15 December 1949

 

General List No. 1

 
     

international Court of Justice

     
 

Corfu Channel

 
     

United Kingdom

 

v. 

Albania

     
     
 

Judgment

 
     
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BEFORE:

President: Guerrero;
Judges: Alvarez, Hackworth, Winiarsky, Zoricic, De Wisscher, Sir Arnold McNair, Klaestad, Badavi Pasha, Krylov, Read, Hsu Mo, Azevedo, M. Ecer;
Judge Hoc: M. Hambro

   
PermaLink: http://www.worldcourts.com/icj/eng/decisions/1949.12.15_corfu.htm
   
Citation: Corfu Channel, U.K. v. Albania, Judgment, 1949 I.C.J. 244 (Dec. 15)
   
Represented By: United Kingdom: Sir Eric Beckett, K.C.M.G., K.C., Legal Adviser to the Foreign Office; Sir Frank Soskice, K.C., M.P., Solicitor-General.
 
     
 
 
     
 

[p245]

The Court,

composed as above,

delivers the following judgment:

By a Judgment delivered on April 9th, 1949, in the Corfu Channel case (merits), the Court declared the People's Republic of Albania responsible under international law for the explosions which occurred on October 22nd, 1946, in Albanian waters, and for the damage and loss of human life that resulted therefrom to the United Kingdom of Great Britain and Northern Ireland (I.C.J. Reports 1949, p. 4).

In that judgment the Court decided that it had jurisdiction to assess the amount of compensation but stated that it could not do so in the same judgment, as the Albanian Government had not yet stated which items, if any, of the various sums claimed it contested, and as the United Kingdom Government had not submitted its evidence with regard thereto. The Court therefore stated that further proceedings on this subject were necessary and that the order and time-limits of these proceedings would be fixed by an order of the same date.

In this order, the Court, after noting that the Government of the United Kingdom had stated, in its Memorial of October 1st, 1947, the various amounts claimed by way of compensation, and after reserving the right of the Parties to avail themselves of the provisions of Article 68 of the Rules of Court, fixed, in accordance with Article 48 of the Statute, the following time-limits: June 25th, 1949, for the observations of the Albanian Government; July 25th, [p 246] 1949, for the reply of the United Kingdom Government, and August 25th, 1949, for the reply of the Albanian Government. Finally, the Court directed that further procedure, including the appointment of experts in case of agreement being reached by the Parties both as to the subject of the experts' opinion and as to the names of the experts, should be regulated by order of the President of the Court in this case.

On June 24th, 1949, the President of the Court made an order in which it was stated that by telegram, dated at Tirana, June 23rd, 1949, the Deputy-Minister for Foreign Affairs of Albania had asked for the extension of the time-limit for the presentation of the Albanian observations to July Ist, 1949, and that there was no reason for refusing that request. The President accordingly decided to extend the time-limits fixed by the Order of the Court of April 9th as follows: July 1st, 1949, for the observations of the Albanian Government; August Ist for the reply of the Government of the United Kingdom ; September Ist for the reply of the Albanian Government.

In a letter dated June 29th, 1949, the Agent for the Albanian Government informed the Court that, in the opinion of his Government: "in accordance with the Special Agreement signed between the Agents of the People's Republic of Albania and of Great Britain, on March 25th, 1948, and presented to the Court on the same day, the Court had solely to consider the question whether Albania was, or was not, obliged to pay compensation for the damage caused to the British warships in the incident of October 22nd, 1946, and the Special Agreement did not provide that the Court should have the right to fix the amount of the compensation and, consequently, to ask Albania for information on that subject".

The United Kingdom Government filed its observations within the time fixed and invoked Article 53 of the Statute. The Albanian Government filed no reply or other document. The case became ready for hearing after September Ist, 1949, and the date of the commencement of the hearing was fixed for November 17th.

In a telegram dated November 15th, the Deputy-Minister for Foreign Affairs of Albania reasserted the opinion expressed in the Albanian Agent's letter of June 29th, and stated that the Albanian Government did not consider it necessary to be represented at the hearing.

