KUALA LUMPUR REGIONAL CENTRE FOR ARBITRATION 2015

Transcription

1 A1515-C KUALA LUMPUR REGIONAL CENTRE FOR ARBITRATION 2015 GOVERNMENT OF THE FEDERAL DEMOCRATIC REPUBLIC OF NEPAL V. DR JOHN THOMAS SMITH JR.; THE AUSTRALIAN NATIONAL MUSEUM; AND THE NATIONAL MUSEUM OF MALAYSIA MEMORIAL FOR THE CLAIMANT

2 CONTENTS INDEX OF AUTHORITIES....2 STATEMENT OF JURISDICTION QUESTIONS PRESENTED STATEMENT OF FACTS...8 SUMMARY OF PLEADINGS...11 PLEADINGS..12 A.THE UNESCO CONVENTION SHOULD BE CONSIDERED THE LEGAL AUTHORITY ON ISSUES TO WHICH IT RELATES AND IS SUPERIOR TO ALL NATIONAL LEGISLATION B.THE CLAIMED OBJECT SHOULD BE RETURNED TO NEPAL.13 B.1.The object belongs to the People of Nepal (i.e. the Nepalese government)..15 B.2.The export of the object was illicit...16 B.3.The import of the object was illicit...18 C. THE CLAIMED OBJECT CANNOT BE RETAINED BY THE RESPONDENT..20 C.1. The Respondent can retain the claimed object under Article 4(e) of the UNESCO Convention...20 C.2. No valid gift..21 Choice of law There was no valid gift under the law of Nepal..24 Further or in the alternative there was no valid gift under Australian law.26 The Claimant did not act ethically or in good faith C.3The required consent has not been granted.32 D.THE RESPONDENTS ARE NOT ENTITLED TO COMPENSATION.34 1

3 CONCLUSION/PRAYER FOR RELIEF

4 INDEX OF AUTHORITIES A. Legislation Legislation Pages on which the Legislation appears Ancient Monument Preservation Act 2013 (1956) (Nepal) 14, 15, 16, 29, 30, 34 Nepal Treaty Act 2047 (1990) 13 Protection of Movable Cultural Heritage Act 1986 (Australia) 14, 18, 19, 30 The Tribhuvan University Act The Muluki Ain 25 B. Treaties Treaty Pages on which the Treaty appears Kuala Lumpur Regional Centre for Arbitration i-arbitration 6, 21 Rules United Nations Educational, Scientific and Cultural Organisation Convention Concerning the Protection of the 1, 3, 8, 11, 12, 13, 14, 15, 18, 19, 20, 21, 26, 29, 30, 32, 33, 34 3

5 World Cultural and Natural Heritage 1972 (UNESCO Convention) C. Cases Name of Case and Citation Pages on which the Case appears Autocephalous Greek-Orthodox Church of Cyprus v 22, 23, 24 Goldberg and Feldman Fine Arts Inc [1990] 108 ILR 488 Case concerning the Free Zones of Upper Savoy and the 13 District of Gex (P.C.I.J., Series A/B, No.46; Annual Digest, , Case No.6) 167 Newcrest Mining (WA) Ltd and Another v Commonwealth 13 of Australia and Another [1999] 2 LRC 70, 98. Raiffeisen Zentralbank Osterreich AG v Five Star General 21 Trading LLC [2001] EWCA Civ 68. D. Books and Articles Name of Book/Article Pages on which the Book/Article appears International Law Commission, Draft Articles on 32 Responsibility of States for Internationally Wrongful Acts, 4

6 with Commentaries, Report of the International Law Commission of the Work of its 53 rd session (2001). Nepal Gazette, Vol.18, No.51, Chaitra 25, 2025 (April 7, ) E. Miscellaneous Name of Source Pages on which the Source appears Moot Problem 8, 9 First Round of Clarifications to the Moot Problem 8, 9 Second Round of Clarifications to the Moot Problem 8, 9 Third Round of Clarifications to the Moot Problem 9 International Council of Museums Code of Ethics (ICOM 28, 29, 30, 34 Code of Ethics) 5

7 STATEMENT OF JURISDICTION The parties to this dispute have agreed in writing to submit this dispute to binding arbitration under the auspices of the Kuala Lumpur Regional Centre for Arbitration i-arbitration Rules (KLRCA). This dispute shall therefore be settled by arbitration in accordance with these rules, pursuant to Rule 1(1)(i)(a) of the KLRCA i-arbitration Rules. 6

8 QUESTIONS PRESENTED a) What laws or legal principles establish (a) Nepal s right to demand the return of the statue and/or (b) the National Museum s right to retain it: i) Australian law; ii) iii) Nepalese law; or International law and/or (UN) Conventions. b) If there is a conflict between them, which law and/or Convention should be applied to this dispute. c) To wha extent, if any, would the final outcome of this dispute be affected by the determination as to which law should be applied, as amended from: will the outcome of this legal dispute be governed by which law/convention is applied and, if so, how. d) What is the effect on this dispute of the failure to comply with Nepalese law? 7

