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  • Law of the Sea Ruling Trumps Ghanaian Judge

    When a nation joins the United Nations Convention on the Law of the Sea (UNCLOS) it should be prepared to have its domestic court rulings overturned by an international tribunal. That hard lesson was recently learned by Ghana.

    Specifically, on December 15, an UNCLOS court—the International Tribunal for the Law of the Sea (ITLOS)—effectively overruled a decision of a judge of the Superior Court of Judicature in Ghana.

    The case involves an Argentine naval training vessel, the Libertad, which sailed into the Ghanaian port of Tema in early October and was then detained as a result of a ruling of the Superior Court in a lawsuit filed there by NML Capital, a subsidiary of the U.S. hedge fund Elliott Capital Management. Elliott Capital holds several hundred million dollars in Argentine bonds and has been attempting to collect on them since Argentina’s historic $80 billion default in 2001. The Ghanaian judge ruled that the Libertad may be held to satisfy part of that debt.

    Argentina then filed an arbitration proceeding under UNCLOS’s mandatory dispute resolution procedures and sought preliminary relief at ITLOS, demanding the immediate release of the Libertad even before the arbitral panel could be seated. The ITLOS panel promptly agreed with the Argentines and ordered Ghana to release the Libertad.

    Ghana is in no position to complain that the ITLOS ruling violates its sovereignty. Ghana ratified UNCLOS and is therefore obligated to defend itself against any claim brought against it in an UNCLOS tribunal, regardless of the merit of such claims. The rulings of UNCLOS tribunals are final, domestically enforceable, and not subject to appeal. In this case, Argentina performed an end run around a Ghanaian court by successfully suing Ghana in an UNCLOS tribunal.

    The ITLOS ruling is unconscionable. The case had several complex legal issues that should have been litigated, such as whether the Libertad was protected from seizure by sovereign immunity and whether Argentina waived that immunity in the terms of its now defaulted bonds. Moreover, the ITLOS panel was supposedly limited to provide relief of a preliminary nature—and then only if Argentina would suffer irreparable harm from the Libertad’s seizure.

    At a minimum, the ITLOS panel could have ordered Argentina to post a cash bond pending the final result of the arbitration proceeding. As it is, the Libertad has sailed away from Ghana, guaranteeing that Argentina, having regained possession of the frigate, will abandon its UNCLOS litigation and will never again be seen in any Ghanaian courtroom.

    The Libertad case illustrates the mischief that may be wrought by international tribunals. There are several reasons why the United States should not make the same mistake as Ghana by ratifying UNCLOS, including potential exposure to baseless lawsuits. ITLOS’s unwarranted intrusion into Ghana’s ongoing domestic commercial litigation serves as an additional reminder to the U.S. as to why it has properly avoided membership in UNCLOS for the past 30 years.

    Posted in International [slideshow_deploy]

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