22 July 1952

 

General List No. 16

 
     

international Court of Justice

     
 

Anglo-Iranian Oil Co.

 
     

United Kingdom

 

v. 

Iran

     
     
 

Judgment

 
     
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BEFORE:

President: Guerrero, Acting President;
President: Sir Arnold McNair;
Judges: Alvarez, Basdevant, Hackworth, Winiarski, Zoricic, Klaestad, Badawi Pasha, Read, Hsu Mo, Levi Carneiro, Armand-Ugon;
Judge ad hoc: M. Karim Sandjabi
   
PermaLink: http://www.worldcourts.com/icj/eng/decisions/1952.07.22_oil_co.htm
   
Citation: Anglo-Iranian Oil Co., U.K. v. Iran, Judgment, 1952 I.C.J. 93 (July 22)
   
Represented By:

United Kingdom: Sir Eric Beckett, K.C.M.G., Q.C., Legal Adviser of the Foreign Office, as Agent; assisted by Sir Lionel Heald, Q.C., M.P., Attorney-General; Professor C. H. M. Waldock, C.M.G., O.B.E., Q.C., Chichele Professor of International Law in the University of Oxford; Mr. H. A. P. Fisher, Member of the English Bar; Mr. D. H. N. Johnson, Assistant Legal Adviser of the Foreign Office, as Counsel; Mr. A. D. M. Ross, Eastern Department, Foreign Office, Mr. A. K. Rothnie, Eastern Department, Foreign Office, as Expert Advisers;

Iran: M. Hossein Navab, Envoy Extraordinary and Minister Plenipotentiary of Iran to the Netherlands, as Agent; Dr. Mossadegh, Prime Minister;
assisted by M. Nasrollah Entezam, Ambassador, former Minister; M. Henri Rolin, Professor of International Law at Brussels University, former President of the Belgian Senate, as Advocate; M. Allah Yar Saleh, former Minister; Dr. S. Ali Shayegan, former Minister, Member of Parliament;
Dr. Mosafar Baghai, Member of Parliament; M. Kazem Hassibi, Engineer, Member of Parliament; Dr. Mohamad Hossein Aliabadi, Professor of the Tehran Faculty of Law; M. Marcel Sluszny, of the Brussels Bar, as Counsel.

 
     
 
 
     
 

[p93]

The Court,

composed as above,

adjudicating on the Preliminary Objection of the Government of the Empire of Iran,

delivers the following Judgment:

On May 26th, 1951, the Government of the United Kingdom of Great Britain and Northern Ireland filed an Application instituting proceedings before the Court against the Imperial Government of Iran. The Application referred to the Declarations by which the Government of the United Kingdom and the Government of Iran accepted the compulsory jurisdiction of the Court in accordance with Article 36, paragraph 2, of the Court's Statute. The Court is asked:

"(a) To declare that the Imperial Government of Iran are under a duty to submit the dispute between themselves and the Anglo-Iranian Oil Company, Limited, to arbitration under the provisions of Article 22 of the Convention concluded on the 29th April 1933, between the Imperial Government of Persia and the Anglo-Persian Oil Company, Limited, and to accept and carry out any award issued as a result of such arbitration.

(b) Alternatively,

(i) To declare that the putting into effect of the Iranian Oil Nationalization Act of the 1st May 1951, in so far as it purports to effect a unilateral annulment, or alteration of the terms, of the Convention concluded on the 29th April 1933, between the Imperial Government of Persia and the Anglo-Persian Oil Company, Limited, contrary to Articles 21 and 26 thereof, would be an act contrary to international law for which the Imperial Government of Iran would be internationally responsible;

(ii) To declare that Article 22 of the aforesaid Convention continues to be legally binding on the Imperial Govern-[p96]ment of Iran and that, by denying to the Anglo-Iranian Oil Company, Limited, the exclusive legal remedy provided in Article 22 of the aforesaid Convention, the Imperial Government have committed a denial of justice contrary to international law;

(iii) To declare that the aforesaid Convention cannot lawfully be annulled, or its terms altered, by the Imperial Government of Iran, otherwise than as the result of agreement with the Anglo-Iranian Oil Company, Limited, or under the conditions provided in Article 26 of the Convention;
(iv) To adjudge that the Imperial Government of Iran should give full satisfaction and indemnity for all acts committed in relation to the Anglo-Iranian Oil Company, Limited, which are contrary to international law or the aforesaid Convention, and to determine the manner of such satisfaction and indemnity."

Pursuant to Article 40, paragraphs 2 and 3, of the Statute, the Application was communicated to the Iranian Government as well as to the States entitled to appear before the Court. It was also transmitted to the Secretary-General of the United Nations.

The Memorial of the Government of the United Kingdom was filed within the time-limit fixed by Order of July 5th, 1951, and subsequently extended at the request of that Government by Order of August 22nd, 1951. The Iranian Government, within the time-limit fixed for the presentation of its Counter-Memorial as finally extended to February nth, 1952, by Order of December 17th, 1951, at the request of that Government, filed a document entitled "Preliminary Observations: Refusal of the Imperial Government to recognize the jurisdiction of the Court".

The deposit of this document having suspended the proceedings on the merits, an Order dated February nth, 1952, fixed March 27th,

1952, as the time-limit within which the United Kingdom Government might submit a written statement of its observations and submissions in regard to the Objection. Furthermore, the States entitled to appear before the Court were informed of the deposit of the Objection. Finally, in pursuance of Article 63 of the Statute of the Court, the Members of the United Nations were informed that in its Objection, the Iranian Government relied, inter alia, upon its interpretation of Article 2, paragraph 7, of the Charter of the United Nations.

The Observations of the United Kingdom Government in regard to the Objection were deposited within the specified time-limit and the case was thus ready for hearing, as far as the Preliminary Objection was concerned.

As the Court included upon the Bench a Judge of the nationality of one of the Parties, the other Party—the Government of Iran—by virtue of Article 31, paragraph 2, of the Statute of the Court, [p97] appointed Dr. Karim Sandjabi, Professor and former Dean of the Law Faculty of Tehran, Member of Parliament and former Minister, to sit as a Judge ad hoc.

As the President of the Court was a national of one of the Parties, he transferred the Presidency for the present case to the Vice-President, in accordance with Article 13, paragraph 1, of the Rules of Court.

Public hearings were held on June 9th, 10th, nth, 13th, 14th, i6th, 17th, 18th, 19th, 21st and 23rd, 1952. The Court heard M. Navab, Dr. Mossadegh and M. Henri Rolin on behalf of the Iranian Government; and Sir Lionel Heald and Sir Eric Beckett on behalf of the United Kingdom Government.

In the course of the argument before the Court, the following submissions were presented :
On behalf of the Iranian Government:
May it please the Court

Subject to all reservations and without prejudice, To find as fact and hold in law:

1° That the Government of the United Kingdom has altered the subject of its claim, as set forth in its Application instituting proceedings;

That the said Application requested that the Iranian Government should be required to give full satisfaction and indemnity for all acts committed in regard to the Anglo-Iranian Company contrary to the rules of international law or to the Concession Convention of April 29th, 1933, and that the manner in which this satisfaction and reparation were to be given should be determined ;

That the United Kingdom Government requested, in its Memorial, as its principal demand:

restitution of the enterprise to the concessionary Company and the determination of the damages due to the said Company for loss and damage, either by the Arbitration Court provided for in Article 22 of the Concession or in such other manner as the Court may decide;

as an alternative, if the Court should not order restitution of the enterprise, that the compensation due for regular expropriation should similarly be determined by the arbitral procedure laid down in Article 22 of the Concession Convention, or in such other manner as the Court may decide ;

as a further alternative, that, in any case, the provisions contained in the Nationalization Act with regard to compensation should be declared inadequate from the point of view of international law, and that the amount of such compensation should be determined by arbitration or by the Court;

that the two first claims are inadmissible, because the Government of the United Kingdom by its Declaration of August 3rd, 1951, abandoned its request for adjudication of the said claims; [p98]

That the third claim is not admissible, no such request having been formulated in the Application instituting proceedings;

That, in any case, the Court has no jurisdiction to deal with it, as this claim was formulated subsequent to the Iranian Government's denunciation on July 10th, 1951, of its Declaration of adherence to the Optional Clause under Article 36 of the Court's Statute, and was not concerned' with the settlement of a dispute;