At the public hearing on November 17th, the Court heard statements by Sir Eric Beckett, K.C., Agent, and Sir Frank Soskice, K.C., Counsel for the United Kingdom. The latter asked the Court to give judgment that the amount of compensation due was the [p 247] amount stated in the final submissions contained in the written Observations of the United Kingdom dated July 28th, 1949, namely:

in respect of H.M.S. Saumarez .... £ 700,087
in respect of H.M.S. Volage..... £ 93,812
in respect of deaths and injuries of naval
personnel....... . . . . £ 50,048
Total...... £ 843,947

The Albanian Government was absent and made no submissions.

At the same sitting, after the Agent for the United Kingdom Government had been heard, the President announced that the Court had decided, in pursuance of paragraph 2 of Article 53 of the Statute, to examine the figures and estimates submitted by the United Kingdom Government, and, in conformity with Article 50 of the Statute, to entrust this investigation to experts as it involved questions of a technical nature.

In an Order dated November 19th, 1949, the Court appointed as experts Rear-Admiral J. B. Berck, of the Royal Netherlands Navy, and Mr. G. de Rooy, Director of Naval Construction, Royal Netherlands Navy, with instructions to "examine the figures and estimates stated in the last submissions filed by the Government of the United Kingdom regarding the amount of its claim for the loss of the Saumarez and the damage caused to the Volage". The Court fixed December 2nd as the time-limit for the filing of the experts' Report. This document was filed within the time fixed, and duly communicated to the Parties. A time-limit expiring on December 10th was given them for the submission of observations.

As some members of the Court had asked for certain explanations in regard to the Report, the experts, summoned to a meeting of the Court, replied on December 3rd to questions put to them. These replies were immediately communicated to the Parties.

The United Kingdom Government, by telegram dated December 6th, 1949, and confirmed by a letter of the same date, stated that it noted that the experts had come to the conclusion that the claim submitted by that Government might be taken as a fair and accurate estimate of the damage sustained and did not therefore wish to make any observations on the particular calculations of the experts.

On the expiry of the time-limit granted to the Parties for the submission of their written observations, a letter signed by [p 248] the Albanian Chargé d'Affaires in Paris, and dated December 10th, 1949, was handed to the Registrar of the Court. This letter asked for a change in the procedure instituted by the Court for the submission of observations and, failing that, for a prolongation of the appointed time-limit until December 23rd. The Court points out that it has given ample opportunity to the Albanian Government to defend its case; that, instead of availing itself of this opportunity, that Government has twice disputed the Court's jurisdiction in the present part of the proceedings, that it did not file submissions and declined to appear at the public hearing on November 17th. In those circumstances the Court cannot grant the request of the Albanian Government.

***
As has been said above, the Albanian Government disputed the jurisdiction of the Court with regard to the assessment of damages. The Court may confine itself to stating that this jurisdiction was established by its Judgment of April 9th, 1949; that, in accordance with the Statute (Article 60), which, for the settlement of the present dispute, is binding upon the Albanian Government, that Judgment is final and without appeal, and that therefore the matter is res judicata.

The position adopted by the Albanian Government brings into operation Article 53 of the Statute, which applies to procedure in default of appearance. This Article entitles the United Kingdom Government to call upon the Court to decide in favour of its claim, and, on the other hand, obliges the Court to satisfy itself that the claim is well founded in fact and law. While Article 53 thus obliges the Court to consider the submissions of the Party which appears, it does not compel the Court to examine their accuracy in all their details; for this might in certain unopposed cases prove impossible in practice. It is sufficient for the Court to convince itself by such methods as it considers suitable that the submissions are well founded.

It was in view of these considerations and on account of the technical nature of the questions involved in the assessment of compensation in the present case that the Court ordered the expert enquiry mentioned above.

The claim of the United Kingdom Government is under three separate heads which will be considered in succession.

1. Loss of the destroyer "Saumarez"

In the final submissions contained in its written Observations of July 28th, 1949, and maintained in its oral statement of November 17th, 1949, the United Kingdom Government estimates [p 249] the damage sustained by the total loss of the destroyer Saumarez at £ 700,087; this sum represents the replacement value of the ship at the time of its loss in 1946 (after deducting the value of usable parts—equipment, scrap), and the value of stores that must be considered as lost.

The experts, for their part, estimated the whole of this damage at a somewhat higher figure,
£ 716,780.

The Court considers the true measure of compensation in the present case to be the replacement cost of the Saumarez at the time of its loss. The Court is of the opinion that the amount of compensation claimed by the United Kingdom Government has been justified. It cannot award more than the amount claimed in the submissions of the United Kingdom Government.

2. Damage to the destroyer "Volage"

In the final submissions as stated in its written Observations of July 28th, 1949, and maintained in its statement in Court, the United Kingdom Government, under the head of damage caused to this vessel, claimed a sum of £ 93,812. The slightly lower figure of the experts, £ 90,800, may, as their Report points out, be explained by the necessarily approximate nature of the valuation, especially as regards stores and equipment.

The Court considers that the figures submitted by the United Kingdom Government are reasonable and that its claim is well-founded. In this matter it takes note of the following conclusion in the experts' Report: "During their enquiry and calculations, and as a result of their experience and of the information placed before them, the experts have become convinced that the claim of £ 793,899 submitted by the United Kingdom Government may be taken as a fair and accurate estimate of the damage sustained."

3. Claims in respect of deaths and injuries of naval personnel

In the final submissions as stated in its written Observations of July 28th, 1949, and maintained in its statement in Court, the United Kingdom Government claimed under this head a sum of £ 50,048, representing the cost of pensions and other grants made by it to victims or their dependants, and for costs of administration, medical treatment, etc. [p 250]

This expenditure has been proved to the satisfaction of the Court by the documents produced by the United Kingdom Government as Annexes 12 and 13 to its Memorial, and by the supplementary information and corrections made thereto in Appendices I, II and III of that Government's Observations of July 28th, 1949.

Finally, the Court points out that the United Kingdom Government, in paragraph 6 of its written Observations of July 28th, 1949, mentioned certain damage, for which it expressly stated that it did not ask for compensation. The Court need therefore express no view on this subject.

For these reasons,

The court,

by twelve votes to two,

Gives judgment in favour of the claim of the Government of the United Kingdom, and

Fixes the amount of compensation due from the People's Republic of Albania to the United Kingdom at £ 843,947.

Done in French and English, the French text being authoritative, at the Peace Palace, The Hague, this fifteenth day of December, one thousand nine hundred and forty-nine, in three copies, one of which will be placed in the archives of the Court and the others transmitted to the Governments of the United Kingdom of Great Britain and Northern Ireland and of the People's Republic of Albania respectively.

(Signed) J. G. Guerrero,
Acting President

(Signed) E. Hambro,
Registrar [p 251]

Judge Krylov declares that he is unable to agree either with the operative clause or with the reasons for the Judgment.

Judge Ečer, judge ad hoc, declaring that he is unable to concur in the Judgment of the Court, has availed himself of the right conferred on him by Article 57 of the Statute and appended to the Judgment a statement of his dissenting opinion.

(Initialled) J. G. G.

(Initialled) E. H. [p 252]


Dissenting opinion by Dr. Ečer, judge “ad hoc”

[Translation]

I agree with Judge Krylov's declaration for the following reasons:

(1) Interpretation of Article 53 of the Statute

The Judgment gives an interpretation of Article 53 of the Statute. The dominating idea in this interpretation is, to my mind, as follows: the default of the respondent—and Albania is the respondent party in the present stage of proceedings—cannot be deemed to be a recognition of the claim and the facts alleged by the applicant. Consequently, the Court is compelled by Article 53 to examine the assertions of the applicant and to satisfy itself that the submissions in the Application are well founded in fact and in law. But in that case, the Court's responsibility is, so to speak, "diminished". The Court is not obliged to examine the facts alleged by the applicant with the same exactness as in the case of an issue raised by the respondent. But I cannot accept this interpretation of Article 53. To begin with, in this case the Court is not faced with a simple default, referred to by Article 53 in the first place: the respondent, having received a copy of the claim (the Memorial), does not reply. Further, when convoked to a public sitting, he does not appear, or he appears and remains silent. Albania did nothing of the sort; on the contrary, both in the written and in the oral procedure she disputed the United Kingdom's claim in fact and in law. She did not take part in the present stage of proceedings for a juridical reason recognized even by the minority of 6 Judges. The present stage of proceedings is not a new case, such as, in my view, is primarily referred to in Article 53, but the final stage in a case that has to be considered as a whole, from the date of the Application—or at any rate of the Special Agreement—to final judgment.

In the present proceedings, therefore, the Court is faced with a situation somewhat different to that referred to in Article 53. The interpretation of Article 53 therefore, in these proceedings, cannot be the same as in a case of pure default.

The words in Article 53: "The Court must .... satisfy itself", are clear. "Satisfy itself" is only a synonym for the "firm conviction" of a Judge. The methods of proof themselves are given in the Rules of Court: documents, witnesses, experts, etc. The whole constitutes "judicial proof". An interpretation seems to me superfluous. The only "penalty" that a defaulting respondent incurs, according to Article 53 of the Statute, is this: the Court's task is solely to consider and give judgment on the submissions of the [p 253] applicant—whether the claim is well founded in fact and law. The Court's task is therefore made easier only in the sense that it does not consider the submissions of the respondent. That is all. But the Court is obliged to consider the assertions (submissions) of the applicant with just the same care and precision, whether the respondent appears or not.

(2) The rule of non ultra petita

This general rule of law within the meaning of Article 38 involves a question of procedure. After pointing out that the amount of compensation claimed by the United Kingdom for the loss of the Saumarez, based on 1946 values, is somewhat lower than that assessed for the same damage by the experts, the Judgment decides that the amount claimed by the United Kingdom Government is justified because of the rule non ultra petita. Thus a problem rises: can this rule influence the selection of the basis of calculation (1943-1946-1949), or not. In my opinion, the rule non ultra petita cannot influence the Court in this matter. If, in determining the replacement value of the Saumarez, the Court must have regard to the moment of the unlawful act, or to the moment of the award of compensation (of the judgment), the problem cannot be settled with the help of the rule above mentioned. In my view, the Court, without any reference to this rule, must decide, in the first place and on grounds of law, and not of mathematics, what basis is juridically to be adopted. And if the figure estimated on this basis is higher than the sum claimed, the Court must limit its award in accordance with the rule non ultra petita.

(3) The reasons for the Judgment

In my view, the Judgment does not give sufficient grounds for the amount and the calculation of the compensation for the loss of the Saumarez and the damage to the Volage. The Judgment compares the United Kingdom figures with those of the experts and decides in favour of the former. To begin with, the Judgment makes hardly any reference to the many United Kingdom documents accepted as evidence of damage. I consider that something should have been said on their value as evidence. Then, the Judgment does not submit the expert enquiry to a similar examination. According to a quite general rule of procedure, the Court is not bound by the opinion of experts. The Court may reject or accept it; but it must always give sufficient reasons. This was specially necessary, since Albania had informed the Court that she had observations to submit on the experts' Report, and since even Great Britain informed the Court that it had observations to make, but did not wish to submit them. [p 254]

(4) Amount of compensation claimed

This is essentially a point of substantive law. It should have been dealt with less briefly in my opinion, having regard to the importance of the case. Just a few words were, I consider, necessary on the law that governs the amount of compensation:

(a) The Judgment of April 9th, 1949, stated that "grave omissions" involved the international responsibility of Albania (p. 23). The consequences were certainly grave. But an omission involving the responsibility of a State must be a culpable omission.

But what was the degree of culp? Dolus, culpa lata, culpa levis? The words "grave omissions" seem to eliminate culpa levis. But in my view, the Judgment should have been more precise on this point. A finding as to the degree of culpability (e.g. culpa lata) would form juridical grounds for the decision on damnum emergens (the positive damage; out-of-pocket loss). A few words might thus be said on the relationship between the degree of culpability and the amount of compensation.

(b) Lastly, the juridical value of the Judgment would have been increased by a few short observations on causality as a juridical element for determining the amount of compensation. I consider it would be useful, and even necessary to state that the United Kingdom claim amounts to a claim for damnum emergens, a notion that grosso modo corresponds to those of "direct", or "necessary", or "inevitable", or "proximate" consequences, used in a number of decisions of international tribunals.

(5) Estimation of damage

Here I confine myself to compensation for the loss of the Saumarez; for that is, in point of law, the vital question. The United Kingdom claimed £ 700, 087 under this head. The experts estimated the damage at £ 716,780.

There does not, and cannot exist a universal rule for calculation. Cases differ from one another. Some involve one or several special circumstances, e.g. the present case, which concerns the loss of a warship. It is evident that the calculation would be simpler and the estimate of the damage in figures would be easier if it were a merchant ship. Commercial values have currency as a common denominator, and are more susceptible of calculation in money. But with all reservations and limitations, there are nevertheless two questions of law common to all cases, if something has been lost through an illegal act, and if restitution in kind is not possible, as in the present case: [p 255]

(1) the question of the moment to be taken by the judge in estimating reparation for the loss. Should it be the moment of the illegal act, or of the court's decision; or the moment when the thing was made?

(2) the question of the conditions under which and the extent to which a sum corresponding to the depreciation of the thing (such as would have occurred if the thing had remained in its owner's hands), should be deducted from the amount of the replacement value.

In regard to (1) the basis of calculation. In the present case there are three possible bases: 1943, 1946, 1949.

(a) The 1943 basis. The order to proceed with the construction of the Saumarez was given by the United Kingdom Government to a company at Hebburn-on-Tyne, on January 9th, 1941; the vessel was handed over after completion and received into the service of the Royal Navy on July 1st, 1943 (Mr. Powell's affidavit, paragraph 4). The actual recorded cost of construction of the ship was £ 554,678 (paragraph 5 of affidavit). If the loss of the Saumarez is calculated in figures corresponding to ship-building costs in 1943, this decision may be justified by the fact that the sum represents the actual damage sustained by the United Kingdom. The rise or fall in prices is a factor not depending on the author of the illegal act, and therefore one for which he cannot be held responsible. There is no causal connexion between the illegal act and the rise or fall of prices. For this reason, the cost of construction actually paid in 1943 might be taken as the figure for the actual loss of the Saumarez.

(b) The 1946 or 1949 basis

Salvioli, in his lectures on La responsabilité des États, la fixation des dommages et intérêts par les tribunaux internationaux (Recueil des Cours, 1929, III, pp. 239-240), says: "The Mixed Arbitral Tribunals introduced the following distinction: where objects were intended to be resold, a sum must be awarded which corresponds to the value of the objects at the time of the act which damaged them—and as regards the decisions mentioned above, at the time of dispossession ; on the other hand, if the object is property which the owner would have kept and used as such, the replacement value must correspond to its mercantile value at the date of the award of compensation" (the italics are the author's). Salvioli expressly refers to the judgment in the Chorzow case.

The grounds for the decisions of the Mixed Arbitral Tribunal and that of the decision of the Permanent Court of International [p 256] Justice in the Chorzow case, on this subject, are stated in the decisions themselves and in the works of several writers who have dealt with the question, and I need not quote them.

In my opinion, these reasons are convincing, and there is no juridical ground for a decision to adopt the moment of the illegal act in such a case.

But a difficulty arises in determining the commercial value at the time of the decision, if the property had no commercial value— as in the present case, where it is a warship that has no commercial value.

According to Roth (Schadenersatz, 1934, p. 102), in such a case, "the judge must determine the value ex csquo et bono, taking account of the special circumstances".

The Court places itself at the moment of the illegal act ; but the Judgment gives no juridical reason for this decision.

(2) Depreciation

The question arises whether there are juridical reasons for deducting a sum in respect of the depreciation of an object, if that object remains in the hands of the owner. The international and national jurisprudence of every country answers this in the affirmative. The experts gave the same reply. They calculated the compensation for the loss of the Saumarez in such a way as to deduct 3% for three years of the vessel's "life" (1943-1946), from the cost of building in 1946. At the Court's meeting on December 3rd, 1949, they also gave the rate of this depreciation. It seems that this is quite justified.

I again refer to Salvioli, who expressed the following opinion : "The Court must take account of an increase or decrease in value which the object would have undergone if it had remained in its owner's hands, and if it had not suffered from the illegal act."

When the Judgment agrees with the figure claimed by the United Kingdom as compensation for the loss of the Saumarez, it implicitly rejects the rule that a sum in respect of depreciation must be deducted from the building costs, without assigning any reason in law for doing so. What would be the effect of this principle in practice is a matter of calculation.

(Signed) Dr. B. Ečer [p 257]


ANNEX 1

List of documents submitted to the Court after the judgment of April 9th, 1949

Document deposited by the Government of the United Kingdom

Affidavit signed by the Deputy-Secretary of the British Admiralty (November 7th, 1949). [p 258]

ANNEX 2

EXPERTS' REPORT OF DECEMBER 1st, 1949

Replacement value: "Saumarez"

The experts have made an estimate of the cost of construction of a destroyer of the Saumarez type, with the aid of the information placed at their disposal by the Royal Netherlands Navy and the Netherlands shipyards. This estimate has been checked in respect of wages, output, organization and of the rise in prices in England, and thus a new estimate on a British basis has been arrived at.