9 STATEMENT OF FACTS These proceedings concern a stone statue of Lord Vishnu seated between Goddesses Lakshmi and Garuda. The statue is over 300 years old and worth over $100, The statue was discovered by Nepalese sheep herders in 2010 in Nepal and was initially displayed at the Chhauni Museum. It was later moved to the National University campus in Kathmandu where it was displayed following an oral agreement between the Chhauni Museum and the University that the statue would be returned upon the request of the Museum or if the University was unable to properly display it. 2 Contrary to Nepalese legislation, 3 the statue was never officially registered with the regulating body in Nepal. Nor was the statue entered into an inventory as required by the UNESCO. 4 There were no specific documents dealing with who had responsibility for the statue s safekeeping whilst it was on display at the University, however, it can be assumed that the Dean s responsibilities extended to the care and protection of the statue. 5 In 2014, the Dean gave the statue to Dr Smith as a gift in gratitude 6 for his lectures at the University. Dr Smith accepted the gift and assumed that it was a replica 7 and he received no other gifts or 1 Moot Problem. 2 Second Round of Clarifications to the Moot Problem, Part 2, s.a. 3 S.2 Ancient Monument Preservation Act, 2013 (1956). 4 Art.5(b). 5 First Round of Clarifications to the Moot Problem, Part 2, s.b. 6 First Round of Clarifications to the Moot Problem, Part 2, s.b. 7 See footnote 4 of the Moot Problem. 8

10 compensation for his services. Dr Smith returned to Australia, having informed both Nepalese and Australian customs officials that he had the statue with him. 8 Dr Smith later donated the statue to the Australian Museum, where an expert examined the statue and discovered that it was authentic. 9 Dr Smith received no economic benefit from the statue and chose to donate it rather than sell it as he had done previously. 10 The statue was displayed as part of an exhibit promoting knowledge, understanding and enjoyment of diverse cultures. 11 The Australian Museum signed a loan agreement with the National Museum in Kuala Lumpur (Malaysia) for a 2 year renewable loan of the statue. 12 The loan agreement between the Australian and Malaysian museums did not require any payment, although the Malaysian Museum covered the shipping costs. The statue was received without any official papers and experts at the National Museum (Malaysia) verified that the statue was authentic. A Nepalese tourist observed the statue prominently displayed at the National Museum (Malaysia) and reported it to Nepalese officials upon her return to Nepal. The Government of Nepal have requested the return of the statue, although they do not assert that it was stolen. 13 The Government of Nepal also seeks compensation for damage done to the statue, however, this issue is not a concern in the present proceedings and shall be dealt with 8 Third Round of Clarifications to the Moot Problem, Part E, s.4. 9 First Round of Clarifications to the Moot Problem, Part 2, s.b. 10 Third Round of Clarifications to the Moot Problem, Part E, s Moot Problem, s Second Round of Clarifications to the Moot Problem, Part 2, s.b. 13 First Round of Clarifications to the Moot Problem, Part 2, s.b. 9

11 following the allocation of ownership of the statue. All parties have agreed to submit the dispute to binding arbitration. 10

12 SUMMARY OF PLEADINGS A. The instant dispute involves a request for the return of cultural property. As the requested object has been trafficked through multiple legal jurisdictions, the starting point in resolving these issues should be international law. The international Treaty covering the issues of cultural property is the UNESCO Convention, which all parties have ratified. It is, therefore, the Claimant s position that the above Convention and any national legislation which domesticates the Convention, should be the authority in resolving this dispute. B. It is the Claimant s position that the claimed object forms part of the cultural heritage of the Claimant country. Such an item is afforded import/export/transfer of ownership protection through Art.3 of the Convention. Therefore, the protection afforded under national legislation which domesticates the Convention ought to be considered in order to establish whether the item is liable to be returned. B.1. For the issue of the export from Nepal, the Nepalese legislation ought to be used. For the issue of the import into Australia, the respective Australian legislation on imports is relevant. B.2. It is the position of the Claimant that under the above legislation, the claimed object should be returned to the Claimant. C. Further or in the alternative, it is the position of the Claimant that the Respondent has no right to retain the claimed object. Whilst Art.4(e) UNESCO affords protection to recipients of valid gifts, provided that the relevant consent by national authorities of the origin state 11