2° That the Court should declare that it lacks jurisdiction ex officio in application of Article 2, paragraph 7, of the Charter of the United Nations, the matters dealt with by the Nationalization Laws of March 20th and May 1st, 1951, being essentially within the domestic jurisdiction of States and incapable of being the subject of an intervention by any organ of the United Nations;

3° That the Court has jurisdiction only in so far as jurisdiction is conferred on it by the declarations of the Parties;
That in the present case the Iranian Declaration limits the jurisdiction of the Court to disputes arising after the ratification of the said Declaration, with regard to situations or facts relating directly or indirectly to the application of treaties or conventions accepted by Persia and subsequent to the ratification of the said Declaration;

That the claims of the United Kingdom Government are based either upon treaties concluded between Iran and other Powers, the benefit of which can only be invoked by the United Kingdom by application of the most-favoured-nation clause, a clause which appears only in the treaties concluded between Iran and the United Kingdom in r857 and 1903, i.e. prior to the ratification of the Iranian Declaration;

or upon an exchange of notes, which does not possess the character of a treaty or convention, dated May 10th, 1928, a date which is prior to the ratification of the Iranian Declaration and which confines itself to noting the Iranian Government's undertaking to respect, in regard to British nationals, the rules of general international law, the violation of which, as such, is not invoked by the United Kingdom Government, and would not give ground for the institution of proceedings before the Court, having regard to the Declarations of the two Parties;

or upon an alleged tacit agreement between the two Governments in connection with the renewal of the Anglo-Iranian Oil Company's concession in 1933, which tacit agreement is formally disputed, and in any case does not possess the character of a treaty or convention, because it was not concluded between States, was not put in writing, and was not registered in conformity with Article 18 of the Covenant of the League of Nations, which was applicable at that time ;

That, accordingly, the Court, on these grounds, lacks jurisdiction;

4° That furthermore, a prima facie examination suffices to show that the British claims have no relation to the treaties, or alleged treaties, that are invoked, as these instruments manifestly do not possess the scope which the applicant State attributes to them;

That, on this ground also, the Court should declare that it lacks jurisdiction; [p99]

5° That the claim concerning the amount of the compensation due to the Anglo-Iranian Oil Company is also inadmissible, because that Company has not yet exhausted the local remedies provided by Iranian law;

6° That the United Kingdom and Iran, having in their Declarations reserved questions which, according to international law, are within the exclusive jurisdiction of States, this reservation, having regard to the substitution of Article 2, paragraph 7, of the Charter of the United Nations for Article 15, paragraph 8, of the Covenant of the League of Nations, must be understood as extending to questions which are essentially within the domestic jurisdiction of States;

That express declarations of this kind undoubtedly reinforce the general provision in Article 2, paragraph 7, of the Charter of the United Nations, and therefore constitute an additional reason for the Court to declare that it lacks jurisdiction;

In view of the foregoing,

To declare that it lacks jurisdiction,

And, in any case, to find that the claims are inadmissible.

As a further alternative,

To place on record for the Iranian Government its declaration that, in so far as may be necessary, it avails itself of the right reserved in its Declaration, to require the suspension of the proceedings, since the dispute before the Court has, in fact, been submitted to the Security Council and is under examination by that body.

On behalf of the United Kingdom Government:

1. That the question of the Court's jurisdiction is the only question which arises for decision by the Court at the present time and no other question, whether or not it is one which could be raised by preliminary objection, falls for decision by the Court at the present time.

2. That the Court has, under Article 36, paragraph 2, of its Statute, jurisdiction in respect of all disputes covered by the declaration of Iran accepting the Optional Clause.

3. That the Iranian declaration accepting the Optional Clause covers disputes arising after the ratification thereof in regard to situations or facts subsequent to the ratification thereof and having reference directly or indirectly to the application of treaties or conventions accepted by Iran at any time.

4. That by reason of the third conclusion, the Court has jurisdiction to entertain the claim of the United Kingdom that Iran, in putting into force the law of 1st May, 1951, relating to the nationalization of the oil industry in Iran, has violated its obligations towards the United Kingdom resulting from the following treaties or conventions accepted by Iran:

(a) The treaties and conventions between Iran and third States enumerated in paragraph 11 of Annex 2 of the United Kingdom [p100] Memorial, being treaties or conventions upon which the United Kingdom is entitled to rely by reason of Article 9 of the Treaty of 1857 between the United Kingdom and Persia and Article 2 of the Treaty of 1903 between the United Kingdom and Persia.

(b) The exchange of notes between the Imperial Government of Persia and the United Kingdom dated 10th May 1928 regarding the position of British nationals in Persia.

(c) The Treaty stipulation arising out of the settlement in 1933, through the mediation of the Council of the League of Nations, of the international dispute between the United Kingdom and Persia, the conditions of which settlement are contained in the Concession Convention concluded by the Imperial Government of Persia with the Anglo-Persian Oil Company in that year.
5. That the contention in paragraph 3 of the Iranian conclusions that the Persian declaration accepting the Optional Clause only covers disputes arising out of treaties accepted by Iran after the date of the ratification of that declaration, is wrong.

6. That if, contrary to the fifth conclusion, the Persian declaration is limited to treaties and conventions accepted by Iran after the date of the ratification of its declaration accepting the Optional Clause, the Court has jurisdiction to entertain the claim by the United Kingdom that Iran has infringed its obligations towards the United Kingdom resulting from the following treaties or conventions accepted by Iran:

(i) the Treaty of Friendship, Establishment and Commerce between Persia and Denmark signed on the 20th February 1934; upon which the United Kingdom is entitled to rely by reason of Article 9 of the Treaty of 1857 and Article 2 of the Treaty of 1903 between the United Kingdom and Persia, and

(ii) the treaty stipulation between the Government of Iran and the Government of the United Kingdom referred to in paragraph (c) of Conclusion 4.

7. That the contention in paragraph (1) of the Iranian conclusions that, by reason of a statement in a note of the 3rd August 1951, from the British Embassy in Tehran to the Iranian Government or otherwise, the United Kingdom has abandoned the claims formulated in letter A of its final conclusions contained in paragraph 48 of the United Kingdom Memorial of the 10th October 195 r, and that therefore these claims cannot be entertained by the Court

(a) does not relate to the question of jurisdiction and therefore does not fall for decision by the Court at the present time, and

(b) is ill-founded.

8. The contention in paragraph (1) of the Iranian conclusions that the alternative claim (litt. B) of the final conclusions in paragraph 48 of the United Kingdom Memorial must be rejected on the ground that it was not covered by the Application instituting proceedings [p101]

(a) does not relate to the question of jurisdiction, and therefore does not fall for decision by the Court at the present time, and

(b) is ill-founded.

9. The contention in paragraph 1 of the Iranian conclusions that the Court has no jurisdiction to entertain the aforesaid claim B, on the ground that it was formulated after the denunciation by Iran of its declaration accepting the Optional Clause, is ill-founded.

10. That the contention in paragraph 5 of the Iranian conclusions that the said alternative claim B is not receivable because municipal remedies have not been exhausted

(a) does not relate to the question of jurisdiction and therefore does not fall for decision by the Court at the present time, and

(b) is ill-founded.

11. That the last "subsidiary" contention in the Iranian conclusions that, by reason of the penultimate paragraph of the Persian declaration accepting the Optional Clause, Iran is entitled to require that proceedings in the Court should be suspended on the ground that the dispute between the Parties has been submitted to the Security Council of the United Nations,

(a) does not relate to the question of the jurisdiction of the Court and therefore does not fall for decision at the present stage, and

(b) is ill-founded.

12. That the present dispute between the United Kingdom and Iran does not relate to a matter which, according to international law, falls exclusively within the jurisdiction of Iran and therefore the jurisdiction of the Court is not affected by exception (c) of the Iranian declaration accepting the Optional Clause.

13. That the contention in paragraph 6 of the Iranian conclusions that exception (c) of the Iranian declaration accepting the Optional Clause must, having regard to the provisions of paragraph 7 of Article 2 of the Charter of the United Nations, be regarded as extending to questions which are essentially within the jurisdiction of Iran, is ill-founded.

14. That if, contrary to Conclusion 13 above, the Iranian contention referred to in 13 above is correct, the present dispute does not relate to a question which falls essentially within the domestic jurisdiction of Iran.

