Although the last ten years have seen an expansion in ICSID arbitration relating to international investment contracts involving States or public law entities, 2 many such contracts are still subject to ICC arbitration. On average, 10% of the parties in new cases referred to the ICC International Court of Arbitration each year are public law entities. 3 Most of these cases are traditional arbitrations concerning non-performance of a contract.

The purpose of the present study is to analyse arbitral practice by looking at ICC awards from 1990 to 2000. Fifty-seven unpublished awards have been analysed, of which twelve have been selected for the commentary which follows. Extracts from six awards that appeared to be the most significant are annexed. This study does not claim to be exhaustive, therefore, but is merely intended to illustrate the practice of ICC arbitrators in cases involving State contracts, using extracts from awards made.

Generally speaking, the problems these contracts raise fall into two kinds. Some are basically no different from those that arise in purely commercial contracts between private undertakings; while others are specific to State contracts, in that the presence or involvement of the State, as either contracting party or public power, calls for a special approach. The latter include the capacity of States to submit to arbitration and the validity of arbitration agreements made by States (part I); extending arbitration clauses to non-signatory States (part II); application of the concept of administrative contract (part III), and, finally, the effects of force majeure, changes of circumstance and acts of authority on the performance of contracts (part IV).

I. Capacity of States to submit to arbitration and the validity of arbitration agreements

The question of whether States have capacity to submit to arbitration has been widely debated, both by jurists and in case law. 4 When faced with assertions by State parties that they do not have the capacity to enter into arbitration agreements, ICC arbitrators have no hesitation nowadays in deciding that those States cannot evade the obligations they have freely accepted in an arbitration agreement. 5 ICC arbitrators invoke general principles of law, and that of good faith in particular, and international public policy. Under some legal systems, prior authorization is needed in order for arbitration agreements entered into by States or entities to be deemed valid.

Two awards are of particular interest here. The first was made in case 6474. A State entered into a contract and an agreement for the sale of agricultural equipment with a foreign company. The State, respondent in the arbitration proceedings, argued that the fundamental changes that had occurred at government level following a military [Page94:] coup allowed it to reconsider undertakings the previous government had concluded, and terminated the contract. The claimant sought payment of the price provided in the contract. The arbitration agreement specified Swiss law as the law applicable to the merits.

The State denied the former Republic had the capacity to submit to arbitration, as its status was open to doubt at the time the contract was signed; it also denied that the representatives of the previous government had the authority to enter into commercial transactions capable of binding the State.

The arbitral tribunal's argument was in two parts. First, it stated that, if one of the parties to an arbitration agreement was a State, or an enterprise or organization under State control, that party could not then invoke its own law to deny that the dispute could be referred to arbitration or that it could be a party to the arbitration. The tribunal then turned to the question of whether the representatives of the State were empowered to enter into arbitration agreements, and held that it was up to the State to show proof that the law or regulations did not allow government ministers to conclude international contracts, and arbitration agreements in particular, and that ministers were in breach of those laws or regulations. In accordance with well-established case law, 6 the arbitral tribunal invoked international public policy to override the internal law of the contracting State7 and dismiss the defence that the representatives of the State did not have capacity or power to enter into an arbitration agreement. 8

The award also required that, when negotiating a contract, the State disclose the provisions of its internal law on contract-making by public law entities; it regarded such provisions as non-existent and to be dismissed if they have not been brought to the other party's attention. This solution does not take account of the duty of disclosure incumbent upon commercial operators as informed professionals, and can no doubt be explained by the particular circumstances of the case before the arbitral tribunal.

