## Facts

- The International Tin Council (ITC) was an international organization formed by treaty and made up of 23 member nations, including the United Kingdom (UK).
- The ITC’s purpose was to stabilize the tin market through buffer-stock operations and related trading activity.
- Under the Sixth International Tin Agreement (ITA6), the ITC could contract, acquire and dispose of property in its own name, and provide for dispute resolution by arbitration.
- The ITC’s headquarters were in London, and the UK recognized the ITC’s presence in England through arrangements relating to its seat.
- The ITC was not incorporated as an English company, and the UK had not implemented (adopted) ITA6 as part of domestic law so as to create privately enforceable rights against the member states.
- In 1985, the ITC collapsed and stopped trading, leaving very large unpaid debts to commercial counterparties and other creditors.
- Creditors, including J. H. Rayner and Maclaine Watson (the creditors), began multiple proceedings in London seeking payment.
- Among other defendants, the creditors sued the Department of Trade and Industry (DTI), treating it as the UK governmental representative for the ITC’s member nations, and contended that the member states were responsible for the ITC’s unpaid commercial obligations.
- The creditors pleaded that, properly understood, the treaty structure made member states liable for ITC debts (including arguments framed in terms of agency, joint liability, or responsibility derived from the treaty arrangements).
- The trial court dismissed the claims against the DTI (and, in substance, against the member states), concluding that the pleadings did not disclose a viable cause of action in English law against ITC members for ITC debts.
- The creditors appealed to the England and Wales Court of Appeal.

## Issues

1. Whether, in English law, the UK (sued through the DTI) or other ITC member states could be held liable for the ITC’s commercial debts when the ITC contracted in its own name under an unincorporated international agreement.
2. Whether alleged obligations or arrangements within ITA6 could be relied on by private creditors in domestic civil proceedings to impose liability on member states absent implementing legislation.
3. Whether the pleadings disclosed any arguable basis (such as agency or joint liability) to treat the ITC’s contracts and defaults as contracts and defaults of the member states.

## Decision

- The Court of Appeal affirmed the trial court’s dismissal/strike-out of the claims against the DTI in its representative capacity.
- The court treated the ITC as an international organization intended to act and contract in its own name, rather than as an agent entering contracts on behalf of member governments.
- The court held that the creditors could not, through domestic private-law claims, convert treaty arrangements among states into a promise by member states to pay the ITC’s private debts where Parliament had not made the treaty rules part of English law.
- The court found no proper basis in the pleadings to impose joint and several liability, guarantee liability, or agency-based liability on the member states for the ITC’s unpaid commercial obligations.
- The result was that the creditors had no actionable claim in English law against the UK (via the DTI) for the ITC’s debts on the theories advanced.

## Legal Principles

- An international agreement does not, by itself, create domestic private rights or liabilities enforceable in English courts unless implemented by legislation.
- Where a treaty-created organization is structured to contract in its own name, creditors generally have recourse against the organization as the contracting party, not against its member states.
- Member states are not treated as guarantors or co-debtors for an international organization’s commercial liabilities without clear words or a clear legal basis establishing such responsibility.
- English courts will not infer an agency relationship between an international organization and its member states simply because the organization was created by, and acts for purposes chosen by, those states.

## Conclusion

The Court of Appeal held that the creditors could not state a claim in English law making the UK or other ITC member nations liable for the ITC’s unpaid debts, because the ITC contracted in its own name under treaty arrangements that were not implemented as domestic law and did not amount to an assumption of liability by member states.


J. H. Rayner v. Department of Trade and Industry, 3 All ER 257 (1988)