Project

Topic: Suspension of Treaty Obligations under the Vienna Convention on the

Law of Treaties

Submitted to: Prof. Debashri Sarkar

Submitted by: Addway Bandyopadhyay
2013BALLB110
A-1361

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 INDEX

INTRODUCTION ...........................................................................................3
STATEMENT OF PROBLEM ..........................................................................4
SCOPE..........................................................................................................4
RESEARCH QUESTIONS ..............................................................................4
MATERIAL BREACH OF A TREATY .............................................................5
SUPERVENING IMPOSSIBILITY OF PERFORMANCE ....................................9
FUNDAMENTAL CHANGE OF CIRCUMSTANCES (REBUS SIC STANTIBUS) .12
CONCLUSION.............................................................................................16
BIBLIOGRAPHY .........................................................................................17

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 INTRODUCTION

Treaties in international law are based on the principle of pacta sunt servanda, i.e.
good faith. All parties to a treaty must always perform their obligations in good faith.
This makes it clear that there is a presumption in favour of validity of treaites under
international law. However, the Vienna Convention on the Law of Treaties (VCLT)
also makes provisions for situations where it is not possible to perform treaty
obligations. In some cases, the terms of a treaty may become impossible,
unnecessarily burdensome, or different from what they were at the time of conclusion
of the instrument. Here, the VCLT allows for treaty obligations to be suspended or
terminated.

This project will address three such situations:

1. Material breach of a treaty
2. Fundamental change in circumstances
3. Supervening impossibility

I would like to express my gratitude to Prof. Debashri Sarkar for allowing me to work
on this topic.

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 STATEMENT OF PROBLEM
Pacta sunt servanda is a norm that has attained the status of customary international
law. Further, it is always given the highest priority among all provisions of the VCLT.
In what situations is it acceptable to bypass this norm and call for suspension of the
treaty? Moreover, what are the thresholds that need to be satisfied in order to subvert
this fundamental norm of international law?

SCOPE
This study will analyze the provisions of the VCLT concerning material breach,
fundamental change in circumstances and supervening impossibility. It will make
references to commentaries and ILC Drafts on these provisions. Where applicable,
relevant case laws will also be referenced.

RESEARCH QUESTIONS
1. Can treaties be suspended merely because the obligations in question have
become burdensome?
2. Is a breach necessary to suspend the terms of a treaty?
3. What are the remedies available when such a situation arises?

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 MATERIAL BREACH OF A TREATY

The concept of material breach is embodied under Article 60 of the VCLT. It allows
for the suspension of a treaty obligation if the other party has breached a provision
that is essential to the accomplishment of the object and purpose of a treaty.

Scope:
Article 60 sets out the substantive conditions under which a treaty may be terminated
or its operation suspended in consequence of a breach. The provision aims at
balancing competing interests and thereby to disturb as little as possible the
international legal order.1 On the one hand, upon a breach of treaty the injured State
acting in good faith should be afforded certain rights vis--vis the defaulting State. In
particular, the injured party should not be called upon to fulfill its obligations under a
treaty when the other party fails to fulfill those obligations which it undertook under
the same treaty (principle of reciprocity). On the other hand, a breach of a treaty,
however serious, does not ipso facto put an end to the treaty, and it is not open to the
injured State simply to allege a violation of the treaty and pronounce the treaty at an
end. As such, Article 60, rather than envisaging reprisals, aims at restoring the
contractual balance. The principles stated therein follow from the reciprocity of the
rights and duties of States and correspond to the rule pacta sunt servanda.2 According
to Article 60, the innocent party may invoke the breach as a ground for suspending or
terminating the treaty; conversely, the innocent party may equally allow the treaty to
continue in force and to assert its right to performance of the treaty. The options of
suspension or termination avert the danger of the defaulting State enforcing the treaty
against the innocent party while itself violating it. However, the innocent party may
choose to demand resumption of performance of the treaty from the defaulting party

1
M.M. GOMAA, Suspension or Termination of Treaties on Grounds of Breach
(1996).
2
M. FITZMAURICE, Material Breach of Treaty: Some Legal Issues, Austrian RIEL
6 (2001) 3

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which cannot, therefore, by its breach, force the termination or suspension of the
treaty.3

What constitutes a Material Breach?

