This Article presents the results of extensive archival research on Lord Asquith’s once famous, and now infamous, 1951 award in Petroleum Development Ltd. v. Sheikh of Abu Dhabi.Footnote 1 The arbitration involved a 1939 oil concession between a British-chartered firm, Petroleum Development Trucial Coast (PDTC) and Sheikh Shakhbut, the Ruler of Abu Dhabi. The concession contained an arbitration clause, and the parties selected Asquith to resolve their dispute. In 1949 PDTC, citing the newly hatched continental shelf doctrine, claimed that the contract gave the company exclusive rights to exploit Abu Dhabi’s continental shelf. PDTC’s claim, if supported, would have expanded the size of its concession dramatically. Shakhbut, eager for the opportunity to obtain additional signing bonuses by awarding the shelf to another company, insisted that the contract did nothing of the kind.
Asquith agreed with Shakhbut, handing Abu Dhabi a major victory. If Asquith had said nothing about why he ruled the way he did, his award would be as forgotten today as Lord Radcliffe’s, in a highly similar 1950 arbitration involving Qatar and PDTC’s sister company.Footnote 2 But Asquith, unlike Radcliffe, was willing to give his reasons, and his reasons as to choice of law are the source of the award’s notoriety:
This is a contract made in Abu Dhabi and wholly to be performed in that country. If any municipal system of law were applicable, it would prima facie be that of Abu Dhabi. But no such law can reasonably be said to exist. The Sheikh administers a purely discretionary justice with the assistance of the Koran; and it would be fanciful to suggest that in this very primitive region there is any settled body of legal principles applicable to the construction of modern commercial instruments. Nor can I see any basis on which the municipal [L]aw of England could apply. On the contrary, Clause 17 of the Agreement … repels the notion that the municipal [L]aw of any country, as such, could be appropriate. The terms of that [C]lause invite, indeed prescribe, the application of principles rooted in the good sense and common practice of the generality of civilised nations—a sort of “modern law of nature.” I do not think that on this point there is any conflict between the parties.
But, albeit English Municipal Law is inapplicable as such, some of its rules are in my view so firmly grounded in reason, as to form part of this broad body of jurisprudence—this “modern law of nature.”Footnote 3
Asquith’s award was, and is, widely interpreted as one of the first serious applications to a foreign concession dispute of what Article 38(1)(c) of the Statute of the International Court of Justice (ICJ) refers to as the “the general principles of law recognized by civilized nations.”Footnote 4 The award was once celebrated as a jurisprudential North Star, guiding the path toward the “delocalization” of concession contracts from domestic legal systems. But today Asquith’s award is reviled, and his insistence that no Abu Dhabi law existed, that the Sheikh’s justice was “purely discretionary,” and that Abu Dhabi was “primitive,” is taken as deeply offensive.
This Article draws on archival material ignored by existing studies to present a new, detailed narrative of the arbitration and its legacy. Serious engagement with the fuller historical record is useful for correcting factual errors that have become embedded in legal discourse. For example, two prominent arbitral treatises claim that Asquith “rejected a choice-of-law agreement selecting the (then uncodified) law of Abu Dhabi in favor of ‘English municipal law.’”Footnote 5 But there was no such choice of law agreement, nor any such rejection. Nor did Shakhbut lose the arbitration, as is sometimes rather inexplicably suggested.Footnote 6 But my more important argument is that leading critical interpretations of the award are less plausible than is commonly assumed. I focus specifically on interpretations that present Asquith as aggressively (or innovatively) applying general principles to, as Antony Anghie puts it, “profoundly negate Third World sovereignty.”Footnote 7 I argue that the award is better understood as resolving a rather ordinary contract dispute in a rather ordinary way, and that general principles had little role to play. The award was hardly revolutionary, and to portray it as such was, and is, highly inventive.
In making the argument I explore the arbitration and the award’s legacy through the lens of legal entrepreneurship, a concept which I develop in more detail further below. Legal entrepreneurs engage in efforts to convince legal authorities, such as judges, arbitrators, and law professors, to proclaim the law as the entrepreneur wishes it to be. My framing is inspired in part by Anne Orford’s recent and provocative discussion of the role of history in international legal practice and scholarship, in which she describes how international lawyers invest in “smoothing” existing precedents into rhetorical forms of their liking, often through a technique of reinterpretation.Footnote 8 One of the fascinating aspects of Asquith’s award is that it has been worn smooth twice, by two generations of international legal entrepreneurs who have invested in the creation and propagation and routinization of radically different visions of the award’s essential meaning and worth. That legacy provides a neat illustration of Hannah Arendt’s observation that “every generation has the right to write its own history” by “rearrang[ing] the facts in accordance with its own perspective,” though we might also remember her insistence that “we don’t admit the right to touch the factual matter itself.”Footnote 9
I first describe Hersch Lauterpacht’s efforts to convince Asquith to provide a reasoned award that would, Lauterpacht hoped, articulate support for Lauterpacht’s instrumentally evolving theory of general principles. Second, and building upon prior work by M. Sornarajah and Andrea Leiter,Footnote 10 I discuss efforts by a network of leading international law scholars in the 1950s and 1960s to smooth the award into rhetorical support for an ambitious theory of general principles and delocalized (or internationalized) concession contracts. Third, and more originally, I identify and evaluate a subsequent smoothing by a small network of scholars writing in the 1990s and 2000s in the traditions of critical legal studies and Third World Approaches to International Law, or TWAIL.Footnote 11 This second generation of scholars has succeeded in implanting a radically different interpretation of Asquith’s award into modern international legal discourse. I offer a provisional explanation of this second generation’s success while suggesting that its main interpretive claims are in tension with the fuller archival record.
The Article draws upon the archives of the British Foreign Office (FO), the British India Office (IOR), British Petroleum (BP), and the Hersch Lauterpacht collection at Cambridge University’s Churchill Archives Center (CAC). Given longstanding interest in the Abu Dhabi arbitration and that the arbitration’s context and proceedings are poorly understood, I err on the side of providing more rather than fewer details. That approach is responsive to the ILC special rapporteur’s recent call for a more thorough examination of “the rationale behind, and the essential functions played by general principles of law when they are applied by international courts and tribunals.”Footnote 12
I. The Concession Negotiations
Abu Dhabi is roughly the size of West Virginia and consists mostly of harsh desert. It was one of seven Persian Gulf sheikhdoms commonly referred to as the “Trucial States.” “Trucial” derives from “truce” and refers to the fact that the sheikhdoms had agreed via various treaties to what amounted to informal protectorates.Footnote 13 The protectorates allowed tribal sheikhs a large degree of autonomy over internal affairs while providing British authorities with control over their external affairs. Until the discovery of oil, British ambitions in the region were relatively minimal, and the British were able to maintain an exceptionally light administrative presence, consisting of a “Political Resident” stationed in Bushire, Iran, and four subsidiary officers spread across the region.