13 has been given, it is the Claimant s position that (a) the item has not been validly gifted and (b) the prescribed consent was not provided by the Claimant. C.1. The issue of gift-giving is not covered in the Convention and as such, the issue of choice of law arises. C.1.1. It is the position of the Claimant that Nepalese law is the applicable law given the material connection with the claimed object. Under Nepalese law, the object was not validly gifted. C.1.2. Furthermore or in the alternative, if it is to be found that Nepalese law is not applicable and that Australian law should be applied instead, it is the position of the Claimant that the claimed object could not be passed by way of a valid gift either. The requisite elements in establishing a valid gift under common law have not been met. C.2. Further or in the alternative, it is the position of the Claimant that no consent was granted by the competent authorities of the Claimant country as required under UNESCO, therefore the item cannot be retained by the Respondents by operation of the Art 4(e). 12

14 PLEADINGS A. The UNESCO Convention should be considered the legal authority on issues to which it relates and is superior to all national legislation. It is accepted within the law of the Federal Democratic Republic of Nepal 14 and the Commonwealth of Australia, 15 and it has been recognised within international case law as early as the time of the International Court of Justice s predecessor, 16 that national legislation does not have jurisdiction over national borders and that international law should govern matters of international nature. It is, therefore, the Claimant s position that the starting point for the resolution of this dispute between the Government of Nepal and the Respondents should be the Convention on the Means of Prohibiting and Preventing the Illicit Import, Export and Transfer of Ownership of Cultural Property 1970 (hereinafter the UNESCO Convention or the Convention ) since it governs matters of international cultural property trafficking and since it has been ratified by all three countries (Nepal, Australia and Malaysia) involved in this case. The protection afforded by the Convention is effective to the countries involved in this dispute through the national legislation 14 S.9 Nepal Treaty Act, 2047 (1990). 15 Newcrest Mining (WA) Ltd and Another v Commonwealth of Australia and Another [1999] 2 LRC 70, Case concerning the Free Zones of Upper Savoy and the District of Gex (P.C.I.J., Series A/B, No. 46; Annual Digest, , Case No. 6)

15 domesticating the Convention in the respective involved countries. It is therefore necessary to follow the provisions of the national legislation of the countries involved in the trafficking of this item to establish that the object must be returned to the Claimant country. The national legislation relevant to this dispute is the Ancient Monument Preservation Act 1956 (as amended in 2013) (hereinafter AMP Act ) for the Federal Democratic Republic of Nepal, and the Protection of Movable Cultural Heritage Act 1986 for the Commonwealth of Australia. It is the Claimant s position that since the claimed object is simply on loan to an institution located in the Federation of Malaysia, Malaysian national legislation, at least on issues arising from the UNESCO Convention, is irrelevant. B. The claimed item should be returned to Nepal. The object that is being claimed is a stone statue of Lord Vishnu, dated at least three hundred years old and its market value is well over $100,000 ( the object ). The object is therefore recognised by all nations (signatories of the UNESCO Convention) party to this arbitration as cultural property as it fulfils the definition found in the UNESCO Convention. 17 It is also an undisputed fact that this object was found in land that forms part of the Federal Democratic Republic of Nepal. It is therefore recognised by all nations party to this arbitration (Australia, Nepal and Malaysia), through their ratification of the UNESCO Convention, that the object forms part of the cultural heritage of Nepal Art.1(b), (c) and (e) UNESCO Convention. 18 Art.4(b) UNESCO Convention. 14

16 The import, export or transfer of ownership of the object is therefore controlled, subject to the national legislation of Australia and Nepal domesticating the UNESCO Convention. 19 It is the Claimant s position that according to the national legislation domesticating the UNESCO Convention the object should be returned since: B.1. B.2. B.3. the object belongs to the People of Nepal (i.e. the Nepalese government); the export of the object was illicit and the import of the object was illicit B.1. The object belongs to the people of Nepal According to Section 17A(1) of the AMP Act except the one under private ownership, all archaeological objects found anywhere shall be under the custody of the Department of Archaeology. It is an undisputed fact that the claimed object was found by herders in land belonging to the national territory of Nepal and that the object was subsequently handed over to government officials. The object is therefore, pursuant to Section 17A(1) of the aforementioned Act, not privately owned, but belonging to the Government of Nepal. 19 Art.3 UNESCO Convention. 15

17 B.2. The exportation of the object was illicit According to Section 13 of the AMP Act 1956 (2013) an historical, archaeological or artistic object as prescribed by Government of Nepal by a Notification published in the Nepal Gazette shall not be exported from Nepal or transferred from one place to another even within Nepal. If it is to be transferred to any place, prior approval of Government of Nepal shall be taken. It is understood by the above provision that the export of an (inter alia) archaeological object that falls under the Government prescription in the Nepal Gazette is illicit if no approval is acquired by the Government of Nepal. The issues that must be addressed under this Section are therefore: (A) whether the object falls under the definition of an archeological object under the Act; (B) whether the object falls under the prescription of the Government in the Nepal Gazette; and (C) whether approval by the Government has been taken to legalise the exportation. (A) The definition of an archeological object is given under Section 2(b) of the same Act and it consists of (inter alia) any movable or immovable objects, which depict the history of any country, and objects as prescribed by Government of Nepal by a Notification in the Nepal Gazette from time to time. 20 The object therefore falls under the category. 20 Emphasis added. 16

