A. The History of EU Loyalty

Ever since the Treaty establishing the European Coal and Steel Community (ECSC),Footnote ⁵ the Treaties governing what is now the Union legal order have contained a specific provision obliging the Member States to take all appropriate measures to ensure fulfilment of their obligations under ‘the Treaty’Footnote ⁶ or, since the entry into force of the Lisbon Treaty, ‘the Treaties’.Footnote ⁷ The original Article 86 ECSC read:

That text had only slightly changed since its first ‘official’ draft. Dated 8 November 1950 and tagged ‘Non-discuté’, what was then Article 62 of the draft ECSC Treaty read:

The definitive French text of Article 86 ECSC shows that apart from the replacement of ‘États parties’ by ‘États membres’, ‘organes de la Communauté’ by ‘institutions de la Communauté’ and the deletion of the words ‘dans l’étendue de leur jurisdiction’, the original agreement among the delegations was maintained throughout the negotiations and the redrafting process.Footnote ⁹

However, the travaux préparatoires do not tell us anything about the reasons for including a provision of this kind. Perhaps the drafters looked at the treaties founding other projects of large-scale, post-war international cooperation around the same time, such as the UN Charter (1945) and the Statute of the Council of Europe (1949). Notably, Article 3 of the Statute of the Council of Europe stipulates:

Similarly, Article 2(2) and (5) of the UN Charter provide:Footnote ¹⁰

While these provisions convey the same message as the last part of Article 86 ECSC (‘to facilitate the performance of the Community's tasks’ and ‘to refrain from any measures incompatible with the common market’), they differ from that provision in that they do not say that the Parties are to implement the acts taken by the organs of the international organization, as the first two lines of Article 86 ECSC do. Why did the drafters of the ECSC Treaty choose to state explicitly that the Member States were obliged to take all measures, whether general or particular, to ensure the execution of their obligation under the decisions and recommendations of the Community institutions? Did that not follow from the principle of pacta sunt servanda and the duty to fulfil treaty obligations in good faith? For example, in Exchange of Greek and Turkish Populations, the Permanent Court of International Justice (PCIJ) held that a clause worded in terms not dissimilar from Article 86 ECSC (‘The High Contracting Parties undertake to introduce in their respective laws such modifications as may be necessary with a view to ensuring the execution of the present Convention’):Footnote ¹¹

The travaux préparatoires of the ECSC Treaty do not answer the question of why the drafters opted to make that obligation explicit. However, we do know that Article 2(2) of the UN Charter was proposed in order to emphasize that States were expected to abandon ‘legalistic contractual positivism’ and should not ‘be content with a merely formal, legalistic obedience towards the obligations laid down in the Charter’.Footnote ¹² In much the same way, Article 86 ECSC was perhaps intended to emphasize that Member States in the first place were to make the newly established Community work in practice and, to that effect, they would have to do more than the new Treaty could mention explicitly. The same would appear from Article 88 ECSC. That provision put the High Authority under a dutyFootnote ¹³ to start infringement proceedings against Member States that failed the obligations incumbent on them ‘en vertu du present Traité’, ie ‘under this Treaty’ or flowing from it—not only those literally laid down by its text, and was described by the ECJ as ‘the ultima ratio enabling the Community interests enshrined in the Treaty to prevail over the inertia and resistance of Member States’.Footnote ¹⁴

It is not unlikely that the introduction of the ‘recommendation’ as a legal instrument in Article 14, third paragraph, ECSC also played a role. Like the EU directive, ECSC recommendations were to be ‘binding as to the aims to be pursued’ but left ‘the choice of the appropriate methods for achieving these aims’ to those to whom the recommendations were addressed. Since this was a new type of legal instrument that, at first sight, left the Member States a significant leeway, it was arguably useful to emphasize in Article 86 that Member States were under a duty to implement ECSC legal instruments, including recommendations. These elements might suggest (part of) the reason for including Article 86 ECSC.

The 1957 Treaty of Rome copied the wording of Article 86 ECSC into Article 5 EEC, at the same time enlarging the scope of the duty to take all necessary measures to ‘all obligations arising out of this Treaty or resulting from action taken by the institutions of the Community’ as well as adding that the Member States were to ‘abstain from any measure which could jeopardise the attainment of the objectives of this Treaty’. The original draft of Article 26 of the Vienna Convention on the Law of Treaties (VCLT),Footnote ¹⁵ which contains the principles of pacta sunt servanda and the duty to execute a treaty in good faith, was to have a second paragraph similar to this addition:

The addition had been proposed by Sir Humphrey Waldock, but the International Law Commission (‘ILC’) found this proscription to be ‘implicitly contained in the obligation to execute treaties in good faith’.Footnote ¹⁷ Accordingly, the International Court of Justice (ICJ) observed inter alia in Land and Maritime Boundary between Cameroon and Nigeria that ‘the principle of good faith is a well-established principle of international law. It is set forth in Article 2, paragraph 2, of the Charter of the United Nations; it is also embodied in Article 26 [VCLT]’.Footnote ¹⁸

B. The Implications of EU Loyalty

The 2007 Treaty of Lisbon again altered the text of what (after the renumbering of the EC Treaty by the Amsterdam Treaty) had become Article 10 EC. As a constitutional principle governing the entire EU legal system, the provision was moved to Article 4(3) of the EU Treaty (TEU). That provision further clarified the scope of the loyalty obligation by adding that the Union and the Member States are to ‘assist each other in full mutual respect in carrying out tasks which flow from the Treaties’.

However, rather than being the source of the loyalty obligation, Article 4(3) TEU codifies a general constitutional principle of the European Union.Footnote ¹⁹ It also finds expression in other provisions of the Treaties, such as Article 24(3) TEU, which provides for the Member States to ‘support the Union's external and security policy actively and unreservedly in a spirit of loyalty and mutual solidarity’ and to ‘comply with the Union's action in this area’.Footnote ²⁰ Duties of loyal cooperation in fact underpin many provisions in the Treaties, such as Article 267 TFEU, which provides for the procedure for references for a preliminary ruling,Footnote ²¹ the requirements of mutual recognition between the Member States flowing from the free movement provisions in the TFEU,Footnote ²² or Article 351 TFEU, which governs the relationship between the Treaties (TEU and TFEU) and international agreements concluded by the Member States before they joined the Union.Footnote ²³

Conversely, the concrete obligations that loyalty imposes according to the Court's case law are sometimes codified in (secondary) EU law. For instance, Article 3 of Council Decision 2010/427/EU establishing the organization and functioning of the European External Action ServiceFootnote ²⁴ lays down inter alia the duties to consult, to assist and to support, which the Court developed in the area of EU external action on the basis of the principle of loyal cooperation.Footnote ²⁵ When a specific provision of primary or secondary EU law constitutes a concrete expression of the general obligation of loyalty laid down in Article 4(3) TEU, the effect of a declaration that a Member State has failed to fulfil its obligation under that specific provision is that there is no need for the Court to find a failure of Article 4(3) TEU.Footnote ²⁶

