The Scientific Research Services (SRS) of Germany’s Federal Parliament on the Chances of Success of Actions against China for Damages Incurred due to the Global Coronavirus Pandemic
Professor and Director of the Institute of International Law
University of Bonn
1. On 5 May 2020, the Scientific Research Services (SRS) of Germany’s Federal Parliament issued a so-called “current status report” entitled “The Corona Pandemic in the Light of International Law (Part 1): The legal framework for actions for damages against the People’s Republic of China” (WD 2 - 3000 - 037/20, 5 May 2020). The SRS are part of the administration of the Federal Parliament which support MPs’ political work in parliament and the constituencies by supplying specialist information, analyses and expert opinions. Reports are usually prepared at the request of individual MPs or parliamentary groups. The work of the SRS is guided by strict party-political neutrality, objectivity and scientific working methods. Reports are the responsibility of the SRS; individual authors are not identified. As part of the parliamentary administration, the SRS are independent of the executive. Their findings do not necessarily reflect the views of the Federal Government – on the contrary, in the area of foreign affairs, international law, economic cooperation, and defence the assessment of the SRS often diverges from that of the Federal Government, which is more constrained by foreign policy considerations in its public statements.
2. After Germany’s major tabloid newspaper, Bild, published a fictitious bill to China of €160bn million for “coronavirus damages” on 15 April 2020, interest in Germany in the legal aspects of potential actions against China for damages caused by the COVID-19 pandemic grew. At the request of two members of the Green party, the SRS addressed the questions of legal liability for economic losses caused by the COVID-19 pandemic and the options for suing China for compensation. Although the SRS’ 20-page report comes with the proviso that it is only a first introduction to the topic “Pandemic and International Law”, and that, because of the complexity of the topic, it cannot comprehensively and conclusively deal with all the legal questions involved (Report, 5), the report gives a good overview of the relevant legal questions which is worth summarising in some detail.
3. The report starts by putting the present COVID-19 pandemic in perspective and observes that the swine flu (H1N1) pandemic in 2009 had already shown that coordination between States was, in parts, inadequate because some States had asserted “viral sovereignty”. The global pandemic crisis management was ultimately based on good faith, as the reporting and notification obligations - and the corresponding monitoring measures and recommendations by the World Health Organization (WHO) - could not be enforced (Report, 5).
4. Setting out the legal framework for actions for damages, the report is divided into three main parts: the procedural question of jurisdiction; the substantive law question of whether and, if so, to what extent China violated international law obligations; and the forensic questions of proof and causation.
Questions of procedure
5. The SRC identified two different ways to take legal action against China. Private individuals and companies could bring actions before national (domestic or Chinese) courts. States could potentially bring cases against China before international dispute settlement bodies such as the International Court of Justice (ICJ), human rights courts (inter-State cases), or international arbitral tribunals (Permanent Court of Arbitration). The parties to the dispute would have to be identified for each action: actions could be brought by individuals, companies or States against a foreign State, its government, State leadership or the communist State party; against a State-owned enterprise, research laboratory or against individual officials in charge (e.g. provincial governors). In each case, it would have to be determined whether the court in question had jurisdiction (Report, 6).
6. The Report relates various actions brought in the U.S. courts by individuals and federal states against the Chinese Government, the Chinese Communist Party, various Chinese Ministries, the Regional Government of Hubei Province, the City Council of Wuhan, the Wuhan Institute of Virology and individual Chinese officials. The SRS noted that U.S. law professors considered the chances of success of such actions as very low. If the United States were to bring claims against China, it would have to do so in international fora. There was no civil jurisdiction of U.S. courts for such actions. While traditionally in U.S. procedural law there existed a very broad understanding of extraterritorial jurisdiction, any action against a foreign State brought by individuals or companies before domestic courts faced the problem of State immunity (Report, 6-7).
7. The immunity of States, which follows from the sovereign equality of States (Article 2(1) UN Charter), is one of the fundamental principles of international law. According to this doctrine, no State can sit in judgment over another State (“par in parem non habet iudicium or iuridictionem”). States are therefore prohibited from having their courts review the legality of the sovereign acts of foreign States (so-called “acta iure imperii”). The SRS observed that practically the entire “pandemic crisis management” of the Chinese Government (quarantine measures, travel restrictions, containment measures, notification of the WHO) would fall under acta jure imperii. In this connection, the Report notes that many U.S. lawyers consider it highly likely that actions brought by private individuals and companies in U.S. courts will ultimately fail because of the principle of State immunity (Report, 8).
