Section 1 - Transfer Pricing
- EVOLUTION OF TRANSFER PRICING IN INDIA – TRANSFER PRICING CA FINAL
- WHAT IS TRANSFER PRICING – CA Final Direct and International Tax
- EVOLUTION OF TRANSFER PRICING IN INDIA [PRE-2001 ERA] – SECTION 92 – TRANSFER PRICING CA FINAL
- MEANING OF TRANSFER PRICE
- TRANSFER PRICING METHODS
- Comparable Uncontrolled Price Method
- EVOLUTION OF TRANSFER PRICING IN INDIA [PRE-2001 ERA] – REPLACEMENT OF EXISTING LAW
- COMPUTATION OF INCOME HAVING REGARD TO THE ALP – SECTION 92 – APPLICABILITY OF ARM’S LENGTH PRINCIPLE
- COMPUTATION OF INCOME HAVING REGARD TO THE ALP – SECTION 92 – BASE EROSION CONCEPT
- ASSOCIATED ENTERPRISES – SECTION 92A (1)
- INTERNATIONAL TRANSACTION [SECTION 92B]
- ARMS’ LENGTH PRINCIPLE
- COMPUTATION OF ARM’S LENGTH PRICE [SECTION 92C]
- SELECTION OF TESTED PARTY
- SELECTION OF PROFIT LEVEL INDICATOR
- SELECTION OF MOST APPROPRIATE METHOD – RULE 10C
- DATA TO BE USED FOR ANALYZING COMPARABILITY OF AN UNCONTROLLED TRANSACTION WITH AN INTERNATIONAL TRANSACTION
- ARITHMETIC MEAN – WHEN MORE THAN ONE PRICE IS DETERMINED
- APPLICABILITY OF RANGE CONCEPT – WHEN MORE THAN ONE PRICE IS DETERMINED
- FUNCTIONS, ASSETS AND RISK (FAR) ANALYSIS
- DOCUMENTATIONS AND COMPLIANCES – DOCUMENTATION REQUIREMENT UNDER THE INCOME-TAX ACT, 1961
- FUNCTIONAL ANALYSIS
- ECONOMIC ANALYSIS
- PENALTY FOR UNDER-REPORTING OF INCOME – SECTION 270A
- PENALTY FOR MISREPORTING OF INCOME – SECTION 270A
- PENALTY FOR FAILURE TO KEEP AND MAINTAIN INFORMATION AND DOCUMENTATION – SECTION 271AA
- PENALTY FOR FAILURE TO FURNISH INFORMATION OR DOCUMENT U/S 92D – SECTION 271G
- COUNTRY BY COUNTRY REPORTING
- Domestic Transfer Pricing
- SAFE HARBOUR RULES FOR INTERNATIONAL TRANSACTION
- TRANSFER PRICING ASSESSMENT procedure in India
- APPEAL PROCEDURE
- POWER OF ASSESSING OFFICER TO DETERMINE THE ARM’S LENGTH PRICE
- REFERENCE TO TRANSFER PRICING OFFICER [SECTION 92CA]
- RECTIFICATION OF TPO ORDER
- POWERS OF TPO
- SECONDARY ADJUSTMENT – SECTION 92CE
- DISPUTE RESOLUTION MECHANISM UNDER TRANSFER PRICING
- ADVANCE PRICING AGREEMENT
- MUTUAL AGREEMENT PROCEDURE
- MISCELLANEOUS TRANSFER PRICING PROVISIONS
Section 2 - Non-Resident Taxation
- CHARGE OF INCOME TAX AND RESIDENTIAL STATUS
- RESIDENTIAL STATUS OF A COMPANY
- SCOPE OF TOTAL INCOME AND INCOME DEEMED TO BE RECEIVED IN INDIA AND ACCRUE OR ARISE IN INDIA
- TAXABILITY OF OFFSHORE FUNDS AND INCOME THROUGH OR FROM ANY PROPERTY, ASSET OR SOURCE OF INCOME IN INDIA