Abu Dhabi’s population at the time was tiny (perhaps just 10,000, compared to over four million today) and almost entirely illiterate.Footnote 14 Much of it was semi-nomadic, roaming on camels from desert to coast and back again according to the seasons.Footnote 15 The sheikhdom was also desperately poor. Abu Dhabi produced little of tradeable value except for pearls hand-gathered from the warm, shallow seas of the Persian Gulf.Footnote 16 But the industry was in decline, as the Japanese had recently mastered the technology of pearl culturing and could supply world demand more cheaply and in volume.Footnote 17 Because Abu Dhabi lacked agricultural self-sufficiency, the pearl crisis was devastating, reducing portions of the population to near-starvation.Footnote 18 It also led to a resurgence in slaving.Footnote 19
Sheikh Shakhbut bin Sultan Al Nahyan (1905–1989) ruled Abu Dhabi from 1928 to 1966. His road to the throne was a dangerous one. Murder was an accepted element of the political process, and three of his immediate successors were quickly killed by close relatives and fellow tribesmen.Footnote 20 Uzi Rabi, a historian, describes Abu Dhabi’s tribe-based political system at the time as “by Western criteria … rudimentary if not anarchic, but not without its own logic,” under which “allegiance and loyalty were offered on a personal basis” and “European concepts of the nation state and of territorial sovereignty were neither applicable nor comprehensible.”Footnote 21
Shakhbut is remembered today as an affable but reactionary conservative who refused to spend his oil revenues on the sorts of development projects that might have pulled his people out of extreme poverty.Footnote 22 He was also an autocrat, though one whose power extended imperfectly into the hinterlands. As Zahlan says, the “shaykhdom’s administrative infrastructure was so rudimentary as almost to be non-existent. The ruler had no civil service; no judges or law courts, except for the [Sharia court]; no army, apart from his personal guards; and no police force. He could rarely, if ever, delegate authority to an appointed person or group of persons without risking his position.”Footnote 23 Disputes between his subjects were resolved informally based on unwritten tribal custom, “common sense,” and compromise,Footnote 24 with Islamic law reserved for “personal status cases.”Footnote 25
The British discovered oil in Persia in 1908, and in 1922 they successfully pressured the trucial sheikhs to sign new treaties promising not to award oil concessions without British approval. Britain’s main foreign policy interests in the Gulf at the time were to establish an air route to India and to prevent a consolidating Saudia Arabia from conquering the coast.Footnote 26 Oil was an afterthought, and the British had insisted on the treaties “not because there was any evidence of oil deposits in the territories … but, after the traumatic experience which British companies had had in securing exploration rights in Turkish Arabia … it was deemed judicious to ensure that if there was any hope of finding oil in the territories … Britain should have the first option.”Footnote 27
When marketable quantities of oil were found in Bahrain in the early 1930s, the trucial sheikhs became increasingly eager to obtain concessions of their own.Footnote 28 The British insisted on their treaty rights of prior approval, and they made it known that approval would be granted only for concessions to British-controlled firms. The choice was a British concession or none, a classic example of historian Frederick Cooper’s concept of the “gatekeeper state.”Footnote 29 The British were especially concerned about preventing Standard Oil of California (SOCAL) from gaining a foothold along the coast. SOCAL held the lucrative Bahrain concession and had won a major concession from Ibn Saud. Letting the Americans into the Trucial Coast would have been a “devastating” second blow to British prestige and control in the region.Footnote 30
The trucial sheikhs saw obvious value in putting multiple suitors into competition, and they were not happy about being denied the opportunity to sell to the highest bidder. Shakhbut proved the most stubborn. He boldly and repeatedly insisted that he, as ruler, could grant a concession to anyone he pleased, and he refused to negotiate for anything less than the same terms that Ibn Saud had received for his much larger concession.Footnote 31
By 1938, Sir Trenchard Fowle, the British political resident, was growing increasingly frustrated. He complained about “a general attitude of obstruction and opposition to His Majesty’s Government, both latent and patent.”Footnote 32 The sheikhs were “adopting an extremely obstructive attitude toward the entirely reasonable terms” that PDTC had offered.Footnote 33 They were “flout[ing] with impunity the authority and wishes” of the British government and treating British naval officers with “discourtesy.”Footnote 34 And Shakhbut was refusing to cooperate in an investigation over potential complicity in the Saudi slave trade.Footnote 35 Fowle’s frustrations were so great that he began to seriously consider ordering the British Navy to seize Shakhbut’s pearling fleet—his only source of income—or to bombard Shakhbut’s fort.Footnote 36 The fact that Fowle was seriously considering literal gunboat diplomacy at such a late date in history is remarkable. On the other hand, Fowle was apparently careful never to communicate the possibility of using force to Shakhbut, and he eventually put his plan on hold out of concern with wrecking PDTC’s chance of obtaining a concession.Footnote 37
Sometime around the end of 1938, Shakhbut’s attitude underwent a substantial change, and he signed a seventeen-article, seventy-five-year concession with Stephen Longrigg, PDTC’s representative, on January 11, 1939, after a short period of negotiation. Longrigg attributed the change to pressure from Shakhbut’s family members, who were eager to receive their shares of signing bonuses, and to Shakhbut’s desire to improve relations with British authorities.Footnote 38 And, in fact, once Shakhbut signed the concession, Fowle’s attitude softened.Footnote 39 He now recognized that Shakhbut’s attitude had recently changed for the better; that the Abu Dhabi slave trade was apparently of only “small proportion;” and that the British now needed Shakhbut’s help protecting PDTC employees in the hinterlands.Footnote 40 Imperialism was something of a collaborative enterprise, and placing massive British investments in the desert would only require more of it.
As a bargaining tactic Longrigg had tried to create the impression that PDTC was in no hurry to sign a concession, and he described making a grand show of preparing to abandon the negotiations just before Shakhbut finally agreed to sign.Footnote 41 But other documents suggest that PDTC was quite anxious to close a deal, as its repeated failure to bring Shakhbut to the negotiating table raised the prospect that some other British-chartered firm might elbow in.Footnote 42 This gave Shakhbut some leverage to get the best financial terms possible. And while he could not avoid the imposition of the Gulf-standard royalty rate of three rupees per barrel, he was able to negotiate substantially higher signing and other bonuses than had other trucial sheikhs. He may also have received unrecorded side payments. These were standard practice at the time, quietly tolerated by British officials as matters “entirely between the Company and the Shaikhs.”Footnote 43
Interestingly, there seems to have been little negotiation over the concession’s non-financial terms. And while the final version did contain an arbitration clause (which I discuss further below), there is no evidence in the diplomatic record that either Shakhbut or the British government took any particular interest in it or in the question of which law might apply. Arbitration and choice of law seem to have lacked imperial salience.
II. Deteriorating Relations
President Harry Truman’s 1945 proclamation on the continental shelf proved a major shock to the network of Gulf concessions. The doctrine, legally and politically contentious at the time,Footnote 44 proved highly attractive to the Gulf states, and in the spring of 1949, the British and Americans came up with a plan for the Gulf rulers to issue that summer their own roughly standardized proclamations.Footnote 45 The lurking question was whether the existing Gulf concessions would extend to this newly acquired territory. For Shakhbut, who had grown increasingly frustrated with PDTC’s failure to strike oil, the obvious answer was “no,” and even before issuing his proclamation he had begun discussions with the Superior Oil Company, an American concern, over a shelf concession.
PDTC’s insistence that its 1939 concession included the shelf failed to weaken Shakhbut’s resolve, and an ominous rumor spread that he was thinking of canceling PDTC’s concession entirely.Footnote 46 Somewhat less ominously, but also quite problematically, Shakhbut now claimed that PDTC’s concession not only did not include the shelf, it also did not include the seabed under Abu Dhabi’s territorial waters.Footnote 47 As Shakhbut put it—and at odds with the plain text of the concession—PDTC was entitled to exploit “land only.”Footnote 48 The argument that PDTC’s existing concession did not include the territorial waters appears to have been cooked up by Shakhbut’s lawyers. The sheikhs of Qatar and Dubai, whom they also represented, made similar claims in their own concession disputes. Lauterpacht, who was advising various oil companies in the Gulf, thought the territorial-waters argument, however flimsy, threatened to “befog the main issue” of rights to the shelf and would potentially give arbitrators an excuse to split the baby: “We shall run the danger that the Umpire, after having found for us on this obvious point, may feel inclined to give the other side ‘something’ on the question of the continental shelf.”Footnote 49 And indeed, the awards in both the Qatar and Abu Dhabi arbitrations would break along just those lines.
Shakhbut recognized that the Company could challenge his interpretation of the concession in arbitration, but he does not appear to have been worried. If the company initiated arbitration, Shakhbut said he would “get ‘lawyers in London’ to expose whatever ‘fraud’ there was in his concession.”Footnote 50 Shakhbut’s confidence in his legal case, at least as to the shelf, was not unwarranted. British and U.S. officials had initially shared the view that the existing concessions would not automatically incorporate the shelf “unless this is expressly provided for in the terms of the concession,” an intriguing suggestion that imperial interests were not always aligned with those of the major oil companies.Footnote 51
However, by the spring of 1949, British officials were becoming rather concerned. The Iraq Petroleum Company (IPC), PDTC’s parent company, had commissioned legal opinions from Lauterpacht on the Gulf concession disputes. Leaked drafts, in which Lauterpacht argued that the concessions were likely to include the shelf, had begun to circulate. The British found Lauterpacht’s analysis serious enough not to “be dismissed as frivolous”Footnote 52 and even “quite persuasive,”Footnote 53 and they forbade the sheikhs from granting new seabed concessions unless the sheikhs themselves were satisfied the new concessions fell outside the areas of existing ones. Seeming to recognize that the sheikhs had little capacity or incentive to make an objective evaluation, the British also insisted that any new grants should, regardless of the sheikhs’ personal evaluations, be expressly conditioned on the outcome of potential arbitrations with existing concession-holders.Footnote 54
If Shakhbut was prepared to fight, so too was PDTC—or more properly, IPC, and the various other oil company “Groups” with which IPC was associated through the Red Line Agreement. The companies saw in the dispute (and the similar disputes with Dubai and Qatar) an important opportunity to invest in precedent. As a memo from the chairman of the Anglo-Iranian Oil Company (AIOC) put it, in reference to the Qatar arbitration, “The principles involved are not confined to Qatar, and it is thought that the ultimate decision may well constitute an important precedent for Oil Concessionaires, not only in the Persian Gulf but through[ou]t the world. For this reason it was decided at an I.P.C. Group meeting to fight the case with all possible strength, and, as one of the Groups, we wish to give all the assistance we can.”Footnote 55
III. Preparing for Arbitration
PDTC notified Shakhbut on May 12, 1949, that it was initiating arbitration, and it reminded him that the arbitration clause required him to nominate his arbitrator within sixty days.Footnote 56 Shakhbut appears to have been unimpressed. He formally declared his jurisdiction over the continental shelf a few weeks later, and he let the sixty-day deadline pass, triggering, in theory, the right of the company to ask the political resident to make a nomination on Shakhbut’s behalf. In response, the company drafted up arbitral terms of reference, which it sent to both Shakhbut and the political resident.Footnote 57 Shakhbut, variously described by IPC’s managing director, John Skliros, as “very angry”Footnote 58 or “disgusted,”Footnote 59 continued to drag his feet into the winter, despite the political resident’s threat to appoint for him an “eminent King’s Council whose fees may be heavy” and for which Shakhbut would be responsible.Footnote 60 Shakhbut responded firmly that the affair was his concern and that the British should let him deal with it as he wished.Footnote 61 Shakhbut’s resistance, by all appearances, was not borne of fear of losing. He insisted that arbitration would only happen on his timeline, and that if or when it happened, he was well-prepared to hire a “barrister” as his arbitrator and to go to London. As Shakhbut succinctly put his case, “there is absolutely no mention or any suggestion of the sea-bed in the [concession] agreement.”Footnote 62 And if “the Company have a claim to make then we shall have ours and we shall place the Company’s concession before the judging body for scrutiny,” presumably for the unspecified “fraud” that he had earlier alleged.Footnote 63
And so, in early December 1950, Shakhbut agreed to concede his shelf to Superior. Officials from the company showed up in Abu Dhabi with a suitcase full of cash to distribute as presents and signing bonuses.Footnote 64 Money in hand and new concession signed, Shakhbut was finally ready.