Crucially, the duty of loyal cooperation not only imposes obligations on the Member States but also on the Union institutions.Footnote ²⁷ Those obligations are mutual,Footnote ²⁸ and create obligations between the Member States and the Union, between the Union institutions,Footnote ²⁹ and between the Member States.Footnote ³⁰ In this way, the duty of loyalty has been ‘the legal basis for a number of fundamental ‘‘constitutional’’ principles of [Union] law that are now so well established that nobody looks for their legal basis any longer’.Footnote ³¹ In Francovich,Footnote ³² for example, the Court derived the principle of Member State liability for breaches of EU law from the principle of loyalty. On that same basis, the ECJ had earlier limited the Member States’ procedural autonomy by requiring that national procedural laws should not make it excessively difficult or virtually impossible to rely on EU law (the effectiveness principle as a limit to national procedural autonomy),Footnote ³³ a condition which the Court later construed rather broadly by creating a duty for national courts to raise certain points of EU law of their own motion,Footnote ³⁴ to reopen administrative procedures in some circumstancesFootnote ³⁵ or to obtain evidence needed by a claimant in order to make a claim under EU law if that claim would otherwise be excessively difficult for the claimant to prove.Footnote ³⁶

It was also on the basis of the principle of loyalty that the Court held it to be impossible for the Member States operating outside the institutional framework of what is now the Union ‘to assume responsibilities which might affect or alter the scope of [Union] rules that have been promulgated for the attainment of Treaty objectives’.Footnote ³⁷ That implies in particular that each time the EU ‘with a view to implementing a common policy envisaged by the Treaty, adopts provisions laying down common rules, whatever form these may take, the Member States no longer have the right, acting individually or even collectively, to undertake obligations with third countries which affect those rules’.Footnote ³⁸ Arguably, even the primacy of EU law itself is based upon the duty of loyalty.Footnote ³⁹

Having examined the origins of the text of current Article 4(3) TEU and the scope of the obligations flowing from it, the following sections compare EU loyalty to international law good faith and Bundestreue.

A. Pacta Sunt Servanda

The principle that is arguably most closely linked to good faith is that of pacta sunt servanda which, in the ECJ's words:

As the third recital in the preamble to the VCLT puts it: ‘the principles of free consent and of good faith and the pacta sunt servanda rule are universally recognized’. In turn, the Greco-Turkish Arbitral Tribunal in Megalidis considered good faith to be ‘the foundation of all law and all conventions’.Footnote ⁵³

In EU law, ‘supremacy’, ‘primacy’ or ‘precedence’ are used interchangeably as ‘appropriate synonyms’Footnote ⁵⁴ of pacta sunt servanda, and regarded as founded on the duty of loyalty. In Costa v ENEL, the ECJ held:

It has often been argued that the primacy of EU law differs from the supremacy of international law.Footnote ⁵⁷ In several paragraphs of the Costa judgment, the ECJ seemingly contrasted the EU legal order with those established by ‘ordinary international treaties’.Footnote ⁵⁸ While the latter leave Contracting Parties the choice as to form and methods, including the choice between a ‘monist’ and a ‘dualist’ attitude towards international law,Footnote ⁵⁹ the EU Treaties are ‘an integral part of the legal systems of the Member States … which their courts are bound to apply’. In assessing compliance with obligations, international law only looks at the result but leaves the Contracting Parties free as to the means to attain that result (‘external primacy’). EU law primacy is said to be different, because it is also concerned with how the Member States implement their EU law obligations (‘internal primacy’). The Court established internal primacy by presenting EU law as different from international law and as in some way part of national law. This was intended to convince national courts in dualist Member States not to treat EU law as they would allegedly treat international law, ie by transposing it, and applying the maxim lex posterior derogat priori in case of conflict with national law.Footnote ⁶⁰

However, De Witte has shown that, as to actual content, there is no such contrast between EU law and international law.Footnote ⁶¹ ‘Internal primacy’ is not specific to EU law but is inherent in the pacta sunt servanda principle applied in international law. International law simply does not have the same judicial tools (most importantly the preliminary ruling procedure) at its disposal fully to develop this consequence of pacta sunt servanda. In other words, States are obliged to ensure the internal primacy of international law, but they do so in accordance with their own national constitutions. As a consequence, the existing potential in international law is only rarely realized, as its effectiveness is at the mercy of municipal courts.Footnote ⁶² In the EU legal order, by contrast, the preliminary ruling procedure occupies a central and unique place.Footnote ⁶³ This procedure allows for ex ante control over compatibility of national law with Union law,Footnote ⁶⁴ in contrast with international law, which normally only acts ex post, by way of international responsibility. The purpose of the preliminary ruling procedure is that of harmonizing the interpretation of EU law.Footnote ⁶⁵ This emphasis on uniformity, De Witte argues, was an additional reason for the Court to speak out on internal primacy as well. However, it is important to note that the ECJ framed the issue not as a conflict between municipal law and international law, but between two types of municipal law, one of which (viz EEC law) took precedence over the other. As Spiermann has pointed out, that does constitute a departure from international law, but only in the sense that the ECJ appears to have been more deferential to State sovereignty than general international law would be.Footnote ⁶⁶

It is perhaps useful to examine some of the practical consequences of EU loyalty and primacy before comparing them with their equivalents from general international law. In emphasizing the duty of the Member States to ensure the effectiveness of EU law in their internal legal orders, the ECJ recalled the intertwinement of loyalty and primacy in Confédération paysanne:Footnote ⁶⁷

EU loyalty also prevents Member States from relying on their own internal legal order to justify a breach of EU law. As the ECJ held in Premiums for grubbing fruit trees:Footnote ⁶⁸

The same counts as regards provisions of a constitutional nature, as the ECJ made clear in Internationale Handelsgesellschaft.Footnote ⁶⁹ Furthermore, the obligations arising from primary or secondary EU law devolve upon the Member States as such and their liability under Article 258 TFEU arises whatever the agency whose action or inaction is the cause of the failure to fulfil its obligations under EU law, even in the case of a constitutionally independent institution.Footnote ⁷⁰ EU law is generally unconcerned with the division of competences within the Member States but only looks at the State as a whole and whether or not it fulfils its obligations.Footnote ⁷¹

Similar duties in international law are not difficult to locate. Indeed, the link between the ECJ's statement, which it has repeated countless times, and Article 27 VCLT was explicitly acknowledged by AG Léger in his Opinion in Köbler:

The AG concluded in a matter-of-fact way: ‘The same is true under Community law.’Footnote ⁷³ How far do such parallels with general international law reach?