8. The SRS also addressed the question of whether the United States could bring a case against China before the ICJ. It explains that the Court’s jurisdiction is based on the consent of the parties and notes that China – like the United States – has not made a general declaration under Article 36(2) of the ICJ Statute accepting the Court’s jurisdiction. It was also difficult to imagine that China would consent ad hoc to have the responsibilities in the COVID-19 pandemic determined by the ICJ, especially, as “the past has shown that China is not even prepared to accept decisions by international dispute resolution bodies” (Report, 9).
9. The SRS pointed out that the International Health Regulations (IHR) – the legally binding secondary law of the WHO – does not establish ICJ jurisdiction against the explicit will of the parties. The possible violation of the reporting and notification obligations of WHO member States under Articles 6 and 7 IHR was the subject of much discussion. However, the wording of the provisions showed that these obligations existed only towards the WHO, which, as an international organisation, had no standing before the ICJ. Instead of a dispute settlement clause providing for ICJ jurisdiction, the IHR provided in Article 56 only for an internal settlement mechanism for disputes between two States Parties concerning the interpretation or application of these Regulations. The express agreement of the Parties concerned was a precondition for the settlement of any dispute. It seemed that since the adoption of the IHR, this dispute settlement mechanism had never been invoked (Report, 9-10).
10. The SRS observed that in the discussion about ICJ jurisdiction for actions for damages as a result of the coronavirus, one provision in the WHO Constitution had received little attention. Article 75 WHO Constitution provided:
“Any question or dispute concerning the interpretation or application of this Constitution which is not settled by negotiation or by the Health Assembly shall be referred to the International Court of Justice in conformity with the Statute of the Court, unless the parties concerned agree on another mode of settlement.”
11. The SRS recalled that in the Armed Activities case of 2006 (Democratic Republic of Congo v. Rwanda), the ICJ had held that “Article 75 of the WHO Constitution provides for the Court’s jurisdiction” (ICJ Reports 2006, 6 at 43, para. 99). In principle, the jurisdiction of the ICJ existed independently of a declaration of the parties accepting the Court’s jurisdiction. The acceptance of the ICJ’s jurisdiction in Article 75 WHO Constitution was implicit in the Constitution and had been agreed to by China and the United States when ratifying the WHO Constitution (Report, 10).
12. The SRS highlighted that the jurisdiction of the ICJ under Article 75 WHO Constitution was expressly limited to the interpretation or application of this Constitution. It was thus questionable whether and, if so, to what extent a State could substantively base its claims against another State for compensation for COVID-19 damage on a violation of the WHO Constitution; that is, a set of rules that essentially provided only the institutional and instrumental framework for the functioning of the WHO. The SRS noted that it had been discussed in passing in the blogosphere whether, for example, the provisions in the WHO Constitution on reports submitted by States (Article 63 f. WHO Constitution), in conjunction with the IHR which were enacted on the basis of Article 21 WHO Constitution - established obligations which China could be accused of having violated. The Report states: “At the moment it is still completely open whether such an argument or ‘construction’ is ultimately legally viable. […] In any case, the way to the ICJ is procedurally complicated, politically sensitive and legally anything but clear. […] In the 70-year history of the ICJ, never has a case been brought against China.” (Report, 11).
13. The SRS also pointed out that even if the ICJ rendered a judgment against China, a permanent member of the UN Security Council, it would be difficult to enforce. Considering the possibility of China vetoing any decision of the Council, it seemed practically impossible to seize the Council of the Chinese crisis management of the corona pandemic. Besides, the Security Council had not proven to be particularly strong when fighting pandemics. However, the SRS did not exclude that, depending on future developments, the COVID-19 pandemic could well become a matter for security and defence policy (Report, 11-12).
Substantive law questions
14. The Report states that any claim for compensation against a foreign State needed a basis in so-called “substantive law”. In terms of international law, the law on State responsibility and the corresponding international obligations during a pandemic were of relevance. The Report then sets out the basics of the law on State responsibility and, in particular, the Articles of the International Law Commission (ILC) on Responsibility of States for Internationally Wrongful Acts (ARSIWA). According to these Articles, a claim for compensation required a breach of an international obligation that was attributable to the State (Report, 12-13).
15. The SRS identified several international law obligations that could be breached by States during a pandemic. Such obligations could arise from general principles such as the duty to cooperate under customary international law, which found expression both in international health law and human rights law in form of notification, warning and reporting obligations. These obligations were also discussed under the term, “due diligence”. These obligations had in common that they were owed not only to the injured State but to the international community of States or to all humanity.