A. The Selection of Arbitrators
The arbitral clause in the Abu Dhabi concession was of the now virtually extinct sort in which each party was to nominate an arbitrator, and only if the two arbitrators disagreed would the case go to a “referee” for a final decision. In fact, while both PDTC and Shakhbut nominated their own “arbitrators,” it was understood that the two party-appointed arbitrators would act as party representatives and advocates, a decision made by IPC in part to save on costs.Footnote 65 As Skliros, IPC’s general manager, explained at a meeting between IPC and the other Groups, “the practical effect [of the arbitration clause] was that each party’s arbitrator … acted as his sponsor’s advocate in the arguing of the case before the umpire” and that because “the Ruler’s arbitrator would represent the views of the Ruler to the exclusion of all other considerations…it was important that [IPC] should appoint someone who would represent I.P.C.’s views with equal clarity and conviction.”Footnote 66
Shakhbut delegated the selection of his arbitrator to Superior, who selected Norman Roy Fox-Andrews, a distinguished London barrister and, not incidentally, the same arbitrator recently nominated by the sheikhs of Qatar and Dubai in their disputes.Footnote 67 Fox-Andrews was a graduate of Trinity Hall, Cambridge and a Bencher of Lincoln’s Inn. He was described as a “very formidable advocate,” as someone who “[f]rom all traces of the lawyer’s vices of prolixity and pomposity … was completely and incurably free. He could be ruthless; he could not be false. He hated exaggeration and sentimentality.…”Footnote 68 Fox-Andrews was assisted by Professor Humphrey Waldock, a professor of international law at Oxford who later served on the European Court of Human Rights and the ICJ, and solicitors from the London firm of Holmes, Son & Pott.
IPC had initially wanted Manley O. Hudson, the distinguished American jurist, as PDTC’s nominee, but strict controls on the exchange of sterling meant that they were unable to obtain a sufficient supply of dollars to pay his substantial fee.Footnote 69 Their second-best choice was Monckton, their own outside counsel and, not incidentally, their nominee for the Qatar arbitration. Monckton was a graduate of Balliol College and an adviser to King Edward VIII who served in the cabinets of Churchill and Anthony Eden. He was known for his intense work habits and a “gift for lucid exposition and [an] ability to disarm witnesses by sheer courtesy.”Footnote 70 Monckton was assisted by Lauterpacht and solicitors from IPC’s London law firm, Bischoff & Company.
For the position of “referee”—that is, the actual arbitrator—Lauterpacht and IPC’s solicitor, Bischoff, strongly preferred someone with international law experience, preferably “a Judge of the International Court or someone very closely associated with it.”Footnote 71 That preference arose in large part from Lauterpacht’s opinion that the case was mostly about international law rather than contract interpretation, a fatal error in judgment.Footnote 72 But Shakhbut’s lawyers caused trouble by refusing to accept a non-British referee, a refusal that greatly limited the pool of “international lawyers.” Shakhbut insisted that because he “was governed in his foreign relations by the British, and had nothing to do with any other nation, … [he] would not recognise a decision by anyone of other [i.e., non-British] nationality,”Footnote 73 and his lawyers threatened to fall back upon the arbitration clause’s default provision, under which the referee would be selected by the Political Resident.
PDTC’s lawyers were cornered. They reached out to Arnold McNair, who initially expressed interest in the position, but McNair withdrew from consideration, citing scheduling conflicts with hearings in the ICJ Norwegian Fisheries case.Footnote 74 They also approached Lord Samuel Porter, the former president of the International Law Association, but Porter was in poor health and refused.Footnote 75 And so, with an appropriate and available British “international lawyer” nowhere to be found, the parties decided to ask Asquith, who had recently agreed to serve as referee in the Dubai arbitration. Asquith, then in his early sixties and just recently appointed a Law Lord, was the son of British Prime Minister Herbert Henry Asquith. His reputation as a lawyer was mixed, with some viewing his various elevations as unmerited and the product of political connections.Footnote 76 On the other hand, Monckton, IPC’s arbitrator-advocate, had found Asquith’s appointment to the Dubai arbitration “thoroughly good … from all points of view,” an opinion which surely held when Asquith readily agreed to switch to Abu Dhabi.Footnote 77
B. PDTC’s Memorial
Lauterpacht played the primary role in drafting PDTC’s spare twenty-nine-page memorial.Footnote 78 He had developed his theory of the Gulf concession disputes in a series of legal opinions that he had drafted for IPC over the previous few months.Footnote 79 Given that Lauterpacht’s reputation as an international jurist rested in part on his celebrated 1927 book on the general principles of law,Footnote 80 it is unsurprising that his IPC legal opinions suggested general principles as a source of governing law. What is surprising is that across those opinions his articulations of his source-of-law theory were cursory, in some ways inconsistent with his earlier scholarship, almost entirely free of serious empirical evidence supporting the existence of specific general principles, and largely subsidiary to a rather wooden parsing of the concession texts themselves.
Lauterpacht’s PDTC memorial was little different. His choice of law analysis consisted of less than one double-spaced page of a bare-bones argument that neither English nor Abu Dhabi law should apply “as such”: “So far as the Claimants are aware, there is no ascertainable law of Abu Dhabi which could be applied in answering the questions raised in this Arbitration … [and that] the Agreement was made in Abu Dhabi and is to be performed there, are facts tending to exclude English law.”Footnote 81 That observation was followed by three brief sentences, with no accompanying analysis or citations to scholarship, declaring that “the general principles of law recognised by civilised States should be applied in deciding the controversy between the parties. These are the principles referred to in Article 38.… They are the principles of law which are generally accepted by municipal and international lawyers throughout the civilised world.”Footnote 82 Note the substitution of “lawyers” for “nations” in his paraphrase of Article 38, a substitution perhaps intended to inflate the authority of Lauterpacht’s own assertions about the existence of general principles supposedly critical to his case.
Lauterpacht’s arguments on the merits consisted almost entirely of a close reading of the text and purpose of the concession, presented as faithfully recovering the parties’ shared intent. This is unsurprising. Most business-related contract litigation involves disputes over interpreting the contract’s terms,Footnote 83 and parties typically “want the arbitrator to give effect to their intentions as expressed in the contract.”Footnote 84 The only legal rule that Lauterpacht presented as something like a general principle (though without explicitly calling it that) was what he called the “well-established rule for the construction of treaties, that where a Ruler undertakes obligations in respect of his State, these obligations extend to any territory subsequently acquired by the Ruler and made part of his State.”Footnote 85 His evidence that such a rule was indeed “well-established” was slim; it consisted mostly of a citation to his mentor McNair’s 1938 treatise. Moreover, his suggestion that international law itself might serve as a source of general principles was striking given that Lauterpacht’s famous 1927 book had focused exclusively on municipal law as a source of general principles to fill gaps in international law. Here he was proposing something rather opposite. His move was not unprecedented at the time,Footnote 86 but it was, and remains, controversial, even if the ILC has recognized a version of the theory in its current project.Footnote 87
C. Shakhbut’s Memorial
Shakhbut’s fifty-eight-page memorial opened with a brief but remarkably self-denigrating description of Abu Dhabi’s geography, economy, and politics. The description is worth quoting at length:
The whole area is most difficult of access and, judged by Western standards, completely uncivilised. Where dwellings are found they are generally mud or wattle huts. There is almost no fresh water and no sanitation. Roads are non-existent.… Cultivation is virtually non-existent, there being practically no cultivable soil.… There is no manufacturing industry in the ordinary sense of the words.