- SALARY PAYABLE BY GOVERNMENT FOR SERVICES RENDERED OVERSEAS AND DIVIDEND PAID BY AN INDIAN COMPANY OUTSIDE INDIA
- EXEMPT INCOME OF NON-RESIDENTS
- INTEREST AND ROYALTY AND FEES FOR TECHNICAL SERVICES
- PRESUMPTIVE TAXATION FOR NON-RESIDENTS – introduction
- Capital Gains tax provisions – CA Final Direct and International Tax Notes
- WITHHOLDING TAX FROM PAYMENTS TO NON – RESIDENTS
Section 4 - Double Taxation Relief
- CONCEPT OF DOUBLE TAXATION AND WHY IT ARISES AND TYPES OF DOUBLE TAXATION RELIEF
- COUNTRIES WITH WHICH NO AGREEMENT EXISTS UNILATERAL AGREEMENTS – SECTION 91
- TREATY PROVISION TO OVERRIDE INCOME TAX ACT AND MODE OF COMPUTATION OF INCOME OF NON-RESIDENTS
- Foreign Tax Credit in India – Rule 128 of the Income Tax Rules 1962 – CA Final International Tax Notes
Section 5 - Black Money
- KEY FEATURES OF THE BLACK MONEY ACT
- APPLICABILITY AND COVERAGE OF THE BLACK MONEY ACT – SECTION 1
- BASIS OF CHARGE – SECTION 3
- DEFINITION OF ASSESSEE – SECTION 2(2)
- APPLICABILITY OF BLACK MONEY ACT TO PERSONS RESIDENT IN INDIA
- DEFINITION OF UNDISCLOSED ASSET LOCATED OUTSIDE INDIA – SECTION 2(11)
- RELEVANT PREVIOUS YEAR FOR CHARGEABILITY TO TAX – UNDISCLOSED ASSET LOCATED OUTSIDE INDIA – SECTION 3
- VALUATION OF AN UNDISCLOSED ASSET LOCATED OUTSIDE INDIA – SECTION 3(2)
- TRANSFER OF ASSETS BEFORE VALUATION DATE
- VALUATION IN CASE OF ACQUISITION OF ASSET OUT OF CONSIDERATION OF OLD ASSET OR BANK ACCOUNT – RULE 3(3)
- MEANING OF ESTABLISHED SECURITIES MARKET – EXPLANATION 1 TO RULE 3
- MEANINGFUL ANNUAL VALUE OF SHARES TRADED ON THE EXCHANGE – EXPLANATION 1 TO RULE 3
- MEANING OF QUOTED SHARE OR SECURITY – EXPLANATION 1 TO RULE 3
- MEANING OF UNQUOTED SHARE AND SECURITY – EXPLANATION 1 TO RULE 3
- SCOPE OF TOTAL UNDISCLOSED FOREIGN INCOME AND ASSET – SECTION 4(1)
- VARIATION MADE IN FOREIGN INCOME DURING ASSESSMENT OR REASSESSMENT- SECTION 4(2)
- NON-INCLUSION OF UNDISCLOSED FOREIGN INCOME AND ASSET IN INCOME COMPUTED UNDER INCOME-TAX ACT- SECTION 4(3)
- NO DISALLOWANCE AND SET-OFF FOR COMPUTATION OF TOTAL UNDISCLOSED FOREIGN INCOME AND ASSET – SECTION 5
- DEDUCTION FROM VALUE OF UNDISCLOSED ASSET OUTSIDE INDIA
- DEDUCTION FROM VALUE OF IMMOVABLE PROPERTY OUTSIDE INDIA
- TAX AUTHORITIES UNDER THE BLACK MONEY ACT – SECTION 6
- CHANGE OF TAX AUTHORITY – SECTION 7
- POWERS OF TAX AUTHORITY
- PROCEEDINGS BEFORE TAX AUTHORITIES TO BE JUDICIAL PROCEEDINGS – SECTION 9(1)
- ASSESSMENT OF FOREIGN INCOME AND ASSETS – SECTION 10
- TIME LIMIT FOR COMPLETION OF ASSESSMENT AND REASSESSMENT – SECTION 11(1)/(2)
- NON-APPLICABILITY OF THE 2-YEAR TIME LIMIT FOR COMPLETION OF ASSESSMENT- SECTION 11(3)
- EXCLUSIONS IN COMPUTING LIMITATION PERIOD OF ASSESSMENT/REASSESSMENT – EXPLANATION 1 TO SECTION 11
- RECTIFICATION OF MISTAKE – SECTION 12
- NOTICE OF DEMAND – SECTION 13
- DIRECT ASSESSMENT OR RECOVERY NOT BARRED – [SECTION 14]
- APPEALS TO COMMISSIONER (APPEALS) – SECTION 15
- APPEAL TO APPELLATE TRIBUNAL – SECTION 18
- APPEAL TO APPELLATE TRIBUNAL – SECTION 18
- APPEAL TO HIGH COURT – SECTION 19
- APPEAL TO SUPREME COURT – SECTION 21
- REVISION OF ORDERS PREJUDICIAL TO REVENUE – SECTION 23
- REVISION OF OTHER ORDERS – SECTION 24
- PAYMENT OF TAX DURING PENDING APPEAL
- RECOVERY OF TAX DUES BY ASSESSING OFFICER -SECTION 30
- RECOVERY OF TAX DUES BY TAX RECOVERY OFFICER – SECTION 31
- MODES OF RECOVERY OF TAX DUES – SECTION 32
- TAX RECOVERY OFFICER BY WHOM RECOVERY OF TAX DUES IS TO BE EFFECTED – SECTION 33
- RECOVERY OF TAX DUES IN CASE OF A COMPANY IN LIQUIDATION – SECTION 34
- LIABILITY OF MANAGER OF A COMPANY – SECTION 35
- JOINT AND SEVERAL LIABILITY OF PARTICIPANTS -SECTION 36
- RECOVERY THROUGH STATE GOVERNMENT- SECTION 37
- RECOVERY OF TAX DUES IN PURSUANCE OF DTAA OR TAX INFORMATION EXCHANGE AGREEMENT- SECTION 38
- RECOVERY BY SUIT OR UNDER OTHER LAW NOT AFFECTED – SECTION 39
- INTEREST FOR DEFAULT IN FURNISHING RETURN AND PAYMENT OR DEFERMENT OF ADVANCE TAX – SECTION 40
- PENALTY IN RELATION TO UNDISCLOSED FOREIGN INCOME AND ASSET – SECTION 41
- PENALTY FOR FAILURE TO FURNISH RETURN FOR FOREIGN INCOME AND ASSET – SECTION 42
- PENALTY FOR FAILURE TO FURNISH INFORMATION OF FOREIGN ASSET OR FOREIGN INCOME IN RETURN OF INCOME – SECTION 43
- DETERMINATION OF VALUE OF FOREIGN BANK ACCOUNT IN INR – EXPLANATION TO SECTION 42
- PENALTY FOR DEFAULT IN PAYMENT OF TAX ARREAR -SECTIONS 44
- PENALTY FOR OTHER DEFAULTS – SECTION 45
- PROCEDURE FOR IMPOSING PENALTY – SECTION 46
- PRIOR APPROVAL OF JOINT COMMISSIONER FOR IMPOSING PENALTY – SECTION 46
- BAR OF LIMITATION FOR IMPOSING PENALTY – SECTION 47
- OFFENCES AND PROSECUTION – CHAPTER V
- AGREEMENT WITH FOREIGN COUNTRIES OR SPECIFIED TERRITORIES – SECTION 73
- MODES OF SERVING NOTICE – SECTION 74
- ADDRESS FOR COMMUNICATION OF NOTICE BY POST OR APPROVED COURIER SERVICE – SECTION 74 READ WITH RULE 14
- E-MAIL ADDRESS FOR COMMUNICATION OF NOTICE – SECTION 74 READ WITH RULE 14
