Azimuddin Law Associates info@azimuddinlawassociates.com
NEWS, VIEWS AND LAW NOTES
Volume 1. October 2019. Number 2
Editors: ADLA Staff
NEWS
WTO News and Views
Korea Anti-Dumping Duties challenge on Pneumatic Values from
Japan:
Appellate body of GATT dispute settlement mechanism has
issued on 10 September 2019 its final verdict on Korea Anti
Dumping duties on pneumatic values from Japan. The document
WT/DSS04/AB/R is available at WTO web. The decision though
upheld the panel’s findings, yet allowed partial relief to Japan in
certain areas.
Safeguard Investigations on Flat-rolled Products
2
On 27 August 2019 Guatemala initiated safeguard
investigation in respect of flat-rolled products of other alloy steels
having a width of 600MM or more.
Such investigations seek to determine whether increased
imports of a product are causing or threatening to cause, serious
injury to the domestic industry. During safeguard investigations,
importers, exporters and other interested parties can present
evidence, views and respond to the presentations of other parties.
A WTO member can take a safeguard action (i.e. restrict imports of
a product temporarily) when the increased imports of the disputed
product are found to be causing, or threatening to cause, serious
injury to domestic industry.
Estate planning Charitable Lead Annuity Trust (CLAT) Structure
The US Internal Revenue Service (IRS) has recently released
a private letter ruling approving a charitable lead annuity trust
(CLAT) structure that may prove useful in estate planning for high
net worth clients. In the case at issue, the taxpayer proposed to set
3
up a revocable trust where the trust would first pay certain debts
and expenses and then distribute the trust assets to other
individuals and trusts if the taxpayer predeceased his spouse.
Should the spouse die first, the trust would have paid the relevant
debts, made distributions to individuals and trusts and then
transfer the remaining assets to the CLAT, which would then pay a
5% annuity to the charity based upon the initial trust's fair market
value. The IRS approved this structure even though in most cases,
the CLAT must have a payout stream that lasts a predetermined
number of years to qualify for tax preferential treatment
(deduction of the present value of annuity payments for the
estate). Here, the IRS determined that it would eventually be
possible to calculate that specified payout term once the CLAT was
funded from the revocable trust after payment of debts, expenses
and distributions to other beneficiaries.
[Tax Facts on line]
4
ESSAY
Today and Tomorrow
By Martin Wolf
FD: IMF: JUNE 2019
In this article the author draws our attention towards global
changes such as shifts in global economic and political directions.
According to the author a transformation has also taken place in
the global power rivalry. The author notes the slowdown in the
process of globalization. According to the author technological
changes are also happening and affecting individuals, nations and
continents in a rapid manner. He discusses the financial fragility and
weak global demand. The climate change according to him is a
serious issue as well.
IMF is confronting all these issues. The author outlines the
ways in which fund is moving for help and assistance where
required. The author believes that we are passing through a phase
of Economic Fragility and accordingly the IMF needs to work in the
following directions.
Helping globalization to survive
5
Meeting the challenge of unstable world economy
Serious engagement on the part of IMF to challenge the
ongoing problems confronting the global economy.
The author also draws our attention towards restructuring of
many of the functions and structure of the fund in the recent past.
According to him the fund has always been providing help and
assistance where necessary as the fund constantly adapts to the
confronting demands.
The author is, however, of the view that the world in general
and the fund member in particular should believe in funds
professionalism, and multilateralism and should help the fund in
seeking and extending the cooperation amongst its members in
order to successfully challenge the global economic problems.
Book Review:
International Law in World Politics By Shirley V. Scott
The book reflects a dramatically changing global context, and
introduces the actors, structures, processes, and issues of
6
international law. The materials in the book include: Current case
studies that bring the subject to life; through a chapter on
international courts and tribunals, more attention has been given
to trade and economic issues; the book also discusses contentious
topics such as Iran nuclear deal; Africa and the ICC, the Paris climate
agreement, rising tensions in the South China Sea etc. The book
effectively explains the role that international law plays in the arena
of world politics today.
The book discusses the following topics in details:
Actors in international law.
States and non-state actors.
Intergovernmental organizations.
International courts and tribunals.
Structures and processes of international law.
Implications of a multilateral treaty and evolution of a
multilateral treaty regime.
Human rights.
The future directions of international law.