There are two distinct grounds of material breach, as found in subparas. 3(a) and (b)
of Article 60 of the VCLT. Culpa of the defaulting State is not mentioned as a
requirement. The innocent State should relate its subsequent courses of action to the
treaty containing the violated treaty provisions.4

Subpara. 3(a) mentions the special case of a repudiation of the treaty not sanctioned
by the present Convention. In this case, the defaulting State rejects the treaty as a
whole. Repudiation encompasses denunciations not justified by the Convention or
excessive retaliatory measures, though not legitimate reprisals or courses of action
under Article 60.5

Subpara. 3(b) focuses more generally on the violation of a provision essential to the
accomplishment of the object and purpose of the treaty. A typical example of such a
violation would be the non-performance, or the incorrect performance, of certain
treaty provisions. In fact, it is not the provisions themselves, but their function within
the treaty regime, which Article 60 requires to be essential.

Subpara. 3(b) requires a material, not a fundamental or major breach of a provision

affecting the central purposes of the treaty. A provision viewed by a party as essential
to the effective execution of the treaty is material, if it induced that party to enter into
the treaty at all, even though the provision may be of an ancillary character. For
instance, even the performance of an arbitration clause may be regarded as essential.
Conversely, subpara. 3 (b) does not raise the issue of minor breaches of essential
provisions, it only asks whether a (major or minor) breach affects the accomplishment

3
D.W. GREIG, International Law (Butterworths, 1976).
4
Namibia Advisory Opinion, ICJ Reports 1971 47, para. 95.
5
U.N.G.A., Official Records of the Third United Nations Conference on the Law of
the Sea, Vol. XVII, U.N. Sales No. E.84.V.3, U.N. Doc. A/CONF.62/122 and Corr. 1-
11 (1982).

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of the object or purpose of the treaty. At any rate, these criteria depend on the
subjective judgment of the innocent parties.6

It must further be noted that the object or purpose of a treaty is the reason for which it
was concluded. It expresses the end results expected from its implementation (mise en
oeuvre).7 An essential provision is the root of the treaty, the violation of which would
make further performance of no interest to the innocent parties.8

Customary basis of Article 60 of the VCLT

State practice discloses a growing recognition by States of the customary nature of
Article 60, at least with regard to bilateral treaties. Very few cases have actually dealt
with Article 60, and the ones that have are not as conclusive as is required to establish
its firm customary nature.9 ICJ judgments have gone as far as to hold that Article 60 is
the codification of existing customary law, but nothing beyond this has been stated.10

In the 1971 Namibia Advisory Opinion, the question arose whether UN GA Res 2145
(XXI) of 27 October 1966 was ultra vires. In that Resolution, the UN General
Assembly had declared that South Africa had failed to fulfill its obligations as a
mandatory power in Namibia and had disavowed the mandate, for which reason the
latter was terminated. The Court considered that [t]he rules laid down by the
[Convention] concerning termination of a treaty relationship on account of breach
may in many respects be considered as a codifi cation of existing customary law on
the subject. The Court concluded that both forms of material breach in Article 60,
subparas. 3(a) and (b), had occurred and that Res 2145 amounted to an exercise of the
right of termination. However, the usefulness of this Advisory Opinion is diminished
by the fact it concerned a relationship with bilateral connotations and not the more

6
ATHANASSIOS VAMVOUKOS, Termination of Treaties in International Law
(OUP, 1985)
7
Railway Traffic between Lithuania and Poland (Lithuania v. Poland), 1931 P.C.I.J.
(Ser. A/B) No. 42.
8
ARNOLD MCNAIR, The Law of Treaties 533 (OUP, 1986)
9
CHRISTOS ROZAKIS, The Concept of Jus Cogens in the Law of Treaties
(North-Holland Publishing, 1976).
10
Gabcikovo Nagymaros Project (Hungary v. Slovakia), 1997 I.C.J. 7

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complex (and traditionally more unsettled) situation of a breach of a multilateral
treaty.

In the 1973 BP v. Libyan Arab Republic Arbitration11, Single Arbitrator Lagergren

found that the Libyan nationalisation laws constituted a fundamental violation of the
concessions at issue. With respect to the question of the continuing existence of the
concession, the Arbitrator stated, with reference to Article 60 (which he regarded as
codificatory): a breach of treaty, regardless of how serious it is, does not ipso facto
terminate the treaty and . . . a State is not at liberty simply to state that a breach of
treaty has occurred and that the treaty as a consequence is terminated . . . The rule
should be understood merely as authorizingand requiringa formal declaration to
the effect that performance under the treaty by the party not in default will come to an
end. Lagergren concluded that Article 60 [fell] short of providing that the innocent
party is entitled to demand specific performance of the violated treaty. Moreover,
there did not exist a uniform general principle of law that an agreement continues in
effect after having been repudiated by one party but not by the other.This restrictive
interpretation of Article 60 focuses on the termination of a treaty as a result of its
breach and not on the right of the innocent party to opt for the continuing performance
of the treaty obligations. However, the case concerned a concession and the law was
determined, inter alia, on the basis of a general principle of law as expressed in
municipal legal systems.