International public policy also underlay the arbitral tribunal's ruling in case 10157. The contract the parties concluded was intended to provide the respondent State with effective means of inspecting imported goods, with a view to considerably increasing its customs revenues, which were one of its main tax resources. The State had problems paying, and the claimant referred the matter to arbitration. French law was applicable to the merits. In dismissing the State's defence that it was not entitled to submit to arbitration, the arbitral tribunal held first of all that international public policy was in fact in favour of States being involved in international arbitration, and found that the prohibition on entering into arbitration agreements as stated in Article 2060 of the French Civil Code was now obsolete. 9

A State's internal legislation or regulations may require prior authorization to be obtained in order for an arbitration agreement to be valid. In this case, it is not, strictly speaking, a question of the capacity to submit to arbitration but rather the specific power to enter into an arbitration agreement: the respondent State objected to the validity of the arbitration agreement on the grounds that such power was lacking. 10 Arbitral tribunals normally refuse to take account of such internal restrictions. 11[Page95:]

II. Extending arbitration clauses to non-signatory States

Two awards are good illustrations of the problems involved in extending an arbitration clause to a State that was not a signatory to the contract at issue. 12

In the first case, a number of private companies - the claimants in the arbitration - had entered into concession agreements with a State. The State then nationalized 51% of the assets of the private companies and transferred them to a public undertaking, upon which, and on account of sanctions imposed by the United States government, the parties concluded an agreement whereby the private companies suspended performance of their obligations while maintaining their interests. The private companies complained that the State was not respecting this suspension agreement and initiated arbitral proceedings before the ICC's International Court of Arbitration against both the public undertaking and the State.

The State argued that, as it was not party to the suspension agreement and had not signed the arbitration clause it contained, it could not be joined in the arbitration proceedings. It also argued that the public undertaking was an independent entity both legally and financially and had the capacity to conclude the contract at issue. Subsidiarily, it argued that it had immunity from jurisdiction, although the arbitral tribunal rightly dismissed this argument in accordance with case law that has now become well established. 13 The claimants singled out two arguments in favour of extending the arbitration clause to the State: first, the suspension agreement and the other agreements signed formed a single contractual whole, so the State was party to the three contracts; secondly, they argued, there was an 'essential identity' between the State and the public undertaking: while the latter was an independent entity in law, it was in fact merely an organ of the State.

Invoking the Plateau des Pyramides case law of the French Court of Cassation, the arbitral tribunal found that the State had acted merely as a regulatory authority, and not as party to the contract, 14 and that the existence of a single contractual whole did not mean that, in signing two of those contacts and ratifying the third, the State agreed to be bound by the arbitration clause in the contract where it merely acted by virtue of its prerogatives of public power.

In the second case, on the other hand, the arbitral tribunal found that, even if a State was not a signatory to an arbitration clause, it was nonetheless bound by it if that was what the parties intended. Following the collapse of the Soviet Union, one of the newly independent States set up a joint venture with a State undertaking and foreign companies to prospect and exploit hydrocarbons. When the State undertaking failed to meet its obligations, the private companies brought arbitration proceedings against the State undertaking and the State itself.

The arbitral tribunal held, first, that the intentions of the parties had to be deduced not merely from the contractual documents and dealings between the parties, but also, and primarily in fact, from evidence which might show that the parties intended to consider the State as bound by the arbitration clause. It then carried out a detailed examination of the contractual documents and other documents entered in the case, and concluded that the history of the negotiations leading to the establishment of the [Page96:] joint venture showed the extent to which the State was involved in the project and that it intended to guarantee the parties that it would be successful. In making its award, the tribunal found that the assurances the State gave had led the parties to believe it was committed to the joint venture: it was therefore bound by the arbitration clause. This award was in line with arbitration case law which seeks to establish whether a State actually intends to be bound by an arbitration agreement it did not sign. 15

III. The concept of administrative contracts

In legal systems that, like the French, distinguish between private and public law, contracts for public services and those that include clauses overriding ordinary law are called administrative contracts. 16 In the international sphere, however, a State contract is not necessarily an administrative contract. 17 The mere fact that a State is involved in a contract does not in itself make that contract an administrative contract.