- AUTHENTICATION OF NOTICES AND OTHER DOCUMENTS – SECTION 75
- NOTICE DEEMED TO BE VALID IN CERTAIN CIRCUMSTANCES – SECTION 76
- APPEARANCE BY APPROVED VALUER IN CERTAIN MATTERS OR AUTHORIZED REPRESENTATIVE – SECTIONS 77 & 78
- MEANING OF AUTHORISED REPRESENTATIVE – SECTION 78
- ROUNDING OFF OF INCOME, VALUE OF ASSET AND TAX – SECTION 79
- CONGNIZANCE OF OFFENCE – SECTION 80
- ASSESSMENT NOT TO BE INVALID ON CERTAIN GROUNDS – SECTION 81
- BAR OF SUITS IN CIVIL COURTS – SECTION 82
- INCOME-TAX PAPERS TO BE AVAILABLE FOR THE PURPOSES OF THE BLACK MONEY ACT – SECTION 83
- APPLICATION OF PROVISIONS OF THE INCOME-TAX ACT – SECTION 84
- AMENDMENT OF PREVENTION OF MONEY-LAUNDERING ACT, 2002 – SECTION 88
Section 6 - Overview of Double Tax Convention
Section 7 - Application and interpretation of tax treaties
- ORIGINATION OF INTERNATIONAL TAX LAW AND DOUBLE TAXATION AND CONNECTING FACTORS
- DEFINITION OF TREATY , DOUBLE TAXATION AVOIDANCE AGREEMENT
- DIRECTIVE PRINCIPLES FOR INTERNATIONAL AGREEMENTS UNDER INDIAN CONSTITUTION AND ROLE OF VIENNA CONVENTION IN APPLICATION AND INTERPRETATION OF TAX TREATIES
- INDIAN JUDICIARY ON PRINCIPLES OF INTERPRETATION IN VIENNA CONVENTION AND ARTICLE 33: INTERPRETATION OF TREATIES AUTHENTICATED IN TWO OR MORE LANGUAGES INDIA AND TAX INFORMATION AND EXCHANGE AGREEMENT (TIEA)
- INTERPRETATION OF TREATIES – MONIST VIEW , DUALISTIC VIEW AND TREATY OVER DOMESTIC LAW
- INTERNATIONAL TAX CONFLICTS AND DOUBLE TAXATION INTRODUCTION AND BASIC PRINCIPLES OF INTREPRETATION OF A TREATY
- CUSTOMARY INTERNATIONAL LAW OF TREATY INTERPRETATION – OBJECTIVE INTERPRETATION , SUBJECTIVE INTERPRETATION AND PURPOSIVE INTERPRETATION
- CUSTOMARY LAW OF TREATY INTERPRETATION PRINCIPLE OF EFFECTIVENESS AND CONTEMPORANEA EXPOSITIO AND LIBERAL CONSTRUCTION
- EXTRINSIC AIDS TO INTERPRETATION OF A TAX TREATY
- OBJECTIVES OF TAX TREATIES ,OBJECTIVE OF DTAAs AND PURPOSE OF ENTERING INTO A DTAA INTO INDIAN CONTEXT – SECTION – 90(1) ?
Section 8A - Anti-Avoidance Measures
Section 8B - BEPS
Section 9 - E-Commerce
- HOW BUSINESS IS TRANSACTED THROUGH E-COMMERCE AND PREVALENT BUSINESS FORMS IN VARIOUS SEGMENTS OF DIGITAL ECONOMY?
- GROWTH OF E-COMMERCE AND TAXATION ISSUES ON E-COMMERCE ?
- PERMANENT ESTABLISHMENT IN E-COMMERCE AND DETERMINATION OF NATURE OF INCOME IN E-COMMERCE TRANSACTIONS?
- OECD RECOMMENDATIONS UNDER ACTION PLAN 1 OF BEPS TO TACKLE TAXATION ISSUES OF E-COMMERCE AND INTRODUCTION OF NEW CHAPTER OF EQUALIZATION LEVY ?
