being ‘a database system in which information is recorded, consensually shared, and synchronised across a network of multiple nodes’3. An important aspect of distributed ledgers is that they ‘do not have a central administrator or a central data storage’4. There are essentially two fundamental characteristics in any system or infrastructure which is DLT-based (for example, Blockchain).5 First is the ‘ability to store, record and exchange information in digital form across different, self-interested counterparties’6, whilst not needing a central record-keeper, and without the need for mutual trust among counterparties, which has so far been so fundamental. Information or data are stored across numerous stores, or ‘ledgers’, in which all of them ‘have the exact same data records, and are collectively maintained and controlled by a distributed network of computer servers, called nodes’7. Thus one finds a peer-to-peer element. Secondly, it needs to be ensured that there is no double spending; that is, that the same asset or token cannot be sent or be part of a transaction more than once. Otherwise, the confusion this would create would be huge.
3 Virtual Financial Assets Act, Chapter 590 of the Laws of Malta, Article 2. 4 Claudio Scardovi, Restructuring and Innovation in Banking (Springer 2016) 36 5 ‘Distributed Ledger Technology (DLT) and Blockchain’. (World Bank Group, 2017). <http://documents.worldbank.org/curated/en/177911513714062215/pdf/122140-WP-PUBLIC-Distributed-Ledger-Technology-and-Blockchain-Fintech-Notes.pdf> accessed 2 April 2019. 6 ibid 2. 7 ibid 1.
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2.1 How does Distributed Ledger Technology Work?
Essentially, in its most simple form, this form of technology refers to one large database, which is independently held and updated by each participant or device, or in more specific jargon, by each node, in a very large network. Decentralised ledgers work in such a way that the records are not, in any way, shape or form, made available to multiple nodes by one central authority. Instead, as already mentioned, these records are constructed independently and held by every node, each one having access to them. In other words, each and every node or participant on the network processes every single transaction, allowing it to come to its own conclusions, after which it votes on those very same conclusions to make sure the majority agree with the conclusions. ‘Once there is this consensus, the distributed ledger has been updated, and all nodes maintain their identical copy of the ledger’. 8 9 10
3. What are Smart Contracts? Don Tapscott, ‘one of the world’s leading authorities on the impact of technology on business and society’11, explained the term ‘smart contract’ in a very simple manner – ‘it’s a contract that self-executes, and has a payment system built into it, sort of like a contract that has built-in lawyers, governments and a bank account’12. In Malta, we find a definition of smart contracts in the Malta Digital Innovation Authority Act. In Article 2, this provision states that: ‘’smart contract’’ means a form of innovative technology arrangement consisting of: (a) a computer protocol; and, or 8 J. Carlos Severino Cardoso, ‘Blockchain and Smart Contracts for the Internet of Things - an Architecture for Sensor Data Availability’ (2018) <http://recil.grupolusofona.pt/bitstream/ handle/10437/9275/thesis_jose_cardoso%20%281%29.pdf?sequence=1> accessed 2 April 2019. 9 Nolan Bauerle, ‘What is a Distributed Ledger?’ (Coindesk) <https://www.coindesk. com/information/what-is-a-distributed-ledger> accessed 2 April 2019. 10 Oliver Belin, ‘The Difference Between Blockchain & Distributed Ledger Technology’ (TRADEIX) <https://tradeix.com/distributed-ledger-technology/> accessed 14 April 2019. 11 ‘About’ <http://dontapscott.com/about/> accessed 14 April 2019. 12 Roxana Flores, ‘What are smart contracts?’ <https://blockchainflashnews.com/whatare-smart-contracts-a-self-executing-contract/> accessed 14 April 2019.
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(b) an agreement concluded wholly or partly in an electronic form which is automatable and enforceable by execution of computer code, although some parts may require human input and control and which may be also enforceable by ordinary legal methods or by a mixture of both13. It would be fair to say that smart contracts have a number of defining features which make them stand out from traditional contracts. Firstly, and very importantly, there is the removal of an intermediary, resulting in less time consumption and less transaction costs - something which makes it very attractive to a consumer. A very common and practical example of an intermediary is a bank, which would be done away with due to the selfexecutory nature of these contracts. Nick Szabo, a legal scholar, computer scientist and one of the pioneers in automated self-enforcing contracts, stated that: Smart contracts often involve trusted third parties, exemplified by an intermediary, who is involved in the performance, and an adjudicator, who is invoked to resolve disputes arising out of performance (or lack thereof). Intermediaries can operate during search, negotiation, commitment, and/or performance14 Whereas these entities are all still involved in this type of contract, they are in-built in the contract, and physically removed from the equation. In addition to this, another defining and closely related feature is the reduction of human involvement, mitigating the possibility of human mistakes.