The difference between the two kinds of contract is that the State plays a pre-eminent role in an administrative contract, but less so in a State contract. 18 In an international contract, the State usually waives the right to exercise its prerogatives of public power and immunity from jurisdiction. Equality between the parties to the State contract is assured by a number of contractual clauses, including arbitration clauses, which deny the courts of the State that is party to the contract jurisdiction over disputes; applicable law clauses, which enable the contract to be internationalized by making it subject to general principles of international law; and intangibility or stabilization clauses, which protect the contract against changes in domestic legislation. 19

That State contracts are arbitrable is nowadays regarded as a general principle of international arbitration law and scarcely any longer a subject of contention: recent legislation even accepts it expressly. 20

The question of the nature of contracts concluded by States does not appear to arise very often in arbitral practice, to judge by the awards considered here. There are just three awards that mark exceptions to this rule: in the first case, the arbitral tribunal accepted that a contract was administrative, whereas it found it was not in the other two.

In case 8646, the dispute concerned a contract for cleaning up the wreckage left after the war that had taken place in a region of the State that was the respondent in the arbitration. Although a ministry in the respondent State had issued a certificate to the effect that the work had been completed, the State had not paid the final instalment of the price agreed for the work, arguing that administrative law applied. The foreign company, the claimant in the arbitration, disputed this, arguing that as the contracting State had only recently introduced a system of administrative law and the administrative courts were therefore inexperienced, the case law the respondent relied on came from a third State and therefore could not be taken into consideration, adding that the contract was commercial, not administrative.

While recognizing that the theory of administrative contracts was as yet undeveloped in the legal system of the respondent State, the arbitral tribunal considered nonetheless that the administration of justice in administrative matters was established in law in that State, and that the principles of administrative law derived [Page97:] from the Egyptian case law cited in this case had to be recognized as a reliable source of information. 21 It found that the contract at issue was administrative and was governed by the administrative law of the respondent State. 22

This solution was dismissed in the other two awards. In award 8843, a commercial company in a former Soviet bloc state had concluded a contract with a ministry in a Middle Eastern State to gather, sort and sell munitions left behind in the territory of that State after a war. The contract provided for an advance payment to be made before work commenced, and was governed by the law of the State that was the respondent in the arbitration. The advance was not paid, and the foreign company referred the matter to arbitration before the ICC International Court of Arbitration. The ministry argued that the contract was an administrative one, and that the claimant could not therefore rely on exceptio non adimpleti contractus to evade its own obligations.

The arbitral tribunal considered the consequences of an abusive breach should the contract be classified as administrative. 23 It accepted that cleaning up and decontaminating the area was a public service, but found nonetheless that the contract was not administrative, on the grounds that its purpose was in fact merely to sell the munitions already collected, which were no longer a danger to the public. 24 The arbitral tribunal then considered the argument advanced by the respondent State, which argued that the profits made and subsequently divided between the two parties had enabled the costs of the work to be reduced and that the contract hence fulfilled a public service and was therefore administrative. The tribunal dismissed this argument, citing the case law of the Egyptian Council of State. 25 According to this award, a contract cannot be regarded as administrative merely because one of the parties is a public authority incurring costs in the public interest, and it was irrelevant whether the other contracting party knew what the authority intended to do with the proceeds of the contract. 26 The arbitral tribunal also refused to consider some of the clauses of the contract as overriding ordinary law, arguing that they were usual in contracts of a military nature concluded by private parties in international commerce. 27

This logic also underlay the award in case 10157. Here, after conducting a detailed analysis of the administrative law applicable to the merits of the dispute, the arbitrator ruled that the contract at issue was not administrative. 28 The State involved based its arguments on the traditional definition of clauses overriding ordinary law, according to which those clauses give the parties rights or impose obligations on them that are 'by their nature not those that anyone is likely to consent to freely in civil or commercial law'. 29 It argued such clauses applied here, namely the clause whereby the State undertook to enact new regulations to enable the private company involved in the contract to perform its contractual obligations; the monopoly the State had granted that company to control the prices, quality and quantities of goods imported; the clause whereby the State would assist its partner in completing the administrative formalities required to perform the contract; and the tax exemptions the State gave the private party.

