<\/span><\/h3>\nLegal liability is generally determined by reference to the type of obligation which is breached.\u00a0 There is a distinction between injury to direct interests and those which indirectly injure or affect interests, usually by injury to nationals or other legal entities recognised under domestic law.<\/p>\n
It is presumed that states, as custodians of sovereign rights, have an interest in wrongs which directly affect them.\u00a0 Such wrongs will include injury to its property, members of its diplomatic missions, armed forces, executive, Head of State etc.<\/p>\n
Where damage or injury is suffered by a natural person or a corporation recognised by its laws, the general position is that the right to bring a claim lies with the State of nationality.\u00a0 This is diplomatic protection.\u00a0 The decision as to whether to exercise it or not may be influenced by political considerations.\u00a0 The State is the judge as to whether protection will be granted and, if so, to what extent.<\/p>\n
The English Court of Appeal has held that diplomatic protection does not give the right to an enforceable duty under domestic law.\u00a0 The court did accept that it had the power to review the exercise of discretion which could be challenged if it could be shown to be contrary to natural justice or irrational (the usual standard for judicial review).<\/p>\n
It follows from the above principle that a State, which recovers damages on behalf of its nationals, need not pass them to the persons concerned.\u00a0 The State may take action even if the individuals affected oppose it.<\/p>\n
<\/span>Diplomatic Protection<\/span><\/h3>\nThe discretionary nature of diplomatic protection has been criticised as inconsistent with human rights.\u00a0 Some States recognize diplomatic protection as an individually enforceable right under their Constitution.<\/p>\n
Nationality may be conferred by sovereigns.\u00a0 It is presumed that nationality granted by a state is valid and recognised.<\/p>\n
Nationality generally follows in accordance with the terms of the relevant national law.\u00a0 However, a State\u2019s claim of nationality will not be conclusive in terms of the exercise of diplomatic principles.<\/p>\n
The criteria for nationality must be consistent with the principles of international law. Nationality law may be disregarded if it is inconsistent with fundamental human rights or discriminatory etc.<\/p>\n
International organisations may be entitled to exercise diplomatic protection in order to discharge their functions.\u00a0 They may even be addressed against the state of the individual\u2019s nationality.<\/p>\n
<\/span>Link with State<\/span><\/h3>\nThere must be a genuine and clear link between the individual and the State, which exercises diplomatic protection.\u00a0 There must be a genuine legal bond in accordance with the individual\u2019s connection with the State. A legal bond must have a basis as a social fact of attachment, a general connection of existence and sentiments together with the existence of reciprocal rights and duties.<\/p>\n
It has been argued that the requirement for a genuine link introduces uncertainty and vagueness and may be open to abuse.\u00a0 It may lead to wrongs not being redressed because of the nature of the link between the national and the State.<\/p>\n
The genuine link criteria is not universally accepted. It has been asserted by the International Court of Justice.\u00a0 It is accepted, however that the nationality claims may not be exercised in bad faith or where they are manifestly inconsistent with principles of international law.<\/p>\n
<\/span>Corporates<\/span><\/h3>\nDiplomatic protection may be exercised in respect of corporates.\u00a0 Difficult issues may arise in determining the nationality of corporations.\u00a0 There are several theories and principles, some of which are incompatible.<\/p>\n
Some cases have taken the view that the place of incorporation is critical.\u00a0 Some courts have looked behind the corporation to its shareholders.\u00a0 However, the general principle that corporations are separate entitiey is upheld, which contradicts this approach.\u00a0 There have been views that the nationalities of shareholders may be relevant where the corporation has ceased to exist.<\/p>\n
States may extend protection to their own nationals who own corporations in other states.\u00a0 Some courts have looked at the substance of the shareholders behind the corporation.<\/p>\n
Some courts have applied the genuine link test formulated in the case of individuals and deny that the place of incorporation gives automatic diplomatic protection.\u00a0 There is strong support for the view that where local incorporation is required, as a matter of law that shareholding interest protection is also required.<\/p>\n
<\/span>Multi-State Links<\/span><\/h3>\nMulti-nationalities of corporates may cause difficulties.\u00a0 Similar issues arise with individuals with dual nationality.\u00a0 In the case of individuals, the real or dominant nationality is broadly accepted as the appropriate one for diplomatic protection.<\/p>\n
Where nationality is equally strong as between the claims of two states, neither should be able to exercise diplomatic protection against another state of which he is national.\u00a0 Otherwise, the sovereign equality of states would be undermined.<\/p>\n
In considering whether nationality is dominant, regard will be given to nationality at birth, residence, states of naturalisation, employment, financial interests, language and the bona fides of the acquisition of nationality.<\/p>\n
<\/span>Shareholders<\/span><\/h3>\nThere is support for the view that the right of shareholders is a secondary right, which may be used if the national state of the company has failed to act on its behalf.\u00a0 However, the majority position is that the secondary right can only come into existence after the primary right has been extinguished and that the non-exercise of protection by the state with the primary right does not necessarily extinguish it.<\/p>\n
The protection of shareholders is consistent with the genuine links doctrine, which has emerged in the case of individuals. In practice, States have been prepared to intervene and exercise diplomatic protection to protect shareholder interests in foreign corporations.<\/p>\n
There is a substantial body in favour of the principle of protection of shareholding interest.<\/p>\n
<\/span>Non-Nationals Protected<\/span><\/h3>\nThe connection of nationality is not always required and may be waived.\u00a0 It may be varied by treaty.\u00a0 It may be delegated to another State.<\/p>\n
Treaties may protect non-nationals.\u00a0 The EU Treaty creates treaty-based diplomatic protection for all EU nationals within the jurisdiction of a Member State, irrespective of nationality.<\/p>\n
Nationality is generally inapplicable to stateless persons, persons who are a minority group, refugees and non-nationals with long-term residence claiming diplomatic protection.<\/p>\n
The above deals with bilateral duties and obligations.\u00a0 The State wronged must demonstrate an injury to its interests or those of its national.<\/p>\n