A REPORT ON SOME IMPORTANT INTERNATIONAL CASES Asian Agricultural Production Ltd. Vs. Srilanka, ICSID, 1990 Principle: Under the principle of subjective state responsibility if a state fails to show that standard of protection has taken, then that state would be responsible for its subjects act. Facts: This case was brought by a British Company against Srilanka before a tribunal established under the convention for the settlement of Investment Dispute 1965 to which both Srilanka and UK were parties on the basis of the consent given by Article 8, Srilanka-UK Bilateral Investment treaty 1980. the company claimed compensation for the destruction of its lankan farm. On the facts the tribunal found that at the relevant time in 1987 the farm was in an area that was largely under the control of the Tamil Tiger rebels and that the management was requested to dismiss some farm staffs who were alleged to have close relation with Tamil Guerillas. They dismissed those staffs upon such request. After some day, properties of the farm were destroyed. The farm demanded the compensation alleging that such destruction was caused by the rebels as they dismissed those staffs upon the request of the Government. Issue: 1. Whether Sri Lanka had strict liability or not? 2. Whether the destruction of the farm was the result of rebel action or the work of some hoodlums? Decision: The decision was in favour of the UK company, that is Srilanka was liable for compensation. Reasoning: It is generally accepted rule of international law, clearly stated in international arbitral awards and in the writings of the doctrinal authorities, that: 1. A state on whose territory an insurrection occur is responsible for loss or damage sustained by foreign investors unless it can be shown that the Government of that state failed to provide the standard of protection required either by treaty or under general customary law; as the case may be, and 2. Failure to provide the standard of protection required entails the states international responsibility for losses suffered regardless of whether the damage accrued during on insurgent offensive act or resulting from governmental counter-insurgency activities.
Nottebohm Case, ICJ, 1955 Liechtenstein vs. Guatemala Facts: