DOUSING GLOBAL FIRES, BY STEPHEN WARDThe spy plane dispute between the governments of the US and China -- which threatened all future trade between the two powers -- reflects how high the stakes can be in international public law cases.And though public international law is a niche area of the City's legal work in which only a handful of firms specialise, it is not unusual for the amounts at stake to be vast.

Clifford Chance, for instance, acting for the Kuwait Petroleum Corporation last year, completed a case which won £10.6 billion for the loss of more than two years' oil revenue after Iraq's invasion of Kuwait in 1990.Jeremy Carver, head of the firm's international law group, explains that this claim went before the United Nations Compensation Commission, which is funded by a percentage of Iraqi oil sales.

In this case, the commission has a role more like that of a skilled insurance assessor than a judge.

The lawyers had no adversaries, and their task was to use a range of disciplines or professional skills, including loss adjusting, accountancy, and engineering to produce verifiable data.TWe had to provide evidence on which the commission could say they were satisfied we had met the level of proof necessary, and award compensation,' says Mr Carver.

He is regarded as a doyen of this field and was awarded a CBE in 1999 for services to international law.Campbell McLachlan, Herbert Smith's head of private and public international law, predicts an explosion in the volume and importance of international law work in the next few years.He says one reason why public international law is becoming increasingly important in commercial affairs is that the end of the Cold War has made it possible to settle more disputes between states by agreement.

TNot only has this led to an increase in the workload of the International Court of Justice in the Hague, it has also led to a proliferation of international tribunals,' says Mr McLachlan, mentioning the International Centre for the Settlement of Investment Disputes, the International Tribunal for the Law of the Sea, and the dispute settlement system of the World Trade Organisation.He adds that businesses are increasingly taking part in formulating disputes brought to these forums by states.Mr Carver says international law work has been generated by splintering of the former Yugoslavia into its many component states.

TWhenever you have a break-up of states, you get quite complicated questions of succession, and they've been particularly complicated in relation to assets,' he says.His firm has been instructed in relation to component central banks trying to recover assets, asking where they can make claims for them.

'If there is a deposit in London, they will want to know if they can sue here,' he says.A characteristic of this branch of work is the depth of research needed in a way which stretches beyond a normal domestic case.The International Court of Justice has just ruled on a long-standing boundary dispute between the states of Bahrain, represented by Freshfield Bruckhaus Deringer, and Qatar, advised by Eversheds.Malcolm Forster, Freshfields' head of international public law, says: 'They are always document and fact intensive to the very highest degree.

Take the Bahrain-Qatar case.

It was, in effect, a history of the Persian Gulf.

The evidence was not only political, but social and cultural and sometimes almost religious.

You employ not only lawyers, but historians, philologists, the lot.'City law firms possess the capac ity to take on this type of work.

'These sort of jobs are akin to massive litigation for clients such as British Nuclear Fuels or the Bank of England that firms like this are doing all the time,' Mr Forster says.

TEven most governments don't have that capacity; nor do the big- name advocates who are expert in this field.'Many cases are also long-running.

Tim Daniel, head of international public law at DJ Freeman, says another border dispute case destined for the International Court of Justice, in which he is representing Nigeria against the Cameroon, has already been going for seven years.

'There should be a hearing next year,' he adds.Mr Carver says in practice there is frequently a crossover between private and public law.

He says: 'Traditionally, the subjects were taught as one -- law was easier in those days.

Inevitably, it has fragmented since then from the middle of the 20th century onwards.

But they do overlap.'International law often provides a different matrix which makes a private practice lawyer's analysis of a problem incomplete.

'Over the years, a number of times many of our finance and other lawyers have come to me saying they are stuck on a complex international transaction, and I've been able to look at it and tell them they've made an analysis which is essentially a domestic law analysis,' Mr Carver says.'They've ignored certain international law elements, and if you factor those in, you get a different answer and a solution.'Mr Forster says, as an example of the private and public law convergence, that it is increasingly common in oil field and pipeline development to negotiate a treaty to avoid future disputes.

'Normally a treaty is negotiated between governments, but the people who are really worried are the investors, so it is a delicate task.'Public international law is a relatively amicable practice area, with, according to Mr McLachlan, a small enough number of practitioners involved to allow the various experts -- solicitors, advocates and other professionals -- to keep in close touch one with another.Unsurprisingly, given the nature of the subject, there are international public lawyers operating out of cities other than London.

At Freshfields, for example, there is a team in Paris and another in New York almost as large as in London.But London remains a hub for several reasons.

It has the professional skills, including legal ones, available at a price and convenience to attract clients from around the world.

It scores over the expertise in Washington DC with some clients for the very reason that it is not the capital city of the world's only superpower, which will have an interest in most world questions.London has been at the centre of international finance and trade for 250 years.