7
RECENT CASES
Principles of judicial review under article 184(3) of the Constitution laid down by the apex court: Ishaq Khan khakwani v. Railway Board PLD 2019. Supreme Court 602.
-Art. 184 (3) – Power of Judicial review under Art. 184 (3) of the Constitution – scope – instances where the Supreme Court may exercise its power of judicial review stated.
The Apex Court ruled, the scope of power of judicial review under
Article 184 (3) of the Constitution of Pakistan in the following
terms:
I. Where acts or omissions on the part of State functionaries
reflect violation of mandatory provisions of law or the rules;
II. Breaches of contracts which do not entail examination of
minute/disputed questions of fact committed by public
functionaries involving dereliction of obligations flowing
from a statute, rules or instructions;
III. Where public functionaries fail to exercise public authority,
especially while dealing with public property, public funds or
assets, in a fair, just, transparent and reasonable manner,
8
untainted by mala fides or colorable exercise of power for
ulterior motives, without discrimination and in accordance
with law, keeping in view the constitutional rights of the
citizens, even in the absence of any specific statutory
provisions setting forth the process in this behalf;
IV. Interference with the decision making process is warranted
where it is vitiated on account of arbitrariness, illegality,
irrationality and procedural impropriety or where it is
actuated by mala fides;
V. Illegal actions from the exercise of powers by the
Governmental bodies while exercising powers to dispense
and regulate special services by means of leases, licenses,
contracts, quotas, etc., as these authorities are expected to
act fairly, justly and in a transparent manner and such
powers cannot be exercised in an arbitrary or irrational
manner;
VI. Inappropriate dealings of public funds, public property,
licenses, jobs or any other government largesse is to be dealt
9
with by public functionaries on behalf of and for the benefit
of the people;
VII. Scrutinize matters where public money is being expended
through procurement or public property is being sold, so as
to ensure that transactions by the Government are
undertaken and contracts executed in a transparent manner,
legally, fairly and justly without any arbitrariness or
irrationality and public money and public property is not
squandered or stolen;
VIII. The presence of elements such as personal solicitation and
personal influence in the procurement of contracts directly
leading to inefficiency in the public service and to
unnecessary expenditures of the public funds;
IX. All agreements for pecuniary considerations to control the
business operations of the government, or the regular
administration of justice, or the appointments to public
offices, or the ordinary course of legislation, are void as
against public policy, without reference to the question,
10
whether improper means are contemplated or used in their
execution; If material changes are brought about in
agreements subsequent to the bidding to benefit a particular
party, this will in fact negate the notion of a fair and open
competitive bidding process; and
X. Courts should ordinarily refrain from interfering in the policy
making domain of the Executive or in the award of contracts
and should not substitute its decision for that of the latter
unless the acts or omissions smack of arbitrariness,
favoritism and a total disregard of the mandate of law.
CASE LAW:
Edited By: Zafar Iqbal
Baluchistan High Court explains the way to re-open an assessment of customs duties. Validity of penalty imposition order held after assessment of leviable duty and taxes under S.80, Customs Act, 1969 and payment thereof and after clearing the vehicles under S. 83, Custom Act, 1969, the available remedy of filing appeal under S. 193, Customs Act, 1969 was not availed by the concerned officials of the Collectorate of Customs Additional Collector of Customs (Adjudication) had no jurisdiction under the provisions of the
11
Customs Act, 1969 to issue show cause notice and to pass Order in Original.
[Collector of Customs vs. M/s Al Habib Enterprises and Engineering: 2019 PTD 1712].
Baluchistan High Court, 31st January, 2019
A business organization had imported concrete transit mixer
trucks which were allowed clearance for home consumption after
submission of prescribed documents. On a subsequent inquiry
Customs attributed an act of mis-declaration on the part of
importer by alleging that the year of manufacture of imported
trucks was incorrect. On the basis of said anomaly, a show cause
notice was issued by an authority namely, the Additional Collector
of Custom (Adjudication). The show cause notice was assailed by
the importer on the ground that Additional Collector who issued
show cause notice was not competent to initiate panel proceedings
under the law. The adjudication officer namely, Additional Collector
however, rejected importer’s plea and imposed penalties. The
order of penalty imposition was challenged before the Appellate
authority who set aside the penalty order. The appellate authority
12
observed that the adjudication officer who imposed penalties was
not competent to pass penalty order since the same was not
authorized by law. The customs challenged validity of Appellate
authority’s order before the Baluchistan High Court. The High Court
held that after assessment of leviable duty and taxes under S. 80,
of the Customs Act, 1969 and payment thereof and after clearing
of the vehicles under S. 83, of the Customs Act, 1969, the available
remedy before the department was to file an appeal under S. 193,
of the Customs Act, 1969 and since the same was not availed by the
department, hence the initiation of penal action by the Additional
Collector of Customs (Adjudication) was without jurisdiction.