First, while international law generally leaves it to the States to decide how to give effect to their international legal obligations, such is not always the case. One obvious example would be the 1949 Geneva Conventions, which oblige the High Contracting Parties to ‘undertake to enact any legislation necessary to provide effective penal sanctions for persons committing, or ordering to be committed, any of the grave breaches’ of the Conventions.Footnote ⁷⁴

Second, one does not need to look very far to find a statement emphatically declaring international law to take precedence over municipal law.Footnote ⁷⁵ For example, in response to an argument submitted by the USA that it had taken certain measures irrespective of any obligations under the agreement at issue, the ICJ held in Obligation to Arbitrate:Footnote ⁷⁶

The ICJ held in the Nuclear Tests cases that ‘the very rule of pacta sunt servanda in the law of treaties is based on good faith’.Footnote ⁷⁷ This close connection between both principles also finds its expression in the text of Article 26 VCLT, which states: ‘Every treaty in force is binding upon the parties to it and must be performed by them in good faith.’Footnote ⁷⁸ The ILC has in that regard also stressed that ‘the rule pacta sunt servanda is itself founded upon good faith’ on several occasions.Footnote ⁷⁹ In Gabčíkovo-Nagymaros Project, the ICJ clarified that Article 26 VCLT combines two elements of equal importance:

The corollary of pacta sunt servanda is the prohibition for a State ‘to invoke the provisions of its internal law as justification for its failure to perform a treaty’, as laid down in Article 27 VCLT. That provision originates in an amendment proposed by PakistanFootnote ⁸¹ at the Diplomatic Conference where the Vienna Convention was negotiated and agreed.Footnote ⁸² Article 13 of the 1949 Draft Declaration on Rights and Duties of StatesFootnote ⁸³ makes explicit the basic idea that underpins this prohibition, ie one of fulfilling obligations in good faith. Allowing States to invoke their own law as an excuse for failure to fulfil their treaty obligations would amount to allowing them to determine themselves the extent of their obligations. As the PCIJ held in Interpretation of the Convention between Greece and Bulgaria respecting reciprocal emigration, it is ‘a generally accepted principle of international law that in relations between Powers who are contracting parties to a treaty, the provisions of municipal law cannot prevail over those of the treaty’.Footnote ⁸⁴ In Certain German Interests in Polish Upper Silesia, the Court further clarified that from the standpoint of international law ‘and of the Court which is its organ, municipal laws are merely facts which express the will and constitute the activities of States, in the same manner as do legal decisions or administrative measures’.Footnote ⁸⁵

Like in EU law, the nature of these legal provisions does not matter. In Treatment of Polish nationals and other persons of Polish origin or speech in the Danzig territory, the PCIJ held that the same principle applies to a State's constitutional law.Footnote ⁸⁶ The principle is also reflected in Article 3 of the Articles on State Responsibility,Footnote ⁸⁷ which makes clear that the characterization of an act of a State as internationally wrongful is governed by international law: ‘Such characterization is not affected by the characterization of the same act as lawful by internal law.’ Or as the ICJ held in LaGrand:Footnote ⁸⁸ ‘the international responsibility of a State is engaged by the action of the competent organs and authorities acting in that State, whatever they may be’.

Hence, while general international law may often lack the judicial machinery the EU has at its disposal, the binding nature of international law and the obligations flowing from it appear to be conceptually the same and based on the same premise of good faith or loyalty as those flowing from primacy in EU law. Equipped as it is with a formidable enforcement machinery mostly lacking in other treaty-based systems or indeed in general international law, EU law could perhaps accurately be described as ‘successful international law’Footnote ⁸⁹ or at least ‘uncommonly successful international law’.

B. Obligations Prior to Ratification (‘sub spe rati’)

In Inter-Environnement Wallonie,Footnote ⁹⁰ the ECJ deduced another key obligation from the duty of loyalty that is particularly relevant for the comparison between EU loyalty and international law good faith. It held that it follows from the duty of loyalty in conjunction with Article 288, third paragraph, TFEU and from the directive itself that during the period of transposition Member States ‘must refrain from taking any measures liable seriously to compromise the result prescribed’ by a directive. Addressed at the Member States, directives generally determine a transposition period and only require them to take the measures necessary to ensure that the result prescribed by the directive is achieved by the end of that period. Although the Member States ‘cannot be faulted for not having transposed the directive into their internal legal order before expiry of that period’,Footnote ⁹¹ a directive ‘has legal effect with respect to the Member State to which it is addressed from the moment of its notification’.Footnote ⁹² Indeed, where directives in principle leave the Member States complete discretion as to the transposition up until the deadline of transposition,Footnote ⁹³ the duty of loyalty poses certain limits to this exercise of Member State power by prohibiting Member State action that would defeat the object and purpose of the directive. That would be the case, for instance, when certain provisions that are incompatible with the directive ‘constitute [the] full and definitive transposition of the directive’. In such a scenario, their incompatibility with the directive ‘might give rise to the presumption that the result prescribed by the directive will not be achieved within the period prescribed if it is impossible to amend them in time’.Footnote ⁹⁴

International law good faith has been used by courts and tribunals to do something quite similar to what the ECJ did in Inter-Environnement Wallonie, ie to limit the discretionary power of Contracting Parties between the signing of an international agreement and its entry into force.Footnote ⁹⁵ The obligation not to defeat the object and purpose of a treaty prior to its entry into force is also codified in Article 18 VCLT. There is of course an important difference with the Inter-Environnement Wallonie case law. There, the directives had entered into force; it was just that the deadline for transposition had not yet passed. Nevertheless, both categories of cases arguably concern the obligations of contracting States between the expression of the will to be bound by a treaty or a specific obligation of a treaty on the one hand, and the definitive and full effectiveness of the treaty or the treaty obligation in question on the other hand.

For example, in the 1928 Megalidis case,Footnote ⁹⁶ Turkey had seized the content of a bank safe deposit box belonging to a Greek national in Smyrna. This had happened just weeks after Turkey had signed the peace Treaty of Lausanne, which provided inter alia for the protection of Greek minorities, but before the treaty's entry into force. The Greco-Turkish Arbitral Tribunal famously held that:

Earlier, the Arbitrator in German Reparations under Article 260 of the Treaty of Versailles (1924), had applied similar reasoning. The Treaty of Versailles ordered Germany to cede to the Reparation Commission certain rights and interests it held in concessions and public enterprises. However, it was unclear what date had to be taken as the point of reference to determine these rights and interests. The Arbitrator had to decide whether it was the date of signature, of ratification, of entry into force or still some other point of reference, given that the parties had agreed that he was to disregard (most of) the travaux préparatoires.Footnote ⁹⁸ He held that:

In the end, the Arbitrator recognized that it was the date of entry into force that had to be taken into account, thereby endorsing the German admission that any action to alienate the rights and interests at issue prior to that date would constitute a violation of the principle of good faith.

The PCIJ judgment in Certain German Interests in Polish Upper Silesia has been regarded as an implicit recognition of the same principle.Footnote ¹⁰⁰ There, Poland argued before the Court that the transaction by which the German Reich sold property (the Chorzów factory) after the signing of the Treaty of Versailles but before its entry into force was contrary to international law ‘which is essentially based on the good faith of the contracting parties’.Footnote ¹⁰¹

Although the reasoning in the international law cases cited may be different from that in the ECJ judgments discussed, the mechanism at work is not. Indeed, the EU courts have treated international law good faith at least in some circumstances as similar in its effects to EU loyalty, which can be illustrated by the following three examples from the General Court of the EU, the ECJ, and an AG at the ECJ.