It has not been invaded in that time, and keeps relatively good records of previous international disputes.As Mr Carver says: 'The archives available in the UK are better than anywhere else in the world, so therefore it's a good research place for virtually any sort of historical political problem.' This is an area where unusually lawyers often find themselves taking the moral high ground against some of the governments involved.Mr Forster says: TYou frequently find yourself caught in political machinery and having to tell governments that one of their fellow governments is producing arguments which are absolute rubbish.

You have to find a way of saying tactfully "that's an interesting submission, but here's a different one".'And Mr Carver, who played a part in setting up the United Nations Compensation Co mmission which aims to avoid adversarial lawyers swallowing up damages, says: 'We (lawyers) have a social obligation not to make ourselves rich but to make sure the law works.'In the China spy plane dispute, he contends that even the policymakers in the US did not adequately understand the basis of the Chinese case.

'China has been asserting intermittently for 50 years that it has the right to treat the major part of the South China Seas as internal waters.

As internal waters they fall within Chinese air space.'Most lawyers would say that China has ratified the UN Conference on the Law of the Sea, so it should accept that its territorial waters end 12 miles from the coast.'But,' Mr Carver says, Tall sorts of unresolved territorial claims exist, and you can't expect people to say: "It's a bad claim, therefore I abandon it."'THE INS AND OUTS OF PUBLIC INTERNATIONAL LAW, KHAWAR QURESHI EXPLAINS WHY THIS FIELD IS BECOMING MORE IMPORTANTPublic international law (PIL) was until relatively recently a subject that most lawyers left behind at university at best.

But with the House of Lords decision in Pinochet (no 3) in 1999 and the current passage of the International Criminal Court Bill through Parliament, there has been a significant change in attitude within the legal profession to this area of law.

Indeed, there has been a great increase in case law in this field over the past ten years.PIL is the legal regime which governs its subjects, namely states, the entities of states (including ministries, state corporations), diplomats, and the more recent creations of states, like international organisations, such as the international Monetary Fund and World Bank.The latter are entities created by treaties (legal agreements between states) and are often given legal capacity within some or all of their member states.Broadly speaking, PIL comprises treaty law, United Nations Security Council binding resolutions, certain judicial decisions and the body of state practice known as customary international law (CIL).A recent statement of principle as to how this country's courts approach PIL, which is contained in the leading text Oppenheim and was approved by Lord Lloyd in the first decision of the House of Lords in the Pinochet case.

R v Bow Street Metropolitan stipendiary magistrate, ex parte Pinochet Ugarte [2000] 1 AC 61 neatly summarises the position: 'The application of international law as part of the law of the land means that, subject to the overriding effect of statute law, rights and duties flowing from rules of customary international law will be recognised and given effect by English courts without the need for any specific act adopting those rules into English law.'However, it is necessary for the rule of CIL to be clear and certain to enable the domestic court to give effect to it.

A recent example of the court requiring certainty of existence for the rule of CIL is in Hutchinson a Newbury Magistrates Court (9 October 2000) Divisional Court.In that case, a woman convicted of the offence of criminal damage to the perimeter fence of a nuclear weapons installation sought to argue that she had a defence for her actions, by virtue of a rule of CIL which prohibited nuclear weapons.She referred to the advisory opinion of the international Court of Justice on the question of the legality of nuclear weapons (1996) to support her argument.The court dismissed her contentions, not least because the International Court of Justice had itself in its advisory opinion stated that the position was far from certain in this rega rd.In the case of The Queen on the Application of Altin Vallaj v The Special Adjudicator (21 December 2000) Dyson J, the issue concerned a challenge to refusal of an asylum claim made by a Kosovo Albanian, and dismissal of an appeal against the refusal by a special adjudicator.However, the court was required to interpret and apply a treaty (the Refugee Convention of 1951) and also recognised the binding legal effect of UN Security Council resolutions issued under chapter VII of the UN Charter.The judge held that the convention was not to be interpreted literally, and, as a matter of fact and law, the United Nations Interim Administration (UNMIK) and NATO's Kosovo force (KFOR) provided the protection required under the convention.

Furthermore, because the Federal Republic of Yugoslavia had consented to the presence and activity of KFOR and UNMIK in Kosovo, the principle of agency could be invoked in this case to attribute their actions to the state authorities.

The case is the subject of an appeal to the Court of Appeal, which is to be heard this month.Case law from our courts over the past ten years manifests an increasing willingness and enthusiasm on the parts of the courts to adjudicate upon matters which engage issues of PIL.

While there is evidence of some reservation in this regard, notably the speeches of Lord Slynn and Lord Goff in the Pinochet (no 1) case, subject to provision of some safeguards to ensure that the court is always properly informed of the relevant and applicable principles of PIL, there is no reason why the courts should not engage in this exercise.As the former president of the International Court of Justice, Judge Jennings, pointed out in 1996 with reference to the writings of Professor Sir Hersch Lauterpacht in 1929: 'International law is the only branch of law containing identical rules administered as such by the courts of all nations'.Recent case law provides every indication that our courts will be required to administer these rules much more frequently than in the past.