ICJ DECISION: BOLIVIA V. CHILE1
OBLIGATION TO NEGOTIATE ACCESS TO THE PACIFIC OCEAN
International Court of Justice – 1904 Treaty of Peace and Friendship (Bolivia-Chile)-obligation to negotiate – intention to be legally bound.
International Court of Justice, October 1, 2018
1 https://www.icj-cij.org/files/case-related/153/153-20181001-JUD-01-00-EN.pdf
13
The need for universal adherence to and implementation of
the rule of law at both the national and international levels” stands
reaffirmed by the ICJ in their recent judgement namely, Bolivia V.
Chile. Amongst other things ICJ did give findings on important legal
issues which are summarized below:
Bilateral Agreements
According to customary international law, as reflected in
Article 3 of the Vienna Convention, “agreements not in written
form” may also have “legal force”. Irrespective of the form that
agreements may take, they require an intention of the parties to be
bound by legal obligations. This applies also to tacit agreements.
The Diplomatic Exchanges
In the case concerning Maritime Delimitation and Territorial
Questions between Qatar and Bahrain,2 the court had found that
signed minutes of a discussion could constitute an agreement if
they “enumerate[d] the commitments to which the Parties ha[d]
2 Qatar v. Bahrain, 1994 I.C.J.112
14
consented” and did not “merely give an account of discussions and
summarize points of agreement and disagreement”.
Status of Declarations and Other Unilateral Acts
Consider the following declarations/statements of Chile:
“Willing to seek that Bolivia acquire its own outlet to the sea” and
“to give an ear to any Bolivian proposal aimed at solving its
landlocked condition”. And “unchanging purpose of studying,
together with that brother country, within the framework of a frank
and friendly negotiation, the obstacles that limit Bolivia’s
development on account of its landlocked condition”. The wording
of these texts does not suggest that Chile has undertaken a legal
obligation to negotiate Bolivia’s sovereign access to the Pacific
Ocean. With regard to the circumstances of Chile’s declarations and
statements, the Court further observes that there is no evidence of
an intention on the part of Chile to assume an obligation to
negotiate. In the opinion of the Court, “an obligation to negotiate
Bolivia’s sovereign access to the sea cannot rest on any of Chile’s
unilateral acts referred to by Bolivia.”
15
Estoppel
“Essential elements required by estoppel” are “a statement
or representation made by one party to another and reliance upon
it by that other party to his detriment or to the advantage of the
party making it”.
Legitimate Expectations
In the opinion of Court legitimate expectations may be found
in arbitral awards concerning disputes between a foreign investor
and the host State that apply treaty clauses providing for fair and
equitable treatment. It does not follow from such references that
there exists in general international law a principle that would give
rise to an obligation on the basis of what could be considered a
legitimate expectation.3
The Charter of the United Nations
The Court held that no obligation to negotiate Bolivia’s
sovereign access to the Pacific Ocean arises for Chile under the
3 Bolivia’s argument based on legitimate expectations thus cannot be sustained.
16
United Nations Charter. Concerning the OAS Charter, the Court
recalls that its Article 3 (i) provides that “controversies of an
international character arising between two or more American
States shall be settled by peaceful procedures”.
The Resolutions of the General Assembly
General Assembly resolutions merely recommend to Bolivia
and Chile that they enter into negotiations over the issue.
Moreover, as both Parties acknowledge, resolutions of the General
Assembly of the OAS are not per se binding and cannot be the
source of an international obligation. Chile’s participation in the
consensus for adopting some resolutions therefore does not imply
that Chile has accepted to be bound under international law by the
content of these resolutions. Thus, the Court refused to infer from
the content of the resolutions Chile’s legal stand position with
respect to their adoption that Chile has accepted an obligation to
negotiate Bolivia’s sovereign access to the Pacific Ocean.