18 (B) The prescription of objects protected from export under the Nepal Gazette includes handwritten Vamshawalis giving historical accounts of any country, manuscripts, gold-plate inscriptions, birch-leaf inscriptions, palm-leaf inscriptions, documents, coins, houses where historical events had occurred or which were occupied by historical personalities and objects used by such [historical] personalities which are at least 100 years old. 21 The object therefore falls under the prescription thereof. 22 (C) It is an undisputed fact that approval by the Government was neither taken nor sought by the First Respondent (Dr. Smith) for the exportation of the object. It is admitted by the First Respondent, within his affidavit, that he was aware of the export prohibition, but he believed that it did not apply to the contested object. It follows from all the above that the exportation of the object by the First Respondent was effected contrary to the export prohibition provided under the laws of Nepal. 21 Emphasis added. 22 Nepal Gazette, Vol. 18, No. 51, Chaitra 25, 2025 (April 7, 1969). 17

19 B.3. The import of the object was illicit The UNESCO Convention calls for the recognition by States Parties to the Convention of the indefeasible right of each State Party to [the] Convention to classify and declare certain cultural property as inalienable which should therefore ipso facto not be exported, and to facilitate the recovery of such property by the State concerned in cases where it has been exported 23 and declares the export, import and transfer of ownership of such property contrary to national export regulations as illicit. 24 The Parliament of Australia has undergone great, meticulous efforts to domesticate the rights and obligations conferred by the Convention. Their work is commendable. The Protection of Movable Cultural Heritage Act 1986 (hereinafter PoMCH Act 1986) affords the extensive protection enshrined in the aforementioned provisions of the Convention. More specifically and in relation to the instant dispute, Section 14(1) of the above Act calls for the forfeiture of an unlawfully imported object. It is the position of the Claimant that the claimed object has been unlawfully imported in Australia, according to the aforementioned Section and that the object is therefore liable to forfeiture. Section 14 of the PoMCH Act 1986 reads as follows: (1) Where: (a) a protected object of a foreign country has been exported from that country; 23 UNESCO Article 13(d). 24 ibid. Article 3. 18

20 (b) the export was prohibited by a law of that country relating to cultural property; and (c) the object is imported; the object is liable to forfeiture. The requirement under Section 14(1)(b) of the Act has been established above and will be considered as fulfilled. The requirement under Section(1)(c), namely that the object was imported in Australia, is factually supported and not contested by any of the Parties to this Arbitration; as such the requirement under Section(1)(c) will also be considered to be fulfilled. The first requirement under Section 14 is the one that remains to be refined and established for the object to be liable to forfeiture. Section 14(1)(a) requires for a protected object of a foreign country to be exported from that country to establish an unlawful import. It is an uncontested fact that the object has been exported from Nepal. The only issue that remains to be established is whether the object falls under the definition of the protected object of a foreign country under the PoMCH Act. The definition of the above is to be found under Section 3 of the same Act. The Act defined a protected object of a foreign country as an object forming part of the movable cultural heritage of a foreign country. The cultural heritage of a country is recognised by the States of all the Parties to this Arbitration as the objects that fall under the categories of Article 4 of the UNESCO Convention. These categories include objects found within the national territory of a country. 25 The claimed object has uncontestably been (as mentioned above) found within the 25 Article 4 (b) of the UNESCO Convention. 19

21 national territory of Nepal and therefore forms part of Nepal's cultural heritage. The last requirement under Section 14 of the Act is therefore established. The import of the claimed object is therefore deemed unlawful under Australian legislation and is liable to forfeiture. For the reasons given above, following the obligations set by the UNESCO Convention and the provisions of the national legislation of the two countries, the object is liable to forfeiture and must be returned. C. The claimed item cannot be retained by the Respondent C.1. The Respondent cannot retain the claimed object under article 4(e) of UNESCO 1970 It is the position of the Claimant that the claimed object cannot be retained by the Respondent on the basis that it constitutes part of the cultural heritage of Australia by way of operation of Article 4(e) of the UNESCO Convention. The aforementioned article provides that if an object has been gifted with the consent of the competent authorities of the country of origin, then that object shall form part of the cultural heritage of the recipient country. The Claimant maintains to that regard that (i) the object has not been validly gifted to the Respondent and/or 20