The people themselves are primitive in the extreme and desperately poor. They have no conception of the standards of life or of the thought or ideas prevailing outside their own inaccessible environment.… Their religion is Islam, applied with all the primitive rigidity to be expected of a backward and isolated people.…
The Sheik … is a sovereign with powers comparable with those of an absolute monarch of the feudal era. He administers law on the basis of the Koran in accordance with his own will and judgment, but there is no other written law. There is no constitution.… There is no parliamentary or other elected body and there are no ministers other than personal advisers. There is no clear line between property used for the benefit of the Sheik’s subjects and his private property. His position resembles rather the head of a tribe than the ruler of a State as understood by civilised peoples. He owns the land within the limits of his boundaries like a mediaeval lord and such interests as other persons may have are dependent on grants from him.Footnote 88
This unflattering description was useful to Shakhbut’s choice-of-law argument.Footnote 89 His lawyers rejected any suggestion that “general principles” understood as Western law might apply because it would be “contrary to reason to apply the standards of lawyers of Western countries or the provisions of codes by which they work” when the “grantor [of the concession] was a man with certain social, political, intellectual and educational attainments of a very limited character.”Footnote 90
And while ideally Abu Dhabi law should apply (“It would surely be wrong to assume that the sovereign should be regarded as intending to abandon the law he knows.”), Shakhbut’s lawyers made no attempt to identify any relevant rules of Abu Dhabi law.Footnote 91 Instead, they highlighted Article 17 of the Concession, which provided that “the Ruler and the Company both declare that they base their work in this Agreement on goodwill and sincerity of belief and on the interpretation of this agreement in a fashion consistent with reason.”Footnote 92 Article 17 served as a sort of choice-of-law clause that meant that “no higher or more technical standard should be applied than that prescribed by elementary principles of fair dealing in simple transactions between persons with such attainments as the sheikh possessed and understandable by such a person.”Footnote 93 This meant that the “question is ‘what did the Sheikh really intend to grant by the document he signed and what did the Company really expect to receive at the time of the grant?’”Footnote 94 The task for Asquith was simply one of deriving “intention and expectation” by drawing inferences from the “language used in the negotiations and in the Concession” understood in the broader context in which it was articulated.Footnote 95 And they warned Asquith not to fall into the mistake of applying by default “English principles of law and construction” because such principles were:
of a highly developed commercial community of advanced civilisation and it does not follow that what may seem a reasonable application of principles of construction to a commercial agreement between two parties familiar with English law and civilisation is equally reasonable where one of the parties belongs to one of the most primitive communities still to be found in the world and to a community in which such law as exists is that of Islam.Footnote 96
The sole appropriate legal criterion in the case was, instead, “reason,” and that meant “reason as between the parties in these circumstances.”Footnote 97 The application of the “technical concepts and methods of interpretation of advanced legal systems to a case where one of the parties has no conception or understanding of them may well be the opposite of reason and contrary to the provisions of Article 17.”Footnote 98 Interestingly, Lauterpacht’s memorial had suggested, albeit much more briefly, a similar argument. Lauterpacht quoted Article 17 to support his argument that to interpret the concession as excluding the seabed of the territorial waters would be to “refus[e] to execute this Agreement in a spirit of good intentions and integrity and … to interpret it in a most unreasonable manner.”Footnote 99
Lauterpacht seemed both somewhat impressed and worried by the strength of Shakhbut’s memorial. In a letter to Monckton urging him to submit a “reply” brief that Lauterpacht had drafted, Lauterpacht felt that he:
ought to state my view quite frankly: … The Sheik has delivered a strong and persuasive Case whereas ours, although to the point, was somewhat concise and formal. It is therefore arguable that, unless we put in a full Reply now, we shall be starting the arbitration with a disadvantage, namely, after the Referee has had time to assimilate the Sheikh’s Case which, unless promptly met with a Reply, is bound to make an impression more lasting than we would like.Footnote 100
But Monckton had fallen seriously ill, and the reply was never submitted.Footnote 101
IV. The Arbitration
IPC’s solicitors worried that the legal “atmosphere” in London was ill-suited to a case raising novel and important issues of international law, an irony given that PDTC had named London (along with Baghdad) as one of two default places of arbitration in the Concession.Footnote 102 And so the arbitral hearing took place instead at 5 rue le Tasse, in Paris, on the Right Bank just across from the Eiffel Tower.
The hearing ran from August 21 to August 28, 1951. It consisted primarily of lengthy oral recitations by Monckton and Fox-Andrews. Lauterpacht and Waldock, who had recently published dueling academic articles on the law of the continental shelf, played supportive but also awkwardly combined roles of advocates and international law experts, delivering speeches of their own.Footnote 103 A stenographer typed up a two-volume transcript.Footnote 104 There were a handful of witnesses, including Shakhbut, flown in from the Gulf, though his brief testimony added little to the proceedings. Asquith appears to have been engaged throughout, intervening with short questions and observations.
A. Monckton’s Opening Speech
Oral arguments commenced on Tuesday, August 21, 1951, with Monckton’s opening speech. Monckton arrived quickly at the choice of law question but barely addressed it: he asserted that he did “not need, until I hear it controverted, to elaborate the proposition that there is no law of Abu Dhabi which conceivably could be applied.”Footnote 105 Asquith intervened with a note of supportive skepticism, surely informed by his reading of Shakhbut’s memorial: “One would not have thought so. We shall hear Mr. Fox-Andrews about this, but one would not have thought there was a settled body of rules or principles which would help in the construction of a commercial document.”Footnote 106 Monckton smartly affirmed Asquith’s instinct. “So far as I am aware, in Mohammedan law as such, there would be wanting any such settled rules and principles” and he suggested that Asquith apply instead “what is enshrined in the Hague Statute and its general principles.”Footnote 107 When Asquith pointed out that the concession made no reference to Article 38 as its choice of law, whereas other concession contracts had included such a reference, Monckton responded by emphasizing that his citation to Article 38 was nothing more than a call for Asquith to “take into account considerations of reason and convenience that are based on general legal experience,” including “certain broad rules and maxims common to the good sense and conscience of civilised mankind.”Footnote 108 That approach, Monckton assured, was little different from Shakhbut’s call for Asquith to interpret the concession “consistent with reason.”Footnote 109 And, consistent with that suggestion, the rest of Monckton’s opening speech—ninety-five pages long in single-spaced transcript—contains barely a hint of anything that looks concretely like a “general principle” of specifically Western law. Indeed, Monckton insisted that all that was needed to interpret the contract was a close reading of the concession text and the record of the negotiations leading up to it, which made it “plain” that Shakhbut, by granting an “exclusive” concession, “was minded to concede … the totality of the area under his rule” whatever size it might ultimately take.Footnote 110 And he urged Asquith not to resort to commonplace maxims like contra proferentem, expressio unius, ejusdem generis, or an un-Latinized English-law maxim that a sovereign’s grant of a concession should be interpreted narrowly rather than broadly. Maxims were a “valuable servant, but a dangerous master,” Monckton warned.Footnote 111
Monckton’s evasion of such maxims is remarkable given his earlier assertion that general principles, as the governing law, included maxims presumably of just that sort. His aversion to contra proferentem was especially awkward given that Lauterpacht had recently published an article arguing that the maxim “may fairly be regarded as a general principal of law.”Footnote 112 But Monckton was in a difficult place, and PDTC’s case was never as strong as Lauterpacht had claimed it to be.
The problem was twofold. First, Monckton’s “plain interpretation” argument rested on the idea that such an interpretation was faithful to the parties’ shared intent. And yet, as Asquith’s active questioning forced Monckton and later Lauterpacht to concede, at the time the concession was signed the idea of drilling the continental shelf “was nowhere near the minds of the parties.”Footnote 113
Second, the text did not support the reading that Monckton sought to impose upon it. Article 2 of the concession, which set out the concession’s geographic scope, defined it, in the Company’s preferred interpretation of the original Arabic, as “the whole territory subject to the rule of the Ruler of Abu Dhabi and its dependencies, and all its islands and territorial waters.”Footnote 114 But as Asquith pointed out to Monckton:
It is really the words which follow [the whole territory] which embarrass you, and the way in which they embarrass you is that there would have been no need to have mentioned the islands and territorial waters if they had been already included, if the whole territory had been already covered. If one mentions one extra thing the presumption is “the territory” means the mainland territory, and all you have added to that is the islands and the territorial waters, which on the other hand means the sea bed below them, and it pointedly omits to add the “sea bed beyond that.”Footnote 115
We can see why Monckton was so eager to avoid maxims. Expressio unius and the like were deadly to his cause.
B. Fox-Andrews’s Opening Speech
Fox-Andrews began his opening speech the following day, and, after a bit of legal throat-clearing he too directly addressed choice of law: “I submit that in this dispute the Law of England has no more direct and immediate application than the law of any other country. Indeed, I submit that the law of no particular country has any particular application, but that one has to be governed by the provisions of Article 17.”Footnote 116 Asquith observed that there did not seem to be “very much under that head between you and Sir Walter, is there?”Footnote 117 To which Fox-Andrews replied, “No my Lord, I think it is only a matter of emphasis really.”Footnote 118 Asquith pushed further: “I do not understand you to say the law of Abu Dhabi applies.”Footnote 119 Fox-Andrews clarified his position: “undoubtedly it would, my Lord, if there [were] any,” and he proceeded to read the portion of his written memorial describing Shakhbut as “like a mediaeval lord” who “administers law on the basis of the Koran in accordance with his own will and judgment.”Footnote 120
Fox-Andrews’s argument on the merits, like Monckton’s, was focused largely on party intent. He was on friendlier terms than Monckton with Latin maxims and was especially eager for Asquith to apply contra proferentem. But for the most part, legal rules in a concrete sense played little role in his argument. The law was the contract read in context through Article 17’s filter of reasonableness. Fox-Andrews’s core argument was thus rather intriguingly like Manley O. Hudson’s. Hudson had prepared a long legal opinion about the case for an American oil company that was shared with IPC’s lawyers.Footnote 121 Hudson thought Abu Dhabi law, rather than English law, clearly governed issues of contract validity or effectiveness, but that Abu Dhabi law was irrelevant given that neither party was challenging the contract’s enforceability nor raising “technical” issues of interpretation that would be peculiar to Abu Dhabi law. As such, Hudson thought, the concession’s “interpretation must be based on the expressed or implied intention of the parties, and not on what is called the ‘proper law of the contract.’”Footnote 122
C. The Professors
Professors Waldock and Lauterpacht spent most of their time serving Asquith a baffling array of cases and arguments on the virtually non-existent international legal rules governing the continental shelf. They invoked the Magna Carta; they cited a U.S. case involving a Florida statute and a fisherman of sponges; a Scottish case about the width of bays and the inter fauces doctrine; a ninety-year-old English case about oyster farming. They made obscure academic distinctions, such as between state proclamations of international law that are declaratory rather than constitutive. Lauterpacht, at least, seems to have been operating under the assumption that Asquith, who had little experience with international law, needed a surplus of detail to understand it.Footnote 123
Their focus on international law (and relative neglect of the issue of contract interpretation) was risky because if the concession did not grant PDTC the right to exploit the shelf’s seabed, then it was not necessary to determine whether international law allowed Shakhbut to alienate that right to the company. But the professors clearly saw the opportunity to make their mark on the development of an excitingly novel, important, and undeveloped area of international law, and they took advantage of their captive audience to expound their views on the subject at length. The amusing high point came when Asquith prompted Waldock to summarize international law regulating sovereignty over so-called “sedentary” fisheries, as applied to “a mysterious substance called chanks,” a sort of sea snail.Footnote 124 Waldock memorably responded: “A fascinating material that is not as mobile as a lobster, but is more mobile than an oyster.”Footnote 125 And, as all good law professors do, he had a case to cite, one that held that chanks, while not sedentary as a matter of reality, were sedentary as a matter of law.