According to the tribunal, the contract did not actually impose any contractual obligations on the Government in itself: it merely outlined a legislative and regulatory framework for the future, which did not yet exist at the time the contract was signed and which was not compulsory for the State; and the fact that the Government was [Page98:] offering to assist with the formalities required for the performance of the contract did not derogate at all from ordinary law. The arbitral tribunal therefore found that these provisions did not override ordinary law in any way. 30

As the contract did not contain any such provisions, the question remained as to whether it was an administrative one on the grounds that it was intended to put the management of a public service in the hands of a private contractor. The arbitrator found that, although the contract was concluded for the needs of a public service, it was not intended to hand over the very performance of that service to the private party. The latter did not take the place of the State's customs services but merely assisted them in the performance of their duties. The arbitrator therefore denied that the contract at issue was an administrative one. 31

IV. Force majeure, changing circumstances and acts of authority

Long-term international contracts take place against a political and economic background which is constantly changing. Events may arise that change the financial foundations of a contract to the point where it becomes impossible to perform. Traditionally, force majeure exonerates an obligor prevented from performing its obligations; but it also puts an end to the contract itself. Concerned to make their contracts as effective as possible, parties try to find solutions that preserve both the contract and contractual balance.

With this in mind, contracts are given clauses - often highly sophisticated ones - whereby events of force majeure merely suspend performance of those contracts temporarily. 32 Along the same lines, an unforeseeable event may arise, not rendering performance of the contract impossible but affecting the balance of the contract and making it excessively onerous. This is precisely where hardship clauses come in. 33

From the awards studied, it appears that arbitrators usually apply the principle rebus sic stantibus, that is the theory of fundamental changes in circumstances, restrictively. 34 The parties involved generally agree to consider political changes resulting from war or revolution as fundamental changes in circumstances; but it is the duty of the arbitrators to interpret the terms of a contract in the light of the governing law, and of international usages, where appropriate. Revolution and war may, in the context of State contracts, fundamentally change circumstances, perhaps to the point where a contract has to be terminated or at least modified. Three awards show how ICC arbitrators approach this. [Page99:]

In case 7365, the arbitral tribunal accepted that the political changes following a revolution, the new government's change of stance and the country's new policy on international relations amounted to fundamental changes that allowed the contracts at issue to be terminated. Two contracts were involved here, to supply and maintain military equipment. Following the revolution, the foreign company evacuated its staff and subsequently refused to return to the country to perform the maintenance contract.

The State entity lodged a request for arbitration against the company, claiming damages for the losses caused by its refusal to return. The applicable law was that of the claimant State, but the parties agreed on the application, in addition, of the UNIDROIT Principles of International Commercial Contracts.

The value of this award lies in the detailed analysis the arbitral tribunal made of the doctrine of fundamental changes to circumstances in both international commercial and national law and in the case law of the Iran-United States Claims Tribunal. Taking the principle of pacta sunt servanda as its starting point, the arbitral tribunal held that, in a long-term contract, it was up to the parties to show some ability to foresee changes that were liable to occur over the term of the contract and that a party's failure to do so should not affect the compulsory nature of contracts in international commerce. 35

Citing decisions of the Iran-United States Claims Tribunal, the arbitral tribunal admitted that the changes that were part of the revolution should be taken into account as fundamental changes in circumstances in the context of commercial dealings in a sensitive sector such as the sale of military equipment, but denied that this applied to contracts for normal commercial dealings, such as selling oil products, stating that 'the revolutionary changes per se did not constitute an unforeseeable change of circumstances which could excuse [State X] from non-performance of any commercial contract entered into with [State Y] prior to the beginning of the revolution' ( Questech, 9 Iran-U.S. C.T.R. 107; 16 Iran-U.S. C.T.R. 13; 15 Iran-U.S. C.T.R. 189).