First, the General Court applied international law good faith in Opel Austria.Footnote ¹⁰² There, the applicant argued that by adopting the contested regulationFootnote ¹⁰³ a few days before the EEA AgreementFootnote ¹⁰⁴ entered into force, the Council had infringed the principle of good faith, according to which, pending the entry into force of an international agreement, the signatories to an international agreement may not adopt measures which would defeat its object and purpose. The General Court, referring to the PCIJ judgment in German interests in Polish Upper Silesia, held that the principle of good faith is a rule of customary international law whose existence is recognized by the ICJ and was therefore binding on the then Community.Footnote ¹⁰⁵ However, presumably because the judgment essentially concerned not the interests of Austria directly, but of Opel Austria, a private party, the Court did not link the principle of good faith to EU loyalty, but to legitimate expectations, and held that principle to be infringed in the case at issue.Footnote ¹⁰⁶

Second, in Intertanko the ECJ gave proof (at least in principle)Footnote ¹⁰⁷ of a similar approach.Footnote ¹⁰⁸ After having established that the validity of Directive 2005/35Footnote ¹⁰⁹ could not be assessed in the light of Marpol 73/78,Footnote ¹¹⁰ the Court noted that the fact that all Member States are parties to Marpol 73/78 was liable to have consequences for the interpretation of, first, the United Nations Convention on the Law of the Sea (UNCLOS)Footnote ¹¹¹ and, second, the provisions of secondary law which fall within the field of application of Marpol 73/78, concluding that in view ‘of the customary principle of good faith, which forms part of general international law, and of Article 10 EC, it is incumbent upon the Court to interpret those provisions taking account of Marpol 73/78’.Footnote ¹¹²

Third, AG Sharpston explicitly made the link between EU loyalty and international law good faith in her Opinion in Commission v Malta.Footnote ¹¹³ That case concerned infringement proceedings against Malta for concluding a public service obligation contract for the provision of a regular high-speed ferry service between the islands of Malta and Gozo. In the period between the signing and the entry into force of its Accession Treaty to the EU, Malta had signed a six-year contract with a Maltese company without giving the opportunity to other EU shipowners to tender. The Commission claimed that Malta had violated an EU regulation containing an obligation to allow for EU-wide tenders.Footnote ¹¹⁴ However, the regulation did not yet apply to Malta at the relevant time, since its Accession Treaty had not yet entered into force. The Commission therefore also claimed that Malta had violated inter alia Article 26 VCLT (the obligation of good faith) in that it had defeated the Accession Treaty's object and purpose by engaging in this six-year contract just a few weeks before acceding to the EU. Even though the Commission claimed a violation of international law good faith (which, according to the AG, who referred to the ECJ judgment in Brita, ‘forms part of the Community legal order’Footnote ¹¹⁵), the AG examined Malta's actions in light of the principle of sincere cooperation and the obligation to ‘refrain from taking any measures liable seriously to compromise the result prescribed’ that the Court established on the basis of that principle in Inter-Environnement Wallonie. In particular, the AG looked at whether a hypothetical Member State carrying out the exact same action in the period between the adoption and the entry into force of the regulation at issue, would have violated the duty of loyalty. Reaching the conclusion that this would not have been the case, she then concluded that the international law duty of good faith (Article 26 VCLT) would in any event not have imposed a greater obligation on Malta in the period after signing but before entry into force of the Accession Treaty. In other words, the AG treated the obligation on the basis of EU loyalty as an obligation that also flows from the international law principle of good faith.

C. Duties of Cooperation

A third key obligation that the ECJ has derived from loyalty is a mutual duty of genuine cooperation and assistance between Member States and Union institutions.Footnote ¹¹⁶

One specific but rather important duty of cooperation is the duty to inform, which flows from the Member States’ obligation to take ‘any appropriate measure, general or particular, to ensure fulfilment of the obligations arising out of the Treaties or resulting from the acts of the institutions of the Union’.Footnote ¹¹⁷ For example, when a Member State decides, on the basis of Article 114(4) and (5) TFEU, to maintain certain national measures incompatible with a Union harmonization measure, it is obliged under Article 4(3) TEU to notify the Commission as soon as possible of what derogating provisions exactly it intends to maintain.Footnote ¹¹⁸ This is not a one-way obligation, since ‘[t]he Commission, for its part, must demonstrate the same degree of diligence and examine as quickly as possible the provisions of national law submitted to it’.Footnote ¹¹⁹ Likewise, within the common foreign and security policy (CFSP), Article 32 TEU obliges the Member States to ‘consult one another within the European Council and the Council on any matter of foreign and security policy of general interest in order to determine a common approach’. Perhaps more strikingly, that same provision provides that before undertaking ‘any action on the international scene or entering into any commitment which could affect the Union's interests’, each Member State must consult the others within the European Council or the Council.

Furthermore, although a Member State is not allowed to justify a breach of EU law on the basis of its internal law or internal difficulties, the ECJ has indicated that when, in giving effect to EU law, a Member State ‘encounters unforeseen or unforeseeable difficulties or perceives consequences overlooked by the Commission’, it can always ‘[submit] those problems for consideration by the Commission, together with proposals for suitable amendments’.Footnote ¹²⁰ In such a scenario, loyalty imposes on the Commission and the Member State concerned a duty of genuine cooperation. In contrast with a case of ‘absolute impossibility’ to implement,Footnote ¹²¹ such ‘unforeseen or unforeseeable consequences’ do not constitute a valid justification for failing to execute Treaty obligations—Member States and Union institutions simply ‘must work together in good faith with a view to overcoming difficulties whilst fully observing the Treaty provisions.’Footnote ¹²² Within the CFSP, Article 28 TEU explicitly provides for such a solution. The principles and objectives of a decision defining an action to be undertaken by the Union can be reviewed by the Council in case of a ‘change in circumstances having a substantial effect on a question subject to such a decision’. This is an echo of the rebus sic stantibus doctrine present in many national laws of obligation, and equally in international law, where it was codified in Article 62 VCLT.Footnote ¹²³ In cases of imperative need arising from changes in the situation with respect to a decision defining an action to be undertaken by the Union (failing a review of the decision by the Council), Member States may take the necessary measures as a matter of urgency having regard to the general objectives of that decision. However, the Member State(s) concerned must inform the Council immediately of any such measures.Footnote ¹²⁴

A Member State violates its duty of cooperation when it adopts provisions affecting the application of EU law, without first consulting the Union institutions involved.Footnote ¹²⁵ Likewise, the adoption of a decision authorizing the Commission to negotiate an international agreement on behalf of the Union marks the start of a concerted EU action at the international level. For that purpose it requires at the very least a duty of close cooperation between the Member States and the Union institutions ‘in order to facilitate the achievement of the [Union's] tasks and to ensure the coherence and consistency of the action and its international representation’.Footnote ¹²⁶ If a Member State autonomously concludes an international agreement on the same subject matter after the Council has authorized the Commission to open negotiations, without consulting with the EU institutions, it infringes Article 4(3) TEU.Footnote ¹²⁷