Authors are not unanimous in their assessment of the declaratory nature of Article 60.
Some implicitly regard the provision as codificatory, often with reference to the
Namibia Advisory Opinion. Most writers, however, see the main principle in Article
60 as being established in general international law, but many details as new; often,
reference is made to para. 2 and the link to Articles 6568 as the innovative part.12
Simmas studies of Article 60 have inferred from a comparison with the pre-ILC

11
B.P.Exploration Co. v. Government of the Libyan Arab Republic, Arbitration
Award of Oct. 10, 1973, 53 I.L.R. 297 (1979).
12
H. Waldock, Second Report on Law of Treaties, II Y.B.I.L.C. 36, 181 (1963)

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situation and from some comments of ILC members that Article 60 amounts to a
progressive development of pre-existing customary law.13

SUPERVENING IMPOSSIBILITY OF PERFORMANCE

Supervening impossibility is when a party seeks to withdraw from or terminate a

treaty because the execution of the treaty has become impossible. This can be due to
the disappearance or destruction of an object that was essential to execution of the
treaty obligations.14 This doctrine was considered for the first time in the Serbian and
Brazilian Loans Case.15 Rarely has it been invoked in any subsequent case laws, but
some literature does exist about it.

Scope of Article 61
Para. 1 of Article 61 concerns in its first sentence the situation of the permanent
disappearance or destruction of an object lying at the heart of the treaty. The word
object excludes individuals as well as such non-physical appearances as legal
regimes.16 The object disappears when it passes out of sight; it is destroyed when it is
irreparably damaged.17

The term permanent, relating to both disappearance and destruction, excludes a

temporary state of affairs. Thus, if the object can reappear, or can be restored, rebuilt
or replaced, or if there is no total disappearance and destruction, the first sentence of
para. 1 cannot apply. Furthermore, Article 61 may not be invoked if it was precisely
the purpose of the treaty to ensure the maintenance of the object at issue, or where
there was a duty to replace the lost or destroyed object.

13
B. SIMMA, Reflections on Article 60 of the Vienna Convention on the Law of
Treaties and Its Background in General International Law, ZR 20 (1970) 5 ff.
14
VCLT, Article 61.
15
PCIJ (1929) Series A nos. 20/21, 40.
16
WALDOCK Report V, YBILC 1966 II 37 f.
17
ILC Commentary on the Vienna Convention, YBILC 1996 II 187 f.

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Examples are easier to imagine than to find in practice, such as the submergence of an
island, the drying up of a river bed, the destruction of a railway, plant, canal,
lighthouse or other installations by an earthquake, etc. A mine may be flooded or a
forest supplying wood for a neighbouring State may burn down. In the Gabcikovo-
Nagymaros Project (Hungary/Slovakia) Case, Hungary had argued that the essential
object of the 1977 Treaty, i.e., an economic joint venture which was consistent with
environmental considerations, had permanently disappeared and that the 1977 Treaty
had become impossible to perform. The Court found it unnecessary to determine
whether the term object in Article 61 can also be understood to embrace a legal
regime as in any event, even if that were the case, it would have to conclude that in
this instance that regime had not definitely ceased to exist. The 1977 Treaty actually
made available to the parties the necessary means to proceed at any time, by
negotiation, to the required readjustments between economic imperatives and
ecological imperatives. The Court continued, with reference to para. 2 of Article 61
(N. 9), that if the joint exploitation of the investment was no longer possible, it was
due originally to Hungarys failure to perform most of the works for which it was
responsible.18

Impossibility and the Nature of Invalidity

Impossibility of performance constitutes a ground for terminating the treaty among all
parties, or for one or more parties for withdrawing from the treaty. In the latter case,
performance of a multilateral treaty may become impossible for only one or a few
parties, whereas the other parties may continue to apply the treaty inter se. However,
there is no automatic invalidity. Impossibility of performance does not result in the
ipso facto termination of, or withdrawal from, the treaty. As in Articles 60 and 62, a
party may invoke the circumstances in Article 61 and thus institute the procedures of
compulsory adjudication laid down in Articles 6568.19 Thereby, Article 61 seeks to
avoid the risk of an arbitrary assertion of the supposed impossibility of performance

18
M. FITZMAURICE, The Gabcikovo-Nagymaros Case: 9 e Law of Treaties, Leiden
JIL 11 (1998) 331 f.
19
ROBERT AGO, I Y.B.I.L.C. 28 (1964).