15. That paragraph 7 of Article 2 of the Charter of the United Nations is not relevant to the jurisdiction of the Court.

16. That if, contrary to Conclusion 15 above, paragraph 7 of Article 2 of the Charter of the United Nations is relevant to the jurisdiction of the Court, the present dispute is not a matter which is essentially within the domestic jurisdiction of Iran.

17. That the Iranian Government, having in its conclusions submitted to the Court for decision several questions which are not objections to the jurisdiction of the Court and which could only be decided if the Court had jurisdiction, has by this action conferred jurisdiction upon the Court on the basis of the principle of forum prorogatum. [p102]

For these reasons, the Government of the United Kingdom accordingly prays the Court:

(1) to declare that it has jurisdiction or, alternatively, to join the question of jurisdiction to the merits; and
(2) to order the Iranian Government to plead on the merits and fix the time-limits for the further written proceedings.

***

On April 29th, 1933, an agreement was concluded between the Imperial Government of Persia (now the Imperial Government of Iran, which name the Court will use hereinafter) and the Anglo-Persian Oil Company, Limited (later the Anglo-Iranian Oil Company, Limited), a company incorporated in the United Kingdom. This agreement was ratified by the Iranian Majlis on May 28th, 1933, and came into force on the following day after having received the Imperial assent.

On March 15th and 20th, 1951, the Iranian Majlis and Senate, respectively, passed a law enunciating the principle of nationalization of the oil industry in Iran. On April 28th and 30th, 1951, they passed another law "concerning the procedure for enforcement of the law concerning the nationalization of the oil industry throughout the country". These two laws received the Imperial assent on May 1st, 1951.

As a consequence of these laws, a dispute arose between the Government of Iran and the Anglo-Iranian Oil Company, Limited. The Government of the United Kingdom adopted the cause of this British Company and submitted, in virtue of the right of diplomatic protection, an Application to the Court on May 26th, 1951, instituting proceedings in the name of the Government of the United Kingdom of Great Britain and Northern Ireland against the Imperial Government of Iran.

On June 22nd, 1951, the Government of the United Kingdom submitted, in accordance with Article 41 of the Statute and Article 61 of the Rules of Court, a request that the Court should indicate provisional measures in order to preserve the rights of that Government. In view of the urgent nature of such a request, the Court, by Order of July 5th, 1951, indicated certain provisional measures by virtue of the power conferred on it by Article 41 of the Statute. The Court stated expressly that "the indication of such measures in no way prejudges the question of the jurisdiction of the Court to deal with the merits of the case and leaves unaffected the right of the Respondent to submit arguments against such jurisdiction".

While the Court derived its power to indicate these provisional measures from the special provisions contained in Article 41 of the Statute, it must now derive its jurisdiction to deal with the merits of the case from the general rules laid down in Article 36 of the [p103] Statute. These general rules, which are entirely different from the special provisions of Article 41, are based on the principle that the jurisdiction of the Court to deal with and decide a case on the merits depends on the will of the Parties. Unless the Parties have conferred jurisdiction on the Court in accordance with Article 36, the Court lacks such jurisdiction.

In the present case the jurisdiction of the Court depends on the Declarations made by the Parties under Article 36, paragraph 2, on condition of reciprocity, which were, in the case of the United Kingdom, signed on February 28th, 1940, and, in the case of Iran, signed on October 2nd, 1930, and ratified on September 19th, 1932. By these Declarations, jurisdiction is conferred on the Court only to the extent to which the two Declarations coincide in conferring it. As the Iranian Declaration is more limited in scope than the-United Kingdom Declaration, it is the Iranian Declaration on which the Court must base itself. This is common ground between the Parties.

The Iranian Declaration, which was drafted in French, is as follows:

[Translation ]

"The Imperial Government of Persia recognizes as compulsory ipso facto and without special agreement in relation to any other State accepting the same obligation, that is to say, on condition of reciprocity, the jurisdiction of the Permanent Court of International Justice, in accordance with Article 36, paragraph 2, of the Statute of the Court, in any disputes arising after the ratification of the present declaration with regard to situations or facts relating directly or indirectly to the application of treaties or conventions accepted by Persia and subsequent to the ratification of this declaration, with the exception of:

(a) disputes relating to the territorial status of Persia, including those concerning the rights of sovereignty of Persia over its islands and ports;

(b) disputes in regard to which the Parties have agreed or shall agree to have recourse to some other method of peaceful settlement;

(c) disputes with regard to questions which, by international law, fall exclusively within the jurisdiction of Persia;

However, the Imperial Government of Persia reserves the right to require that proceedings in the Court shall be suspended in respect of any dispute which has been submitted to the Council of the League of Nations.

The present declaration is made for a period of six years. At the expiration of that period, it shall continue to bear its full effects until notification is given of its abrogation."

According to the first clause of this Declaration, the Court has jurisdiction only when a dispute relates to the application of a treaty or convention accepted by Iran. The Parties are in agreement on this point. But they disagree on the question whether this juris-[p104]diction is limited to the application of treaties or conventions accepted by Iran after the ratification of the Declaration, or whether it comprises the application of treaties or conventions accepted by Iran at any time.

The Government of Iran contends that the jurisdiction of the Court is limited to the application of treaties or conventions accepted by Iran after the ratification of the Declaration. It refers to the fact that the words "et postérieurs à la ratification de cette déclaration" follow immediately after the expression "traités ou conventions acceptés par la Perse".

The Government of the United Kingdom contends that the words "et postérieurs à la ratification de cette déclaration" refer to the expression "au sujet de situations ou de faits". Consequently, the Government of the United Kingdom maintains that the Declaration relates to the application of treaties or conventions accepted by Iran at any time.

If the Declaration is considered from a purely grammatical point of view, both contentions might be regarded as compatible with the text. The words "et postérieurs à la ratification de cette déclaration" may, strictly speaking, be considered as referring either to the expression "traités ou conventions acceptés par la Perse", or to the expression "au, sujet de situations ou de faits".

But the Court cannot base itself on a purely grammatical interpretation of the text. It must seek the interpretation which is in harmony with a natural and reasonable way of reading the text, having due regard to the intention of the Government of Iran at the time when it accepted the compulsory jurisdiction of the Court.

The text itself conveys the impression that the words "postérieurs à la ratification de cette déclaration" relate to the expression which immediately precedes them, namely, to "traités ou conventions acceptés par la Perse", to which they are linked by the word "et". This is, in the opinion of the Court, the natural and reasonable way of reading the text. It would require special and clearly established reasons to link the words "et postérieurs à la ratification de cette déclaration", to the expression "au sujet de situations ou de faits", which is separated from them by a considerable number of words, namely, "ayant directement ou indirectement trait à l'application des traités ou conventions acceptés par la Perse".

The Government of the United Kingdom has endeavoured to invoke such special reasons. It has relied on the fact that the Iranian Declaration is copied from the corresponding clause adopted by Belgium in 1925 which refers to "tous les différends qui s'élèveraient après la ratification de la présente déclaration au sujet de situations ou de faits postérieurs à cette ratification". It is argued that thereafter this formula or a similar one was adopted by numerous States and that the Iranian Declaration must be understood in the same-sense, namely, that the expression "et postérieurs à la ratification de cette [p105] declaration" relates only to the expression "au sujet de situations ou de fails".

But these expressions, which in the Belgian Declaration are closely linked to each other, are in the Iranian Declaration separated by the words "ayant directement ou indirectement trait a Vapplication des traites ou conventions acceptes par la Perse". By the interpolation of these words, the substance of the usual formula was so much altered that it is impossible to seek the real meaning of the Iranian Declaration in that formula. This Declaration must be interpreted as it stands, having regard to the words actually used.

The Government of the United Kingdom has further argued that the Declaration would contain some superfluous words if it is interpreted as contended by Iran. It asserts that a legal text should be interpreted in such a way that a reason and a meaning can be attributed to every word in the text.

It may be said that this principle should in general be applied when interpreting the text of a treaty. But the text of the Iranian Declaration is not a treaty text resulting from negotiations between two or more States. It is the result of unilateral drafting by the Government of Iran, which appears to have shown a particular degree of caution when drafting the text of the Declaration. It appears to have inserted, ex abundanti cautela, words which, strictly speaking, may seem to have been superfluous. This caution is explained by the special reasons which led the Government of Iran to draft the Declaration in a very restrictive manner.