22 (ii) that the object was not gifted with the consent of the competent authorities of the Federal Democratic Republic of Nepal. C.1.1.No valid gift The issue relating to donation or gifting of an object entails a requirement of choice of law. Since the UNESCO Convention does not prescribe any specific rules to be applied in order to establish title/possession and since the Convention is also silent on the issue of choice of law, the arbitration needs to be persuaded as to which law must be applied on the issue of gift-giving. C Choice of law The issue of choice of law is always essential, and frequently determinative in cases of international nature. The issue is also a very difficult one to be resolved. Regarding the present dispute, it seems that there needs to be a choice as to whether to apply the law of the place where the object originates from (i.e. Nepalese law) or the law of the place where the object was transacted (i.e. Australian law). There is no clear nor definite formula as to making a choice of law. 26 The parties to this arbitration did not agree to any applicable law and the choice as to which law is to be applied lies to the full discretion of the Arbitral tribunal. 27 That is to say that the choice of law is not bound by any relevant existing principles of either the seat of the Arbitration (Kuala Lumpur) or any of the legal traditions of the countries involved in the Arbitration. Therefore, it is the position of the Claimant that general principles as to the issue of choice of law are best to be 26 This fact has been recognised even in common law jurisdictions see Raiffeisen Zentralbank Osterreich AG v Five Star General Trading LLC [2001] EWCA Civ 68 at [29]. 27 KLRCA i-arbitration rules, Article 35(1). 21

23 extracted from cases whose sub judice issues are similar to the present dispute (i.e. cases involving trafficking of cultural property). The claimant chooses to extract general principles as to the issue of choice of law from the relatively recent case of Autocephalous Greek-Orthodox Church of Cyprus v Goldberg and Feldman Fine Arts Inc. 28 The case was adjudicated in the Court of Appeal in the United States State of Indiana and it concerned some mosaics which were originally affixed in a church located within the territory of the Republic of Cyprus, which were later looted. The mosaics were trafficked through a number of European countries to finally end up in the hands of Peg Goldberg, an American art dealer. The case had to deal with multiple issues, amongst them was the issue of choice of law. The court, being established under the law of the land which has a tradition of precedent, was influenced by the relevant precedent and statute law when deciding the applicable law. More specifically, the court applied a rule which would determine whether the lex loci delicti commissi (the law where the tort was committed) should be applied. As it has been stated above, since this tribunal is not bound by any law or precedent, the legal merits of the case are of no help in defining a test to determine a choice of law. Although the text of the relatively similar case 29 serves the purpose of extracting general principles which may be of guidance as to the question of choice of law. 28 [1990] 108 ILR The sole difference with the instant dispute is that no looting of an object is being alleged. 22

24 The court in Autocephalous inquired which law had a materially closer connection to the case sub judice by examining the particular facts of the case. Although the facts are largely different to the ones in the present dispute, 30 the following factors have been taken into account and can be said to be relevant for the present dispute: (AA) the number of actors involved in the case according to their nationality/location; (BB) the duration of the cultural object s stay in each country; (CC) whether the object went through a country s customs; (DD) whether the object entered a country s stream of commerce; (EE) the nationality of the actors that effected the transfer of the cultural object; (FF) the nationality of the current possessors/owners of the objects and (GG) the current location of the object. 31 The above seven considerations must therefore by applied to the facts of the present dispute. Considering the movement and exchange of hands of the object from the date of its discovery to the present date the above considerations indicate the following: (AA) the Nepalese actors involved in the case clearly outweigh the number of actors of any other nationality involved in the case. Taking into account the herders that found the object, the government officials that retrieved it, the Chhauni museum s representative(s) that subsequently received it and the Tribhuvan University Dean on the one end and Dr Smith, the Australian Museum representative(s) and the Malaysian Museum representative(s) on the other end the above finding is unquestionable. (BB) The object s stay in Nepal lasted for four years (between the year of discovery and the year when Dr Smith left Nepal with the object ) whereas the object s stay in Australia lasted four months (March-July 2014) and the 30 In Autocephalous the possessor of the cultural object engaged in multiple contractual relations. 31 These amongst other considerations which are not relevant to the present dispute were discussed at pp of the case. 23

25 object s stay in Malaysia lasted (up until the day of this tribunal) sixteen months. Therefore the duration of the object s stay calls for Nepalese law to be used. The answer to consideration (CC), that is whether the object went through a country s customs, is to be answered to the affirmative for all countries involved in the dispute therefore it provides no benefit for any law to be applied. The answer to consideration (DD), namely whether the object entered the country s stream of commerce is to be answered in the negative for all countries involved in the dispute therefore it provides no benefit for any law to be applied. It is the Claimant s opinion that consideration (EE) is to be answered in the same way consideration (AA) has been answered, it therefore renders an additional benefit for Nepalese law to be applied. (FF) The nationality of the current possessors of the object is Malaysian and the nationality of the current owners of the object (since the object is on loan) is Australian. Consideration (FF) confers a benefit for Australian/Malaysian law to be applied. (GG) the current location of the object is in Malaysia, this fact confers a benefit for Malaysian law to be applied. Following the considerations that formed part of the decision as to the choice of law in the case of Autocephalous it seems clear and unequivocal that the law to be applied in the present dispute is the law of Nepal, since the law of Nepal has a materially closer connection to the events of this dispute. C There was no valid gift under the law of Nepal (i) Having established that the law of Nepal is to be applied on the issue of giftgiving/title in this dispute, the issue that must be addressed is whether the person who gave the object to the First Respondent, that is Tribhuvan University s Dean, was capable of gifting the object to the First Respondent. The relevant Nepalese law on issues related to gift-giving is to 24