The Legal Significance of Instruments, Acts and Conduct Taken
Cumulatively
17
The Court noted that Bolivia’s argument of a cumulative
effect of successive acts by Chile is predicated on the assumption
that an obligation may arise through the cumulative effect of a
series of acts, even if it does not rest on a specific legal basis.
However, given that the Court’s analysis shows that no obligation
to negotiate Bolivia’s sovereign access to the Pacific Ocean has
arisen for Chile from any of the invoked legal bases taken
individually, a cumulative consideration of the various bases cannot
add to the overall result. It is not necessary for the Court to consider
whether continuity existed in the exchanges between the Parties
since that fact, if proven, would not in any event establish the
existence of an obligation to negotiate Bolivia’s sovereign access to
the Pacific Ocean.
RECENT LEGISLATION
The government has framed and circulated listed companies (Draft
Code of Corporate Governance) Regulations, 2019. The draft
regulations inter alia, provide for the composition of board, its
directors and members while defining the procedure for its
18
meetings, issues which can be placed before Board of Directors,
their responsibility and functions. It also provides procedure for
audit, reporting and constitution of committees.
RECENT GUIDANCE
State Bank of Pakistan EPD Circular Letter No. 07 of 2019. [April 19, 2019].
Clarification relating to Foreign Currency Accounts
1. Attention of Authorized Dealers is invited to the second
proviso of sub-section (4) of the Section (5) of the
Protection of Economic Reforms Act (PERA), 1992 which,
inter-alia, states as under:
“provided that no cash shall be deposited in an
account of a citizen of Pakistan resident in
Pakistan, unless the account holder is a filer as
defined in the income Tax Ordinance, 2001 (XLIX
of 2001)”
2. It has come to our notice that some Authorized Dealers are
not allowing non-residents to open and maintain foreign
19
currency accounts on the pretext that they are not appearing
as ‘filer’ in the Active Taxpayer’s List of FBR.
3. However, it is evident from the aforementioned Proviso that
the instructions, contained therein, are not applicable to
non-residents.
4. An updated copy of the PERA, 1992 is enclosed herewith for
information and meticulous compliance.
Note: All requests for free subscription be sent to : azilawass@yahoo.com
NEWS, VIEWS AND LAW NOTES
Volume 1. October 2019. Number 2
Editors: ADLA Staff
NEWS
WTO News and Views
Korea Anti-Dumping Duties challenge on Pneumatic Values from
Japan:
Appellate body of GATT dispute settlement mechanism has
issued on 10 September 2019 its final verdict on Korea Anti
Dumping duties on pneumatic values from Japan. The document
WT/DSS04/AB/R is available at WTO web. The decision though
upheld the panel’s findings, yet allowed partial relief to Japan in
certain areas.
Safeguard Investigations on Flat-rolled Products
2
On 27 August 2019 Guatemala initiated safeguard
investigation in respect of flat-rolled products of other alloy steels
having a width of 600MM or more.
Such investigations seek to determine whether increased
imports of a product are causing or threatening to cause, serious
injury to the domestic industry. During safeguard investigations,
importers, exporters and other interested parties can present
evidence, views and respond to the presentations of other parties.
A WTO member can take a safeguard action (i.e. restrict imports of
a product temporarily) when the increased imports of the disputed
product are found to be causing, or threatening to cause, serious
injury to domestic industry.
Estate planning Charitable Lead Annuity Trust (CLAT) Structure
The US Internal Revenue Service (IRS) has recently released
a private letter ruling approving a charitable lead annuity trust
(CLAT) structure that may prove useful in estate planning for high
net worth clients. In the case at issue, the taxpayer proposed to set
3
up a revocable trust where the trust would first pay certain debts
and expenses and then distribute the trust assets to other
individuals and trusts if the taxpayer predeceased his spouse.
Should the spouse die first, the trust would have paid the relevant
debts, made distributions to individuals and trusts and then
transfer the remaining assets to the CLAT, which would then pay a
5% annuity to the charity based upon the initial trust's fair market
value. The IRS approved this structure even though in most cases,
the CLAT must have a payout stream that lasts a predetermined
number of years to qualify for tax preferential treatment
(deduction of the present value of annuity payments for the
estate). Here, the IRS determined that it would eventually be
possible to calculate that specified payout term once the CLAT was
funded from the revocable trust after payment of debts, expenses
and distributions to other beneficiaries.
