The compelling need to revisit the Monetary Gold principle.

By Nipun Kalra

Nipun Kalra is a student in law at The National Law University in Delhi, India.


The International Court of Justice (ICJ) in the Monetary Gold case laid down the ‘indispensable third party’ (ITP) principle as a preliminary objection (hereafter mentioned as the Monetary Gold principle). It held that the Court cannot exercise its jurisdiction to adjudicate any case in which a legal interest of a third party forms the very subject matter of the Court’s decision, and that, as a consequence, the Court irreversibly adjudicates upon the rights and obligations of a third party. The Monetary Gold  principle also implies that the Court is not barred from ruling the decision for the sole reason that the legal interest of the third State might be affected by the decision. 

It has to be noted that the original judgment of the ICJ in the Monetary Gold case was narrow and case specific because it was undisputed that the gold, the subject matter of the claims, belonged to Albania. The Monetary Gold principle, however,  should not be used as a restriction on the Court’s power, in cases which involve highly sensitive issues concerning the international community at large, especially in those where the Court’s jurisdiction is already established.

The ICC and the situation in Palestine

On 22 January 2020, after concluding that there was a reasonable basis to believe that war crimes were (or are being) committed on Palestinian territory, the Prosecutor of the International Criminal Court (‘ICC’) sought a declaration from the ICC Pre-Trial Chamber that the territory over which ICC may exercise jurisdiction under Article 12(2)(a) comprised the occupied territory of Palestine (West Bank and the Gaza Strip). This territory has been claimed by Israel and hence, any ruling with respect to it, would be against the consent of Israel. 

Further, on 30 April 2020, the Prosecutor filed a response to the submissions of the amicus curiae, the victims and the involved states. As far as the territorial jurisdiction was concerned, the Prosecutor submitted that the Monetary Gold principle was inapplicable in the present case, and accordingly Israel’s consent for jurisdiction was not required.  

It was submitted by Prosecutor that ruling on the war crimes committed in Palestinian territory would be “no more than an intermediary determination for the ultimate purpose of the Court’s future adjudication” (para 38). Assuming that the Monetary Gold principle is applicable in the case, the bar on jurisdiction comes into effect only when the merits stage of the proceedings is reached. Determining the territorial jurisdiction of the Court does not entail ruling on territorial disputes between Israel and Palestine. Hence, it is possible for ICC to rule on the breaches of obligations arising from the occupied Palestinian territory without actually determining territorial disputes with a “third party”.  

The ICJ has consistently clarified that in order for a third state to be an ‘indisputable third party’, the Court’s decision must irreversibly impact the legal interest of the absent state. Since the court’s decisions are res judicata between the parties to the dispute, such impact should effectively become irreversible (Bosnia and Herzegovina v. Serbia and Montenegro, para. 120). In the Monetary Gold case, the prayer before the Court was to direct the transfer of gold from Italy to the United Kingdom. However, the Permanent Court of Arbitration had held that the title of the gold was with Albania. Therefore, had the Court decided on the transfer or possession of gold, it would have adjudicated upon the proprietary interest of Albania. Thus, the enforceability of the Court’s judgement required as a matter of prerequisite the transfer of the title to the gold from Albania.

Strict adherence to Monetary Gold Principle acts as unwarranted restriction on Court’s functioning

In Continental Shelf case, the ICJ denied the request of Italy to intervene and continued to hold the proceedings in Italy’s absence. The Court ruled that the Monetary Gold principle would only apply when the legal interest of a third State forms the very subject matter of the decision. Thus, though Italy’s legal interest might be affected, it would not form the very subject matter of the decision.

In the Nauru case, the ICJ again ruled that in no way the Court is precluded from adjudicating claims if the legal interest of an absent third State might possibly be affected but does not form the subject matter of the decision. Essentially, the Court found that it was not a prerequisite to determine the responsibility of either New Zealand or the United Kingdom in order to determine Australia’s responsibility, since no finding on the two other states could have affected Nauru’s claims against Australia. Moreover, such judicial determination would only have “influential, not controlling, precedential value” (Page 297-298, Judge Shahabudden’s Separate Opinion). 

The Monetary Gold principle is established on the basis of realities in the modern international relations where legal disputes between States are rarely bilateral. If the Court is precluded from adjudicating the disputes between the States without the presence of all the States whose legal interest might get affected, it would then lead to unwarranted restrictions on the Court’s ability to carry out its function. 

Article 59 of the Statute of ICJ should be interpreted independently   

Article 59 of the ICJ Statute provides that “the decision of the Court has no binding force except between the parties and in respect of that particular case“. This article mainly protects states that do not intervene in the proceedings. This allows the court to maintain the purely bilateral nature of disputes. However, the Court’s reliance on this article prevents it from adjudicating on disputes which are multifaceted in nature. For example, the ICJ in the East Timor case, held that the judgment of the Court would amount to a determination of Indonesia’s rights and obligations and thus in the absence of Indonesia, deciding the case would run counter to the principle of ‘State Consent’. However, the judgment did not address the right of the East Timorese to self-determination. 

Some commentators have argued that the Court cannot always satisfactorily resolve whether the third party is ‘necessary’ at a preliminary stage. The Court can leave the determination of this question until the merits stage when the Court has a clearer view of the subject matter of the decision. For example, in the Nicaragua case, the United States claimed that El Salvador was an indispensable third party to the case. The Court rejected this argument. However, it found at the merits stage that its decision in that case would affect El Salvador; yet it continued to make the determination in the absence of that state. 

Moreover, in Corfu Channel case, it was argued that Yugoslavia in its absence, could not be held liable for any wrong-doing, for that would be contrary to the principles of consent. Still, the ICJ was able to side-step these third-party issues by founding Albania’s liability on its independent acts. The court in fact, reformulated the policies into a truly bilateral dispute and then gave decisions on the dispute.  


Coming back to the Monetary Gold case, Albania would not have been protected by the application of Article 59 of the ICJ Statute. However, it was impossible for the court to delve into the dispute before ascertaining Albania’s rights on which Italy’s claims were based. In short, in order for the elements of the Monetary Gold principle’s applicability to be met, the protection provided by Article 59 of the ICJ Statute must be frustrated. Monetary Gold principle should be inapplicable where a judgment affects third States by implication, since that would unduly narrow the Court’s function. A non-material inference on third States’ legal position is not enough for Monetary Gold to be applicable. Such protection is already rendered by Article 59 of the ICJ Statute with the judgment’s res judicata and binding effect limited to parties.

Therefore, it is not easy for the ICC to ignore the disputes that are multifaceted in nature, like the one which has arisen in the disputed occupied territory of Palestine. Rather, the onus is put on the ICJ to revisit the Monetary Principle in order to expand its application in the modern international relations, where disputes are multi-faceted in nature. Such restriction on the Court’s power to adjudicate would act as a barrier to justice to the interested parties.  

[None of the views and opinions represented in this article are necessarily representative of the official views and opinions of Jus Cogens, or any institutes the author may be affiliated with.]