26 be found under the Nepalese General Code. 32 Under Chapter 19 of the Nepalese General Code it is specified that: Number 1. A person may provide a property in which the person has right to another person, as a donation or gift A person shall not donate or gift any property, other than a property which he or she can deal with at his or her own will, without obtaining a deed of consent executed or witnessed by the coparceners and those who have right in such a property. The above provision of the Nepalese General Code clearly establishes that property may only be gifted when the donor of that property has absolute control and possession over the object. The provision s principle could be broadly equated with the Common law rule of Nemo dat quod non habet. Under the aforementioned rule and the provision of the General Code, no person is capable of giving property which he does not have. It is an unquestioned fact of the instant dispute that the claimed object was given to the University Dean (who subsequently gifted the object to the First Respondent) by a representative of the Chhauni Museum in Kathmandu. It is also an undisputed fact of the instant dispute that the oral agreement between the Chhauni Museum and the University Dean was that the object would be returned if for any reason the Museum requested for the object to be returned. The above facts clearly establish that the University Dean could not deal with the property at his own will. Indeed, it can be seen within the agreement between the two institutions that any subsequent treatment of the object would be dependent on the Chhauni Museum s rights over the object. 32 The Muluki Ain. 25

27 It is therefore established from the above facts that, following the provisions of the General Code, the University Dean was unable to gift the object to the First Respondent and that the object cannot constitute cultural heritage of any other nation, under the definition given within Article 4(e) of the UNESCO Convention other than the country of Nepal. C Further or in the alternative there was no valid gift under Australian law If the Arbitration Tribunal is not persuaded by the Claimant s arguments as to the issue of choice of law and if the Arbitration Tribunal is satisfied that Australian law is to be followed on the issue of gift-giving, it is the Claimant s position that the Claimed object has not been validly gifted under the law of Australia either. Australian Common law recognises the nemo dat rule (as discussed above) in the same way that the law of Nepal does. Under the rule, a person cannot give better title to another than the one he already possesses. In Australia, the rule has been recognised to be subject to a number of exceptions. The relevant exception for the instant dispute is encompassed under the principle of estoppel by representation. The aforementioned principle can be used (in Australia) as a form of defence in the process of validating evidence and can also be the cause of action of a case. 33 Under the principle of estoppel by representation, when property is handed over by a 33 Waltons Stores (Interstate) Ltd v Maher [1988] HCA 7. 26

28 donor and the donor of that property makes a representation that he had and could pass the title that he has in fact passed, he is precluded from going back on his representation. The requisite elements to be proven for the principle of estoppel by representation to be established are as follows: there must be a representation made by A; that representation must have been relied on by B; the conduct of A induced B to rely on the representation in such way that it would be reasonable for B to have relied upon it; A knew B would or intended for B to rely on the representation; B acted to his detriment; and A failed to act to avoid the detriment. 34 The above test applied to the instant dispute, where A is the Tribhuvan University Dean (as represented by the Claimant) and B is the Respondent, cannot be satisfied. It is an uncontested fact of the instant case that the University Dean has made a representation that he was capable of gifting the claimed object and that the First Respondent relied on that representation when he received the object. It can also be accepted that the Dean would know that the First Respondent would rely on his representation since he was aware that the item would have been received as a gift and treated as such by the Dean. It can also be accepted that the Respondents have acted to their detriment since they have incurred some benefits from the acquisition of the claimed object. Such benefits could be revenues incurred by the exhibition of the object and publicity. It can also be accepted that the Dean has not acted in any way as to avoid that detriment. It seems, however, improbable that there were any circumstances in which the conduct of A could be proven to have induced B to rely on the representation and that such reliance was reasonable. The Respondents, in their respective characters, are actors equipped with extensive 34 Ibid. [34]. 27