As the case in question concerned the transfer of highly important military equipment between two States, the arbitral tribunal found that the changes in the wake of the revolution allowed the parties to demand unilaterally either that the contracts be terminated or that they be modified, in particular by deferring the scheduled deadlines for a reasonable period of time. 36

In the second case, the parties, two public undertakings, had entered into a turnkey contract of a military nature, to design, build and equip an apprenticeship and training centre for repairing and maintaining armoured vehicles. Then a revolution occurred in the respondent's State, preventing it from performing its contractual obligations for a period of five months; the other contracting party terminated the contract and referred the matter to arbitration.

The respondent invoked the doctrine of fundamental changes in circumstances; the arbitral tribunal had to decide whether the revolution amounted to an 'exceptional risk' within the meaning of the general terms and conditions of the contract.

When analysing the domestic law applicable to the merits, the arbitral tribunal noted that Muslim law included the concept of force majeure under the name of quwa qahira or quwat al-qanun and that according to sharia law performance is merely suspended for as long as the event of force majeure persists. [Page100:]

A defence founded on force majeure raises two questions under Islamic law: firstly, can a State enterprise invoke force majeure, if, in that capacity, it is responsible to some extent for causing it? And, secondly, was the event of force majeure unforeseeable and unavoidable?

In this particular case, having accepted, in accordance with the case law of the Iran-United States Claims Tribunal, that the events in question constituted force majeure, the arbitral tribunal nonetheless dismissed that defence advanced by the respondent, on the grounds that it had failed to observe the basic principles of diligence and disclosure that arose necessarily out of the principle of good faith, in failing to inform the other contracting party that it was unable to perform its obligations in good time. One point to note here is that contracts very often subject the right to invoke force majeure to rigorous formalities which, if not respected, prevent it from applying. These formalities are based on the duty of disclosure incumbent on the parties to a contract.

While war is generally considered as an event of force majeure, ICC arbitrators do not always accept it as such. In case 7177, for example, the arbitral tribunal found that the war in Iraq was not an unforeseeable and unavoidable event liable to have a significant effect on the balance of the contract. If a contract is concluded at a time of political instability, changing circumstances cease to be unforeseeable.

The circumstances of the case were as follows. Following a call for tenders, the respondent signed a contract with the claimant, a private company trading in hydrocarbons, in October 1990 to buy a given volume of oil for the period November 1990 to March 1991. The applicable law was Greek law and the seat of the arbitration was in London. 37 Two weeks after Iraq invaded Kuwait and United Nations armed forces started their land offensive, a second contract was signed to buy diesel, with deliveries scheduled for February-April 1991. Military operations ended on 28 February 1991; the price of petroleum on the international markets then fell. The parties met to renegotiate the price of the petroleum under the contract. They were unable to agree, and the vendor terminated the contract on the grounds of fundamental changes in the market. The purchaser then initiated arbitration proceedings.

The arbitral tribunal's position was that a change in circumstances must be weighed in light of good faith and commercial practices, and only after the contract has been made. Greek law requires the party invoking a change in circumstances to show proof that it was unforeseeable. If the contract was concluded at a time of unrest, when changes in circumstances were likely or imminent, the obligor cannot invoke the option offered by Greek law, that is to say either request that the contract be modified to suit the new circumstances or that it be terminated. In this case, the arbitral tribunal noted that, at the time the contract was signed, the war in Iraq was already under way, and it was therefore possible to foresee changes liable to affect the performance of the contract, and thus dismissed the argument based on force majeure.