- WHO IS LIABLE TO DEDUCT EQUALISATION LEVY AND WHOSE INCOME IS LIABLE FOR DEDUCTION OF EQUALISATION LEVY ?
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DIRECTIVE PRINCIPLES FOR INTERNATIONAL AGREEMENTS UNDER INDIAN CONSTITUTION AND ROLE OF VIENNA CONVENTION IN APPLICATION AND INTERPRETATION OF TAX TREATIES
DIRECTIVE PRINCIPLES FOR INTERNATIONAL AGREEMENTS UNDER INDIAN CONSTITUTION
Article 51 of the Indian Constitution has set out some directive principles, which must be followed by the State, in the context of International agreements and relationships as under : –
- The State shall endeavor to –
- Promote international peace and security;
- Maintain just and honorable relations amongst nations;
- Foster respect for international law and treaty obligations in the dealings of organized people with one another; and
- Encourage settlement of international disputes by arbitration
ROLE OF VIENNA CONVENTION IN APPLICATION AND INTERPRETATION OF TAX TREATIES
- Since Tax Treaty is a part of international law, its interpretation should be based on certain set of principles and rules of interpretation. The Vienna Convention on Law of Treaties (codified in 1969), ratified by 114 Countries in April 2014, provides the basic rules of interpretation of any international agreement (including a tax Treaty).
- Even though India is not a signatory to this Convention, it has a great persuasive value as it is the authentic, codified customary public international law. Indian Courts have recognized and referred to principles enshrined in this Convention.
- The creation and their consequences are determined according to the rules contained in the Vienna Convention on the Law of Treaties.
INDIAN JUDICIARY ON PRINCIPLES OF INTERPRETATION IN VIENNA CONVENTION
- In Abdul Razak A. Meman’s case, the AAR observed that“ these recitals indicate that the purpose of entering into the Treaty is to promote mutual economic relations by concluding an agreement for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and on capital”. (Emphasis supplied)
ARTICLES OF VIENNA CONVENTION PROVIDE FOR DETAILED RULES OF INTERPRETIN
ARTICLE 31 – GENERAL RULE OF INTERPRETATION
ARTICLE 32 – SUPPLEMENTARY MEANS OF INTERPRETATION
ARTICLE 33 – INTERPRETATION OF TREATIES AUTHENTICATED IN TWO OR MORE LANGUAGES
ARTICLE 31 OF THE VIENNA CONVENTION – GENERAL RULE OF INTERPRETATION
- Article 31(1) of the Vienna Convention provides that
- “A Treaty shall be interpreted in good faith in accordance with the ordinary meaning to be given to terms of the Treaty in their context and in the light of its object and purpose.”
The context shall also comprise, of : –
- Agreement relating to the Treaty, made between all parties while concluding Treaty;
- Any instrument made by one party in connection with Treaty conclusion, and accepted by the other party.
- Article 31(2) and (3) of the Vienna Convention further provides that the following additional factors shall also be taken into account for the interpretation of Treaties, together with the context : –
- Any subsequent agreement between the parties regarding the interpretation or application of the Treaty;
- Any subsequent practice in the application of the Treaty, which establishes the agreement of the parties regarding its interpretation;
- Any relevant rules of international law applicable to relation between the parties.
- A special meaning shall be given to a term if it is established that the parties so intended.
ARTICLE 32 OF THE VIENNA CONVENTION – SUPPLEMENTARY MEANS OF INTERPRETATION
- In order to confirm the meaning resulting from the application of Article 31, or where Article 31 interpretation leaves ambiguous or obscure meaning or leads to absurd result, one can take recourse to supplementary means of interpretation, including the preparatory work of the Treaty and the circumstances of its conclusion.
ARTICLE 33 OF THE VIENNA CONVENTION – INTERPRETATION OF TREATIES AUTHENTICATED IN TWO OR MORE LANGUAGES
- If a Treaty has been authenticated in two or more languages, the text is equally authoritative in each language, unless the Treaty provides or the parties agree that, in case of divergence, a particular text shall prevail.