29 knowledge on the problems of trafficking cultural property. All Respondents do not deny that they are, and have been, aware of the export prohibition of the government of Nepal. In fact, the Second Respondent, that is the National Museum of Australia, is party to the International Council of Museums ( ICOM ) Ethics code which imposes ethical obligations on institutions that deal with cultural property. According to the provisions of this Ethics code, the Second Respondent has not acted ethically in receiving the claimed object. It is the position of the Claimant that the Respondent's actions cannot in anyway be established to be reasonable according to the representation made by the University Dean if the Second Respondent has not exercised the minimum standard of due diligence as encompassed in the ICOM Ethics Code. Furthermore and by way of clarification of the above stated, the ethical obligations imposed on the Second Respondent will be discussed further below. C The Claimant did not act ethically or in good faith. According to 2.2. of the ICOM Code (to which the Second Respondent is, as aforementioned, party to) regarding Valid title 35 of objects of cultural heritage: No object or specimen should be acquired by purchase, gift, loan, bequest, or exchange unless the acquiring museum is satisfied that a valid title is held. Evidence of lawful ownership in a country is not necessarily valid title. 35 The ICOM Code defines Valid Title as Indisputable right to ownership of property, supported by full provenance of the item since discovery or production. 28

30 The museum could not have been satisfied that valid title has passed because it has not exercised every effort to validate Dr Smith s claims as to the passing of title and indeed did not question the lack of any satisfactory documents verifying that title belonged to Dr Smith. Furthermore, the Museum failed under 2.3 (Provenance 36 and Due Diligence) of the ICOM Code because before the acquisition of the statue, it did not make every effort to ensure that the object acquired has not been illegally obtained in, or exported from its country of origin [ ] in which it might have been owned legally. Due diligence 37 in this regard should establish the full history of the item since discovery or production. It is clear that the Australian Museum did not exercise the aforementioned due diligence as required by the ICOM Code otherwise it would have both questioned the legality of the export of the statue, since it was aware of the statue s authenticity and either was, or should, 38 have been aware of the relevant legislation regarding cultural property such as the export prohibition of Nepal (section 13 of AMP Act); and the international Conventions (such as the UNESCO Convention) and yet acquired the statue. Further or in the alternative (i.e. even if the museum had investigated and found satisfactory evidence as to the validity of title but with further evidence it is found that that initial search was inaccurate), the ICOM Code, in 6.2, regarding the restitution of Cultural Property, prescribes that the actions that the Australian Museum must undertake to return the statue. The country of origin, Nepal, seeks its restitution if it: 36 The ICOM Code defines Provenance as: The full history and ownership of an item from the time of its discovery or creation to the present day, through which authenticity and ownership are determined. 37 The ICOM Code defines due diligence as: The requirement that every endeavour is made to establish the facts of a case before deciding a course of action, particularly in identifying the source and history of an item offered for acquisition or use before acquiring it. 38 The museum is obligated, in 8.1. of the ICOM Code (p.17) to be familiar with relevant international, national and local legislation. 29

31 can be demonstrated to have been exported or otherwise transferred in violation of the principles of international and national conventions, and shown to be part of that country s or people s cultural or natural heritage. Considering that the export of the statue was illicit under the 1970 UNESCO convention, as well as section 13 of the AMP Act 1956 (2013) (Nepal) and section 14 of the PoMCH Act 1986 (Australia), the Museum should (since it is legally free to do so based on the aforementioned statutes and Conventions) take prompt and responsible steps to cooperate in its return. 39 Importantly, ICOM sets the principle that all Museums, which are members of ICOM, demonstrate full conformity with international, regional, national and local legislation as well as treaty obligations. 40 Regarding National legislation, it is clear that the Australian Museum, by refusing to forfeit the statue, failed to comply with section 14 of the Australian legislation (PoMCH Act) and also failed to respect the legislation of another state (Nepal) by not conforming to section 13 of AMP Act. 41 Additionally, on the international level, ICOM requires (at 7.2.) that museums should acknowledge (among other international legislation), the UNESCO Convention that is taken as a standard in interpreting the ICOM Code of Ethics for Museums. In effect, the 8 th Principle of the ICOM Code requires that Museums observe accepted standards and laws and uphold the dignity and honour of their profession. They should safeguard the public against illegal or unethical professional conduct. 42 In addition to being aware of relevant legislation, members of the museum profession should avoid situations that 39 ICOM Code, p Principle 7, ICOM Code, p See 7.1. of ICOM Code, p Principle 8 of ICOM Code, p

32 could be considered improper conduct 43 and should not support the illicit traffic of cultural property whether it is in a direct or an indirect level. 44 Since the reception of the item by Dr Smith, the Australian Museum has acted in an improper manner since it failed to contact the relevant country of origin of the statue regarding the dubious manner of its acquisition, failed to return it when requested and thus has acted in a highly unethical manner which does not dignify their profession as an institution which safeguards and protects cultural property. As aforementioned, the failure of the Second Respondent to fulfil its ethical obligations under the above Code certainly negates the ability of the Respondent to assert that the Respondent acted reasonably to the representation made by the University Dean, to fulfil the test of the principle of estoppel by representation. It is therefore the position of the Claimant, that if the Arbitral Tribunal is satisfied that the law of Australia is to be used on the point of law of gift-giving, the title of the claimed object could not be transferred from the University Dean to the Respondent by way of estoppel because the Respondent did not act reasonably according to the representation made by the University Dean. It should be noted, however, that whatever the choice of law, whether Australian or Nepalese, the result should be same of the ICOM Code, p of the ICOM Code, p.17 31