The "interest on the growing capital outlay" has not been taken into account in this calculation, as its inclusion did not seem to be justifiable in the present proposal. On the other hand, a sum in respect of insurance, on a post-war basis, has been included.

The experts applied the cost of building a completed destroyer to a destroyer of the Saumarez type; they also made a new calculation on a British basis. The smaller of the above two figures, which differ but little one from the other, was taken, and a cost price of £739,470 on a 1946 basis was arrived at.

In estimating the true replacement value, account was taken of the fact that during the first year of a ship's service, the decrease in value of the ship is counterbalanced by additions and alterations and, inter alia, by the extra cost of preparing the ship as a flotilla leader. After the first year, a depreciation begins to occur and grows steadily greater with the lapse of time. Taking the life of a ship as fifteen years, the depreciation during the first three years would be respectively 0—1—2 %; thus, the replacement value of H.M.S. Saumarez in 1946 must be reckoned at £717,280.

Value of stores

With the help of the blue prints of a former British destroyer of the same class, the experts made an approximate calculation of the damage sustained through the loss, damaging and unserviceability due to sea-water, of the stores contained in the bows of the ship. They estimate this damage at £23,300.

Value of still serviceable equipment

The total value of £74,870 mentioned for equipment is in agreement with the data placed at the experts' disposal from similar ships. [p 259]

As it has been stated by the United Kingdom that the equipment in question had been in the ship since 1946, it may be assumed that, besides that part that was damaged by mine-explosion or by sea-water, the rest has seriously deteriorated through lack of upkeep; consequently, an estimate of its value must be in the nature of speculation. Taking all risks into consideration, a claim of £20,000 is considered reasonable.

Scrap

Taking into consideration the necessary cost of salvaging and cutting up, as well as the cost of transporting the material from Malta to the scrap plants, ¿3,800 may be taken as a reasonable figure.

Compensation for "Saumarez"

In view of what has been stated, the experts have arrived at the following figure for damage to H.M.S. Saumarez:

Replacement value........ £717,280
Stores........... £ 23,300
£740,580
Less £ 20,000 + £ 3,800......£ 23,800
£716,780

Damage "Volage"

The experts were in the fortunate position of having directed the carrying out of similar repairs to a former British destroyer in 1946. It is true that in the former case, only a small part of the bows had to be replaced; but this afforded a good basis of comparison. In arriving at their figures, the experts had to take account of the fact that the more extensive repairs to H.M.S. Volage required a long period of 205 days in dock; this had considerable influence on the total cost. The greater cost of transport of material had also to be considered, and lastly the cost of the trials after the completion of repairs. In the experts' opinion, these trial voyages are inseparably connected with such extensive repairs.

The experts estimate the total of these costs at £64,300.

Stores

As regards the valuation of lost stores, what has been said in the case of H.M.S. Saumarez holds good. Taking into consideration the loss of anti-submarine equipment, this figure is estimated at £26,500.

Compensation for "Volage"

Repairs Volage.......... £64,300
Stores and equipment....... £26,500
£90,800 [p 260]


Compensation:

£716,780
£ 90,800
£807,580

The experts would point out that their figures are an approximation, especially in the case of the value of stores and equipment, and still more as a considerable part of the equipment is of a secret nature, and further that the portions of equipment that remain would have to be dismantled and examined before an exact estimate of their value were possible.

During their enquiry and calculations, and as a result of their experience and of the information placed before them, the experts have become convinced that the claim of £793,899 submitted by the United Kingdom Government may be taken as a fair and accurate estimate of the damage sustained.

This Report was drawn up in English in one copy at the Peace Palace, The Hague, this first day of December, one thousand nine hundred and forty-nine.