The Member States and the EU institutions have a special obligation of close cooperation in fulfilling the commitments undertaken by them under joint competence when they conclude a mixed agreement (ie agreements concluded by the Union and all or some of the Member States).Footnote ¹²⁸ In the Mox Plant case, the Court held that this is so particularly when a Member State submits to an arbitral tribunal outside the Union framework a dispute essentially on undertakings resulting from a mixed agreement which relates to an area, in which the respective areas of competence of the EU and the Member States are liable to be closely interrelated.Footnote ¹²⁹ In those circumstances, the obligation of close cooperation within the framework of a mixed agreement involves a duty to inform and consult the competent EU institutions prior to instituting dispute-settlement proceedings within the framework of UNCLOS.Footnote ¹³⁰ By bringing proceedings under that system, without having first informed and consulted the competent EU institutions, Ireland had therefore failed to comply with its duty of cooperation under Articles 4(3) TEU and 192 EURATOM.Footnote ¹³¹ Indeed, as the Court clarified in Opinion 2/13, the obligation enshrined in Article 344 TFEU of Member States ‘to have recourse to the procedures for settling disputes established by EU law — and, in particular, to respect the jurisdiction of the Court of Justice, which is a fundamental feature of the EU system — must be understood as a specific expression of Member States’ more general duty of loyalty resulting from Article 4(3) TEU’.Footnote ¹³²

The principle at work is vividly illustrated by the PFOS case,Footnote ¹³³ which concerned infringement proceedings brought by the Commission against Sweden for having unilaterally proposed that perfluoroctane sulfonate (‘PFOS’) be added to Annex A to the Stockholm Convention on Persistent Organic Pollutants.Footnote ¹³⁴ It had done so, regardless of the fact that a strategy had been agreed in the Council not to propose the addition of PFOS for the time being. Under EU law, Sweden is free to adopt measures providing for a higher level of environmental protection within its own jurisdiction.Footnote ¹³⁵ However, proposing such measures within the framework of an international agreement to which the Union is a party, which would imply that the Union may be bound by a more stringent measure with which it did not express its agreement, is quite a different thing and does not fall within the scope of Article 193 TFEU.Footnote ¹³⁶ It is important to appreciate in that regard that Sweden was exercising its own competence when it submitted the proposal to list PFOS. However, in doing so, the principle of sincere cooperation required that it take into account the fact that the Union too is competent in the matter and that a strategy had been agreed within the Council.

Although these obligations are particularly detailed in EU law, they are not a unique characteristic of EU loyalty. Rather, in a contractual context involving mutual obligations for the parties, duties of cooperation are the natural consequence of good faith.Footnote ¹³⁷ Where good faith in general regulates the exercise of a State's power,Footnote ¹³⁸ the duty to cooperate more specifically obliges States to consult, inform, and cooperate with other States whenever the exercise of their own powers risks having an impact on the powers of others.

For example, in The Islands of Palmas Case sole arbitrator Huber famously held: ‘Territorial sovereignty involves the exclusive right to display the activities of a State. This right has a corollary duty: the obligation to protect within the territory the rights of other States.’Footnote ¹³⁹ This is particularly clear when the exercise of one State's territorial sovereignty leads to physical consequences on the territory of another State, as was the case for instance in the Trail Smelter Case.Footnote ¹⁴⁰ A similar idea underlies Principle 19 of the Rio Declaration on Environment and Development,Footnote ¹⁴¹ which obliges States to ‘provide prior and timely notification and relevant information to potentially affected States on activities that may have a significant adverse transboundary environmental effect and [to] consult with those States at an early stage and in good faith’. More generally, it is in certain circumstances essential to inform those whose sphere of interest may be affected by certain events or facts. For example, in the Corfu Channel Case,Footnote ¹⁴² the ICJ held the basis of responsibility to be Albania's failure to warn the United Kingdom of the presence of mines in Albanian waters that had been laid by a third State.

Furthermore, the obligation to consult and collaborate in order to devise a solution for unforeseen circumstances also exists in international law.Footnote ¹⁴³ For example, in the Rainbow Warrior case, the UN Secretary-General acted as an arbitrator to resolve the conflict between France and New Zealand. Part of his ruling consisted in France being obliged to hold the two agents on an isolated military base in the Pacific. However, when one of the agent's father was dying, France decided unilaterally to allow the agent to return to France, even letting her stay there for quite a while after her father had passed away. The arbitral tribunal held that the father's situation might indeed have been a humanitarian reason for making an exception from the isolation, but that France should have nevertheless consulted New Zealand on this point, informing it of the new situation and asking New Zealand's consent for allowing the agent to come to France. In other words, ‘the French Republic did not make efforts in good faith to obtain New Zealand's consent’.Footnote ¹⁴⁴

International institutional law has likewise recognized mutual obligations between an organization and its members to cooperate in good faith, and may oblige States to exercise their own competences with caution. The Separate Opinion of Judge Rezek in Difference Relating to Immunity from Legal Process of a Special Rapporteur of the Commission on Human Rights put the basic principle as follows:

The ICJ held in that regard in the Agreement between the WHO and Egypt caseFootnote ¹⁴⁶ that the

The ICJ derived three concrete obligations from the duty to cooperate: (i) an obligation to consult together in good faith as to the question under what conditions and in accordance with what modalities a transfer of the WHO Regional Office from Egypt could be effected; (ii) in the event of a transfer, a duty to consult together and to negotiate regarding the various arrangements needed to effect the transfer from the existing to the new site in an orderly manner and with a minimum of prejudice to the work of the Organization and the interests of Egypt; and (iii) a duty on the party wishing to effect the transfer to give a reasonable period of notice to the other party for the termination of the existing situation regarding the WHO Regional Office at Alexandria, taking due account of all the practical arrangements needed to effect an orderly and equitable transfer of the Office to its new site.Footnote ¹⁴⁸ The ICJ considered that

Much like in EU law, good faith in international institutional law is therefore not exclusively an obligation incumbent upon the Member States, but entails duties for all the organs of the organization in question, and regulates the relationships between those organs. As such, it gives rise to ‘a duty of fairness, respect and mutual co-operation, and a duty to take account of the juridical acts of the various organs between each other’.Footnote ¹⁵⁰

A. EU Loyalty as Bundestreue

As already mentioned, EU loyalty is often equated with ‘federal good faith’, in the sense of a constitutional law principle different from international law good faith.