[Tax Facts on line]
4
ESSAY
Today and Tomorrow
By Martin Wolf
FD: IMF: JUNE 2019
In this article the author draws our attention towards global
changes such as shifts in global economic and political directions.
According to the author a transformation has also taken place in
the global power rivalry. The author notes the slowdown in the
process of globalization. According to the author technological
changes are also happening and affecting individuals, nations and
continents in a rapid manner. He discusses the financial fragility and
weak global demand. The climate change according to him is a
serious issue as well.
IMF is confronting all these issues. The author outlines the
ways in which fund is moving for help and assistance where
required. The author believes that we are passing through a phase
of Economic Fragility and accordingly the IMF needs to work in the
following directions.
Helping globalization to survive
5
Meeting the challenge of unstable world economy
Serious engagement on the part of IMF to challenge the
ongoing problems confronting the global economy.
The author also draws our attention towards restructuring of
many of the functions and structure of the fund in the recent past.
According to him the fund has always been providing help and
assistance where necessary as the fund constantly adapts to the
confronting demands.
The author is, however, of the view that the world in general
and the fund member in particular should believe in funds
professionalism, and multilateralism and should help the fund in
seeking and extending the cooperation amongst its members in
order to successfully challenge the global economic problems.
Book Review:
International Law in World Politics By Shirley V. Scott
The book reflects a dramatically changing global context, and
introduces the actors, structures, processes, and issues of
6
international law. The materials in the book include: Current case
studies that bring the subject to life; through a chapter on
international courts and tribunals, more attention has been given
to trade and economic issues; the book also discusses contentious
topics such as Iran nuclear deal; Africa and the ICC, the Paris climate
agreement, rising tensions in the South China Sea etc. The book
effectively explains the role that international law plays in the arena
of world politics today.
The book discusses the following topics in details:
Actors in international law.
States and non-state actors.
Intergovernmental organizations.
International courts and tribunals.
Structures and processes of international law.
Implications of a multilateral treaty and evolution of a
multilateral treaty regime.
Human rights.
The future directions of international law.
7
RECENT CASES
Principles of judicial review under article 184(3) of the Constitution laid down by the apex court: Ishaq Khan khakwani v. Railway Board PLD 2019. Supreme Court 602.
-Art. 184 (3) – Power of Judicial review under Art. 184 (3) of the Constitution – scope – instances where the Supreme Court may exercise its power of judicial review stated.
The Apex Court ruled, the scope of power of judicial review under
Article 184 (3) of the Constitution of Pakistan in the following
terms:
I. Where acts or omissions on the part of State functionaries
reflect violation of mandatory provisions of law or the rules;
II. Breaches of contracts which do not entail examination of
minute/disputed questions of fact committed by public
functionaries involving dereliction of obligations flowing
from a statute, rules or instructions;
III. Where public functionaries fail to exercise public authority,
especially while dealing with public property, public funds or
assets, in a fair, just, transparent and reasonable manner,
8
untainted by mala fides or colorable exercise of power for
ulterior motives, without discrimination and in accordance
with law, keeping in view the constitutional rights of the
citizens, even in the absence of any specific statutory
provisions setting forth the process in this behalf;
IV. Interference with the decision making process is warranted
where it is vitiated on account of arbitrariness, illegality,
irrationality and procedural impropriety or where it is
actuated by mala fides;
V. Illegal actions from the exercise of powers by the
Governmental bodies while exercising powers to dispense
and regulate special services by means of leases, licenses,
contracts, quotas, etc., as these authorities are expected to
act fairly, justly and in a transparent manner and such
powers cannot be exercised in an arbitrary or irrational
manner;
VI. Inappropriate dealings of public funds, public property,
licenses, jobs or any other government largesse is to be dealt
9
with by public functionaries on behalf of and for the benefit
of the people;
VII. Scrutinize matters where public money is being expended
through procurement or public property is being sold, so as
to ensure that transactions by the Government are
undertaken and contracts executed in a transparent manner,
legally, fairly and justly without any arbitrariness or
irrationality and public money and public property is not
squandered or stolen;
VIII. The presence of elements such as personal solicitation and
personal influence in the procurement of contracts directly
leading to inefficiency in the public service and to
unnecessary expenditures of the public funds;
IX. All agreements for pecuniary considerations to control the
business operations of the government, or the regular
administration of justice, or the appointments to public
offices, or the ordinary course of legislation, are void as
against public policy, without reference to the question,
10
whether improper means are contemplated or used in their
execution; If material changes are brought about in
agreements subsequent to the bidding to benefit a particular
party, this will in fact negate the notion of a fair and open
competitive bidding process; and
X. Courts should ordinarily refrain from interfering in the policy
making domain of the Executive or in the award of contracts
and should not substitute its decision for that of the latter
unless the acts or omissions smack of arbitrariness,
favoritism and a total disregard of the mandate of law.