16. Information, warning, reporting and consultation obligations (due diligence) could also arise from the WHO’s IHR 2005, which were binding under international law (because they had been ratified by the member States) as well as from the ILC’s 2016 Draft Articles on the Protection of People in the Event of Natural Disasters, which were largely reflective of customary international law (Report, 14).
17. The SRS stated that fundamental and human rights in the relationship between State and citizen were primarily relevant with regard to pandemic measures restricting basic freedoms (quarantine, lock-down, bans on freedom of assembly, religious restrictions, etc.), whereby fundamental rights had to be balanced against the State’s obligation to ensure public health. Nevertheless, international human rights treaties – especially the right to life in Article 6 of the International Covenant on Civil and Political Rights and the right to health in Article 12 of the International Covenant on Economic, Social and Cultural Rights – could also give rise to more extensive obligations concerning (pandemic) prevention and cooperation between States. Depending on the circumstances, even “viral misinformation” by a State could amount to a violation of human rights.
18. International law obligations of “States affected by a pandemic” could further arise from general principles of international law, such as the solidarity principle, the principle of cooperation, or the no-harm principle, which found expression, for example, in the 2001 ILC Draft Articles on Prevention of Transboundary Harm from Hazardous Activities (Report, 15).
19. The SRS finally also briefly addressed the question of whether China’s potential international responsibility could be precluded because of force majeure, distress or necessity but concluded that all three circumstances precluding wrongfulness did not really fit the situation of the COVID-19 pandemic and therefore did not preclude China’s potential responsibility (Report, 16).
20. The Report states that in court, the crucial question is whether the facts which give rise to a violation of international law obligations can be established and proved. The SCS noted that there was plenty of speculation about the origin of the coronavirus, including speculation about safety issues at the Wuhan Institute of Virology. It also referred to allegations of a cover-up, the destruction of virus samples and the close supervision of scientific publications on the virus by China. In addition, it listed various allegations of obscuring the extent of the crisis, withholding or suppressing confidential reports (e.g. on the risk of a person-to-person infection), partly through massive pressure on doctors and journalists, the belated notification of the WHO, and deficiencies in the “corona crisis management” by China (belated closure of the animal market in Wuhan, lack of travel warnings, etc.). However, the SRS also noted that the WHO did not agree with these allegations (Report, 16-17).
21. The SRS observed that any action for damages would depend on the causation between the breach of an international obligation and the alleged damage. It pointed out that in the so-called Bosnian Genocide Case (ICJ Reports 2007, 43 at 234, para. 462), the ICJ determined the question of causation on the basis of the “sufficiently direct and certain causal nexus” test, according to which the injured State must demonstrate that a harmful event (e.g. the corona pandemic) could have been contained or averted “with a sufficient degree of certainty” if the respondent State had complied with its obligations under international law. During a pandemic, the problem was that one-dimensional (quasi “undisturbed”) chains of causation between a breach of obligation and the damage incurred could hardly be identified and proved. Between the outbreak of the virus in China and the specific occurrence of damage (e.g. a business bankruptcy) in the United States, there were numerous actions and events that could have had a lasting impact on the occurrence of the damage and therefore had to be taken into account when it came to causation. In the event of an action for damages against China, it would be practically impossible in terms of proof to distinguish between corona damage solely attributable to the respondent State’s negligence and damage caused, triggered or augmented by possible pandemic mismanagement by the claimant State. The Report observes: “Anyone who ends up losing their job due to the pandemic will not first look for the reason for their dismissal on the Wuhan animal market, but will consider other, more obvious causes. If someone dies of (or with) COVID-19, previous illnesses will also have to be disclosed during the autopsy” (Report, 18).
22. On the question of “multi-causality”, the SRS quoted the ILC, which stated: “It is only ‘[i]njury … caused by the internationally wrongful act of a State’ for which full reparation must be made. This phrase is used to make clear that the subject matter of reparation is, globally, the injury resulting from and ascribable to the wrongful act, rather than any and all consequences flowing from an internationally wrongful act” (ILC Yearbook 2001, II/2, 92, para. 9). The SRS concluded that, from a psychological point of view, it was understandable that injured States and individuals were looking for “persons to blame” and to invoke responsibility – possibly also to distract from their own failures. However, one of the lessons of the pandemic included the painful realisation that the question of guilt ultimately led to nothing.