On May 10th, 1927, the Government of Iran denounced all treaties with other States relating to the regime of capitulations, the denunciation to take effect one year thereafter, and it had commenced negotiations with these States with a view to replacing the denounced treaties by new treaties based on the principle of equality. At the time when the Declaration was signed in October 1930, these negotiations had been brought to an end with some States, but not with all. The Government of Iran considered all capitulatory treaties as no longer binding, but was uncertain as to the legal effect of its unilateral denunciations. It is unlikely that the Government of Iran, in such circumstances, should have been willing, on its own initiative, to agree that disputes relating to such treaties might be submitted for adjudication to an international court of justice by virtue of a general clause in the Declaration.

It is reasonable to assume, therefore, that when the Government of Iran was about to accept the compulsory jurisdiction of the Court, it desired to exclude from that jurisdiction all disputes which might relate to the application of the capitulatory treaties, and the Declaration was drafted on the basis of this desire. In the light of these considerations it does not seem possible to hold that the term "traites ou conventions", used in the Declaration, could mean treaties [p106] or conventions concluded at any time, as contended by the Government of the United Kingdom.

It is objected that the Government of Iran, at or about the time when it signed the Declaration, concluded with a number of other States bilateral treaties which provided for arbitration of disputes relating to treaties already concluded or to be concluded. This attitude is said to be contrary to the view that the Government of Iran desired to exclude from the jurisdiction of the Court treaties accepted by it before the ratification of the Declaration.

This objection loses all weight when it is viewed in the light of the special reasons which prompted the formulation by the Iranian Government of its Declaration on the one hand, and of the arbitra-tion clauses inserted in certain treaties on the other. That Government was dealing with two different situations, one being particular, the other general. It is quite understandable that it was disposed to accept the arbitration clause as it is expressed in the treaties concluded with certain States which were willing to give up capitulatory rights. But the Government of Iran was confronted with an entirely different problem when it was preparing a Declaration under Article 36, paragraph 2, of the Court's Statute, binding itself to submit to the jurisdiction of the Court in relation to all States which had signed similar Declarations or which might do so in the future, whether such States had concluded with Iran treaties replacing the regime of capitulations or not.
Having regard to these considerations, the Court is satisfied that it was the manifest intention of the Government of Iran to exclude from the jurisdiction of the Court disputes relating to the application of all treaties or conventions accepted by it before the ratification of the Declaration. This intention has found an adequate expression in the text of the Declaration as interpreted above by the Court.

That such was the intention of the Government of Iran is confirmed by an Iranian law of June 14th, 1931, by which the Majlis approved the Declaration. This law was passed some months after the Declaration was signed and some months before it was ratified. It was stated in that law that the Majlis approved the Declaration relating to the compulsory jurisdiction of the Court "as it was signed by the representative of Iran" on October 2nd, 1930; it was further stated that the law comprised a single article and the text of Article 36 of the Court's Statute, "together with the conditions of the Iranian Government's accession to the aforesaid Article". One of these conditions was mentioned as follows:

"In respect of all disputes arising out of situations or facts relating, directly or indirectly, to the execution of treaties and conventions which the Government will have accepted after the ratification of the Declaration." [p107]

This clause, referring as it does to "treaties and conventions which the Government will have accepted after the ratification of the Declaration", is, in the opinion of the Court, a decisive confir-mation of the intention of the Government of Iran at the time when it accepted the compulsory jurisdiction of the Court.

It is argued that the terms used in the law are not identical with the text of the Declaration. That is true. But it is irrelevant, since the law only paraphrases the Declaration without repeating it textually. Had the Iranian Government been of the opinion that the terms of the law differed from the true meaning of the Declaration, as it was signed in October 1930, it could easily have altered the Declaration. But it did not do so. It ratified it in September 1932 without any modification. It must therefore have considered that the Declaration corresponded to the explanation given in the law of 1931.

It is contended that this evidence as to the intention of the Government of Iran should be rejected as inadmissible and that this Iranian law is a purely domestic instrument, unknown to other governments. The law is described as "a private document written only in the Persian language which was not communicated to the League or to any of the other States which had made decla-rations".

The Court is unable to see why it should be prevented from taking this piece of evidence into consideration. The law was published in the Corpus of Iranian laws voted and ratified during the period from January 15th, 1931, to January 15th, 1933. It has thus been available for the examination of other governments during a period of about twenty years. The law is not, and could not be, relied on as affording a basis for the jurisdiction of the Court. It was filed for the sole purpose of throwing light on a disputed question of fact, namely, the intention of the Government of Iran at the time when it signed the Declaration.

Having regard to the foregoing considerations, the Court concludes that the Declaration is limited to disputes relating to the application of treaties or conventions accepted by Iran after the ratification of the Declaration.

***
The United Kingdom contends, however, that even if the Court were to hold that the Declaration applies only to disputes relating to the application of treaties or conventions accepted by Iran after the ratification of the Declaration, it would still have jurisdiction in the present case. The contention of the United Kingdom is that the acts of which it complains constitute a violation by Iran of certain of its obligations to the United Kingdom resulting from treaties or conventions accepted by Iran after the ratification of the Declaration. The treaties and conventions relied upon in this connection are: [p108]

(i) The Treat}' of Friendship, Establishment and Commerce concluded between Iran and Denmark on February 20th, 1934; the Establishment Convention concluded between Iran and Switzerland on April 25th, 1934; and the Establishment Convention concluded between Iran and Turkey on March 14th, 1937.

(ii) What the United Kingdom Government describes as the "treaty stipulation" between the Government of Iran and the Government of the United Kingdom arising out of the settlement in 1933, through the mediation of the Council of the League of Nations, of the international dispute between the United Kingdom and Iran relating to a concession known as the D'Arcy Concession.

Article IV of the Treaty of 1934 between Iran and Denmark, upon which the United Kingdom Government relies, provides that:

[Translation] "The nationals of each of the High Contracting Parties shall, in the territory of the other, be received and treated, as regards their persons and property, in accordance with the principles and practice of ordinary international law. They shall enjoy therein the most constant protection of the laws and authorities of the territory for their persons, property, rights and interests."

The Establishment Conventions concluded by Iran with Switzerland and Turkey each contain an article similar to Article IV of the Iranian-Danish Treaty.

The United Kingdom relies on these three treaties by virtue of the most-favoured-nation clause contained in Article IX of the Treaty concluded between the United Kingdom and Iran on March 4th, 1857, and in Article 2 of the Commercial Convention concluded between the United Kingdom and Iran on February 9th, 1903.

Article IX of the Treaty of 1857 reads:

"The High Contracting Parties engage that, in the establishment and recognition of Consuls-General, Consuls, Vice-Consuls, and Consular Agents, each shall be placed in the dominions of the other on the footing of the most-favoured nation; and that the treatment of their respective subjects, and their trade, shall also, in every respect, be placed on the footing of the treatment of the subjects and commerce of the most-favoured nation."

Article II of the Commercial Convention of 1903 provides as follows:
[Translation]”… It is formally stipulated that British subjects and importations in Persia, as well as Persian subjects and Persian importations in the British Empire, shall continue to enjoy in all respects, the regime of the most-favoured nation...."

It is argued by the United Kingdom Government that the conduct of the Iranian Government towards the Anglo-Iranian Oil [p109] Company constitutes a breach of the principles and practice of international law which, by her treaty with Denmark, Iran promised to observe towards Danish nationals, and which, by the operation of the most-favoured-nation clause contained in the treaties between Iran and the United Kingdom, Iran became bound to observe towards British nationals. Consequently, the argument continues, the dispute which the United Kingdom has brought before the Court concerns situations or facts relating directly or indirectly to the application of a treaty—the Treaty of 1934 between Denmark and Iran—accepted by Iran after the ratification of her Declaration.

The Court cannot accept this contention. It is obvious that the term traites ou conventions used in the Iranian Declaration refers to treaties or conventions which the Party bringing the dispute before the Court has the right to invoke against Iran, and does not mean any of those which Iran may have concluded with any State. But in order that the United Kingdom may enjoy the benefit of any treaty concluded by Iran with a third party by virtue of a most-favoured-nation clause contained in a treaty concluded by the United Kingdom with Iran, the United Kingdom must be in a position to invoke the latter treaty. The treaty containing the most-favoured-nation clause is the basic treaty upon which the United Kingdom must rely. It is this treaty which establishes the juridical link between the United Kingdom and a third-party treaty and confers upon that State the rights enjoyed by the third party. A third-party treaty, independent of and isolated from the basic treaty, cannot produce any legal effect as between the United Kingdom and Iran: it is res inter alios acta.

