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Arbitration -- disposing of the Marcoses' millions

RIGHTS to property, whether buildings in New York, pesos in Hawaii, or bank accounts in the Philippines, are determined by law. No agency of the United States government has the authority under our Constitution to deprive anybody, American or foreigner, angel or devil, of property without ``due process of law.'' Thus the disposition of the Marcoses' cash, land, jewelry, and rights in various corporations' holdings in the US and elsewhere cannot be decided by gut judg-ments of who is wicked and who is a victim of wicked-ness. In fact, the law takes account of good and evil and disentangles the ``rights'' in ways calculated to do ``justice'' in the highest sense of the word.

Even if the Marcoses' property in Hawaii or New York or elsewhere is to be sold and the proceeds distributed according to the demands of ``justice,'' the buyers must have assurance that they are buying the legal property rights that the seller purports to have. Thus, there is no easy path to settling the Marcos property problem.

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But there are several sure paths that can be taken.

There is the usual path of tort claims against the Marcos people, including Gen. Fabian Ver and Ferdinand and Imelda themselves. They hold no official positions in the US and have no immunity from normal civil actions in our state and, in some cases probably, federal courts. They can be sued for whatever assaults, property con-versions, or other torts our law allows.

If appropriate, our law will refer aspects of the cases to Philippine law to decide whether various takings and imprisonments were legally valid in the place and at the time done. If that approach seems unsatisfactory, it would be interesting to know why; whether we would like to rewrite the facts and laws that governed the Philippines for the past 20 years, and, if so, what authority we have to do so. And if we could do so, whether our sovereign equals, the USSR and the Philippines, could do the same to us.

There is the usual path of property adjudication, seeking declarations of property rights with regard to real and personal property located within the US. If President Marcos did not have the legal right under Philippine law to transfer money from one bank account to another, if he siphoned off state assets to his personal use, a US court should have little difficulty holding him to have acted as a trustee for Philippine government property and awarding the papers concerning the con-trolling interest in US corporations or US property to the government of the Philippines. The techniques are well-known and there are no significant obstacles to using American court procedures to discover the bases of the Marcoses' claims and to adjudicate their validity under our law and our understanding of Philippine law for some purposes with regard to property within our borders.

The most interesting is the path of international arbitration. There is a major precedent for this sort of thing in the Tinoco Arbitration of 1923.

In 1917, Frederico Tinoco overthrew the Costa Rican government of Alfredo Gonzalez. Tinoco ``retired'' in August 1919 and fled the country. The old Costa Rican Constitution was restored, a ``law of nullities'' was passed purporting to nullify various acts of the Tinoco government, and Great Britain was left with a number of property claims against the Costa Rican state growing out of acts of the Tinoco government.

The validity of those claims, including about $500,000 claimed by the Royal Bank of Canada, was referred by a treaty of arbitration between Great Britain and Costa Rica to a sole arbitrator. They chose William Howard Taft, the former President of the United States and at the time chief justice of the United States Supreme Court. Taft's award disallowed the Act of Nullities, but found that Tinoco had acted in most of what he did beyond his authority as President of Costa Rica, even under his own Constitution. He held then that the state of Costa Rica was not bound as a matter of international law to honor the purported obligations entered into by an official acting beyond his legal authority.

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The British got paid for services actually rendered and property transferred to Costa Rica, but private concessions and personal manipulations done under the appearance but not the reality of presidential authority, were simply ineffective to create legal rights in Tinoco and his friends, or those foreigners who had received ``rights'' from them. The situation is the same in the US, where the president cannot commit his country in ways beyond his constitutional authority. It would be more than surprising if the situation were any different in the Philippines.

Thus, there seems an eminently ``conservative'' way to uphold the rule of law and rights of property without trying to confiscate anything from anybody -- in other words, to pass title to the state of the Philippines regarding American and other property allegedly bought by Marcos and his friends.

The US and the Philippines can by treaty agree to arbitrate the claims to property in the US, referring the legal issues perhaps to a Singaporian or other Southeast Asian jurist of eminence; Tommy Koh, the foreign minis-ter of Singapore and former dean of the law faculty at the university there comes immediately to mind as one obviously qualified candidate.

In the treaty negotiation, private rights against Marcos and his friends for their supposed torts can be retained for US courts, if the US and the Philippines governments agree. Or, various special rules can be set up on the pattern of the tribunals established to consider the US nationals' claims against Iran growing out of the Khomeini revolution.

Best of all, US courts need not pretend to be international tribunals and take the political and legal blame if they find that the law allows the Marcos people to retain any portion of their property here. It also avoids the converse risk that all would be taken from them, and that other foreign depositors would remove their sizable deposits from US banks for fear of politicization of the American law of property.

It is, after all, only by respect for the law and for property rights that we protect our own investors both here and abroad. And when international law not only does ``justice,'' but also keeps us uninvolved in the internal spasms of a friendly state and strengthens everyone's sense of order and security with regard to foreign investments, the processes and rules of the international legal order should be used.

Alfred P. Rubin teaches international law at the Fletcher School of Law and Diplomacy.

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