The United Nations Compensation Commission was created in 1991 to settle claims arising out of Iraq's invasion of Kuwait during the Gulf War. William Huth provides a thorough examination of the UNCC's approach to the resolution of such claims and explains how this tribunal constitutes an important template for the disposition of future commercial disputes arising out of international conflict.
The United Nations Compensation Commission (UNCC) created by the U.N. Security Council to settle claims arising out of the Gulf War is an important international claims tribunal by any measure.1
Since its establishment in May 1991,1 the UNCC, located in Geneva, Switzerland, has had an excellent track record in terms of organization, efficiency, and the application of sophisticated modern techniques for assessing and adjudicating mass claims of individuals. Reporting to the Security Council, a political arm of the United Nations, and not an arm of the International Court of Justice, the UNCC considers itself primarily a fact-finding body, although it has had to decide significant legal issues when assessing claims pending before it. This nonpolitical undertaking was different from what has been expected previously of the Security Council.3 The UNCC's Governing Council has the same membership as the Security Council, and in part for this reason, the commission has not been totally apolitical.
While the commission has authority to settle claims of individuals, and indeed such claims have first priority,4 this article focuses primarily on corporate business claims. Even though claims of individuals far exceed business claims in number, business claims vastly exceed claims of individuals in both value and complexity.5 Further, virtually all claims of individuals have been decided, and the commission now is directing most of its resources to deciding business and government claims. Business claims have presented the UNCC with several difficult and unique issues which it is currently in the process of working out.
Among the important business claims matters being addressed by the UNCC are its ambitious work plan for finally determining all outstanding claims on its docket by year 2003, resolving long-outstanding legal questions regarding its jurisdiction over claims arising out of contracts with Iraq, the nature and extent of the evaluation and hearing process for business claims including participation of the parties, and dealing with numerous corporate claims that do not meet the commission's threshold filing criteria.
Genesis and Structure of the UNCC
Security Council Resolution 687,' adopted on April 3, 1991, (1) reaffirmed that Iraq is liable under international law for any direct loss, damage, or injury to individuals, governments, and business organizations resulting from Iraq's invasion and occupation of Kuwait starting on Aug. 2, 1990; (2) authorized creation of a fund to pay claims; and (3) directed creation of a commission to administer the fund.
In Resolution 686, adopted on March 2, 1991, as of the termination of active combat in the Gulf War, the Security Council required as a condition to a definite end to the war that Iraq accept its liability under international law "for any loss, damage, or injury arising in regard to third states, and their nationals and corporations, as a result of the invasion and illegal occupation of Kuwait by Iraq."7
Resolution 686 was incorporated by reference in Resolution 687. On April 6, 1991, Iraq offcially notified the U.N. of the acceptance of Resolution 687 by Iraq's National Assembly.8 While Iraq's acceptance put to rest questions relating to the country's legal liability to business, as well as other claimants, the resolution left open troublesome questions regarding the commission's jurisdiction over business claims which have divided the Governing Council.
In his report to the Security Council dated May 2, 1991,9 the secretary-general named the fund for payment of awards the United Nations Compensation Fund (the fund), and the commission the United Nations Compensation Commission (UNCC). …