3.1 How do Smart Contracts Work? A smart contract contains the agreement or obligation between the said parties, with all the relevant clauses between party A and party B - the same as with traditional contracts. For example, since smart contracts are selfexecutory, the agreement would state, give or take, that when A receives payment from B, only then will B acquire ownership of the object, or asset, in 13 Malta Digital Innovation Authority Act, Laws of Malta, Article 2. 14 Nick Szabo, ‘The Phases of Contracting’ (1998) <http://www.fon.hum.uva.nl/rob/ Courses/InformationInSpeech/CDROM/Literature/LOTwinterschool2006/szabo.best.vwh. net/phases.html> accessed 14 April 2019.
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4. Advantages of Implementation There are multiple advantages if we were to implement such technologies. Transparency, for example, is crucial, and highly sought after. Obligations, whether contractual or not, are built on trust, and the element of transparency helps to build this trust between parties. An obligation in the form of a smart contract is made transparent once it is recorded in a public ledger, one which all the parties to an obligation would have access to. That same ledger stores all the necessary information on the object or items of the agreement, thus promoting transparency between the parties. ‘A distributed ledger can allow all the information that is stored to be easily and freely viewable, which can add a huge amount of desired transparency to a variety of industries’16. One must also mention that potential parties to a new and separate future obligation will have access to the information on the same object or asset which they might want to acquire. For example, A sells his car to B and this transaction is recorded in the ledger, along with the properties of the car, such as its make, colour, year of manufacture, mileage, engine power, type 15 Ray King, ‘What Is a Smart Contract and How Does it Work?’ <https://www.bitdegree. org/tutorials/what-is-a-smart-contract/> accessed 4 March 2019. 16 Matt Crook, ‘What is distributed ledger technology?’ (Liquid, 13 October 2013) <https:// blog.liquid.com/distributed-ledger-technology> accessed 4 March 2019.
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of transmission etc. 5 years later, C might want to purchase that same car from B. C would have all the information he needs on the object (in this case, the car) in the ledger, thus eliminating the possibility of fraudulent behaviour from B when it comes to selling the car. Another advantage related to these technologies is efficiency. Due to a lack of intermediaries, such as banks, transactions are concluded much quicker – ‘you no longer need a trusted third party when you make a transaction’17. As a simple example, let us imagine a scenario where farmers are granted a certain amount of money by the government if, due to a lack of rain over the course of twelve months, their produce does not grow enough, making them of unsatisfactory quality to the market. In this case, they would be unable to make a living, and thus may be eligible to receive that amount of money. If a smart contract is used for this kind of obligation, and it is (manually) programmed to detect the amount of precipitation over twelve months, then at the end of those twelve months, the program would establish whether the farmer party to the obligation satisfies the requirement, and the amount of money in question would be transferred to him immediately, on the day the twelve month period closes. Without such technology, the farmer would most probably need to get in touch with a lawyer, who would then begin the process to have his client given what is due to him by acquiring proof of the precipitation over the course of the twelve months or lack thereof, and so on. This would come at a cost to the farmer, not merely financially, but also in time lost to have the amount promised sent to him. Also, the contract would be easily accessible in the ledger, and one would not need to waste time going over huge amounts of paper contracts. Another example is in the case when ‘a group of football enthusiasts agree on a wager on which team is going to win the Premier League. At the end of the season, the smart contract would retrieve the information from the official website of the Premier League and automatically distribute the winnings to the person who successfully predicted the winning team’18. The automatic distribution of the winnings is what makes it so efficient and attractive to the parties. One final advantage is that of immutability, somewhat related to security. Immutability essentially means that once a record has been uploaded into 17 Ray King, ‘What Is a Smart Contract and How Does it Work?’ <https://www.bitdegree. org/tutorials/what-is-a-smart-contract/> accessed 4 March 2019. 18 James Debono, Jens Buedinger, ‘How smart contracts may affect the legal community’ Times of Malta, (5 November 2017) <https://www.timesofmalta.com/articles/view/20171105/ business-news/How-smart-contracts-may-affect-the-legal-community.662296> accessed 14 April 2019.