CASE LAW:
Edited By: Zafar Iqbal
Baluchistan High Court explains the way to re-open an assessment of customs duties. Validity of penalty imposition order held after assessment of leviable duty and taxes under S.80, Customs Act, 1969 and payment thereof and after clearing the vehicles under S. 83, Custom Act, 1969, the available remedy of filing appeal under S. 193, Customs Act, 1969 was not availed by the concerned officials of the Collectorate of Customs Additional Collector of Customs (Adjudication) had no jurisdiction under the provisions of the
11
Customs Act, 1969 to issue show cause notice and to pass Order in Original.
[Collector of Customs vs. M/s Al Habib Enterprises and Engineering: 2019 PTD 1712].
Baluchistan High Court, 31st January, 2019
A business organization had imported concrete transit mixer
trucks which were allowed clearance for home consumption after
submission of prescribed documents. On a subsequent inquiry
Customs attributed an act of mis-declaration on the part of
importer by alleging that the year of manufacture of imported
trucks was incorrect. On the basis of said anomaly, a show cause
notice was issued by an authority namely, the Additional Collector
of Custom (Adjudication). The show cause notice was assailed by
the importer on the ground that Additional Collector who issued
show cause notice was not competent to initiate panel proceedings
under the law. The adjudication officer namely, Additional Collector
however, rejected importer’s plea and imposed penalties. The
order of penalty imposition was challenged before the Appellate
authority who set aside the penalty order. The appellate authority
12
observed that the adjudication officer who imposed penalties was
not competent to pass penalty order since the same was not
authorized by law. The customs challenged validity of Appellate
authority’s order before the Baluchistan High Court. The High Court
held that after assessment of leviable duty and taxes under S. 80,
of the Customs Act, 1969 and payment thereof and after clearing
of the vehicles under S. 83, of the Customs Act, 1969, the available
remedy before the department was to file an appeal under S. 193,
of the Customs Act, 1969 and since the same was not availed by the
department, hence the initiation of penal action by the Additional
Collector of Customs (Adjudication) was without jurisdiction.
ICJ DECISION: BOLIVIA V. CHILE1
OBLIGATION TO NEGOTIATE ACCESS TO THE PACIFIC OCEAN
International Court of Justice – 1904 Treaty of Peace and Friendship (Bolivia-Chile)-obligation to negotiate – intention to be legally bound.
International Court of Justice, October 1, 2018
1 https://www.icj-cij.org/files/case-related/153/153-20181001-JUD-01-00-EN.pdf
13
The need for universal adherence to and implementation of
the rule of law at both the national and international levels” stands
reaffirmed by the ICJ in their recent judgement namely, Bolivia V.
Chile. Amongst other things ICJ did give findings on important legal
issues which are summarized below:
Bilateral Agreements
According to customary international law, as reflected in
Article 3 of the Vienna Convention, “agreements not in written
form” may also have “legal force”. Irrespective of the form that
agreements may take, they require an intention of the parties to be
bound by legal obligations. This applies also to tacit agreements.
The Diplomatic Exchanges
In the case concerning Maritime Delimitation and Territorial
Questions between Qatar and Bahrain,2 the court had found that
signed minutes of a discussion could constitute an agreement if
they “enumerate[d] the commitments to which the Parties ha[d]
2 Qatar v. Bahrain, 1994 I.C.J.112
14
consented” and did not “merely give an account of discussions and
summarize points of agreement and disagreement”.