It is contended by the United Kingdom that upon the coming into force of the Iranian-Danish Treaty on March 6th, 1935, Iran became bound, by the operation of the most-favoured-nation clause, to treat British nationals on her territory in accordance with the principles and practice of international law. Without considering the meaning and the scope of the most-favoured-nation clause, the Court confines itself to stating that this clause is contained in the Treaties of 1857 and 1903 between Iran and the United Kingdom, which are not subsequent to the ratification of the Iranian Declaration. While Iran is bound by her obligations under these Treaties as long as they are in force, the United Kingdom is not entitled to rely upon them for the purpose of establishing the jurisdiction of the Court, since they are excluded by the terms of the Declaration.

The United Kingdom argued that the question which the Court had to consider was not "what are the treaties which confer on Great Britain the rights in question", but "what are the treaties whose application is in dispute". But from the legal point of view, what is in dispute is not the application of the Treaty of 1934 between Iran and Denmark, but the application of the Treaty of 1857 or the Convention of 1903 between Iran and [p110] the United Kingdom in conjunction with the Treaty of 1934 between Iran and Denmark. There could be no dispute between Iran and the United Kingdom upon the Iranian-Danish Treaty alone.

The United Kingdom also put forward, in a quite different form, an argument concerning the most-favoured-nation clause. If Denmark, it is argued, can bring before the Court questions as to the application of her 1934 Treaty with Iran, and if the United Kingdom cannot bring before the Court questions as to the application of the same Treaty to the benefit of which she is entitled under the most-favoured-nation clause, then the United Kingdom would not be in the position of the most-favoured nation. The Court needs only observe that the most-favoured-nation clause in the Treaties of 1857 and 1903 between Iran and the United Kingdom has no relation whatever to jurisdictional matters between the two Governments. If Denmark is entitled under Article 36, paragraph 2, of the Statute, to bring before the Court any dispute as to the application of its Treaty with Iran, it is because that Treaty is subsequent to the ratification of the Iranian Declaration. This can not give rise to any question relating to most-favoured-nation treatment.

The word "indirectement" in the phrase "au sujet de situations ou de faits ayant directement ou indirectement trait a l'application des traites ou conventions" has been relied upon in arguing that the dispute brought before the Court may be considered as involving indirectly the application of a treaty subsequent to the Declaration—the Iranian-Danish Treaty of 1934. The words "directement ou indirectement" clearly describe the manner in which a certain situation or certain facts forming the subject-matter of a dispute may be related to a treaty: such relation may be direct or indirect. But such direct or indirect relation is not in issue in the present case. What is in issue is whether the United Kingdom, for the purpose of satisfying the requirements of the Declaration, can invoke a treaty to which it is not a party by way of a treaty to which it is a party. The word "indirectement" cannot apply to the solution of this question. If the United Kingdom is not entitled to invoke its own Treaty of 1857 or 1903 with Iran, it cannot rely upon the Iranian-Danish Treaty, irrespective of whether the facts of the dispute are directly or indirectly related to the latter treaty.

The Court must, therefore, find in regard to the Iranian-Danish Treaty of 1934, that the United Kingdom is not entitled, for the purpose of bringing its present dispute with Iran under the terms of the Iranian Declaration, to invoke its Treaties of 1857 and 1903 with Iran, since those Treaties were concluded before the ratification of the Declaration; that the most-favoured-nation clause contained in those Treaties cannot thus be brought into operation; and that, consequently, no treaty concluded by Iran with any third party can be relied upon by the United Kingdom in the present case. [p111]

***

The Court will now consider whether the settlement in 1933 of the dispute between the Government of the United Kingdom and the Government of Iran relating to the D'Arcy Concession, through the mediation of the Council of the League of Nations, resulted, as is claimed by the United Kingdom, in any agreement between the two Governments which may be regarded as a treaty or convention within the meaning of this expression in the Iranian Declaration.

Whether or not the concession contract of 1933 or the settlement of the dispute in that year constituted an agreement between the Government of Iran and the Government of the United Kingdom is a question relating to jurisdiction, the solution of which does not depend upon a consideration of the merits. It can be and must be determined at this stage, quite independently of the facts surrounding the act of nationalization complained of by the United Kingdom.

In November 1932 the Iranian Government decided to cancel the D'Arcy Concession. On December 19th, 1932, the United Kingdom Government, having protested to the Iranian Government without avail, submitted the case to the Council of the League of Nations. The Council placed the question on the agenda and appointed a Rapporteur. On February 3rd, 1933, the Rapporteur informed the Council that the Governments of Iran and the United Kingdom had agreed to suspend all proceedings before the Council; that they agreed that the Company should immediately enter into negotiations with the Iranian Government, the respective legal points of view being entirely reserved; and that, in the event that the negotiations should fail, the question should go back to the Council. After prolonged discussion between the representatives of the Iranian Government and the representatives of the Company, an agreement—the Concession Contract—was signed by them at Tehran on April 29th. It was subsequently ratified by the Iranian Government. On October 12th, the Rapporteur submitted his report, together with the text of the new concession, to the Council, declaring that "the dispute between His Majesty's Government in the United Kingdom and the Imperial Government of Persia is now finally settled". Thereupon the representatives of Iran and the United Kingdom at the Council each expressed their satisfaction at the settlement thus reached. The question was removed from the agenda of the Council.

The United Kingdom maintains that, as a result of these proceedings, the Government of Iran undertook certain treaty obligations towards the Government of the United Kingdom. It endeavours to establish those obligations by contending that the agreement signed by the Iranian Government with the Anglo-Persian Oil [p112] Company on April 29th, 1933, has a double character, the character of being at once a concessionary contract between the Iranian Government and the Company and a treaty between the two Governments. It is further argued by the United Kingdom that even if the settlement reached in 1933 only amounted to a tacit or an implied agreement, it must be considered to be within the meaning of the term "treaties or conventions" contained in the Iranian Declaration.

The Court cannot accept the view that the contract signed between the Iranian Government and the Anglo-Persian Oil Company has a double character. It is nothing more than a concessionary contract between a government and a foreign corporation. The United Kingdom Government is not a party to the contract; there is no privity of contract between the Government of Iran and the Government of the United Kingdom. Under the contract the Iranian Government cannot claim from the United Kingdom Government any rights which it may claim from the Company, nor can it be called upon to perform towards the United Kingdom Government any obligations which it is bound to perform towards the Company. The document bearing the signatures of the represen-tatives of the Iranian Government and the Company has a single purpose: the purpose of regulating the relations between that Government and the Company in regard to the concession. It does not regulate in any way the relations between the two Governments.

This juridical situation is not altered by the fact that the concessionary contract was negotiated and entered into through the good offices of the Council of the League of Nations, acting through its Rapporteur. The United Kingdom, in submitting its dispute with the Iranian Government to the League Council, was only exercising its right of diplomatic protection in favour of one of its nationals. It was seeking redress for what it believed to be a wrong which Iran had committed against a juristic person of British nationality. The final report by the Rapporteur to the Council on the successful conclusion of a new concessionary contract between the Iranian Government and the Company gave satisfaction to the United Kingdom Government. The efforts of the United Kingdom Government to give diplomatic protection to a British national had thus borne fruit, and the matter came to an end with its removal from the agenda.

Throughout the proceedings before the Council, Iran did not make any engagements to the United Kingdom other than to negotiate with the Company, and that engagement was fully executed. Iran did not give any promise or make any pledge of any kind to the United Kingdom in regard to the new concession. The fact that the concessionary contract was reported to the Council and placed in its records does not convert its terms into the terms of a treaty by which the Iranian Government is bound vis-à-vis the United Kingdom Government. [p113]

The United Kingdom has stressed the similarity between the case of The Free Zones of Upper Savoy and the District of Gex and the present case, and has cited the Order made by the Permanent Court of International Justice on December 6th, 1930, in the former case to show that the concessionary contract of 1933 "laid down what was to be the law between the United Kingdom and Iran". The Court does not see any analogy between the two cases. The subject-matter of the dispute in that part of the Free Zones case which has been relied upon by the United Kingdom related to customs matters, which were of direct concern to the two countries, while the subject-matter of the dispute between the United Kingdom and Iran in 1932 and 1933 arose out of a private concession. The conclusion of the new concessionary contract removed the cause of a complaint by the United Kingdom against Iran. It did not regulate any public matters directly concerning the two Governments. It could not possibly be considered to lay down the law between the two States.