At Asquith’s urgings, both professors also spent a bit of time clarifying their positions on the choice of law applicable to the concession. Their responses to Asquith’s questions reveal how relatively unimportant choice of law was to the resolution of the dispute. Waldock explained his view that choice of law was only relevant to provide principles of contract interpretation (or “construction”) that might be needed to resolve textual ambiguities. And because Abu Dhabi law, as he understood it, had no obvious law on contract interpretation, Asquith should, if needed, look instead to “municipal law, in other words … constitutional law and not into international law.”Footnote 126 Waldock’s aversion to “international law” was a product of Lauterpacht’s argument that the concession contract was analogous to a treaty and that treaty-law rules of interpretation should apply. As Waldock put it (somewhat unartfully), “I am hoping to persuade your Lordship, of this principle upon which my learned friend relied, that this sort of Concession inevitably has to be interpreted as extending to after-acquired territories. I do not think you will find that sort of principle in the field of constitutional law.”Footnote 127
Waldock’s insistence on “constitutional law” may seem odd. Constitutional cases rarely deal with principles of contract interpretation. However, that framing allowed him to place heavy emphasis on a questionably relevant 1865 House of Lords decision involving oyster fisheries and the “public trust” doctrine, under which the sovereign’s freedom to alienate public lands was limited to circumstances in the public interest.Footnote 128 Waldock’s over-ambitious argument, one that Asquith rejected in his award, was that he should recognize and apply the general principle that “the grant of the Sovereign is to be construed restrictively owing to his responsibilities as trustee for his people.”Footnote 129
Lauterpacht, for his part, made clear to Asquith that his choice of law argument was concerned entirely with convincing Asquith that the international law of treaties should apply to the concession, not because the concession was literally a treaty, but because the concession was “exclusive” and thus sufficiently analogous to one, an argument that he had first tried out in his 1949 legal opinions.Footnote 130 (Lauterpacht never explained why exclusivity mattered to the analogy). In support he cited a 1944 article in the British Yearbook by F.A. Mann in which Mann argued that parties to a state contract could legally “de-localize” the contract from municipal law by including a contractual clause adopting “rules of strict public international law” as governing law.Footnote 131 As Lauterpacht explicitly emphasized in response to questioning by Asquith, the point of his turn to international law as a source of general principles was to access the alleged international law presumption that treaties were intended to apply to after-acquired territory. That, Lauterpacht assured Asquith, was the “gist of the argument.”Footnote 132
There was some hidden irony. While Lauterpacht was now insisting on using general principles to identify a rigid interpretive presumption in his client’s favor, he had taken quite a different position in his famous 1927 book. There he argued that treaty interpreters should not resort to rigid interpretive rules derived from municipal law but should instead focus on the “dominant principle which says that effect is to be given to the declared will of the parties.”Footnote 133
Another obvious inconvenience for Lauterpacht was that Shakhbut’s concession did not contain a choice-of-law clause of the sort upon which Mann’s analysis relied. Lauterpacht’s solution, offered in response to Asquith’s probing, was to assert that his treaty-law presumption was “not a technical rule of International Law peculiar to treaties which therefore ought not to and cannot reasonably be applied to a Concession.”Footnote 134 Rather, he insisted, there were “reasons of convenience and commonsense which entitle that rule to be regarded almost as a general principle of law” that should be applied even in the absence of a choice of law clause selecting public international law.Footnote 135 But Lauterpacht also admitted that Asquith’s task was essentially to determine party intent. The international law presumption applicable to treaties provided an appropriate way of doing so when a “private Concession agreement … exibit[ed], in vital respects, the characteristics of a Treaty.”Footnote 136 And here, in something that seems a lawyer’s trick, Lauterpacht invoked burden of proof: it was Shakhbut’s burden, he claimed, to show that there were “difference[s] between a Treaty and a Concession” going to “to the very roots of the matter” if Shakhbut wished to avoid the interpretive presumption.Footnote 137
D. The Translators
Asquith’s award is sometimes criticized for his supposed failure to research “Islamic law.”Footnote 138 The fact that both parties insisted to him that there was no such relevant law undercuts a charge of dereliction of duty. The archives suggest a second qualification. During the concession negotiations, Shakhbut successfully insisted that the Arabic draft should be considered the only legally authoritative version. The problem now was that Arabic at the time lacked a term directly corresponding to the English legal concept of “territorial waters.”Footnote 139 Translation difficulties led the parties, with Asquith’s support, to each appoint a professor of Arabic who would serve as an expert witness. At the hearing Asquith urged the witnesses to do their best to arrive at an agreed translation. By the end of the hearing they submitted a mostly agreed translation, along with very short individual statements.Footnote 140 In making their translations both had consulted, as they put it, “classical Arabic jurisprudence,” the Egyptian Constitution of 1923, the Organic Law of Iraq, and the recent practice of “Arabic lawyers,” a fact that suggests that “Islamic law” was not ignored to the extent sometimes claimed.Footnote 141 Their main disagreement concerned the proper translation of the Arabic word “aradi,” used in Article 2 to define the area of the concession. Did “aradi” have a narrower sense of “land” (as in dry land and perhaps inland waters) or could it be interpreted more broadly to include at least some portion of the seabed? Shakhbut’s translator thought that “aradi” had the narrower sense; PDTC’s translator thought the sense broad enough to include the land beneath the territorial waters. But neither suggested that “aradi” was reasonably interpreted as referring to the seabed of the continental shelf.
V. The Award
Lord Radcliffe, in the Qatar arbitration, had produced an unreasoned award largely in Qatar’s favor. Lauterpacht was determined to avoid that fate in Abu Dhabi, not just on substance but on form. He wanted a reasoned win.Footnote 142 Lauterpacht’s strategy to get what he wanted was false modesty and unctuous flattery. He opened his speech at oral argument with the former before quickly shifting to the latter. His “primary task [was] to explain, under the guidance and leadership of Sir Walter, the Claimant’s case in so far as it bears on a field with which I have tried to make myself familiar.”Footnote 143 But he also considered it his “duty” to make sure that Asquith understood the opportunity at hand.Footnote 144 Asquith’s award would “sure[ly] … be an Award of considerable importance from the point of view of International Law.”Footnote 145 Asquith was “called upon to decide matters … of acknowledged novelty” that involved “vital questions of International Law like the problem of the freedom of the seas, and that which is even more important, the enduring problem of the application of International Law to new conditions.”Footnote 146 Lauterpacht seemed to share the opinion of a correspondent that Asquith, as “an undoubtedly able man with an academic bent,” would “be attracted by the opportunity of charting a new field of law.”Footnote 147 The arbitration was, Lauterpacht assured, “an event, if possible, transcending in importance, the important issue with which we are presented.” And it was in Lauterpacht’s “personal capacity … as [e]ditor of the International Law Reports” that Lauterpacht was “looking forward to the opportunity of incorporating in the 1951 volume … a decision of your Lordship’s which will prove of great usefulness.”Footnote 148 Asquith took the bait, delivering his award—a reasoned one of twenty-five double-spaced pages—on October 19, 1951.