(Signed) Berck

(Signed) G. De Rooy [p 261]


ANNEX 3

QUESTIONS PUT BY MEMBERS OF THE COURT AND REPLIES OF THE EXPERTS (MEETING OF DECEMBER 3rd, 1949)

Present: Acting-President Guerrero, Judges Alvarez, Hackworth, Winiarski, Zoricic, De Visscher, Sir Arnold McNair, Klaestad, Badawi Pasha, Krylov, Read, Hsu Mo, Azevedo, M. Ecer, Judge ad hoc; Registrar Hambro. Also present as Experts. Rear-Admiral J. B. Berck, of the Royal Netherlands Navy, Mr. G. de Rooy, Director of Naval Construction of the Royal Netherlands Navy.

The President [translation].—The Court is now sitting. We have asked the experts to come for a few moments to to-day's sitting, to enable them to supply certain members of the Court with explanations that they would like to have on the Experts' Report.

You have before you the questions on which our colleagues would like to have explanations. Would the Experts kindly reply to Judge De Visscher's question:

Would the experts explain the difference between the two methods of calculation referred to respectively in paragraphs 1 and 3 of page 1 of the Report? [FN1]

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[FN1] See p. 258, paras. 1 and 3.
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Rear-Admiral Berck.—The evaluation of the construction costs of the destroyer Saumarez was approached by two ways:

In the first instance, we started from the actual costs of a completed destroyer of 1,925 tons standard displacement, revised the calculation for the Saumarez of 1,730 tons, taking into account differences in labour wages, labour performance and costs of materials, and arrived at a cost for new construction in 1946 of £751,750.

In the second place, we followed the normal proceedings in planning a new ship. We calculated the building costs of shipbuilding, engineering, electrical engineering, armament, torpedoes and special equipment, all on a 1946 British basis. The result was a new construction figure of £737,470.

This last figure, having been obtained in the most accurate way, was inserted in our report, "the first figure serving only as a control.

The President [translation].—Is M. De Visscher satisfied?

M. De Visscher [translation].—Yes, Mr. President.

The President [translation].—Will the Expert now reply to Judge Azevedo's question? [p 262]

I. What is the progressive rate of depreciation of a destroyer, during each year of its existence, which is estimated at fifteen years?

Rear-Admiral Berck.—I. The depreciation value of a destroyer is due, in the first place, to the normal wear and tear of the ship. In the second place, the installed war equipment becomes in the long run more or less obsolete, depending on the development of new equipment.

This last influence becomes most marked in the second five years, as in the last five years the destroyer cannot any longer be considered as a first line ship, although it is still usable for many war purposes.

In our experience, the yearly depreciation must be fixed as follows: First year, 0%; second year, 1%; third year, 2%; fourth year, 3%; fifth year, 4%; sixth to tenth year, 7%; eleventh to fifteenth year, 10%, leaving at the end of fifteen years a residual value of 5%. This is more than the actual scrap value, as the ship is still usable for special purposes, training, etc.

2. What was the rate of increase in the cost of building a destroyer in 1946 and in 1949, as compared with its cost in 1943?

2. The increased cost of building in England in 1946, as compared with 1043, is about 30%. Our own information tallies in this respect with the data given in Mr. Powell's affidavit. I regret we have not had time to obtain the necessary data for 1949. I would, however, roughly estimate it at 50 to 60% for warships. For merchant ships it would be 43%.

The President [translation'].—Is Judge Azevedo satisfied with the reply?

Judge Azevedo [translation],—Yes.

The President [translation].—There are now the four questions' asked by Judge Ecer.

Judge Ečer [translation].—An answer was given to my questions 2 and 3 in the explanations furnished to Judges De Visscher and Azevedo. Only questions 1 and 4 remain to be answered.

1. On page 1, paragraph 2 [FN1] of the Report, it is said: "On the other hand, a sum-in respect of insurance, on a post-war basis, has been included."

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[FN1] See p. 258, para. 2.
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(a) Can the experts mention this sum?

(b) I would draw the experts' attention to Mr. Powell's affidavit, in which two figures are given:
in paragraph 5 — £21,359.
in paragraph 7 — £ 2,000.[p 263]

It seems to me that the difference may be explained as follows: in paragraph 5, the figure covers two classes of risks, the builder's and the King's Enemy risks; whereas the amount in paragraph 7 only covers the builder's risks.

Am I right?

Rear-Admiral Berck.—1 (a) As the insurance for builder's risk is fixed at the London Exchange, we put into our calculation the same figure as Mr. Powell, namely, £2,000.