That position is habitually supported by drawing a parallel between EU loyalty and the principle of Bundestreue in German constitutional law. Both principles play a role in the functioning of their respective legal orders as federal systems and, so the reasoning goes, that distinguishes them from the application of the general principle of good faith in international law, which is said not to share any of these federal characteristics.Footnote ¹⁵¹

Many of the obligations that the Bundesverfassungsgericht (‘BVerfG’, the German Constitutional court) has formulated on the basis of the Bundestreue principle do indeed correspond to obligations that the ECJ has construed on the basis of loyalty.Footnote ¹⁵² For instance, the prohibition for Länder to make use of their concurring powers from the moment that the Bund starts legislating the same subject matterFootnote ¹⁵³ comes quite close to the ECJ's ERTA case law.Footnote ¹⁵⁴ Just like in EU law, the principle plays a crucial role in the field of external relations. Both the Bund and the Länder have the capacity to conclude international agreements,Footnote ¹⁵⁵ but since the Bund enjoys a presumption of external competence, the Länder have ‘particularly serious’ loyalty obligations towards the Bund in this area.Footnote ¹⁵⁶ Another similarity is the prohibition for one of the ‘parts’ of the federal State to justify its refusal to perform its duties of federal fidelity by referring to another part's failure to do the same.Footnote ¹⁵⁷ Nevertheless, unlike the German Constitutional Court, the ECJ never expressly founded this prohibition on the loyalty principle.Footnote ¹⁵⁸ Although these are just a few examples of similarities between both principles, they elucidate why so many authors have highlighted the parallel between loyalty and Bundestreue.

That being said, the obligations of federal fidelity in Germany certainly are not always identical to those established by the ECJ. Both systems differ in their constitutional design and in many respects the former is clearly more integrated than the latter. As a consequence, the case law of the German Constitutional court contains different and occasionally more far-reaching obligations of federal good faith. For instance, because the Bund enjoys a presumption of external competence,Footnote ¹⁵⁹ many of the Bundestreue applications in this area concern duties for the Bund to inform and consult the Länder early on when it acts internationally.Footnote ¹⁶⁰ In the EU, on the other hand, loyalty mostly operates in the other direction, calling on the Member States (at the very least) to inform and consult with the European Commission from the moment there is a start of concerted Union action.Footnote ¹⁶¹

Nevertheless, the distinction between federal and international law good faith is arguably artificial. Both are applications of the same general principle, which by its nature leads to different consequences depending on the level of integration of the legal relationship in which it applies.Footnote ¹⁶² A difference in legal consequences does not necessarily imply a different underlying principle.

B. Bundestreue as Good Faith

Could the comparison between EU loyalty and international law good faith be extended to Bundestreue on the basis of the same three applications used in the previous section? That is not a straightforward exercise. With regard to pacta sunt servanda, it has never been necessary for the German BVerfG to refer to Bundestreue to posit the binding character of federal law.Footnote ¹⁶³ Like EU loyalty, Bundestreue is only relied on when there are no other, more precise rules that determine the outcome of the dispute.Footnote ¹⁶⁴ Article 31 of the Grundgesetz (German Basic Law) unequivocally states: ‘Bundesrecht bricht Landesrecht’ (literally ‘federal law breaks state law’). That arguably made it abundantly clear that as long as the Bund acted within the sphere of its powers, federal law was binding on the Länder.Footnote ¹⁶⁵ Thus, the German Constitutional court never needed to have recourse to an unwritten constitutional principle to establish this. For some, the fact that the court based its acceptance of a rebus sic stantibus doctrine on the Bundestreue principleFootnote ¹⁶⁶ implies that the court views that principle as an expression of pacta sunt servanda as well.Footnote ¹⁶⁷ However, the court arguably came closer to expressing this idea when it held that Bundestreue could require the Länder to respect international treaties concluded by the Bund as federal law.Footnote ¹⁶⁸

By contrast, the Bundesverwaltungsgericht (the federal Administrative court) has referred to both pacta sunt servanda and Bundestreue to emphasize the binding nature, not of federal law as such, but of agreements between the Länder (so-called Staatsverträge).Footnote ¹⁶⁹ The Bundesverwaltungsgericht thereby explicitly drew on the continuity between federal (constitutional) law and international law. As will be seen below, there was a time when the German constitution recognized international law as a subsidiary source of law in the relations between the Länder. However, ruling in 1976, the Bundesverwaltungsgericht emphasized that the relationship between the Länder was exhaustively regulated by constitutional law—partly by the Grundgesetz, partly by the principle of Bundestreue.Footnote ¹⁷⁰ The constitutional court of one of the Länder had held that the Land statute approving an agreement between all of the Länder was incompatible with the Land's constitution.Footnote ¹⁷¹ Other Länder, it had ruled, were obliged to respect this ruling.Footnote ¹⁷² The Bundesverwaltungsgericht disagreed.Footnote ¹⁷³ The relationship between the Länder could only be governed by principles stemming from a legal order common to all of them, which usually meant principles of federal law.Footnote ¹⁷⁴ Federal law did not explicitly provide a solution, but the Länder's duty of Bundestreue required them to look for a mutually acceptable solution in case of disputes, if necessary by requesting a court ruling. Until then, the agreement had to be carried out.Footnote ¹⁷⁵ Although constitutional law, not international law, applied between the Länder, the court nevertheless considered it apposite to refer to the fact that, under international law, even a treaty that was held to be unconstitutional remains binding.Footnote ¹⁷⁶ It reasoned that what was true between independent States had to be true a fortiori between the more integrated states of a federation, thus using the continuity between both legal orders as an additional argument for the primacy of the agreement between the Länder.

Matters are equally nuanced with respect to the prohibition to frustrate a treaty or a directive after it has been signed or agreed upon, but before its ratification or the expiry of the period of transposition, respectively. Until 2006, the German Bundesstaat could legislate by way of framework legislation in much the same way as the EU,Footnote ¹⁷⁷ though only with respect to a limited list of topics.Footnote ¹⁷⁸ However, there does not seem to be a Bundestreue-based German analogue to the ECJ's Inter-Environment Wallonie case law.Footnote ¹⁷⁹

That being said, the central idea that underpins this second application, namely that it is possible for a state acting within the sphere of its powers to abuse those powers, is part and parcel of the case law on Bundestreue. In the very first case in which the BVerfG referred to the principle, for instance, the court held that the Länder could not arbitrarily withhold their constitutionally required consent to federal legislation. Because federal good faith required that they have regard for the interests of other Länder, some objective justification for their veto was required.Footnote ¹⁸⁰ The similarity of this case to the ICJ's Advisory Opinion in Admission of a State to the United Nations Footnote ¹⁸¹ (discussed below) is striking. Both courts constrain a government's discretion in exercising a vote by requiring an objective justification for the voting decision, thereby effectively considering all votes lacking such justification abusive. It is not a coincidence that where Bundestreue mandated this outcome in German constitutional law, good faith did the same in international law.