After providing a bit of geographical background, setting out the various questions that the parties had tasked him with answering, and reviewing the relevant clauses of the concession, Asquith addressed the “‘Proper Law’ applicable in construing [the] contract[.]”Footnote 149 And he provided his now infamous articulation of the source of that law. There is no evidence that Asquith had a particularly deep or original notion of the concept of general principles, though, as Francis Jalet has suggested, his reference to a “modern law of nature” strongly suggests he had a natural law concept in mind.Footnote 150 Natural law is typically said to be primarily knowable via the exercise of reason, and if Jalet is correct it seems misguided to criticize Asquith for not employing a more robust comparative methodology to identify his general principles, as some have done.Footnote 151 English law was not a sample from which Asquith inappropriately drew an inference of a population average but an inspiration for his exercise of reason.Footnote 152
The general principles that Asquith invoked were few and basic. The first principle was the “paramount importance [of] the actual language of the written instrument,” a principle that he located in English law but which he also insisted was “no mere idiosyncrasy of our system, but a principle of ecumenical validity” the departure from which would invite “chaos.” Textualism has historically been the predominant approach to contract interpretation,Footnote 153 and Asquith’s embrace of it was hardly radical. Textualism is reflected in the Ottoman Civil Code, for example,Footnote 154 and even Shakhbut seems to have been a textualist: recall that his response to PDTC’s claim to the shelf was that “there is absolutely no mention or any suggestion of the sea-bed in the [concession] agreement.”Footnote 155 And, of course, textualism has long been recognized as a method of treaty interpretation.Footnote 156 There are different flavors of textualism, ranging from rigid literalism to what Kenneth Vandevelde calls “quasi-textualism,”Footnote 157 but the idea stripped to its essence—that the words of a negotiated and formalized contract are an important part of the interpretive exercise—seems difficult to dismiss as chauvinistically Western. Moreover, the parties clearly intended for Asquith to prioritize the text of the concession as the best way of recovering their shared intent. They jointly insisted as much throughout the hearing, just as they jointly insisted on the application of law based upon some minimal concept of general principles understood through the lenses of reason and common sense. Parties typically do not expect arbitrators to depart from common positions taken in contract-based private litigation, and, at least according to modern norms, Asquith could only ignore the parties’ consensus as to interpretive method and choice of law by jeopardizing his own authority.Footnote 158
Asquith’s second general principle, which he offered as “mere common sense” was the English-law maxim expressio unius. Asquith’s reference to “common sense” offers the intriguing possibility that he was not really applying general principles at all, but rather something else—perhaps “common sense” in the Aristotelian sense of “prudence.”Footnote 159 That view fits with Etienne Mureinik’s observation that expressio unius “is said merely to be a rule of common sense: it is a convenient label for a particular pattern of reasoning, which owes its validity not to the authority of the maxim, but to its own intrinsic cogency,”Footnote 160 or with the observation of an experienced Swedish arbitrator that maxims and canons of construction (of the sort that Asquith applied):
are based on rules of semantics, logic and common sense [and] they are broadly similar in most legal systems, although they may be stated in slightly different terms. These general canons of interpretation do not serve as strict rules, but function as principles or rules of thumb, which rarely, if ever, direct the arbitrator to arrive at any particular result.Footnote 161
In either case—that in which Asquith was applying a natural-law concept of general principles, or a methodology of common sense—it seems questionable to criticize him for applying “English law.”Footnote 162 Asquith himself insisted that he was not applying English law “as such,” and he explicitly rejected, both in the award and in the hearing, the application of “rigid English rules” of evidence which would have forbidden him from considering evidence extrinsic to the text, such as the negotiation history and pre- and post-formation communications.Footnote 163 He also rejected the English rule that ambiguous grants by the Crown are to be interpreted against the grantee. That rule “owe[d] its origin to incidents of our own feudal polity and royal prerogative that are now ancient history; and its survival, to considerations which, though quite different, seem to have equally little relevance to conditions in a protected State of a primitive order on the Persian Gulf.”Footnote 164 Moreover, his award cited but a single 1889 English case, Colquhoun v. Brooks, a fact remarkable given the numerous English cases with which the parties deluged him at the hearing. Colquhoun is, facially, an odd case to cite. It concerned the interpretation of the British Income Tax Acts and their applicability to income earned abroad. But Monckton had cited the case to Asquith during the hearing for language suggesting that expressio unius was a dangerous maxim. Asquith cited the case in his award not to establish it as governing law, or even to suggest that it expressed a general principle, but to signal that he recognized the danger.
Asquith’s interpretation was straightforward. Article 3 of the contract granted to PDTC the exclusive right to exploit oil in an “area” defined in Article 2, and Article 2—in the translation from the Arabic agreed by the parties in the course of the hearing—defined the area as “the whole of the lands which belong to the rule of the Ruler of Abu Dhabi … and all the islands and sea waters which belong to that area.”Footnote 165 As Asquith had suggested in the hearing, he placed great textual emphasis on the first “and,” which suggested that “the whole of the lands” referred to the mainland (including inland waters) while the clause following “and” included other geographical areas (“islands” and “sea waters”) that “belong[ed]” to Abu Dhabi apart from the mainland. The question that naturally followed was how to interpret “sea waters” “belonging” to Abu Dhabi, and for what followed Asquith made a key interpretive assumption: he would interpret the contract “in the year 1939 and banishing from [his] mind the subsequent emergence of the doctrine of the ‘Shelf.’”Footnote 166
In the hearing, Shakhbut’s lawyers had not seriously contested the idea that at least some portion of the “sea waters” along Abu Dhabi’s coast “belonged” to Abu Dhabi. The dispute instead was whether “sea waters” meant “territorial waters” or something greater. PDTC’s lawyers had presented evidence that PDTC’s original draft concession, in English, had explicitly referred to “territorial waters,” which PDTC subjectively understood to mean the international definition of waters within three miles of the coast. Longrigg, PDTC’s negotiator in 1939 and PDTC’s witness at the hearing, testified that Shakhbut was “absolutely fogged” by the phrase “territorial waters,” that he had never heard it before, that he was insulted by the idea that his sovereignty over the sea was so limited, and that he had insisted that he controlled waters extending up to fifty miles into the Gulf. PDTC claimed in the hearing that it had reacted to Shakhbut’s insistence by agreeing to a term in Arabic translation that was best interpreted as meaning “sea waters” well beyond the territorial sea.Footnote 167 (Unfortunately for this argument, Fox-Andrews skillfully presented extrinsic evidence showing that PDTC had always understood the concession to cover the territorial waters within the three-mile limit).
When Asquith rejected in his award the interpretive relevance of Shakhbut’s subjective lack of knowledge of the international law definition of “territorial waters,” he was thus rejecting an argument in the oil company’s favor and not, as Leiter implies, rejecting “the intention of the parties” against Shakhbut’s interest.Footnote 168 Asquith’s invocation of the international law definition was useful to Shakhbut’s case, as it provided support for an interpretation of “sea waters” as equivalent to “territorial waters” as an objective reasonable person, aware of international law in 1939, would have assumed. Indeed, Shakhbut’s lawyers did not seriously contest the idea that “territorial waters” was an appropriate interpretation of “sea waters.” Rather, their argument was that the concession’s reference to “sea waters” was only intended to allow passage over the sea, not exploitation of the underlying seabed. Asquith’s resolution of that aspect of the claim was purely textual and difficult to criticize. Recall that Article 3 gave the company the right “to search for discover [and] drill for … mineral oils … within the area.”Footnote 169 The “sea waters” were part of the “area,” including the seabed and subsoil because, because, as Asquith noted in his award, “oil is not won from salt water.”Footnote 170
Asquith supported his finding that “sea waters” could not be interpreted to include the shelf with an appeal to expressio unius, which suggested that by granting PDTC rights within a delimited area the parties implicitly intended to deny the company rights outside of the delimitation. But Asquith was not a literalist, and his textualist reading was supported by context too. As Asquith put it in the award:
[one] should certainly in 1939 have read the expression “the sea waters which belong to that area” only as including, but as limited to, the territorial belt and its subsoil. At that time neither contracting party had ever heard of the doctrine of the Continental Shelf, which as a legal doctrine did not then exist. No thought of it entered their heads. None such entered that of the most sophisticated jurisconsult, let alone the “understanding” perhaps strong, but “simple and unschooled” of Trucial Sheikhs.Footnote 171
While Asquith’s reasoning seems to slip into subjectivism, his reference to the “most sophisticated jurisconsult” suggests an objectivist approach as well, perhaps applied in cumulation.Footnote 172
IPC had now suffered two major losses, in Qatar and Abu Dhabi, and the Sheikh of Dubai was understandably eager for his own arbitration to finally begin. IPC’s solicitors, Bischoff and Sons, were ready to throw in the towel: “Asquith’s decision … would probably be followed by any Umpire.… In these circumstances it would appear to be a waste of time and money to fight the Dubai case.”Footnote 173 Lauterpacht, ever optimistic, begged to differ. While an English judge would be “very unlikely” to depart from Asquith’s award, if IPC could appoint an international judge, like his mentor Lord McNair, there was a “fair chance of success.”Footnote 174
International lawyers quickly affirmed that Asquith had said something important, so much so that they invited him to propose a toast at that year’s Grotius Society Dinner.Footnote 175 The topic of his short speech was the Abu Dhabi arbitration. Good lawyers know their audiences, and after brief remarks about the continental shelf (but none about general principles) and a light-hearted joke about a “mysterious entity called [a] ‘chank,’” Asquith smartly confirmed that “International law was never so important as to-day.”Footnote 176 And he raised his glass to the Society and to “International Law” herself.