23. The SRS noted that in the past, States had regularly refrained from seeking reparations for damage in connection with the breach of obligations concerning the protection against infectious diseases. Significantly, the IHR did not provide for recourse to the courts for compensation claims, but only a dispute settlement mechanism – and even the latter had not yet been used in practice (Report, 19).
24. The Report ends with the comment that “it remains to be seen what the lawsuits against China that have been brought in the United States with regard to COVID-19 will contribute to State practice in international health law.” (Report, 20).
25. While the report states that it “is not its purpose to examine and assess in detail the chances of success of possible actions against China” (Report, 4), the authors of the report leave no doubt that they give these actions little chance of success. This assessment seems to be shared by the German Federal Government, which, in response to a parliamentary question on its position on compensation claims against the Chinese State for the economic damage caused by the coronavirus pandemic based on international law or other grounds, stated: “From the Federal Government’s point of view, there is no question of any financial compensation claims against China” (GPIL, Notable statements on international law during April 2020).
26. In general, the report cannot be faulted. However, there are several issues that need to be drawn out more clearly. The SRS identified the principle of State immunity as the major bar to any action against China by individuals or companies before domestic courts. Irrespective of whether one adheres to the absolute theory of State immunity, like China, or follows the restrictive theory, like most other States, there is general agreement that States are immune from the jurisdiction of the courts of other States with regard to their sovereign acts (acta jure imperii). The SRS rightly observed that practically the entire “pandemic crisis management” of the Chinese Government (quarantine measures, travel restrictions, containment measures, notification of the WHO) would fall under acta jure imperii and thus be immune from the jurisdiction of U.S. and other domestic courts.
27. There is, however, one prior question to be addressed: do other States and their courts have jurisdiction to sit in judgment on China’s pandemic crisis measures? While the report notes that in U.S. procedural law, traditionally there exists a very broad understanding of extraterritorial jurisdiction, the SRS did not examine whether this extraterritorial jurisdiction also covers claims for compensation for alleged violations of notification, reporting or cooperation obligations in case of a public health emergency of international concern under the IHR, human rights law or general international law. For example, any claim under the U.S. Alien Tort Statute (28 U. S. C. §1350), which establishes the jurisdiction of the U.S. district courts for “any civil action by an alien for a tort only, committed in violation of the law of nations”, would have to show that these violations belong to “the modest number of international law violations” for which U.S. federal common law provides a cause of action (Sosa v. Alvarez-Machain, 542 U.S. 692 (2004)) and overcome “the presumption against extraterritorial application” of the Alien Tort Statute (Kiobel v. Royal Dutch Petroleum Co., 569 U.S. 108 (2013)). In light of the jurisprudence of the U.S. Supreme Court, these seem to be insurmountable obstacles. More importantly, however, the SRS did not address the legality of the exercise of such civil extraterritorial jurisdiction by U.S. courts under international law. While U.S. courts have asserted extraterritorial civil jurisdiction over human rights violations and other major violations of international law, this does not mean that this assertion is in conformity with international law. As Judges Higgins, Kooijmans and Buergenthal pointed out in their joint sperate opinion in the Arrest Warrant case, while “this unilateral exercise of the function of guardian of international values has been much commented on, it has not attracted the approbation of States generally” (Arrest Warrant of 11 April 2000 (Democratic Republic of the Congo v. Belgium), ICJ Reports 2002, 3 at 77, para. 48). Thus, the question of State immunity does not really arise, as there is no valid extraterritorial civil jurisdiction in the first place.
28. The SRS also raised the question of whether the United States could bring a case against China before the ICJ on the basis of the compromissory clause in Article 75 of the WHO Constitution. The SRS did not examine the question, but simply reported discussions in the blogosphere; stating that at the moment “it is still completely open whether such an argument or ‘construction’ is ultimately legally viable”. This is a rather cautious statement, considering that the jurisdiction of the ICJ under Article 75 WHO Constitution is expressly limited to “disputes concerning the interpretation or application of this Constitution”. China has not been accused of violating the WHO Constitution but of violating the notification, information and reporting obligations in the IHR. The IHR in Article 56 have their own mechanism for settling disputes “concerning the interpretation or application of these Regulations”. This provision is lex specialis for disputes concerning the IHR and blocks any recourse to Article 75 of the WHO Constitution. Basing the ICJ’s jurisdiction for corona-related claims on Article 75 WHO Constitution is thus not a viable argument.