Status of Declarations and Other Unilateral Acts
Consider the following declarations/statements of Chile:
“Willing to seek that Bolivia acquire its own outlet to the sea” and
“to give an ear to any Bolivian proposal aimed at solving its
landlocked condition”. And “unchanging purpose of studying,
together with that brother country, within the framework of a frank
and friendly negotiation, the obstacles that limit Bolivia’s
development on account of its landlocked condition”. The wording
of these texts does not suggest that Chile has undertaken a legal
obligation to negotiate Bolivia’s sovereign access to the Pacific
Ocean. With regard to the circumstances of Chile’s declarations and
statements, the Court further observes that there is no evidence of
an intention on the part of Chile to assume an obligation to
negotiate. In the opinion of the Court, “an obligation to negotiate
Bolivia’s sovereign access to the sea cannot rest on any of Chile’s
unilateral acts referred to by Bolivia.”
15
Estoppel
“Essential elements required by estoppel” are “a statement
or representation made by one party to another and reliance upon
it by that other party to his detriment or to the advantage of the
party making it”.
Legitimate Expectations
In the opinion of Court legitimate expectations may be found
in arbitral awards concerning disputes between a foreign investor
and the host State that apply treaty clauses providing for fair and
equitable treatment. It does not follow from such references that
there exists in general international law a principle that would give
rise to an obligation on the basis of what could be considered a
legitimate expectation.3
The Charter of the United Nations
The Court held that no obligation to negotiate Bolivia’s
sovereign access to the Pacific Ocean arises for Chile under the
3 Bolivia’s argument based on legitimate expectations thus cannot be sustained.
16
United Nations Charter. Concerning the OAS Charter, the Court
recalls that its Article 3 (i) provides that “controversies of an
international character arising between two or more American
States shall be settled by peaceful procedures”.
The Resolutions of the General Assembly
General Assembly resolutions merely recommend to Bolivia
and Chile that they enter into negotiations over the issue.
Moreover, as both Parties acknowledge, resolutions of the General
Assembly of the OAS are not per se binding and cannot be the
source of an international obligation. Chile’s participation in the
consensus for adopting some resolutions therefore does not imply
that Chile has accepted to be bound under international law by the
content of these resolutions. Thus, the Court refused to infer from
the content of the resolutions Chile’s legal stand position with
respect to their adoption that Chile has accepted an obligation to
negotiate Bolivia’s sovereign access to the Pacific Ocean.
The Legal Significance of Instruments, Acts and Conduct Taken
Cumulatively
17
The Court noted that Bolivia’s argument of a cumulative
effect of successive acts by Chile is predicated on the assumption
that an obligation may arise through the cumulative effect of a
series of acts, even if it does not rest on a specific legal basis.
However, given that the Court’s analysis shows that no obligation
to negotiate Bolivia’s sovereign access to the Pacific Ocean has
arisen for Chile from any of the invoked legal bases taken
individually, a cumulative consideration of the various bases cannot
add to the overall result. It is not necessary for the Court to consider
whether continuity existed in the exchanges between the Parties
since that fact, if proven, would not in any event establish the
existence of an obligation to negotiate Bolivia’s sovereign access to
the Pacific Ocean.
RECENT LEGISLATION
The government has framed and circulated listed companies (Draft
Code of Corporate Governance) Regulations, 2019. The draft
regulations inter alia, provide for the composition of board, its
directors and members while defining the procedure for its
18
meetings, issues which can be placed before Board of Directors,
their responsibility and functions. It also provides procedure for
audit, reporting and constitution of committees.
RECENT GUIDANCE
State Bank of Pakistan EPD Circular Letter No. 07 of 2019. [April 19, 2019].
Clarification relating to Foreign Currency Accounts
1. Attention of Authorized Dealers is invited to the second
proviso of sub-section (4) of the Section (5) of the
Protection of Economic Reforms Act (PERA), 1992 which,
inter-alia, states as under:
“provided that no cash shall be deposited in an
account of a citizen of Pakistan resident in
Pakistan, unless the account holder is a filer as
defined in the income Tax Ordinance, 2001 (XLIX
of 2001)”
2. It has come to our notice that some Authorized Dealers are
not allowing non-residents to open and maintain foreign
19
currency accounts on the pretext that they are not appearing
as ‘filer’ in the Active Taxpayer’s List of FBR.
3. However, it is evident from the aforementioned Proviso that
the instructions, contained therein, are not applicable to
non-residents.
4. An updated copy of the PERA, 1992 is enclosed herewith for
information and meticulous compliance.
Note: All requests for free subscription be sent to : azilawass@yahoo.com