(b) As His Excellency Judge Ečer rightly points out, the higher figure in Mr. Powell's affidavit also covers the additional risks in war-time.

4. On page 2,[FN1] under "Value of still serviceable equipment", the Report says: "The total value of £74,870 mentioned for equipment is in agreement with the data placed at the experts' disposal from similar ships."

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[FN1] See p.258.
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Could the experts say:

(a) Where this figure of £74,870 has been mentioned?
(b) If this figure represents the value of still serviceable equipment, why do the experts consider reasonable the sum of £20,000, mentioned in paragraph 13 of the United Kingdom Observations?
(c) Why is it said in the Report that a claim of £20,000 is reasonable, when it is not a claim but, on the contrary, a reduction of the United Kingdom claim?

Rear-Admiral Berck.—Regarding question 4, at the public sitting of this Court held on Thursday, November 17th, Sir Frank Soskice announced that the different departments of the Admiralty had made lists of equipment suited for possible re-use. The estimated value of this equipment as new, was £74,870.

For destroyers of the same class now in service in the Royal Netherlands Navy, we made the same valuation and found that the figure mentioned by the United Kingdom Government for equipment as new, was acceptable.

As we pointed out in our report, the assessment of the present day value is of a speculative nature.

The equipment had been in the ship for three years without proper maintenance, in the sub-tropical climate of Malta, and under the influence of salty air. Deterioration and corrosion is to be expected. Before being used again, each instrument has to be taken apart, cleaned and checked, and corroded parts will have to be replaced. Taking into account labour and transportation costs, a reduction of £20,000 is fair and, in the opinion of the experts, on the high side. [p 264]

Regarding question 4 (c), we regret that in the haste of finishing the report, the £20,000 was put down as a claim. As Judge Ečer rightly points out, it is not a claim, but a reduction of the total claim.

The President [translation].—Is Judge Ečer satisfied?

Judge Ečer [translation],—Yes, Mr. President.

The President [translation].—We have now Judge Winiarski's question.

In their Report of December 1st, paragraph 2, [FN1] the experts say that "The 'interest on the growing capital outlay' has not been taken into account in this calculation, as its inclusion did not seem to be justifiable in the present proposal."

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[FN1] See p. 258, para. 2.
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(a) Why?
(b) What, in your opinion, were the reasons for including it in Mr. Powell's calculation?

Rear-Admiral Berck.—Regarding the question of Judge Winiarski, the builder of a warship is not paid on delivery of the ship, but during the time of construction, in instalments. A first instalment is as a rule made after the signing of the contract; further payments when principal parts, for instance, hull, main machinery, etc., are completed. Theoretically, it seems right to add to the building costs the interest on the growing capital outlay.

In our experience, however, this interest is never added to the building costs.

In Mr. Powell's affidavit, the interest on growing capital outlay is mentioned, but not included in the final claim.

We are not able to judge the reasons for including this amount in Mr. Powell's affidavit.

The President [translation],—Is Judge Winiarski satisfied?

Judge Winiarski [translation],—Yes, Mr. President.

The President [translation],—Do other members of the Court, wish to put questions to the experts?

Judge Zoričić [translation].—If I understood rightly, Rear-Admiral Berck, in reply to Judge De Visscher's question, said that a sum of £737,470 was reached, whereas the amount in the report is £739,470. This point must be cleared up in order that the verbatim record should not contradict the Report.

Rear-Admiral Berck.—As a matter of fact, the figure of £737,470 is the new construction figure. There must be added the insurance costs of £2,000, and we kept the new construction figure clear of that.

The President [translation].—Are there any further questions? [p 265]

Judge Ečer [translation].—If the experts have examined all the details of the damage, I should like to ask them whether they can say that all the damage to the Volags mentioned in the United Kingdom document is the direct consequence of the explosion.

Rear-Admiral Berck.—We have seen the details as given by the United Kingdom Government about the damage to the Volage, and we must consider this as a direct consequence of the mine explosion.

The President [translation].—It remains for me to thank the experts for the explanations they have given us; their replies will be useful to the Court in fixing the amount of the reparations.

Rear-Admiral Berck.—The experts would like to thank the Court for having given them the opportunity of having participated in a small way in the Court's work.

The Court rose at 11 a.m.

 
     

 

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