It often happens that the performance of a contract is rendered impossible by an act of authority. Act of authority covers impediments arising out of orders or prohibitions issued by the authorities exercising their general extra-contractual powers. To have an exonerating effect, acts of authority must be unforeseeable and unavoidable. 38 The awards studied show that State offshoots cannot invoke intervention by the State in order to exempt themselves from liability. [Page101:]

In one case, for instance, the arbitral tribunal found that being unable to obtain the budget required for the performance of a contract did not amount to a government decision justifying termination of the contract. The contract at issue here was to set up and implement a project in the field of industrial pollution, financed partly by a public enterprise. The contract provided that that public enterprise and the respondent's government had to approve the project first, and required the respondent to open an irrevocable letter of credit in the claimant's favour. The respondent suspended performance of the project as it was unable to obtain the funds required to open the letter of credit.

In the eyes of the arbitral tribunal, the public authority's agreement depended, not on the allocation of funds, but on the inclusion of the project in the country's economic plan. As the contract was included in the plan, this was not a question of refusal by the ministry, but rather of the respondent being unable to assemble the funds required to perform the project. It was therefore liable, and had to be ordered to indemnify the harm caused to the respondent.

In another award, likewise, the arbitral tribunal held that although regulations issued by government bodies were acts of authority, they were not necessarily events of force majeure. A private company had entered into three contracts with a State undertaking to procure, stock and supply butane gas for the year ahead. French law was applicable. The respondent was unable to obtain an import licence, and terminated the contract, claiming that the government's refusal was based on grounds of public interest. 39 The claimant denied this, emphasizing that the respondent was a public enterprise wholly under the control of the State and created by it to exercise regulatory power in a specific sector of the national economy. The ministry's decision could not therefore be taken as being external to the respondent but, on the contrary, as emanating from it directly.

The arbitral tribunal found that for the authorities to refuse to sign the import licence amounted to bad faith, showing that the State wanted to terminate the contract and obtain a better deal elsewhere. This excuse was no reason for breaking the contract and showed that the State entity disregarded its contractual obligations and was in breach of the principle of good faith that should govern the contracts between the parties. 40

Conclusion

The awards examined here thus show both a moderate and a pragmatic approach to the particularities of contracts involving States or public law entities. While differing circumstances of fact may sometimes give rise to different solutions (such as deciding whether an arbitration clause should be extended to a non-signatory State, for example), we find, taken as a whole, that the awards are highly consistent. This confirms, if proof were needed, that there is in this field, as in others, a true body of arbitral case law, the remarkable consistency of which can be explained by 'the methods used by international commercial arbitrators to determine the rules applicable to the disputes referred to them'. 41

1
The author thanks Irina Pongracz, J.D. Missouri University and avocate at the Paris Bar, for her assistance in preparing this article.

2
S. Manciaux, Investissements étrangers et arbitrage entre Etats et ressortissants d'autres Etats (Litec, 2004); E Gaillard, La jurisprudence du CIRDI (Pedone, 2004); I. Fadlallah, Ch. Leben & E. Teynier, 'Investissements internationaux et arbitrage', Gazette du Palais, Les cahiers de l'arbitrage, 2003/2, part 2, p. 3.

3
See E. Silva Romero, 'Quelques brèves observations du point de vue de la Cour internationale d'arbitrage de la Chambre de commerce internationale', paper presented at the colloquium on new developments in transnational arbitration relating to international investment, organized by the Institut des Hautes Etudes Internationales of Paris II University, 3 May 2004; see also, by the same author, 'ICC Arbitration and State Contracts' (2002) 13:1 ICC ICArb. Bull. 34.

4
See Fouchard, Gaillard, Goldman on International Commercial Arbitration, ed. E. Gaillard & J. Savage (Kluwer Law International, 1999) [hereafter Fouchard Gaillard Goldman] at 313ff.

5
E. Silva Romero, supra note 3.

6
See Appendix hereafter, pp. 102-106, §§ 159-161.

7
ibid., §§ 163-164.

8
ibid., § 168.