- A version of the Treaty in a language other than wherein text was authenticated, shall be considered an authentic text only if the Treaty so provides or the parties so agree.
- The terms of the Treaty are presumed to have the same meaning in each authentic text.
- Where a particular text does not prevail over the other text, if comparison of the authentic texts discloses a difference, which cannot be removed by Article 31 and 32, the meaning which best reconciles the texts, having regard to the object and purpose of the Treaty, shall be adopted.
ARTICLES OF THE VIENNA CONVENTION ON LAW OF TREATIES, RELEVANT TO UNDERSTAND THE APPLICATION AND INTERPRETATION OF TAX TREATIES
ARTICLE 26 – PACTASUNTSERVANDA (IN GOOD FAITH) : –
- Every Treaty, which is in force, is binding upon the parties to the Treaty, and it is mandatory for them to follow the Treaty , in good faith.
ARTICLE 27 – INTERNAL LAW AND OBSERVANCE OF TREATIES : –
- Failure to perform obligations under a Treaty, cannot be justified by a Treaty country, by invoking the provisions of its internal law. This rule is applicable even if entering into the Treaty itself was in violation of provision of internal law (Article 46).
- In India the concept of “Treaty Override” is well accepted. Section 90 (2) provides that provisions of domestic tax laws vis-à-vis Treaty would be applied to the extent the same are more beneficial to the assesses.
ARTICLES OF THE VIENNA CONVENTION ON LAW OF TREATIES , RELEVANT TO UNDERSTAND THE APPLICATION AND INTERPRETATION OF TAX TREATIES
ARTICLE 28 – NON RETROACTIVITY OF TREATIES : –
- Treaty provisions, do not bind a party to a Treaty, in relation to any act or fact which took place, or any situation which ceased to exist, before the date of the Entry into force of the Treaty with respect to that party. However, this rule is subject to any different intention appearing from the Treaty or otherwise.
ARTICLE 29 – TERRITORIAL SCOPE OF TREATIES : –
- Unless a different intention appears from the Treaty or is otherwise established, a Treaty is binding upon each party to a Treaty, in respect of its entire territory.
ARTICLE 30 OF THE VIENNA CONVENTION – APPLICATION OF SUCCESSIVE TREATIES RELATING TO THE SAME SUBJECT MATTER
- Where parties enter into successive treaties, relating to the same subject-matter, their rights and obligations shall be determined in accordance with the following paragraphs (Subject to Article 103 of the Charter of the United Nations).
- When a Treaty specifies that it is subject to, or not to be considered as incompatible with, an earlier or later Treaty, the provisions of that other Treaty shall prevail
- When all the parties to the earlier Treaty are also parties to the later Treaty but earlier Treaty is not terminated or suspended in operation under Article 59, the earlier Treaty applies only to the extent that its provisions are compatible with those of the later Treaty.
- When the parties to the later Treaty do not include all the parties to the earlier one :
- For States who are Party to Both treaties – Same rule applies as Bullet 2 above;
- Between a State party to both treaties and a State party to only one of the treaties, the Treaty to which both States are parties, governs their mutual rights and obligations.
WHERE TREATY ARE SUBJECT TO OTHER TAX TREATIES ENTERED LATER
- Sometimes parties to the Treaty
- subject themselves to provisions of other tax treaties that may be entered at a later date,
- In such cases the provisions of that later Treaty shall prevail.
- For example Most Favored Nation (“MFN” Clause) in the protocol on DTA with France.
ARTICLES OF THE VIENNA – ARTICLE 34 – GENERAL RULE REGARDING THIRD STATES
- A Treaty does not create either obligations or rights for a third State without its consent.
ARTICLES OF THE VIENNA – ARTICLE 42 – VALIDITY AND CONTINUANCE IN FORCE OF TREATIES
- The termination of a Treaty, its denunciation or the withdrawal of a party,
- or its suspension may take place only as a result of the application of the provisions of the Treaty or of the Convention.