It is thus clear that the proceedings before the Council of the League of Nations which led up to the settlement in 1933 of the dispute between the United Kingdom and Iran relating to the D'Arcy Concession, did not result in the conclusion of any treaty or convention between the two countries.

***

The Court has found that the United Kingdom is not entitled to invoke any of the treaties concluded by Iran with Denmark and Switzerland in 1934 and with Turkey in 1937 and that no treaty or convention was concluded in 1933 between Iran and the United Kingdom. No other treaties having been relied upon by the United Kingdom as treaties or conventions subsequent to the ratification of the Iranian Declaration, the Court must conclude that the dispute brought before it by the United Kingdom is not one of those disputes arising "in regard to situations or facts relating directly or indirectly to the application of treaties or conventions accepted by Persia and subsequent to the ratification of this Declaration". Consequently, the Court cannot derive jurisdiction in the present case from the terms of the Declaration ratified by Iran on September 19th, 1932.

***

During the oral proceedings, the United Kingdom Government presented a Submission "that the Iranian Government, having in its Conclusions submitted to the Court for decision several questions which are not objections to the jurisdiction of the Court, and which could only be decided if the Court had jurisdiction, has by this action conferred jurisdiction upon the Court on the basis of the principle of forum prorogatum". Although the Agent of the United [p114] Kingdom Government stated subsequently that he did not wish to press his contention on this point, the Submission was not formally withdrawn. The Court must, therefore, deal with it.

The principle of forum prorogatum, if it could be applied to the present case, would have to be based on some conduct or statement of the Government of Iran which involves an element of consent regarding the jurisdiction of the Court. But that Government has consistently denied the jurisdiction of the Court. Having filed a Preliminary Objection for the purpose of disputing the jurisdiction, it has throughout the proceedings maintained that Objection. It is true that it has submitted other Objections which have no direct bearing on the question of jurisdiction. But they are clearly designed as measures of defence which it would be necessary to examine only if Iran's Objection to the jurisdiction were rejected. No element of consent can be deduced from such conduct on the part of the Government of Iran. Consequently, the Submission of the United Kingdom on this point cannot be accepted.

Accordingly, the Court has arrived at the conclusion that it has no jurisdiction to deal with the case submitted to it by the Application of the Government of the United Kingdom dated May 26th, 1951. It is unnecessary for the Court to consider any of the other objections raised to its jurisdiction. Since the Court is without jurisdiction in the present case, it need not examine any arguments put forward by the Iranian Government against the admissibility of the claims of the United Kingdom Government.

***

In its above-mentioned Order of July 5th, 1951, the Court stated that the provisional measures were indicated "pending its final decision in the proceedings instituted on May 26th, 1951, by the Government of the United Kingdom of Great Britain and Northern Ireland against the Imperial Government of Iran". It follows that this Order ceases to be operative upon the delivery of this Judgment and that the Provisional Measures lapse at the same time. [p115]

***


For these reasons,

The Court,

by nine votes to five,

finds that it has no jurisdiction in the present case.
Done in English and French, the English text being authoritative, at the Peace Palace, The Hague, this twenty-second day of July, one thousand nine hundred and fifty-two, in three copies, one of which will be placed in the archives of the Court and the others will be transmitted to the Government of the United Kingdom of Great Britain and Northern Ireland and to the Imperial Government of Iran, respectively.

(Signed) J. G. Guerrero,
Vice-President.

(Signed) E. Hambro,
Registrar.

Sir Arnold McNair, President, availing himself of the right conferred on him by Article 57 of the Statute, appends to the Judgment the statement of his individual opinion.

Judges Alvarez, Hackworth, Read and Levi Carneiro, availing themselves of the right conferred on them by Article 57 of the Statute, append to the Judgment statements of their dissenting opinions.

(Initialled) J. G. G.
(Initialled) E. H. [p116]


INDIVIDUAL OPINION OF PRESIDENT McNAIR

I concur in the conclusion reached in the Judgment of the Court and wish to add some words of my own, as the reasons leading me to this conclusion are not entirely the same as those contained in that Judgment.

I shall begin by making some remarks of a preliminary character. Under the Covenant of the League of Nations and the Statute of the Permanent Court of International Justice no State was under any obligation to accept the jurisdiction of that Court. However, Article 36, paragraph 2, of the Statute afforded to States an opportunity of doing so by means of a voluntary act. That paragraph (which is reproduced in the Statute of the present Court in terms which are identical in all material respects) was in the nature of a standing invitation made on behalf of the Court to Members of the League of Nations to accept as compulsory, on the basis of reciprocity, the whole or any part of the jurisdiction of the Court as therein denned. It should be noted that the machinery provided by that paragraph is that of "contracting-in", not of "contracting-out". A State, being free either to make a Declaration or not, is entitled, if it decides to make one, to limit the scope of its Declaration in any way it chooses, subject always to reciprocity. Another State seeking to found the jurisdiction of the Court upon it must show that the Declarations of both States concur in comprising the dispute in question within their scope. Article 36, paragraph 5, of the Statute of the present Court, which came into force in 1945, provides that Declarations made under Article 36 of the Statute of the Permanent Court and which were then still in force should be deemed to be acceptances of the compulsory jurisdiction of the present Court, and it is common ground between the Parties that the Iranian Declaration ratified on 19 September, 1932, was in force when the United Kingdom filed its Application in this Court on 26 May, 1951. It is also common ground that the present dispute falls within the scope of the United Kingdom's Declaration.

An international tribunal cannot regard a question of jurisdiction solely as a question inter partes. That aspect does not exhaust the matter. The Court itself, acting propria motu, must be satisfied that any State which is brought before it by virtue of such a Declaration has consented to the jurisdiction. This aspect of the matter was mentioned in the Judgment of the Permanent Court in 1927 in the Chorzow Factory Case (Jurisdiction), Series A, [p117]

No. 9, p. 32 (not a case arising on a Declaration) in the following passage:

"It has been argued repeatedly in the course of the present proceedings that in case of doubt the Court should decline jurisdiction. It is true that the Court's jurisdiction is always a limited one, existing only in so far as States have accepted it; consequently,, the Court will, in the event of an objection—or when it has automatically [d'office] to consider the question—only affirm its jurisdiction provided that the force of the arguments militating in favour of it is preponderant. The fact that weighty arguments can be advanced to support the contention that it has no jurisdiction cannot of itself create a doubt calculated to upset its jurisdiction. When considering whether it has jurisdiction or not, the Court's aim is always to ascertain whether an intention on the part of the Parties exists to confer jurisdiction upon it. The question as to the existence of a doubt nullifying its jurisdiction need not be considered when, as in the present case, this intention can be demonstrated in a manner convincing to the Court."

***

The principal question before the Court is the meaning of the following words occurring in the Iranian Declaration of acceptance of the jurisdiction of the Court, dated 2 October, 1930, and ratified on 19 September, 1932:

"sur tous les différends qui s'élèveraient après la ratification de la présente déclaration, au sujet de situations ou de faits ayant directement ou indirectement trait à l'application des traités ou conventions acceptés par la Perse et postérieurs à la ratification de cette déclaration, exception faite pour....".

Does the reference to treaties or conventions denote treaties or conventions accepted by Iran regardless of the date of their acceptance, as the United Kingdom contends, or only treaties or conventions accepted by Iran after the date of the ratification of the Declaration, as Iran contends? That is, do the words "postérieurs à la ratification de cette déclaration" refer to "situations ou faits", as the United Kingdom contends, or to "traités ou conventions", as Iran contends? The importance of this matter lies in the fact that the United Kingdom relies, at any rate as a basis of the jurisdiction of the Court, upon certain treaties accepted by Iran before 19 September, 1932.

I need not repeat the discussion of the matter contained in the Judgment of the Court because I accept the conclusion at which the Court has arrived. Both interpretations are grammatically possible, as Counsel for the United Kingdom admitted. Moreover, both are possible as a matter of substance; both make sense, though the effects of the two interpretations are quite different. In short, there is a real ambiguity in the text, and, for that reason, [p118] it is both justifiable and necessary to go outside the text and see whether any light is shed by the surrounding circumstances.