9
See Appendix hereafter, pp. 113-117, §§ 22-26.

10
See e.g. Article l39 of the Iranian Constitution of 15 November 1979, according to which 'the resolution of disputes concerning State property, or the submission of such disputes to arbitration, shall in each case be subject to approval by the Council of Ministers and must be notified to Parliament. Cases in which one party to the dispute is foreign, as well as important domestic disputes, must also be approved by Parliament.' (cited in Fouchard Gaillard Goldman, supra note 4 at 315). See also N. Sarkis, 'L'autorisation d'arbitrage, obstacle au recours à l'arbitrage des entreprises du secteur public en Syrie' [1998] Rev. arb. 97.

11
See e.g. ICC award 3526 of 1982 (State of Iran v. Société Cementation International Ltd.) upheld by the Court of Justice of the Canton of Geneva in spite of Article 139 of the Iranian Constitution (cited in Fouchard Gaillard Goldman, supra note 4 at 325, note 367). According to the Geneva court, 'to admit the principle of the approval of recourse to arbitration by the government or legislature of a country that is party to the arbitration agreement is to allow that party to unilaterally avoid the obligation that it freely undertook'.

12
See Fouchard Gaillard Goldman, supra note 4 at 290ff.; Ph. Leboulanger, 'Groupes d'Etat(s) et arbitrage' [1989] Rev. arb. 415; B. Oppetit, 'Les Etats et l'arbitrage international : esquisse de systématisation' [1985] Rev. arb. 493.

13
Ph. Leboulanger, 'Immunités et arbitrage' in J. Verhoeven, ed., Le droit international des immunités : contestation ou consolidation ? (LGDJ/Larcier, 2004) 253; E. Gaillard, 'Convention d'arbitrage et immunités de juridiction et d'exécution des Etats et des organisations internationales', [2000] ASA Bulletin 471; see Trib. gr. inst. Paris, National Iranian Oil Company v. State of Israel summary proceedings order of 10 January 1996, [2000] ASA Bulletin 325 (Annot. H. Arfazadeh); [2002] Rev. arb. 427 (Annot. Ph. Fouchard).

14
See Cass. 1re civ., 6 January 1987, (1987) 114 J.D.I. 638 (Annot. B. Goldman); [1987] Rev. arb. 469 (Annot. Ph. Leboulanger).

15
See Ph. Leboulanger, 'Groupe d'État(s) et arbitrage' [1989] Rev. arb. 415.

16
See H. Slim, 'Les contrats d'État et les spécificités des systèmes juridiques dualistes' [2003] Rev. arb. 691.

17
See M. Kamto, 'La notion de contrat d'Etat : une contribution au débat' [2003] Rev. arb. 719.

18
According to some writers, international law does not distinguish between administrative contracts and purely private contracts as such a distinction is contrary to pacta sunt servanda; see J.-F. Lalive, 'Les contrats entre Etats ou entreprises étatiques et personnes privées, développements récents' (1983) 181 Collected Courses of the Hague Academy of International Law 9.

19
Ch. Leben, 'L'évolution de la notion de contrat d'État' [2003] Rev. arb. 629; see also A. Giardina, 'Clauses de stabilisation et clauses d'arbitrage : vers l'assouplissement de leur effet obligatoire' [2003] Rev. arb. 647.

20
e.g. Algeria, Egypt or the OHADA Uniform Arbitration Act.

21
In another ICC award, in case 8843, analysed below, the tribunal considered that the principles established by Egyptian administrative case law were relevant and applied them to the dispute before it; see Appendix hereafter, pp. 110-113.

22
See Appendix hereafter, p. 109, § 10.1.3.

23
See Appendix hereafter, pp. 110-113, § 385.

24
ibid., §§ 399, 400.

25
ibid., § 403.

26
ibid., § 405.

27
ibid., § 406, 407, 408.

28
In this case, the parties had entered into a contract to provide the respondent State with effective means of checking goods entering the country so as to increase customs revenue, considered to be one of the State's main sources of tax revenue. The government of the respondent State had great difficulty paying. Consequently, the claimant, a private company, suspended its contractual activities and filed a request for arbitration with ICC. French law was applicable to the merits.