VIENNA CONVENTION – ARTICLE 46 – PROVISIONS OF INTERNAL LAW REGARDING COMPETENCE TO CONCLUDE TREATIES
- A State cannot conclude that a Treaty is invalid, on the ground that its consent to Treaty was a violation of its internal law regarding competence to conclude treaties . However, this is subject to the exception when : –
- Violation was manifest ; and
- Concerned a rule of its internal law of fundamental importance.
VIENNA CONVENTION – ARTICLE 60 – TERMINATION OR SUSPENSION OF THE OPERATION OF A TREATY AS A CONSEQUENCE OF A BREACH
- If there is a material breach of a Bilateral Treaty by one of the parties, other party can invoke it as a ground for terminating/ suspending operation of the Treaty ( whole or in part). A material breach of a Treaty, could be :
- Repudiation of the Treaty not sanctioned by the Convention; or
- Violation of a provision essential to accomplishment of the object or purpose of the Treaty.
VIENNA CONVENTION – ARTICLE 60 – TERMINATION OR SUSPENSION OF THE OPERATION OF A TREATY
Right of the other Party in case of a Material breach – The foregoing paragraphs are without prejudice to any provision in the Treaty applicable in the event of a breach.
PARTY SPECIALLY AFFECTED BY THE BREACH
- Party specially affected by the breach can suspend operation of the Treaty (wholly or partly), between itself and the defaulting State;
PARTY OTHER THAN DEFAULTING PARTY – UNANIMOUS DECISIO
- Other parties, by unanimous agreement, can suspend the operation of the Treaty (wholly or partly) or terminate it either : –
- in relations amongst themselves and the Defaulting State; or
- Between all the parties;
PARTY OTHER THAN DEFAULTING PARTY – INDIVIDUAL DECISION
- Any party other than the defaulting State can invoke the breach by one of the parties as a ground for suspending the operation of the Treaty (wholly or partly) with respect to itself, if the Treaty is of such a character that a material breach of its provisions by one party
- radically changes the position of every other party with respect to further performance of its obligations under the Treaty.
VIENNA CONVENTION – ARTICLE 61 – SUPERVENING IMPOSSIBILITY OF PERFORMANCE
- If their is a temporary impossibility of performing provision of a Treaty , it may be invoked only as a ground for suspending its operation.
- Generally, a party may invoke the impossibility of performing provision of a Treaty as a ground for terminating or withdrawing from it, if the impossibility results from the permanent disappearance or destruction of an object indispensable for the execution of the Treaty.
However, a party may not be entitled for invocation, where the impossibility is the result of a breach by that party of
- An obligation under the Treaty ; or
- Any other international obligation owed to any other party thereto.
VIENNA CONVENTION – ARTICLE 62 – FUNDAMENTAL CHANGE OF CIRCUMSTANCES
- A fundamental change of circumstances, which was not foreseen by the parties (vis a vis those existing at the time of the conclusion of a Treaty), may not be invoked as a ground for terminating or withdrawing from the Treaty unless
- The existence of those circumstances constituted an essential basis of the consent of the parties to be bound by the Treaty; and
- The change radically transforms the extent of obligations still to be performed under the Treaty.
ARTICLE 63 OF THE VIENNA CONVENTION – SEVERANCE OF DIPLOMATIC OR CONSULAR RELATIONS
- The severance of diplomatic or consular relations between parties to a Treaty does not affect the legal relations established between them by the Treaty except in so far as the existence of diplomatic or consular relations is indispensable for the application thereof.
ARTICLE 64 OF THE VIENNA CONVENTION – EMERGENCE OF NEW PEREMPTORY NORM OF GENERAL INTERNATIONAL LAW
- If a new peremptory norm of general international law emerges,
- any existing Treaty which is in conflict with that norm becomes void and stands terminated.
- A peremptory norm is a fundamental principle of international law, which is accepted by the international community of states, as a norm from which no deviation is permitted.