The comparison is more straightforward with respect to duties of cooperation, the most far-reaching example of the application of good faith. In that regard, no strict conceptual distinction between the obligation to cooperate and the prohibition of abuse appears to exist. For the BVerfG, the former is often simply the flipside of the latter. Whenever the effects of Land legislation go beyond the Land, Bundestreue requires the legislator to ‘take account of’ the interests of both the Bund and the other Länder—a positive obligation.Footnote ¹⁸² A failure to have sufficient regard to these interests amounts to an abuse.Footnote ¹⁸³ For instance, when a Land exercises its competence to transpose federal framework legislation and sets the wages of its officials, it has to take into account matters of common concern. Thus, a Land violates the principle of Bundestreue by setting the wages at such a high level that it risks upsetting the national budget.Footnote ¹⁸⁴ The same is true, mutatis mutandis, for the actions of the Bund affecting Länder interests.Footnote ¹⁸⁵

The BVerfG has repeatedly held that Bundestreue requires mutual cooperation, not only between Bund and Länder, but also between Länder.Footnote ¹⁸⁶ Just like good faith in international law or loyalty in EU law, the principle imposes duties to inform or consult. For instance, when the Bund intends to adopt legislation that touches on Länder interests—be it internally or at the EU level—it has to keep them duly informed, consult, cooperate and negotiate with them.Footnote ¹⁸⁷ In doing so, the Bund also has to treat the Länder equally.Footnote ¹⁸⁸ Therefore, it cannot play the Länder out against one another in order to prevent them from having an actual impact on the content of the proposal.Footnote ¹⁸⁹ Another example of this duty to consult can be found in Article 89(3) GG, which demands that ‘[i]n the administration, development, and new construction of waterways, the requirements of land improvement and of water management … be assured in agreement with the Länder’, and has been described as an expression of Bundestreue.Footnote ¹⁹⁰

Bundestreue also imposes special duties of cooperation in exceptional circumstances. The BVerfG has used the principle as the basis for its doctrine of rebus sic stantibus: when circumstances have changed fundamentally, making it unreasonable for a Land to carry out the agreement concluded with another Land, Bundestreue can justify a modification of the agreement, a mitigation of the obligations it imposes, or replace it in kind by monetary payment.Footnote ¹⁹¹ It is for the same reason that the BVerfG has called the duty to renegotiate the respective shares of the Bund and the Länder in the revenue from the turnover tax ‘whenever the ratio of revenues to expenditures of the Bund becomes substantially different from that of the Länder’ (Article 106(4), first sentence, GG) a duty of Bundestreue.Footnote ¹⁹² The Bundesverwaltungsgericht, in the case discussed above, held that when all Länder have jointly adopted an agreement (Staatsvertrag) and a dispute arises over its execution, Bundestreue requires them to find a mutually acceptable solution. This obligation is reminiscent of the duty to negotiate in good faith, which the ICJ notably imposed on Hungary and Slovakia in Gabčíkovo–Nagymaros.Footnote ¹⁹³

Finally, some of these duties of cooperation go further than those existing in EU law. In Germany, ‘the federal principle’ entails a duty for the more affluent Länder to assist (within certain limits) the Länder facing financial difficulties.Footnote ¹⁹⁴ The BVerfG has formulated a self-standing duty of financial solidarity between the Länder that goes beyond the equalization regime in Article 107 GG.Footnote ¹⁹⁵ In case of an ‘extreme budgetary crisis’ in either the Bund or one of the Länder, the other members of the federation have a duty to assist financially. Moreover, they have to cooperate in order to coordinate their measures. In the EU, the link between financial solidarity and loyalty is not entirely absent. In an early case, the Court held that solidarity lies at the basis of ‘the whole of the Community system in accordance with the undertaking provided for in Article 5 of the Treaty [now Article 4(3) TEU]’.Footnote ¹⁹⁶ However, the ECJ appears to have used the term ‘solidarity’ in a broad sense,Footnote ¹⁹⁷ because it saw expressions of it not only in the Member States’ duty of mutual assistance where a Member State was seriously threatened with difficulties as regards its balance of payments as expressions of solidarity (Article 108 EEC), but also in Member States’ duty to coordinate their economic policies and to treat their policies on exchange as a matter of common concern (Articles 105 and 107 EEC). Moreover, the duty of financial assistance, though described as an expression of loyalty by the Court, was in fact based on a specific (since repealed) EEC Treaty provision.

C. The History of Bundestreue in International Law Good Faith

That the distinction between federal and international good faith is artificial is further borne out by the legal history of Bundestreue which, rather than being a legal mechanism particular to States, has its origins in an application of the principle of Treu und Glauben (the general principle of good faith) to the international cooperation between independent States, a political agreement between the different Einzelstaaten that constituted the (then) German Reich.

While there had been primitive forms of a similar principle in German history,Footnote ¹⁹⁸ the intellectual father of Bundestreue as an unwritten constitutional principle supplementing the (then recent) Constitution is widely regarded to be Rudolf Smend.Footnote ¹⁹⁹ In a 1916 contribution to a Festschrift,Footnote ²⁰⁰ Smend argued that, independently of the Reich's Constitution,Footnote ²⁰¹ there was an unwritten duty for the parts and the Bund to cooperate sincerely. Although the Constitution established a clear hierarchy between the central government and the states, he claimed that the constitutional and political reality of the Reich was based on an agreement between equal and independent Einzelstaaten to form a Bund together.Footnote ²⁰² This was arguably a bit of a stretch,Footnote ²⁰³ as in December 1870 the North German Confederation (Bund) had made way for a unified German Reich led by Kaiser Wilhelm I, in whom the Constitution vested extensive powers. Moreover, dominated by the comparatively outsized Prussia, the states were far from equal in practice. However, right before the conversion of the Bund into the Reich, in November 1870, the North German Confederation and the south German states had indeed formally agreed to form a new German Bund. The German Reich, though different in some respects, took over most of the North German Confederation's Constitution (and even its flag). The combination of these elements with his reading of the political reality to Smend was proof of the continuity of the agreement between the states. In his eyes, the constitutional reality of this agreement between equal, sovereign states therefore supplemented the written Constitution, which envisioned a hierarchically structured Reich.

What is more, judging by the words he used, Smend arguably regarded this pact as an international treaty.Footnote ²⁰⁴ For instance, he saw the Constitution as ‘in the first place a diplomatic act’,Footnote ²⁰⁵ and argued that the Einzelstaaten had to carry out their duties vis-à-vis the Reich, not as subjects obeying a government's commands, but as equals, ‘im diplomatischen Stil des völkerrechtlichen Verkehrs’.Footnote ²⁰⁶ Crucially, Smend added that, like all agreements, this (international) agreement between the Einzelstaaten had to be carried out in good faith. Because the relationship between Reich and Einzelstaaten, rather than a hierarchical one, was one between Verbündeten and the Bund they create, good faith imposed a mutual duty to cooperate sincerely.Footnote ²⁰⁷

Smend's ideas on Bundestreue as a legal principle have become part and parcel of German constitutional law. Even though he had developed them specifically for the monarchical Bundestaat, Smend continued to defend their validity after the German Reich was replaced by the Weimar Republic,Footnote ²⁰⁸ and many subscribed to his view.Footnote ²⁰⁹ The Bundesverfassungsgericht would later recognize that the constitutional theory developed with respect to the 1871 Reichsverfassung was relevant for the interpretation of the new, post-1949 Bundesstaat.Footnote ²¹⁰ It would put Smend's ideas on Bundestreue in practice, on at least two occasions explicitly referring to Smend's 1916 contribution.Footnote ²¹¹

The connection between international law good faith and federal fidelity, however, was made most clearly by the Bundesverfassungsgericht's predecessor, the Weimarer Staatsgerichtshof (WSGH).Footnote ²¹² In the 1927 Danube Sinkhole (‘Donauversinkung’) case,Footnote ²¹³ though not referring explicitly to Smend, the WSGH connected the international law duty of good faith with the principle of Bundestreue between the German Länder. In so doing, the court confirmed the parallel on which Smend had based his ideas. Imposing a constitutional duty of federal fidelity on the Länder essentially comes down to applying the general principle of good faith to an (implicit) international treaty. The identity of both concepts moreover was not just a purely academic discussion but had practical significance.