29
See R. Chapus, Droit administratif général, vol. I (1993) at 444ff., § 604 ff.

30
See Appendix hereafter, pp. 113-117, § 34.

31
ibid., § 35.

32
See Ph. Kahn, 'Force majeure et contrats internationaux de longue durée' (1975) 102 J.D.I 467; Article 7.1.7(2) of the UNIDROIT Principles of International Commercial Contracts state: 'When the impediment is only temporary, the excuse shall have effect for such period as is reasonable having regard to the effect of the impediment on the performance of the contract .'; D.W. Rivkin, 'Lex Mercatoria and Force Majeure' in Transnational Rules in International Commercial Arbitration (ICC Publishing, 1993) 161; P.-H. Antonmattei, Contribution à l'étude de la force majeure (LGDJ, 1992).

33
See B. Oppetit, 'L'adaptation des contrats internationaux aux changements de circonstances : la clause de « hardship »' (1974) 101 J.D.I. 794; D. Philippe, Changement de circonstances et bouleversement de l'économie contractuelle (Bruylant, 1986); idem, '"Pacta sunt servanda" and "Rebus sic stantibus"' in L'apport de la jurisprudence arbitrale (ICC Publishing, 1986) 181; H. Van Houtte, 'Changed Circumstances and Pacta Sunt Servanda' in Transnational Rules in International Commercial Arbitration (ICC Publishing, 1993) 105; M. Fontaine & F. De Ly, Droit des contrats internationaux, 2d ed. (Bruylant, 2003).

34
In the 1971 award in ICC case 1512, the arbitrator held as follows: 'The principle "Rebus sic stantibus" is universally considered as being of strict and narrow interpretation, as a dangerous exception to the principle of sanctity of contracts. Whatever opinion or interpretation lawyers of different countries may have about the 'concept' of changed circumstances as an excuse for non-performance, they will doubtless agree on the necessity to limit the application of the so called 'doctrine rebus sic stantibus' (sometimes referred as 'frustration', 'force majeure', 'Imprévision', and the like) to cases where compelling reasons justify it, having regard not only to the fundamental character of the changes, but also to the particular type of the contract involved, to the requirements of fairness and equity and to all circumstances of the case. . . . Caution is especially called for, moreover, in international transactions where it is generally much less likely that the parties have been unaware of the risk of a remote contingency or unable to formulate it precisely.' S. Jarvin & Y. Derains, Recueil des sentences arbitrales de la CCI 1974-1985 (Kluwer Law and Taxation, 1998) 3 at 4.

35
See Appendix hereafter, pp. 108-109, § 89, 8-10.

36
ibid., § 8.17, 8.18.

37
See Appendix hereafter, p. 107, § 5.2.1.1

38
See P. Kinsch, Le fait du prince étranger (LGDJ, 1994); S. Salama, L'acte de gouvernement : contribution à l'étude de la force majeure dans le contrat international (Bruylant, 2001).

39
The memorandum of understanding relating to deliveries of butane and use of underground storage contained a force majeure clause expressly indicating what qualified as such: 'None of the parties shall be responsible for lack of performance or delay in performance caused by Acts of God, industrial disturbances, war, whether declared or not, social unrest, peril at sea, compulsory or voluntary regulations published or required by any governmental authority, breakdown in machinery or in the Terminal equipment or facilities, interruption of transport or distribution networks, or unavailability of the product at its source, or any other cause of a similar kind or category as those listed above, reasonably beyond its control, here referred to as force majeure' [translated from the original French].

40
'Any government would have practically unlimited power to interfere in contracts for the supply of goods and services if the available inventories, local needs and the situation on international markets could at any moment be invoked as a valid reason for the issuance of import prohibitions.' Final award of February 1992 in ICC case 6375.

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See E. Loquin, 'A la recherche de la jurisprudence arbitrale' in La Cour de cassation, l'Université et le Droit (Litec, 2003), 213.