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the ledger, then that same record cannot be changed or cancelled - it is there for good. Therefore, to denote a change, a new record has to be created. Thus, as long as the ledger remains distributed, the data inputted in it cannot be tampered with, and a trail is created. For this reason, immutability goes hand in hand with security, as no individual is capable of changing a record for his own personal gain. Smart contracts on a decentralised platform are fair, as they are not controlled by any one central party. Instead, they are found in a distributed ledger, ‘a shared database run by many computers (called nodes) belonging to many different people. Because of this, not one single person or company has control of it. It means it is near impossible to hack it — the hacker would need to hack more than half of the nodes if they wanted to attack the blockchain or the smart contracts that run on it. Therefore, smart contracts can run safely and automatically without anyone being able to change them!’19. Being almost hack-proof means that more and more people would trust these types of technology, as they can trust that their interests are safeguarded, with very little, if at all, possibility of a catastrophe. In fact, smart contracts on a distributed ledger are encrypted and distributed amongst the nodes on the network, guaranteeing no changes or a loss of the data. Trust is implicit to this type of technology.
4.1 Disadvantages of Implementation On the other side of the coin, one big issue is that of data protection and privacy, or rather, the issue as to whether there is any data protection and privacy. ‘Maintaining privacy is the most difficult technical issue with any distributed ledger’20. A decentralised distributed ledger is available to everyone, running on a very large number of computers, on which every kind of asset can be stored, transacted, moved, exchanged and even managed without the need of any single intermediary. Whereas at first glance it would be reasonable to assume that this is advantageous due to transparency and an equal availability of information across the database, and despite it being very difficult to hack, there is a downside to this. A number of questions arise, such as ‘how much information should be made available on the ledger?’; ‘how much information is really necessary?’. In cases of a decentralised 19 Ray King, ‘What Is a Smart Contract and How Does it Work?’ <https://www.bitdegree. org/tutorials/what-is-a-smart-contract/> accessed 4 March 2019. 20 Stephen Diehl, ‘Transaction Privacy in Distributed Ledgers’ (Adjoint, 18 September 2018) <https://www.adjoint.io/news/entry/transaction-privacy-in-distributed-ledger-solutions> accessed 14 April 2019.
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distributed ledger, it is not one entity, usually a company, which holds all of a person’s (sometimes sensitive) information, but this information is spread out across a number of nodes, meaning that there is more than one place from which to access the information. There is not one central authority holding all the information but parts of the data are held in numerous nodes. Because there is no one central authority responsible to look out for malicious users and attacks, if a malicious transaction is actually made, in such a case it is impossible to reverse or delete it. It is also important to mention the General Data Protection Regulation, a legislative instrument which first and foremost aims to give control to all individuals within the EU over their personal data. This piece of legislation, which was implemented on May 25th 2018, holds an important distinction in regard to this topic, found in Article 17 - dealing with the right to erasure or the ‘right to be forgotten’. To quote the first part of this article: 1. The data subject shall have the right to obtain from the controller the erasure of personal data concerning him or her without undue delay and the controller shall have the obligation to erase personal data without undue delay where one of the following grounds applies: (a) the personal data are no longer necessary in relation to the purposes for which they were collected or otherwise processed21. Whenever a transaction takes place, it is recorded in the distributed ledger, and since that same record is immutable and it is impossible to delete, one can argue that this technology’s very nature goes against what the GDPR outlays. Thus, this would make the aforementioned technology incompatible with EU law. On the other hand, a traditional contract does not have this obstacle, as it can easily be deleted or destroyed, making it compatible with EU law. Therefore, the issue here revolves only with regards to smart contracts. There are also some disadvantages which are relatively minor when compared to the above. One of them is that despite the fact that these 21 Regulation on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC (Data Protection Directive) [2016] OJ 2 119/43.
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technologies are quite advanced and reduce human intervention to a minimum, leading to much fewer human errors, this factor is not completely done away with. For example, people are still needed to write the code of a smart contract. The problem lies with the fact that the smallest of mistakes in the programming process could result in a calamity, which could potentially be worth even millions in costs or expenses, especially since a smart contract in a distributed ledger cannot be subsequently altered.
