International Law Case Report: Barcelona Traction, Light & Power Co.

This report analyzes the Barcelona Traction, Light and Power Company case, a significant dispute in international law. The case involved the Belgian government seeking compensation for losses to stakeholders due to actions by the Spanish government. The report details the background of the dispute, the company's establishment and operations, and the facts of the case, including the Spanish government's rejection of arguments related to share ownership and bond servicing. Key legal issues, such as jurisdiction and diplomatic protection, are examined, along with arguments from both parties. The report also discusses the court's decision, which denied Belgium the right to claim on behalf of the company, and the importance of the case in international law, particularly regarding state protection of foreign investors and the concept of 'Jus Standi'. The conclusion highlights the differences in the court's rulings and the significance of shareholder identity in seeking compensation, referencing relevant international law principles and court decisions.

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Student Name:
Student Id:
University:
Barcelona Traction ,
light and Power CO.
(Belgium v spain)

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Case background
 Belgian government asked compensation for loss to
stakeholders
 2 phases of case judgement
 Spanish government rejected 1st & 2nd objections, while passed 3rd
& 4th objection
 The court held inadequacy of Belgian government to protect
stakeholder’s interest

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Barcelona Traction Light and Power
Company
 Established in 1911 in Toronto
 Created many subsidiaries to generate and transmit electric
power in Spain

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Facts
 Spanish government rejected the argument that
 The shares of Barcelona Traction Light and Power Company held by Belgian
individuals.
 The organization issued bonds dominated in sterling.
 The servicing of bonds were affected during the Spanish civil wars.
 Spanish authorities refused to honour transfer of foreign currency after
war
 Spanish government could not able to authorize foreign transfers

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Facts
 The court ordered the liquidation of assets of the company
 The court declared the company bankrupt
 Two subsidiaries of the company were also liquidated.
 Before submitting to international court of justice, 2736 orders
have been sent to other courts.
 Barcelona traction doesn’t take any proceeding in Spanish
courts

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Issues

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Arguments
 Termination of proceeding by one party gives other the
right to start new proceeding.- first objection

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Arguments
 Lack of jurisdiction –second objection

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Decision
 It has been observed that
 Belgian does not have right to claim that the rights of the company
were affected by actions of the Spain.
 States should provide legal protection to foreign nationals
 Court denied to provision of “Jus Standi”

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International law and importance for the
case
 No absolute obligation
 There is no absolute obligations to protect foreign investors against law
 Municipal laws
 If stakeholder’s interest have been affected by the company, then
company could not claim for it.
 Diplomatic protections
 There is no rule for the company to authorize the diplomatic protection
for grievance redressal, whenever there is an incident of unlawful act
against a company in foreign capital.

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Special circumstances
 Belgian shareholders do not get immunity and diplomatic
protection from Canada
 They do not have authority to claim against the state.
 Dismissal of case showcases the difference between a state
and an individual which in national context

z It can be concluded from the above analysis of the
case that there are various differences in the rulings
of the court. The ruling of the court was carried out
in the favour of Spain as there was no jurisdiction
with Belgium and no diplomatic immunity was given
by the shareholders for seeking any compensation.
But, if it was possible for the shareholders to give a
proper identity where the headquarters of the
company are situated than it is possible that an aid
could be given.
Conclusion