VI. Legal Entrepreneurship and Legal Meaning
In privately commenting on the Gulf shelf arbitrations generally, IPC’s lawyers noted “some absurdity in the combination … of detailed evidence such as might be heard in a very ordinary contract case, and the high sphere of thought on international law in which the conception of the Continental Shelf floats.”Footnote 177 How did a “very ordinary contract case” become remembered as extraordinary?Footnote 178
The Abu Dhabi arbitration provides an unusually rich opportunity to explore the role of legal entrepreneurship in the creation of international legal meaning. The idea of legal entrepreneurship is a relatively old one. In the 1970s, Richard Danzig, in his historical examination of Hadley v. Baxendale, described how a small group of elite English lawyers transformed an obscure dispute about a broken crank shaft into one of the most famous contract cases in the common law world.Footnote 179 Danzig’s claim was that the case could “usefully be analyzed as a judicial invention in an age of industrial invention.”Footnote 180 In the 1990s, Cass Sunstein popularized the concept of “norm entrepreneurs,” a somewhat broader notion of individuals who try to influence “social attitudes of approval and disapproval, specifying what ought to be done and what ought not to be done.”Footnote 181
Scholars have used the idea of legal entrepreneurship to explain the rise of international commercial and investment arbitration. Yves Dezalay and Bryant Garth’s sociolegal study is the leading example.Footnote 182 They describe the efforts of a network of entrepreneurial international lawyers to invent and market doctrines such as general principles and lex mercatoria to promote a new profession—international arbitration—from which they would be well-positioned to profit. David Schneiderman, building on a similar theoretical framework, uses the idea of “norm entrepreneurs” to explain the rise of international investment arbitration.Footnote 183 Nicolás Perrone, drawing inspiration from a different theoretical source, argues that “norm entrepreneurs for international investment protection did succeed in promoting a legal imagination about foreign investment relations.”Footnote 184 Melissa Durkee has highlighted the role of private actors as “interpretive entrepreneurs” who give new meanings to investment treaties,Footnote 185 and Orford, as noted above, has highlighted the ways in which international lawyers “smooth” international legal history into narratives that support their clients’ causes. We also see an increasing number of empirical examinations of the roles played by specific actors in lobbying for international investment law rules or institutions.Footnote 186
Modern scholars claim that Asquith’s award “adopted the solution tendered by counsel for the claimant, notably Sir Hersch Lauterpacht”Footnote 187 or that there was a “proximity between Lord Asquith’s ‘modern law of nature’… and Lauterpacht’s vision of general principles for a seamless international law.”Footnote 188 But Lauterpacht’s attempt at legal entrepreneurship is more plausibly interpreted as a failure. Lauterpacht pitched to Asquith a new theory of general principles derived from international law, not municipal law, and Asquith refused to swing. The natural-law theory that Asquith seems to have had in mind was a different beast, and his application of it led not to victory for Lauterpacht’s client but a loss, one compounded by Lauterpacht’s insistence on a reasoned award.
Like entrepreneurs in other fields, Lauterpacht showed excessive optimism and unusual perseverance.Footnote 189 This is most evident in his repeated insistence to his oil company clients that their claims against the sheikhs were not just worth pursuing, but something close to a sure thing. Thus, for example, in his July 1949 IPC opinion, he insisted that PDTC’s case was “very strong,” that there would be “little or no difficulty in substantiating” it, and that it should “be pursued with vigour.”Footnote 190 And in an August 1949 opinion for IPC, drafted jointly with Monckton and another IPC lawyer, H.L. Parker, he issued a remarkable “dissenting note” from the majority view that in the Qatar case “the Company is in a considerable difficulty on the wording of this Concession and we cannot rate the chances of success [as] at all high.”Footnote 191 Monckton and Parker had accordingly urged that “[e]very step should … be taken to have the Abu Dhabi arbitration heard first” so that it might serve as a favorable precedent in the weaker Qatar case,Footnote 192 a view shared by AIOC’s chairman, Sir William Fraser.Footnote 193 Lauterpacht, in dissent, insisted that the Qatar case was actually “slightly stronger” because the Qatari concession contained a choice of law clause that expressly selected “general principles” as the governing law, and that the sequence of the arbitrations thus did not matter.Footnote 194 The award by Radcliffe was indeed unfavorable, and Lauterpacht’s eagerness to generate precedent in his theory’s (and his client’s) favor was off to a bad start. As PDTC’s solicitor, Bischoff, put it in a letter to Lauterpacht, “this [Qatar case] unfortunately was not a sound enough set of facts to provide a good test case. On this basis, it is probably just as well in the long run that no reasons are given, and we must regard it as the first volume only of a trilogy.”Footnote 195
Whether Lauterpacht was honestly or instrumentally overconfident is not clear, but it is interesting to note that the business literature on entrepreneurship emphasizes the incentives of entrepreneurs to exaggerate and dissemble to gain necessary support for their ventures.Footnote 196 Legal entrepreneurs seem especially incentivized because law is a profession in which things become legally true simply by convincing people of socially recognized authority to repeat them.Footnote 197 As Dezalay and Garth put it, “There is, therefore, an incentive—not unusual in law or, for that matter, in any marketing exercise—to try to ‘make it by faking it.’”Footnote 198
International law advocates are necessarily placed in the position of presenting aspiration as description,Footnote 199 and it seems reasonable to wonder whether Lauterpacht as scholar held the same views as Lauterpacht as advocate. Lauterpacht himself hinted at the tension. As he wrote to Monckton during the preparations for the Abu Dhabi arbitration, “Temperamentally I tend to identify myself with the side on which I am [on], but I frankly think that we have a good case in law and otherwise.”Footnote 200 And as his principal biographer, his son Elihu, noted in the context of Lauterpacht’s work on the AIOC-Iran dispute, “Whether Lauterpacht, in his academic capacity, fully shared the views which he…developed in his professional capacity is open to some doubt.”Footnote 201 That Lauterpacht as legal entrepreneur was willing to shift his positions when helpful is also suggested by Koskenniemi’s observation that his Viennese and British dissertations take strikingly different positions on the role of analogies in international law.Footnote 202
Why did Lauterpacht fail? Danzig’s article on the invention of Hadley v. Baxendale provides a structure for constructing a plausible explanation. According to Danzig, “For an invention to be widely employed it must not only fill a need and be well fabricated; it must also be marketed.”Footnote 203 Lauterpacht’s invention was poorly fabricated: it relied on legal gimmicks like burden of proof; it sought to impose by questionable analogy a rigid interpretive presumption on a contract which clearly called for the application of a flexible interpretive method. It failed to fill a need. Traditional textualist principles of contract interpretation were adequate to the task at hand of recovering likely party intent. And it was poorly marketed. Lauterpacht, like Monckton, spent most of his time presenting to Asquith ultimately irrelevant arguments about the international law of the Continental Shelf.
We see a different species of legal entrepreneurship in the collective efforts of post-award international lawyers to smooth Asquith’s award into precedential support for ambitious theories of contractual delocalization. Leiter, building on earlier assertions by Sornarajah, has described how a small network of lawyers in the 1950s and 1960s established “a circle of self-referential precedents” that provided an “authoritative legal foundation for the internationalization of concession agreements.”Footnote 204 My aim here is not to re-describe these efforts, though it is certainly true that Asquith’s award was frequently cited by the era’s leading international jurists. Bin Chen’s famous 1953 treatise on general principles approvingly cited Asquith’s award eight times, more than almost any other single case, and he closed his book by prominently quoting Asquith’s recognition of general principles as “rooted in the good sense and common practice of civilized nations.”Footnote 205 Other citations followed: F.A. Mann;Footnote 206 McNair;Footnote 207 Philip Jessup;Footnote 208 L.C. Green;Footnote 209 J.L. Simpson and Hazel Fox;Footnote 210 Wolfgang Friedman;Footnote 211 Theodor Meron;Footnote 212 Berthold Goldman;Footnote 213 and Abolbashar Farmanfarma, an Iranian international lawyer.Footnote 214
This early treatment was consistently positive or benign, to the extent that Green, revisiting the award in 1970, praised Asquith for his sensitivity to the needs of “unsophisticated peoples” against whom “it would be inequitable and smacking of fraud to insist too rigidly on the technical meaning of the language used.”Footnote 215 Scholars from the Third World discussed the award uncritically into the 1980s,Footnote 216 and even Sornarajah initially treated it lightly, condemning instead the way in which international lawyers like Mann and McNair mischaracterized the award in support of their own more extreme theories.Footnote 217
This long stretch of uncritical reaction to Asquith’s award is remarkable given claims in the modern literature that “Lord Asquith’s remarks and his subsequent award … caused grave offence across the Middle East,”Footnote 218 or that the “lack of sensitivity of Lord Asquith … appalled the Gulf. As a result, the cause of international arbitration had suffered,”Footnote 219 or that “in 1951 the award in the Abu Dhabi arbitration sent a shock through the Arab world.”Footnote 220 They are also at odds with Gulf state practice in the award’s immediate aftermath. Kuwait, Dubai, Sharjah, Ajman, Umm al Qaiwan, Ras al Khaimah, and Muscat and Oman all included arbitration clauses in post-Abu Dhabi concession contracts, and many of those concessions also contained choice of law clauses selecting something like general principles—hardly a sign of “grave offense.”Footnote 221
Criticisms of Asquith’s award began appearing in the mid-1980s, but they were rare and generally mild: Asquith went “too far;”Footnote 222 his reasoning was “not always satisfactory;”Footnote 223 the award “lacked … sensitivity;”Footnote 224 Abu Dhabi’s experience was “malencontreuse[].”Footnote 225 The principal exception was a 1991 article by Sornarajah, in which he abandoned his earlier, more cautious tone by accusing Asquith of being a co-conspirator in a scheme to “further the objective of alien control over the resources of Abu Dhabi.”Footnote 226 Asquith presided over a “charade[] … to ensure that a legal cloak for continued control over the oil riches of the region was maintained.”Footnote 227 And Sornarajah would later claim that Asquith’s award “reeks of racial superiority.”Footnote 228 This aggressive reinterpretation appears to have been largely ignored at the time, and other international lawyers continued to present Asquith’s award in a rather positive light.Footnote 229
Things changed in 2000 with the publication of Amr Shalakany’s symposium contribution in the Harvard International Law Journal.Footnote 230 Shalakany was then a lecturer at Cairo University and an SJD candidate at Harvard studying under David Kennedy, one of the most prominent critical international legal theorists of his time. While scholars debate the extent of TWAIL’s debts to critical legal studies,Footnote 231 Shalakany’s presentation of his argument was unabashedly critical: he opened with a quote about “revolution,” references to Derrida and queer theorist Judith Butler, and a discussion of the concept of “spectrality.”Footnote 232 His aim was bold: to counter the growing acceptance of arbitration by the Third World by demonstrating that international arbitration was fundamentally biased against the interests of Third World states through a “disciplinary sensibility” that was “uncongenial to economic development strategies which underscore the role of state regulatory interventions.”Footnote 233 His example of “regulatory interventions” against which arbitration was “biased” was bold as well: Qadaffi’s nationalizations of Western oil companies in the 1970s. The boldness lay in the well-known perversities of Qadaffi’s revolution and the inconstancy and ineffectiveness of his autocratic rule, characteristics readily observable by the early 1970s, even by fellow leftists.Footnote 234
Shalakany built his argument around a presentation of Sornarajah as the chief representative of an “academically sophisticated yet morally outraged Third World” who was engaged in a supposed “debate” with arbitration promoters, represented by Jan Paulsson.Footnote 235 Shalakany’s elevation of Sornarajah’s scholarship provided valuable pedigree to his own argument that arbitration’s neo-colonial historical origins—which Shalakany specifically dated to the Abu Dhabi arbitration—continue to haunt arbitration in the present. Shalakany claimed that Asquith “applied general principles of international contract law against the Persian Gulf emirate” and that Asquith’s “unabashed chauvinism … served to substantiate the notion that a tainted genealogy of arbitration was connected to the rise of a neocolonial legal order.”Footnote 236 And he accused Asquith of:
leav[ing] the reader with a logical puzzle combined with a sense of cultural indignation; Lord Asquith does not elaborate on which scale he determined that a “modern law of nature” was more sophisticated than the “primitive” Islamic law or how it would therefore be capable of governing such intricate “modern commercial instruments.”Footnote 237
Shalakany’s article was an impressively entrepreneurial effort to rebrand Asquith’s award as the start of something contemptable. It was also inventive. Asquith may have applied general principles in some light form, but for, and not against, Shakhbut’s main claim. And there is little evidence that Shakhbut’s award was understood to “substantiate” arbitration’s “tainted” origins until Shalakany himself presented it as doing so.