33 C.1.2. The required consent has not been granted Further or in the alternative, the Respondent cannot retain the item on the basis of Article 4(e) of the UNESCO Convention because the prescribed consent by the competent authorities of Nepal has not been granted (ii)furthermore and in addition to the above, it is the position of the Claimant that the object was not gifted with the consent of the competent authorities of the Federal Democratic Republic of Nepal, therefore for this additional reason, the object cannot be said to constitute cultural heritage of any country other than the country of Nepal following Section 4(e) of the UNESCO Convention. The Claimant holds this position because (a) the Universit()y Dean is not a competent authority capable of giving consent to the transaction and (b) because the Government s conduct did not represent any consent to the transaction on the Government s behalf. (a) It is the Claimant s position that the University Dean cannot be established to be a competent authority of the state capable of giving consent to the transaction. The International Law Commission, which is an organ established by the United Nations, characterises as conduct attributable to the state for the purposes of international law, that of its organs of government, or of others who have acted under the direction, instigation or control of those organs, i.e. as agents of the State. 45 The Commission also states that in determining what constitutes an organ of a State for the purposes of responsibility, the internal law and practice of each State are of prime importance. It follows from the commentary of the International 45 International Law Commission. "Draft articles on Responsibility of States for Internationally Wrongful Acts, with commentaries." Report of the International Law Commission on the Work of its 53rd session (2001)

34 Law Commission that a state authority for the purposes of international law is an authority which has been defined as such within the internal law of a country. The issue that remains to be addressed is whether the University Dean is defined as a competent authority acting on behalf of the state under Nepal s national legislation, in order to establish whether the requisite consent for the transaction can been granted by the Dean. It is an unquestioned fact of this dispute that the University Dean gifted the object under his capacity as the Dean. The relevant Nepalese legislation regulating the establishment and functioning of Tribhuvan University is the Tribhuvan University Act, 2049(1992). Section 4 of the aforementioned Act defines the University as an autonomous body corporate, 46 while Subsection 3 of the same Section states that the University may, like an individual, acquire, use, sell and dispose of, or otherwise manage, any movable and immovable property. The provisions of the above Section clearly indicate that the intention of the Government of Nepal was for the institution to be a private entity and for their employees to be empowered to act autonomously and without the guidance or permission of the state. It follows from the abovementioned that the University Dean cannot, in any way, be characterised as a representative of the Government capable of granting consent on behalf of the State. Therefore consent on behalf of the Federal Democratic Republic of Nepal was not and could not be granted by the University Dean for the second requirement under Article 4(e) of the UNESCO Convention to be fulfilled. 46 Subsection 1 of the Tribhuvan University Act

35 (b) It is also the position of the Claimant that the conduct of the Government of Nepal cannot be said to constitute any form of consent on behalf of it. It is an unquestioned fact of the instant dispute that the local authorities of Nepal failed to enter the claimed object in the national inventory of Nepal as provided under the UNESCO Convention 47 and under Nepal s national legislation. 48 It is the Claimant s position that the above failure solely amounts to a minor omission on behalf of the Claimant. It is also Claimant s position that the above omission cannot in any way be regarded as the requisite consent by a State as prescribed under Article 4(e) of the UNESCO Convention and therefore, that the above omission cannot in any way negate the indefeasible right of a Country to recover its cultural property. D. The Respondents are not entitled to compensation. Finally, and as a complementary point, it is the position of the claimant that since the National Museums of both Australia and Malaysia did not act ethically according to the ICOM Code of Ethics, the two institutions did not exercise the requisite due diligence as to establish that they have acquired the claimed object innocently. It can be unequivocally shown from the facts that the Second and Third Respondents have, after examination, detected the object as genuine and exhibited it as such. Their aforementioned knowledge estops the two institutions from denying that they have not acted in good faith. It is the position of the Claimant that the Respondent is therefore not entitled to any compensation as so prescribed under Article 7(b)(ii) of the UNESCO Convention. 47 Article 5(b). 48 AMP Act 2013 (1956) Sections 13(2),(2A) and; (2B). 34

36 CONCLUSION AND PRAYER FOR RELIEF Therefore, in light of the relevant issues, arguments submitted and authorities cited, it is most humbly and respectfully requested that this Arbitral Tribunal adjudges and declares that: 1. Both the export and the import of the claimed object were licit and the object ought to be forfeited to the Claimants. 2. The Respondents have no right to retain the object under any legal principle. 3. The object, therefore, belongs to the people of Nepal and shall be returned to the Claimant country free from any obligations attached to it. Respectfully submitted, Council for the Claimant. 35