29. The SRS rightly stated that any claim for compensation against a foreign State needed a basis in so-called “substantive law”. As there is no actio popularis in international law, any claim for compensation requires a violation of a substantive international law obligation owed to the claimant. The report does not address the crucial question of which international law obligations China could have owed to the individuals or companies bringing claims before domestic courts. The SRS referred, in rather general terms, to a duty to cooperate under customary international law; information, warning, reporting and consultation obligations under the IHR; and obligations arising from the solidarity principle, the principle of cooperation or the no-harm principle. None of these obligations, however, is owed to individuals or companies. These are inter-State obligations. There is also no general duty to cooperate which would require States to provide other States with timely, accurate and sufficiently detailed public health information. Similarly, no such obligation arises from the solidarity principle, the principle of cooperation or the no-harm principle. Otherwise, the specific provisions on notification and information-sharing in the IHR would not be necessary.
30. The SRS also referred to obligations under international human rights treaties but did not explain why China was obliged to secure, for example, the right to life or the right to health to persons in the United States or other countries. States, as a rule, owe human rights obligations only to persons within their territory or under their jurisdiction. Any claim for compensation by individuals and companies based upon international law thus requires that the obligation be owed to these natural or legal persons (and not to States) and that these obligations also apply extraterritorially. Against this background it is difficult to comprehend how so-called “viral misinformation” by a State could amount to a violation of the human rights of persons in other States.
31. The SRS identified various obligations under the IHR as bases for potential compensation claims by States against China. However, pursuant to Article 48(2)(b) ARSIWA, reparation in the form of compensation is due only to the injured State or the beneficiaries of the obligation breached. The term “beneficiaries” refers to situations where the obligation is not owed to a State or where non-State actors are the ultimate beneficiaries and in that sense holders of the relevant rights (e.g., human rights or individual rights under Article 36 of the Vienna Convention on Consular Relations). Any claimant State must therefore be an injured State in terms of Article 42 ARSIWA. A State qualifies as an injured State if the obligation breached is owed to that State, either individually or as part of a group of States, or to the international community as a whole. The relevant obligations in Articles 6 and 7 IHR, however, are owed to the WHO, not to the States members of the organization either individually or collectively. The IHR are not a multilateral treaty but were adopted as a binding decision of the World Health Assembly. The term “State Party” in the IHR refers to the State Parties of the WHO, not to treaty parties of the IHR. Article 6 IHR expressly states that each State Party “shall notify WHO” and shall “communicate to WHO [...] information”. It is the WHO, not States, that is to “send to all States Parties [...] public health information which it has received [under Article 6] and which is necessary to enable States Parties to respond to a public health risk” (Article 11(1) IHR). Even if the obligations under the IHR were owed to all members of the WHO, an individual member State would only be injured by the breach of the obligation if the breach specifically affected that State or if the breach was of such a character as to change radically the position of all the other States to which the obligation is owed with respect to the further performance of the obligation. As most, if not all, States have been affected by the COVID-19 pandemic, it would be difficult to argue that the United States was “specifically” affected by the alleged belated notification of the coronavirus outbreak on the part of China or that the alleged belated notification radically changed the position of all other WHO member States with respect to the further performance of the notification obligation. Inter-State claims for compensation therefore cannot be based on a violation of the IHR.
32. The SRS made it clear that it was impossible to prove “a sufficiently direct and certain causal nexus” between the allegedly belated or insufficient notification of the WHO by China and any damage occurring in the United States. According to the test developed by the ICJ in the Bosnian Genocide case, such a nexus could be considered established only if the Court were able to conclude from the case as a whole and with a sufficient degree of certainty that the COVID-19 pandemic would in fact have been averted if China had notified the WHO in due time. Any claim for compensation must therefore founder on forensic grounds alone.
33. While not expressly pronouncing on the chances of success of actions against China for damages incurred due to the global coronavirus pandemic, the SRS assembled a long list of legal – procedural, substantive, forensic – and factual obstacles to such actions. Against this background the only conclusion to be drawn from the present report is that such actions must be doomed to failure.
Notes about the author:
Stefan Talmon is Professor of Public Law, Public International Law and European Union Law, and Director at the Institute for Public International Law at the University of Bonn. He is also a Supernumerary Fellow of St. Anne’s College, Oxford, and for the academic year 2020-2021 a Visiting Fellow at All Souls College, Oxford. He practices as a Barrister from Twenty Essex, London, and frequently advises States and corporations on questions of public international law. He has appeared as counsel and expert before the International Court of Justice, the European Court of Human Rights and international arbitral tribunals as well as domestic courts in England, Germany and the United States of America.