Shalakany’s article was subsequently promoted by a handful of Kennedy’s students who would go on to become well-known as foundational TWAIL scholars. For example, James Gathii, the special editor for the symposium issue in which Shalakany’s article appeared, has referred to it as “[o]ne of the best articulations” of neo-imperial bias in international arbitration.Footnote 238 More consequentially, Anghie, in his famous book that helped to consolidate the TWAIL movement, described himself as “indebted” to Shalakany’s and Sornarajah’s critical scholarship on arbitration.Footnote 239 And he cited Shalakany to support his claims that Asquith was “attempting to profoundly negate Third World sovereignty” and that the award is viewed today as an “embarrassment” from which “[international] arbitrators … attempt[] to distance themselves.”Footnote 240
International lawyers operating outside of TWAIL have internalized this narrative and regularly articulate similar judgements. Michael Elliot, in an article citing Sornarajah, Shalakany, and Anghie, accuses Asquith of using general principles to fill an allegedly artificial “gap” to apply a “law conducive to transnational corporations’ interests,” a position that ignores the fact that transnational corporations were on both sides of the issue.Footnote 241 Fuad Zarbiyev, in an article that draws upon Sornarajah and Anghie, calls the award “remark[ably] … racist and patronizing.”Footnote 242 Kleinheisterkamp, citing Shalakany, finds the award “troubling,” “[a]lmost absurd,” “odd and poor.”Footnote 243 And international arbitration specialists closer to the practitioner side of things now routinely reject Asquith’s award as “wicked,”Footnote 244 as “scurrilous” and of “sad renown,”Footnote 245 as a “ghost” that needs “banishing,”Footnote 246 as a “bad memory.”Footnote 247 Even Judge Brower, an elite international investment arbitrator and one of the fiercest defenders of the institution,Footnote 248 favorably cites Shalakany and presents Asquith’s award as “redolent, if not an extension, of the old ‘Capitulations’ system.”Footnote 249
Why was Shalakany’s entrepreneurial invention apparently so successful? For scholars intent on building a new field of international legal study around the idea that international law is biased, neo-imperial, racist, or the like, Asquith’s award provided a promising encapsulation of the larger argument, a potentially powerful symbol of what members of the emerging field were against, and what they were for.Footnote 250 If the international legal system could have produced such an award, and celebrated it for decades, was that not compelling evidence that the system itself is rotten? As Kennedy says, citing Anghie, “When international law turns out to be colonialism by another name … we have scandal.”Footnote 251 Asquith’s award was scandal condensed. Reinventing Asquith’s award thus filled a rhetorical need, and the quality of the construction was decent enough—especially if one limited oneself to the face of the award, read through modern eyes.
The award was also well-marketed, and to understand how we can turn to Leiter’s description of the earlier generation of international legal entrepreneurs as a small network of elite lawyers engaged a “circle of self-referential” citation.Footnote 252 A small network of elite or soon-to-be-elite international lawyers, structured around Kennedy and Harvard Law School and sharing certain intellectual commitments, engaged in a pattern of “self-referential” citation that served to ratify and normalize Shalakany’s take on the Abu Dhabi arbitration (and his more general theory of international arbitration’s neo-imperialist biases). That key participants in this network enjoyed or would soon enjoy what Dezalay and Garth describe as “symbolic” (or “social”) capital seems also relevant.Footnote 253 Kennedy possessed tremendous status within critical international legal circles, and as Anghie has noted, he regularly promoted the work of his critically and TWAIL-oriented students.Footnote 254 And Anghie himself would quickly amass his own impressive symbolic capital as one of the founders of a dynamic new field.Footnote 255 It is not surprising that Leiter, who cites both Anghie and Sornarajah in her own recent TWAIL-like critique of Asquith’s award as a vehicle for “maintain[ing] imperial patterns of domination in favour of Western states and their companies,” would thank Kennedy in her preface for giving her access to his “network.”Footnote 256 It is the network’s repetition of its members’ claims about legal meaning that gives those ideas substance and effect in the real world, and readers are more likely to take those repetitions seriously if scholars of renown seem to have endorsed them.Footnote 257
The invention’s success outside of the network might in turn be plausibly explained by the invention’s incorporation of a mechanism to promote what Sunstein calls norm “bandwagoning”Footnote 258: Anghie’s claim that Asquith’s award was an “embarrassment” from which international lawyers “distance themselves.”Footnote 259 This assertion was almost certainly inaccurate at the time. Anghie’s only citations in support are to a page in Shalakany’s article that says nothing of the kind and to a page of an article by Paulsson that contains only the barest of hints of such an idea and which does not even mention Asquith or his award. But once it became widely accepted that the award was an embarrassment no rational international lawyer would refuse the opportunity to publicly signal that he too was on the bandwagon. To refuse risked associating oneself with apologists of colonialism and racism, hardly a promising strategy for winning international legal business or academic appointments in the modern age. It was easier and safer to embrace the criticism while, through a rhetorical strategy of periodization, quarantining the scandal to an earlier “phase” from which international arbitration had moved on.Footnote 260
VII. Conclusion
In a lecture presented at the 2000 annual meeting of the American Society for International Law, Makau Mutua, who also earned his SJD at Harvard, memorably declared that the “regime of international law is illegitimate. It is a predatory system that legitimizes, reproduces and sustains the plunder and subordination of the Third World by the West.”Footnote 261 Shalakany’s entrepreneurial reinvention of Asquith’s award presented the argument in smoothed miniature, and it is no surprise that Mutua calls Asquith’s award “repugnant.”Footnote 262 A closer examination of the historical record provides a basis for understanding why Asquith said the things he said, including the parts from which modern readers might recoil. It helps us reconsider the reasonableness of characterizations of the award as troubling, absurd, odd, poor, wicked, and the like. It provides an opportunity to reassess the plausibility of claims that international arbitration and general principles meaningfully served imperial aims. Indeed, the archives suggest the plausibility of an opposite interpretation—of the arbitration as an example not “of a non-Western sovereign being tamed” but as “a strategic deployment of [Western] international legal tools to advance local sovereign interests against more powerful foreign counterparts.”Footnote 263
My aim has been descriptive and analytical rather than critical in a colloquial sense. I do not claim that international lawyers engaged in legal entrepreneurship of the sorts described here are doing anything wrong. Their entrepreneurial activities, as Orford and others have emphasized, are perfectly normal, a routine aspect of international legal practice and of politically engaged international legal scholarship.Footnote 264 I hope to have shown, however, that engagement with the archives can help us to more accurately judge the accuracy of factual claims, the plausibility of competing interpretations, and the reasonableness of opinions about historical legal events and their legacies. I also do not mean to suggest that this Article’s research substantially undermines claims in the TWAIL literature about the modern-day significance of international law’s colonial origins. My focus has been on a single case, albeit one that has been used by prominent scholars as an encapsulation of their larger arguments, and my claim is largely this: if Asquith’s award is, as Mohtashami calls it, a “ghost,” it is, seen in the light of the historical record, not a particularly scary one.Footnote 265 That Asquith said or did anything of much inherently lasting importance, either for good or for evil, was an invention, the recognition of which allows us, as Leiter has said, to “demystif[y] the aura of the award.”Footnote 266
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