5. Critical Analysis Thus, how would consumer rights legislation be affected with the introduction of such technologies - positively or negatively? And how would the law need to change in order to keep providing the best possible protection to consumers once these alien technologies are implemented? To determine whether consumer rights legislation would need to change (and how) in order to allow the use of these two types of technologies to take place with no setbacks on consumers, the first order of business is to decide on whether the rights in question will be affected positively or negatively with the use of these technologies. One needs to look at both the benefits and the risks, and determine whether the former outweighs the latter. Having highlighted the advantages and disadvantages of implementing these technologies, it is fair to say that determining whether the benefits outweigh the risks is nothing short of being considered a challenging feat. Fundamentally, it comes down to one’s subjective outlook on the topic those that are pro-technology and progress will say that the benefits outweigh the risks, while more conservative individuals will state that the issue of data protection and privacy is too delicate to play around with. Trying to take an objective point of view as much as possible, the benefits do seem to slightly outweigh the risks. The technology is first and foremost still in its infancy, meaning that it can only progress and improve as time passes, experience is gained and more studies are conducted. Besides this, the number of benefits that come out of these technologies seems to surpass the risks, in the sense that, were the technologies to be implemented as they are today, there would be a higher chance of success thanks to the advantages the technologies bring about, rather than failure due to their 330
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inherent disadvantages. Another important point which can be made is the fact that the law can cater for any risks which may arise, and provide fail-safe provisions and legislations to extinguish any possible backlash from the risks mentioned. It is imperative to keep in mind that it is physically impossible to replicate the benefits such technologies would provide to the traditional method; thus, the only possible option is to eliminate the risks from the new, technologybased method. With the above information in mind, consumers stand to gain a lot if distributed ledger technology and smart contracts were to be introduced in Maltese law. The average consumer’s life would be made drastically easier if such technologies were to be implemented. Risks do exist, but it is fair to point out that no technology is really 100% risk-free. The benefits in this situation do seem to outweigh the risks, and for good reason. Since it is in the interest of any person who seeks to purchase goods and services for his own personal use to have business conducted quickly, efficiently and at the least possible cost, then introducing and implementing distributed ledger technology and smart contracts would be indeed beneficial to consumers. ‘Anything that saves large amounts of money will always generate a lot of interest’22. Both DLTs and smart contracts promise just that – a system which conducts transactions instantaneously, without the need of any third parties, and safely; overall, a system which encourages people to trade and do business with peace of mind. How would consumer rights law need to change to accommodate the introduction and implementation of DLT and smart contracts? Fundamentally, there are two ways such a change may occur. The first possibility is that of keeping the present laws in place, and merely amend and update them where necessary to include all that comes with the availability of DLT and smart contracts. On the other hand, one finds the possibility of creating a new piece of legislation catering specifically for those situations in which consumers are affected due to DLT and smart contracts. Nevertheless, the difference between the two is minimal - it is merely a question of structure. Creating a new piece of legislation may be considered better and administratively easier, so as not to overload the already existing provisions, and to make the 22 Brian Slater, ‘Distributed Ledger Technology: Do the benefits outweigh the risks?’ (TABB Group, 21 September 2016) <https://tabbforum.com/opinions/distributed-ledger-technology-do-the-benefits-outweigh-the-risks/> accessed 15 April 2019.
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process of finding the relevant laws easier. Any necessary changes would not need to be drastic, immaterial of which one of the aforementioned methods would be applied. In its very essence, the end result of conducting business in the traditional method and via DLT or smart contracts is identical; it is simply the method which is different. So, changes that would need to take place need to be related to the method only. This makes any alterations that may need to occur minor ones, if at all needed. For example, under the Consumer Rights Regulations, the first three subarticles of article 4, whose information is also replicated in article 5 in one way or another, - ‘the main characteristics of the goods or services’23, ‘the identity of the trader’24 and everything that comes with it, such as their name, address, telephone number etc, as well as ‘the total price of the goods or services inclusive of taxes’25 (where it can be calculated) - are written in a manner in which no real change to these provisions is necessary in order to adapt them to the technologies at hand. Since these things can be easily listed down in a smart contract on a distributed ledger, it does not matter that they can be represented in this technological way. Therefore, it does not make any difference from a legislative point of view. This means that the already existing provisions do not need to change in order to accommodate this new technology. The same argument can be made for the rest of the provisions found in Articles 4 and 5, respectively, of the Consumer Rights Regulations. However, in case new legislation dealing specifically with consumer contracts entered into via smart contracts on a distributed ledger were to be created, it would be well advised if legislators were to implement the notion that everything mentioned in these two articles is still to be presented to the consumer before they enter into a contractual obligation. Whether one provision is created which states that everything that is mentioned in Articles 4 and 5 of the Consumer Rights Regulations is to be made clear in the smart contract, or whether each provision underneath both sets of articles is restated, thus having each and every requirement stipulated separately rather than having them all grouped up underneath one heading, makes no real difference. It 23 Consumer Rights Regulations, Subsidiary Legislation 378.17 of the Laws of Malta, Article 4(1)(a). 24 Ibid, Article 4(1)(b). 25 Ibid, Article 4(1)(c).