The Danube Sinkhole is an incipient underground stream capture that causes the water of the Danube at a particular spot to seep into the soil and flow through underground caverns, eventually resurfacing in the source of the river Aach. This natural phenomenon takes place mostly on the territory of what was then the Land of Baden. However, the sinkhole is located close to the border with what was then the Land of Württemberg and for a substantial part of the year the Danube riverbed dries up completely over a distance of 10 to 12 kilometres after the sinkhole in Württemberg territory.Footnote ²¹⁴ This had serious consequences for watermills and other water-powered industry but also for water provision to Württemberg cities. Since the water that seeped into the soil for a large part ended up in the river Aach, it was not in Baden's interest to limit the sinkhole phenomenon. The Länder of Württemberg and Preußen claimed that Baden had contributed to the worsening of the phenomenon by not sealing holes in the dam of a weir and not carrying out maintenance works in the riverbed of the Danube, and took the case to the WSGH.

The 1919 Weimarer Reichsverfassung (‘WRV’) had made Germany a Bundesstaat—a confederation with Länder that formally still had independent statehood in the traditional sense.Footnote ²¹⁵ Similarly to current Article 25 of the Grundgesetz,Footnote ²¹⁶ Article 4 WRV stated that ‘[d]ie allgemein anerkannten Regeln des Völkerrechts gelten als bindende Bestandteile des deutschen Reichsrechts’.Footnote ²¹⁷ However, contrary to Article 25 of the Grundgesetz,Footnote ²¹⁸ Article 4 WRV applied both to the international relations of the Reich and the relations between the Länder to the extent that they were not covered by federal law.

Article 4 WRV allowed the WSGH to operationalize the connection between the international law duty of good faith and the principle of Bundestreue between the German Länder. After having determined that it could apply neither federal law (Reichsrecht) nor the law of any of the Länder involved (Landesrecht) to the dispute, the WSGH moved on to apply international law as a subsidiary source of law.Footnote ²¹⁹ As mentioned, Article 4 WRV explicitly made ‘the generally recognized rules of the law of nations’ part and parcel of German federal law. At the outset, the WSGH remarked that it would look at international law in its new form—not a law of strict coexistence but a law of cooperation the starting point of which was the limitation of State sovereignty on the basis of the mere fact of being part of the international community.Footnote ²²⁰ It is on that basis, the WSGH stated, that ‘eine Pflicht der Staaten zur gegenseitigen Achtung und Rücksichtnahme, eine Pflicht, einander nicht zu verletzen’Footnote ²²¹ was established in international law. Crucially, however, it considered this duty more exigent (limiting sovereignty to a larger extent) in a more integrated legal system such as the German Bundesstaat than in the worldwide community of States.Footnote ²²²

Noticing that there were no specific treaty rules available to solve the dispute at hand, the WSGH remarked that this principle of ‘gegenseitigen Achtung und Rücksichtnahme’Footnote ²²³ also underpins the international law on rivers, as appears for instance from treaties regulating in detail the cooperation between States bordering larger international rivers.Footnote ²²⁴ Hence, the WSGH held, it is a generally recognized rule of international law that no State is allowed to take measures on its territory with regard to an international river that negatively affect the water stream on the territory of other States.Footnote ²²⁵ In assessing whether Baden had infringed this rule, the factual circumstances played a large role. Moreover, account had to be taken not just of the damage done by Baden to the other Länder. Rather, a balance had to be struck between the advantage for Baden and the damage to the other Länder. For this balancing exercise, the close relationship between the German Länder as part of the same Bundesstaat was of particular importance.Footnote ²²⁶ The Court left the definitive settlement of the dispute to an agreement between the parties, but held in an interim decision that both Baden and Würtemberg had to refrain from increasing or diminishing the natural sinking of water by artificial constructions such as dams and weirs. Baden did have to counteract the detrimental accumulation of sand and gravel in the riverbed but was not obligated permanently to improve the bed of the river.Footnote ²²⁷

This German case law may very well have influenced international case law, not in the least with regard to the application of the principle of Treu und Glauben (good faith) to balance the sovereign powers of several states. An example may be the judgment in the Territorial Jurisdiction of the International Commission of the River Oder case, rendered by the PCIJ only two years after the Danube Sinkhole case. This case also concerned the cooperation of States bordering the same river and, though the legal problem at issue was quite different from that at stake in the Danube Sinkhole Case (and need not concern us here), the PCIJ phrased the duties of cooperation between such States in a remarkable passage:

The Danube Sinkhole Case, especially when read together with the Territorial Jurisdiction of the International Commission of the River Oder Case, shows the clear link between Bundestreue and the application of the general principle of good faith in international law. It thereby appears to gainsay the idea that Bundestreue (federal good faith) is a completely different principle from international law good faith.

It could be objected that the WSGH nowhere used the term ‘Bundestreue’ in Danube Sinkhole. However, Smend himself rarely used the term ‘Bundestreue’Footnote ²²⁹ and certainly did not attach much value to a specific denomination. Next to terms like ‘Vertragstreue’,Footnote ²³⁰ ‘bundesfreundliches Verhalten’Footnote ²³¹ or ‘bundesfreundlicher Gesinnung’,Footnote ²³² Smend mostly described the obligations the principle imposed. Like the WSGH,Footnote ²³³ he spoke of a duty of Rücksicht—an obligation to take the interests and competences of other States into account and avoid harm to them.Footnote ²³⁴ More important than the semantics is the substantive continuity between the obligations imposed by good faith between sovereign States in the international community at large and the duties that same principle imposes between the entities of a federation. According to the PCIJ, the mere geographical fact of bordering the same river compels States to cooperate and, in that way, creates a ‘community of interest’. Similarly, the WSGH reasoned that the fact of belonging to the international community created certain obligations of cooperation, of Achtung und Rücksichtnahme, of good faith. The Danube Sinkhole Case illustrates the functioning of the general principle of good faith (Treu und Glauben) as a principle that applies to all law, but whose consequences depend on the legal relationship to which it is applied.Footnote ²³⁵