Rebus Sic Stantium

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Scheffler: Rebus Sic Stantibus

THE POLITICIZATION AND DEATH
OF REBUS SIC STANTIBUS
Since 1968, the countries comprising the Organization of Petroleum Exporting Countries (OPEC), and particularly those bordering the Persian/Arabian Gulf, have been moving toward a markedly different view of their mineral resources. With the recent oil embargo and the concomitant use of petroleum as a "weapon," the transformation is complete; the States involved now consider their natural resources to be a political tool 1 rather than simply an income-producing good. Instrumental in this transformation has been the concept of rebus sic stantibus, and it is the objective of this article to illustrate the use to which the doctrine has been put, and its subsequent demise as an effective legal tool. I.

THE DOCTRINE

Rebus sic stantibus is a doctrine which, in simple terms, holds that an agreement may, when certain conditions are met, be partially or wholly abrogated. The conditions necessary may be detailed in the agreement itself, but more often the agreement is silent not only as to the particular conditions neces~ary, hut also as to recognition of the doctrine itself.

Primarily for this reason, 3 the progression of the principle into recognized law has been laborious. Grotius first marked it as a viable concept in 1620, 4 but it was not until 1929 that it achieved a place in a written compilation of the law. 5 Since 1929 it has moved through two major codifications, 6 the most recent being in 1969. 7

2

I. "Politics" or "political" should be taken to mean "national": thus, "political goals" refer to such inherently national objectives as economic independence and national self-sufficiency, both of which are avowed goals of the Persian/Arabian Gulf countries under consideration here.

2. Literally, "at this point in affairs; in these circumstances." BLACK'S LAW DICTIONARY 14:32 (4th ed . 1951).
:3. Primarily, but not exclusively: in all times and in all circumstances in which rebus sic stantibus has been called upon, the countervailing force of pacta sunt servanda has been applied. This latter doctrine, with its command of logic and centuries of use, has been the primary additional force opposing the translation of rebus sic stantibus from theory into practice . For the definitive discussion on the relative merits of rebus sic stantibus and pacta sunt servanda, see LORD McNAIR, THE LAW OF TREATIES 491 et seq. (1961 ).

4. H. GROTIUS, THE LAW OF WAR AND PEACE, XVI, 25 (1925).
5. Harvard Law School, Research in International Law, III, Law of Treaties, 29 AM . •J. INT'L L. 1096-1126 (Supp. 1935).
6. RESTATEMENT (SECOND) FOREIGN RELATIONS LAW OF THE UNITED STATES § 153 0965) .
7. Vienna Convention on the Law of Treaties, 8 INT'L LEG. MAT. 679-768 (1970).

Published by SURFACE, 1974

1

Syracuse Journal of International Law and Commerce, Vol. 2 [1974], Iss. 1, Art. 5

68

Syr. J. Int'I L. & Com.

[Vol. 2:67

These three codifications and the arguments surrounding them 8 have considered rebus sic stantibus as an element of treaty law, and it is within the law of treaties that the doctrine has achieved most of its growth. Several Western systems of law, however, consider the doctrine to be a part of their contract law, 9 and, as will appear later in this articie, the principle is firmly embedded in the law surrounding the

interpretation of oil concession agreements in the Middle East. There has been considerable judicial reluctance to embrace the theory; w in fact, a recent International Court of Justice opinion implies that the use of the doctrine in international jurisprudence is virtually nonexistent. 11 This reluctance, however, has not extended to the international business community. On the contrary, while the principle seems to have reached a point of stagnation in its original milieu of treaty law, it has flowered abundantly in the rich soil of commercial disputes. In the process, most of the arguments which...
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