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would be up to the legislators to decide which option is most feasible and the easiest, although a stronger argument for the first option can be made, as any additions or removals from articles 4 and 5 of the Consumer Rights Regulations would be automatically accounted for, rather than having to also amend the new document every now and again. All this would reinforce the need to provide all the information a consumer needs to have made available to them before they proceed with any contract. What would need to change with regards to consumers’ rights in order to continue protecting this group of individuals within society has to do with protection from the disadvantages of DLT and smart contracts. One big issue which needs to be handled is the notion found in Article 17 of the General Data Protection Regulation26. The right of data erasure once the reason for which such data is collected ends is clearly highlighted in the first point of the first sub-article: ‘the personal data are no longer necessary in relation to the purposes for which they were collected or otherwise processed’27. Also, this erasure is to take place as soon as possible, without any unnecessary hold-ups – ‘the erasure of personal data concerning him or her without undue delay and the controller shall have the obligation to erase personal data without undue delay’28. Thus, this is also in the consumers’ interest, and it is the legislators’ responsibility, to provide such a right in the law. Firstly, it continues to promote consumers’ rights, and providing them with the best possible protection there is. Secondly, it is also required to eliminate any incompatibility with EU law; rather, it would complement it. On this point, the legislators here would effectively be hitting two birds with one stone. The law does provide for the scenario in which data which needs to be erased is made public (in this case, available to all the nodes on the network). In fact, the following sub-article stipulates that: where the controller has made the personal data public and is obliged pursuant to paragraph 1 to erase the personal data, the controller, taking account of available technology and the cost of implementation, shall take reasonable steps, including technical measures, to inform controllers which are processing the personal 26 Regulation on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC (Data Protection Directive) [2016] OJ 2 119/43. 27 ibid (Emphasis added). 28 ibid (Emphasis added).
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data that the data subject has requested the erasure by such controllers of any links to, or copy or replication of, those personal data29. Since literally deleting data and records on a distributed ledger might currently be technologically impossible, this leaves two possible options. The first option is to follow what this sub-article states. However, as it has already been stated, erasure is impossible, thus, requiring all the nodes on the network to delete their copy would not solve anything. The only sensible option, technology permitting, is to program the code of the DLT so as to hide the transaction from everyone but the parties who were part of the transaction, once this is accomplished of course. For extra security, the code of this technology would need to make such record viewable only, without the ability to share with third parties in any way, shape or form. This would be a big step forward with regards to one of the most prominent, if not the most prominent, disadvantages there is - the issue of having data protection and privacy threatened. After all, one needs to keep in mind that ‘the GDPR was fashioned for a world where data is centrally collected, stored, and processed’30, and not for distributed ledgers. Another possible, not to mention prudent, scenario would be for legislators to cap the number of nodes on a network. This would decrease the possibility of abuse or disadvantages towards consumers, by decreasing the number of entry points on the network, making the inputting of malicious transactions more difficult to carry out. Another important point is that ‘there’s the concern that users will have false information about them listed online as this brings its own problems if it can’t be properly corrected and the false records totally expunged’31. In case this scenario takes place, such false information would be available only to the limited number of nodes on the network, and not to a greater audience. At the same time, this also brings about another advantage, in the sense that since this technology is so new, 29 Regulation on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC (Data Protection Directive) [2016] OJ 2 119/44. 30 Michèle Finck, ‘Blockchains and Data Protection in the European Union’ [2018] 4(1) European Data Protection Law Review, 17 <https://edpl.lexxion.eu/data/article/12327/pdf/ edpl_2018_01-007.pdf> accessed 13 March 2019. 31 ‘Deleting Information from a Distributed Ledger or Blockchain’ (Kwôri, 30 May 2016) <http://www.kwori.co.uk/blog/2016/5/30/deleting-inforhttp://www.kwori.co.uk/ blog/2016/5/30/deleting-information-from-a-distributed-ledger-or-blockchainmation-from-a-distributed-ledger-or-blockchain> accessed 2 April 2019.