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(e.g., as to whether it was permanent, rather than temporary) as a mere pretext for
repudiating the treaty.20

Exception

Para. 2 states the circumstances under which the impossibility of performance may
not be invoked by a party as a ground for terminating, withdrawing from or
suspending the operation of a treaty. While the rules in para. 1 assume that the treaty
is being carried out in good faith, para. 2 provides an exception which is based on the
principle that a party cannot take advantage of its own wrong. This exception was
introduced at the Conference in 1968 and can also be found, mutatis mutandis, in
Article 62, subpara. 2(b). In particular, the treaty party may not invoke the
impossibility of performance, if the impossibility is the result of a breach by that party
either of an obligation under the treaty or of any other international obligation owed
to any other party to the treaty. A State which is in a position of factual impossibility
to perform the treaty as a result of its own actions continues to be bound by the treaty
despite that impossibility. Only the other treaty parties may invoke the supervening
impossibility of performance as a ground for terminating, or withdrawing from, the
treaty.

20
CHRISTIAN TAMS, Research Handbook on the Law of Treaties (Edward Elgar
Publications, 2014).

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 FUNDAMENTAL CHANGE OF CIRCUMSTANCES (REBUS SIC STANTIBUS)

Every contract is to be understood as being based on the assumption of things

remaining as they were at the time of its conclusion. However, sometimes the
obligations under a treaty may transform to an unreasonable extent, owing to factors
that did not exist and were unforeseeable at the time of conclusion of the treaty. In
such situations, the affected party may refuse to perform their obligations under the
treaty, claiming fundamental change of circumstances. 21 Although this has been
recognized as a principle of international law for a very long period of time, most
judges have shied away from discussing what the exact modalities or boundaries of
fundamental change are. In the Free Zones of Upper Savoy and the District of Gex
Case22, often adduced as a leading case on the matter the Permanent Court expressly
reserved its position on the matter. It was prepared to recognize the doctrine of rebus
sic stantibus, but found it unnecessary to consider any of the questions of principle, in
particular as to whether the theory could be regarded as constituting a rule of
international law and the occasions on which and the method by which effect could be
given to the theory if recognized.

Scope

Treaties cannot be seen independently from the circumstances surrounding them. It is

true that every party to a treaty bears the risk that its expectations in respect of the
treaty are not or only partly fulfilled. However, if the circumstances change
substantially, the equivalence of treaty obligations may become imbalanced and
treaties lose their object and purpose. It would appear unduly formalistic nevertheless
to expect the parties to continue to perform the treaty. Article 62 thus reflects an
aspect of good faith. By providing a possibility of terminating, withdrawing from, or
suspending a treaty in an orderly manner, Article 62 pre-empts a partys intentions,
for instance, to breach a treaty in order to avoid its obligations. By providing an

21
VCLT, Article 62.
22
PCIJ (1932) Series A/B no. 46, 156.

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instrument of peaceful change, Article 62 demonstrates its close links with pacta sunt
servanda.

Application

The doctrine of fundamental change of circumstances applies only when the change is
so substantial that it alters the obligations under the treaty, and causes a significant
imbalance in the responsibilities of both parties. 23 There are two conditions under
which the doctrine of fundamental change can be invoked: (i) The changed
circumstances constitute the essential basis of the consent of the parties to the treaty;
and (ii) The change radically transforms the extent of obligations to be performed
under the treaty24 and is unforeseeable at the time of conclusion of the treaty. Art. 62
suggests a high threshold for invocation. Both the above conditions need to be met in
order to claim fundamental change.

A change that affects the motives of one party alone does not concern the rebus
doctrine. 25 Such expectations come under the purview of the doctrine only if their
absence/change makes the consent provided by the aggrieved party at the time of
conclusion devoid of any material ground.26 A decrease in profitability would amount
to fundamental change, only when one party incurred a loss on its investment.

The transformation or change complained of must be radical, i.e. it must

fundamentally alter the size or scale of the obligations within the treaty.27

Examples of fundamental change have in fact been discussed by the ILC in their
commentary to the Vienna Convention. States may enter a treaty bringing about the

23
Commentary on the Draft Articles on State Responsibility, Report of the
International Law Commission, G.A.O.R., 56th Sess., Supp. No. 10, U.N. Doc.
A/56/10 (2001)
24
VCLT, Art. 62.
25
ATHANASSIOS VAMVOUKOS, Termination of Treaties in International Law
(OUP, 1985).
26
Fisheries Jurisdiction (United Kingdom v. Iceland), 1973 I.C.J. 18.
27
Lucerne v. Aargau, 8 BGE 43-58.