In 1928 the Assembly of the League of Nations launched a campaign for securing more acceptances of the compulsory jurisdiction of the Permanent Court. This campaign bore fruit, for in the years 1928 to 1932 inclusive some 26 States deposited Declarations accepting the compulsory jurisdiction of the Court in some form or another. Among the Governments which responded to the appeal was the Iranian Government. Its contribution was a very modest one, though it enabled its delegate at Geneva to announce to the Assembly on 16 September, 1930, that he had received a telegram from Teheran to the effect that his country had "acceded to the Optional Clause of the Statute of the Permanent Court of International Justice".

Iran's limitation of its acceptance to situations and facts relating directly or indirectly to treaties or conventions was unique, and one is naturally led to inquire whether there was any reason for this unusually restrictive attitude, and whether there is anything that indicates which of the two possible interpretations of the formula is the correct one.
The explanation given by the Iranian Government in paragraph 19 of its Preliminary Observations dated 22 February, 1952, in which this Objection to the jurisdiction was raised, is as follows:

"The Iranian Government had, indeed, overwhelming reasons of international policy to limit its acceptance in the way it did: on October 2nd, 1928 [ ? 1930], it had denounced all existing treaties, binding it to other States, which were based on a capitulatory system; this resulted in a great number of negotiations for the replacement of former conventions by new agreements based on the equality of the contracting parties.

The Iranian Government drafted the clause under which it adhered to the Statute of the Court in such a way as to exclude the Court's jurisdiction in respect of international conventions signed before that date, because it had denounced those conventions and because it wanted to put an end generally and finally to the capitulatory system. That is the reason why it was naturally inclined to accept the Court's jurisdiction only in respect of treaties subsequent in date to its adherence, that is to say, to confine ourselves to the essentially political aspect, subsequent to the change which came about in 1928 in Iran's negotiations with other States."

This statement—made in 1952—requires investigation, and we must ascertain whether there was during the relevant period 1928 to 1932 anything peculiar in the treaty position or the treaty-making activities of Iran. The gradual break-up of the regime of Capitulations throughout the world during the decade [p119] following the first World War is described in Professor A. J. Toynbee's Survey of International Affairs for 1928, pages 349 and 350, and in Wheeler-Bennett's Documents on International Affairs, 1928, pages 200-212. Iran moved in 1927, and on May 10 of that year "formally notified all States holding capitulatory privileges in Persia [believed to number at least 13] that those privileges would be abolished on the 10th May, 1928". As a sequel to this denunciation it became necessary for Iran to overhaul her treaty system, to revise her treaties and to replace the former capitulatory system by a series of treaties of commerce and establishment befitting the new status of legal equality which she had asserted and acquired.

In consequence, as an examination of the League of Nations Treaty Series shows, the years 1928 to 1932 were marked by intense activity on the part of Iran in the negotiation of new treaties of friendship or commerce or establishment. In the case of some States formerly holding capitulatory privileges Iran had to be content with provisional solutions embodied in Exchanges of Notes, some of which had not been replaced by formal treaties at the end of 1932 or much later. In short, Iran's treaty system was in a state of suspense and transition, and it was difficult for her to know precisely how she stood in relation to certain States, and what vestiges of the old regime still remained.

I think it is also necessary to bear in mind the large part that had been played by most-favoured-nation clauses in creating the network of the capitulatory system in Iran and elsewhere.

A perusal of Hertslet, Treaties, etc., between Great Britain and Persia, and between Persia and other Foreign Powers (1891), shows how widespread these clauses were in the treaties of Iran. It is true that these clauses are in no way confined to the system of Capitulations and have been used for hundreds of years by States in their treaty relations without any reference to Capitulations. Nevertheless, from the point of view of a State which had been subject to a system of Capitulations for at least a century and had only recently denounced them and emerged into a new status, it would be surprising if the most-favoured-nation principle was not regarded as an obnoxious concomitant of that system. Such a State, while still engaged in negotiating a new treaty regime restricting the most-favoured-nation principle to normal commercial intercourse, would naturally be shy of accepting any compulsory jurisdiction in terms wide enough to expose itself to the invocation of any part of its old treaty system that might still survive. [p120]

These historical considerations make it easier for me to understand why the Iranian Government should desire to start with a clean slate in regard to the compulsory jurisdiction of the Court and to limit its obligations in that regard to treaties and conventions accepted by it after 19 September, 1932.

The British comment upon the Iranian Government's explanation of the limitations contained in its Declaration, quoted above, is to be found -in paragraph 20 of the Observations of the United King-dom of 24 March, 1952. (a) It is said there that the British interpretation of that Declaration would suffice to exclude from compulsory jurisdiction disputes arising out of treaties relating to Capitulations, because even on that interpretation the Declaration is limited to disputes arising after 19 September, 1932, and relating to situations or facts subsequent to that date. But Iran's new treaty system was not yet complete on 19 September, 1932, when the Declaration was ratified—much less so on 2 October, 1930, when it was deposited in Geneva; some of the new treaties had not been ratified; some had not even been negotiated ; and in a number of cases all that existed was an Exchange of Notes agreeing upon a "Provisional Settlement". In my opinion, it is intelligible, for the reasons given above, that the Iranian Government, when it decided on 2 October, 1930, to sign a Declaration, should have confined it to treaties accepted after the ratification of that Declaration.

(b) Again, it is said by the United Kingdom that during the period 1929-1934 the Iranian Government entered into a large number of treaties with various States in which it accepted some form of international arbitration for disputes arising from the application or interpretation of treaties, past, present or future. I do not find this answer convincing. It is one thing to agree upon arbitration with a specific State; it is another thing to accept the jurisdiction of the Permanent Court in regard to treaties generally, with the knowledge that that acceptance involves the risk of being compelled to litigate with any Member of the League of Nations which had made a Declaration containing the necessary element of reciprocity. Moreover, if the eleven treaties enumerated in paragraph 21 of the same Observations and cited in support of this argument are examined, it will be found that most of them are treaties made with States formerly holding capitulatory rights in Iran and later willing to substitute new treaties which would recognize Iran's new status of equality; while three of them are with Estonia, Finland and Lithuania—new arrivals on the international scene—which had, so far as I can ascertain, never held capitulatory rights in Iran. Thus the States mentioned in this paragraph are precisely the kind of States with which Iran might be disposed to agree upon some general form of arbitration for disputes upon treaties. In my opinion these eleven treaties are not inconsistent with the view that what the Iranian [p121] Government was afraid of when signing its Declaration on 2 October, 1930, was the possibility of being summoned before the Permanent Court under that Declaration by virtue of some treaty, or part of some treaty, dating from, or connected with, the regime of Capitulations.

Accordingly I have formed the opinion that the Iranian Government's interpretation of its Declaration is preferable to that of the United Kingdom and that the Declaration refers only to situations or facts relating directly or indirectly to the application of treaties or conventions accepted by Iran after 19 September, 1932 (and then only subject to the reservations contained in the Declaration, which are not now in question).

In coming to this conclusion I have not relied on the Iranian Law of 15 January, 1931, communicated to this Court as late as 10 June, 1952, and I should have preferred that it should be excluded from the consideration of the Court. Its admissibility in evidence is open to question, and its evidentiary value is slight.

***

I now come to the second question, namely, whether there are any treaties ratified by Iran after 19 September, 1932, upon which the United Kingdom can rely in order to establish the jurisdiction of the Court. The United Kingdom's first claim to be able to do this (see paragraph 22 of the Observations of 24 March, 1952) rests on what is there described as "the international engagement between Persia and the United Kingdom to observe the terms of the Concession Convention of 1933",

With regard to that Concession Convention, which was made between the Iranian Government and the Anglo-Persian Oil Company, Limited, I accept the finding of the Court and the reasoning which supports it. I do not regard it as falling within the expression "traites ou conventions acceptes par la Perse". Neither the circumstances in which it was negotiated, nor the settlement of the contemporaneous dispute between the United Kingdom and Iran which was pending before the Council of the League of Nations, resulted in the creation of a tacit or an implied agreement between the United Kingdom and Iran that can be brought within the formula "traites ou conventions acceptes par la Perse". Upon the significance of the expression "acceptes par la Perse", I draw attention to the observations of the Permanent Court of International Justice in 1924 in the Mavrommatis Palestine Concessions Case, Judgment No. 2 (Jurisdiction), Series A, No. 2, at page 24, on the meaning of the expression "international obligations accepted by the Mandatory", and to the observations of Lord Finlay and Judge Moore to the same effect at pages 47 and 68. The words [p122] "acceptés par la Perse" would not be apt to describe a tacit or an implied agreement, if any such agreement had arisen. Some meaning must be given to the word "acceptés".