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it would be beneficial to set up this technology on a small scale first, in order to allow experts to study and analyse the way it works on a small platform, giving them enough information to make an educated assumption as to how it would work on a larger scale; and provide all the necessary components to make it work on such a scale, and further on in the future, maybe even on a national scale. On an equally important note, human involvement is not completely done away with, which naturally leaves room for human error. It would thus be reasonable for legislators to create specific provisions which would bestow to consumers rights related to recourse, or else compensation, in case anything goes wrong, including due to human error and gross negligence - tort. The Maltese Civil Code itself caters for instances of tort32. An element of flexibility should, and needs to be present in those situations where an error is not too serious and is fixable, so long as the consumer is not too gravely injured. This is due to the fact that this technology is still very new, and therefore even experts in the field will still have many limitations in their expertise, meaning that it might be impossible for them to cater for every scenario possible. Nevertheless, consumers need to be protected in those cases where there is serious damage or negligence due to human involvement, with the parties at hand needing to take responsibility for their actions, and be held liable. In addition to this, legislators cannot forget those situations in which consumers suffer injury through extraneous causes. While there might not be an individual or a company to blame, if a consumer suffers injury, no matter by what, then they should have some sort of recourse or compensation. This may be monetary in nature, or else in the form of a benefit or service, and this can be provided either insurance companies or by a government grant. On a final, more specific, yet smaller note, local legislators would need to keep in mind and clearly stipulate in the law at which point in a long-distance contract is the transaction concluded. Thus, essentially the issue revolves around the moment in which the smart contract executes - for example, at which point does the transfer of money need to occur. Chapter 426 of the Laws of Malta, or the E-Commerce Act, needs to be read and analysed, and kept as a benchmark with regards to any new provisions that would need to be created. It is after all ‘an act to provide in relation to electronic commerce and to provide for matters connected therewith or ancillary thereto’33. At the same time and running parallel, on an EU level, the Electronic Commerce 32 33
Civil Code, Chapter 16 of the Laws of Malta, Title IV. Electronic Commerce Act, Chapter 426 of the Laws of Malta, Preamble.
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directive or Directive 2000/31/EC34 would also need to be considered. Clarifying things of this nature will help make things easier for lawyers to interpret, and for consumers, since everything is distinctly stipulated for them with regards to their rights. They will know exactly when they can act or when they can institute proceedings in case of injury etc… if they are informed when the contractual obligation is concluded. Clarifying the stages of these types of contracts with this type of technology will give the consumers a better understanding of where they stand with regards to their rights.
6. Conclusion In conclusion, the above points may not be exhaustive, but they are certainly the most obvious, and arguably, pressing issues, and it would be fair to say that taking note of them when drafting new legislation would improve the already existing one in the sense that it would update it with regards to the ongoing implementation of these new technologies. It would be insensible if no changes and/or amendments are made to the current legislation on consumer rights with the introduction of distributed ledger technology and smart contracts. Any new elements which affect society, and by consequence the law in place, need to be accounted for. Whenever any new component is created, it brings about with it the positives and negatives. The legislators’ duty is to determine what these are, and then make sure that the law they legislate takes them into account, and caters for their existence. In such situations, changes or alterations would indeed be required due to the risks that consumers would face. A number of provisions would need to be added or amended, in order to bestow more rights on the consumer, so as to cater for the new risks or disadvantages of the implementation of distributed ledger technology and smart contracts. Whilst any advantages are more than welcome, disadvantages need to be accounted for, and thus providing new and stronger rights to consumers would balance out the risks that implementation would bring about. It is crucial for all those states around the globe which are interested in implementing and allowing obligations and contracts to be entered into and 34 Directive 2000/31/EC of the European Parliament and of the Council of 8 June 2000 on certain legal aspects of information society services, in particular electronic commerce, in the Internal Market (Directive on electronic commerce).
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conducted in such a manner, to start from a national level. If all states do this, then eventually there would be a number of different pieces of legislation in each respective country dealing with the same situations. Once such pieces of legislation are found in a number of different countries, then the EU could potentially come into the equation and harmonise the different laws.
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