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regulation and equitable division amongst them of certain resources and activities
(e.g., fishing), though after a certain period, the distribution of resources changes
(e.g., the fish abandon a particular area). Or a country may undertake to supply
another country with quantities of goods, e.g., oil or iron ore or agricultural products;
suddenly, oil wells or mines are exhausted, or the formerly agricultural State becomes
industrialised, and the State can no longer satisfy even its own internal needs.28 This
would be an example of successful application of fundamental change of
circumstances.

Exceptions
According to the opening sentence of para. 2, a fundamental change of circumstances
may not be invoked as a ground for terminating or withdrawing from a treaty in two
cases. The first is if the treaty establishes a boundary (subpara. 2[a]). If only parts of
the treaty contain rules on boundaries, the change may still be invoked in respect of
the remainder of the provisions. The purpose of this provision is to provide for the
stability of boundaries. Otherwise, Article 62, intended as an instrument of peaceful
change, could become a source of friction. 29 Boundaries are not immutable, but
Article 62 does not provide a tool for seeking the termination of a boundary treaty.
The travaux prparatoires indicate a relatively broad interpretation of the notion of
establishing boundaries. In the Frontier Dispute (Burkina Faso/ Mali) Case, 30 the
Court saw subpara. 2(a) as [covering] both delimitation treaties and treaties ceding or
attributing territory. Still, subpara. 2(a) does not go so far as to include treaties
establishing territorial status (for instance, servitudes), as was unsuccessfully
proposed by the US in Vienna. The provision is equally not concerned with the
principle of self-determination, as envisaged in Article 1, para. 2 of the UN Charter,
which can be invoked independently of Article 62 where the conditions for its
operation exist.

28
Statements in the ILC by PAREDES, YBILC 1963 I 146, para. 38.
29
Dissenting Opinion of Judge AJIBOLA in the Territorial Dispute (Libya/Chad)
Case, ICJ Reports 1994 64 f, para. 53.
30
ICJ Reports 1986 563, para. 17

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In the second case, a fundamental change of circumstances may not be invoked, if it is
the result of a breach by the party invoking it either of an obligation under the treaty
or of any other international obligation owed to any other party to the treaty. While
the rule in para. 1 generally assumes that the treaty is being carried out in good faith,
subpara. 2(b) provides for the special case that a party cannot take advantage of its
own wrong. This principle can also be found, mutatis mutandis, in Article 61, para. 2.
Whether or not there has been a breach, is to be interpreted according to Article 60,
subparas. 3(a) and (b).

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 CONCLUSION

In this study, we have discussed (at length) the various requirements for invoking the
termination or suspension of treaties under the three grounds we had set about to
discuss. Far from being bypasses, these serve as standard bearers of pacta sunt
servanda. Each and every one of these grounds has been introduced only to let an
innocent party have an opt-out clause within a treaty. These provisions under the
VCLT ensure that no party has to perform an obligation that is unnecessarily onerous.
There are caveats to this, of course, but the basic understanding is that if an
unreasonable obligation was not considered by the parties at the time of conclusion of
the treaty, then there is no reason as to why it should be performed to their detriment.
From the substantive content to the procedural requirements for invoking these
grounds, each aspect is governed almost completely by good faith. The duty to inform
the other party of invocation is the most important among these standards. Through
this study, I have gained a thorough and detailed knowledge of these provisions
concerning treaty interpretation and termination. The role of parties consent has also
become apparent to me, in that it governs all facets of treaties, from formation to
performance.

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 BIBLIOGRAPHY

All the materials cited as footnotes have been referred to while making this project. In
addition, I have used the following materials extensively:

1. Mark Villiger, Commentary on the 1969 Vienna Convention on the Law of

Treaties (Nijhoff, 2009).
2. Malcolm N. Shaw, International Law (CUP, 2008).
3. Enzo Cannizzaro, The Law of Treaties (OUP, 2010).
4. Oliver Drr, Vienna Convention on the Law of Treaties: A Commentary
(Springer, 2012).
5. Peter Malanczuk, Akehursts Modern Introduction to International Law
(Routledge, 1997).
6. D.J. Harris, Cases and Materials on International Law (Sweet & Maxwell,
2005).

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