The United Kingdom's second claim to be able to base the jurisdiction of the Court upon a treaty ratified by Iran after 19 September, 1932, rests upon three treaties made by Iran with Denmark (1934), Switzerland (1934) and Turkey (1937) "upon the provisions of which" (according to paragraph 22 of the above-mentioned Observations) "the United Kingdom is entitled to rely by virtue of most-favoured-nation clauses in the treaties of 1857 and 1903 between the United Kingdom and Persia". These treaties are said "to bring the present case within the terms of the declaration". It will suffice, for the purpose of considering this argument, to confine ourselves to the Treaty of 1934 between Iran and Denmark (which came into force on 21 March, 1935) and Article 9 of the Anglo-Persian Treaty of 1857, which was expressly preserved on a temporary basis by means of an Exchange of Notes between Iran and the United Kingdom dated 10 May, 1928 {British Parliamentary Paper, Cmd. 3606).

Unquestionably, if the jurisdiction of the Court in this case had already been established and if the Court was now dealing with the merits, the United Kingdom would be entitled to invoke against Iran the most-favoured-nation clause (Article 9) of the Anglo-Persian Treaty of 1857, f°r the purpose of claiming the benefit of the provisions of the Irano-Danish Treaty of 1934 as to the treatment of foreign nationals and their property. But that is not the question now before the Court. The question is whether the United Kingdom can effectively base the jurisdiction of the Court on the Irano-Danish Treaty of 1934 as a treaty "postérieur à la ratification de cette déclaration"—which is quite another matter.

Having regard to the view which I have expressed that the Iranian Declaration applies only to treaties ratified by Iran after 19 September, 1932, I consider that this contention of the United Kingdom encounters two obstacles:

(a) the first is that the United Kingdom can rely on no treaty between herself and Iran ratified after that date. In reply to that objection, it may be argued that the Iranian formula does not in express terms say that the treaties aimed at by it must be treaties made between Iran and the other Party to the proceedings in this Court. Nevertheless, I am strongly inclined to think that when a State makes a Declaration agreeing, on a basis of reciprocity, to refer disputes arising out of treaties to this Court, that Declaration means disputes arising out of treaties made between the two Parties to the proceedings. However, whether that view is right or wrong, there is the further, and in my opinion fatal, obstacle:

(b) that the United Kingdom, before it can base its claim on the Irano-Danish Treaty, must establish a connection with it, [p123] and this the United Kingdom attempts to do by invoking Article 9 of the Anglo-Persian Treaty of 1857—a treaty which antedates the Iranian Declaration.

Thus it would be necessary, in order to accept this contention of the United Kingdom, for the Court to hold that the United Kingdom can

(a) not only invoke a treaty of 1934 between Iran and a third State, but also

(b) telescope together that treaty and a treaty between Iran and herself of 1857 by praying in aid a most-favoured-nation clause contained in the last-mentioned treaty.

Can either treaty alone, or both of them together, be called "un traite ou convention accepté par la Perse" after 19 September, 1932, within the meaning of the Declaration? I think not. Such an interpretation seems to me to be artificial and much strained, and I cannot accept it. I do not consider that a State making a Declaration under paragraph 2 of Article 36 can be said to contemplate such a roundabout application of it.

Nor do I consider that the words "directement ou indirectement" help the United Kingdom because these words qualify the relation between the situations or facts and the application of the treaty, and are not apt to cover the indirect operation of a most-favourednation clause in connecting a treaty of 1857 with a treaty of 1934 for the purpose of satisfying the formula contained in the Iranian Declaration.

For these reasons I am unable to accept the United Kingdom's claim to base the jurisdiction of the Court upon the treaties with Denmark, Switzerland and Turkey accepted by Iran after 19 Sep-tember, 1932.

Accordingly the Court has no jurisdiction in this case.

(Signed) Arnold D. McNair. [p124]


DISSENTING OPINION OF JUDGE ALVAREZ

[Translation ]

I
Nature of the dispute

The case now before the Court has given rise to long discussions, both in the written proceedings and in the oral arguments. All the legal questions relating to jurisdiction involved in the dispute have not, however, in my opinion, been fully brought out.

There are four important questions which have to be considered by the Court:

(1) What is the scope of the Declaration by which Iran accepted the provisions of Article 36, paragraph 2, of the Statute of the Court, or rather, how is this Declaration to be construed?
(2) Is the nationalization by Iran of the oil industry, which directly affected the Anglo-Iranian Oil Company, a measure solely within the reserved domain of Iran, and thus outside the jurisdiction of the Court?
(3) What is the nature of the United Kingdom Government's intervention in this case?
(4) What is the scope of Article 36, paragraph 2, of the Statute of the Court? Is the Court competent to deal with questions other than those expressly specified in the said article?

I shall follow the scheme of my previous individual and dissenting opinions, and consider the questions indicated above from the point of view of the law, after which I shall apply the law to the facts of the present dispute.

One preliminary observation of cardinal importance must be made in this connection. As a result of the profound and sudden transformations which have recently occurred in the life of peoples, it is necessary to consider in respect of the above questions, first the way they have been settled until recent times, that is to say, in accordance with classical international law, and secondly, how they are settled to-day, that is to say, in accordance with the new international law.

There is a fundamental difference between the two. Classical international law was static, it scarcely altered at all, because the life of peoples was subject to few changes; moreover, it was based on the individualistic regime. The new international law is dynamic; it is subject to constant and rapid transformations in accordance with the new conditions of international life which it must ever reflect. This law, therefore, has not the character of quasi-immutability; it is constantly being created. Moreover, it is based upon the regime [p125] of interdependence which has arisen and which has brought into being the law of social interdependence, the outcome of the revitalized juri-dical conscience, which accords an important place to the general interest. This is social justice. This law is not, therefore, mere speculation ; nor is it the ideal law of the future, but it is a reality ; it is in conformity with the spirit of the Charter as it appears from the Preamble and from Chapter I thereof.

The Court must not apply classical international law, but rather the law which it considers exists at the time the judgment is delivered, having due regard to the modifications it may have undergone following the changes in the life of peoples; in other words, the Court must apply the new international law.

II

Scope of the Declaration by which Iran accepted the provisions of Article 36, paragraph 2, of the Statute of the Court

It was this question which gave rise to the most lengthy argument. The Parties resorted to arguments of all kinds, especially to arguments based on the rules of grammar. The question whether Iran's Declaration of adherence was unilateral or bilateral in character was also argued. I shall not dwell long upon this latter point; the Declaration is a multilateral act of a special character ; it is the basis of a treaty made by Iran with the States which had already adhered and with those which would subsequently adhere to the provisions of Article 36, paragraph 2, of the Statute of the Court.

The Iranian Declaration of adherence should not be construed by the methods hitherto employed for the interpretation of unilateral instruments, conventions and legal texts, but by methods more in accordance with the new conditions of international life.

The traditional methods of interpretation may be summarized by the following points:

(1) It is considered that the texts have an everlasting and fixed character as long as they have not been expressly abrogated.
(2) Strict respect for the letter of the legal or conventional texts.
(3) Examination of these texts, considered by themselves without regard to their relations with the institution or convention as a whole.
(4) Recourse to travaux préparatoires in case of doubt as to the scope of these texts.
(5) Use, in reasoning, of out-and-out logic, almost as in the case of problems of mathematics or philosophy.
(6) Application of legal concepts or doctrines of the law of nations as traditionally conceived. [p126]
(7) Application of the decisions of the present International Court, or of the earlier Court, in similar cases which arise, without regard to the question whether the law so laid down must be modified by reason of the new conditions of international life.
(8) Disregard for the social or international consequences which may result from the construction applied.

Some form of reaction is necessary against these postulates because they have had their day.

In the first place the legal or conventional texts must be modified and even regarded as abrogated if the new conditions of international life or of States which participated in the establishment of those texts, have undergone profound change.

Then it is necessary to avoid slavish adherence to the literal meaning of legal or conventional texts; those who drafted them did not do so with a grammar and a dictionary in front of them; very often, they used vague or inadequate expressions. The important point is, therefore, to have regard above all to the spirit of such documents, to the intention of the parties in the case of a treaty, as they emerge from the institution or convention as a whole, and indeed from the new requirements of international life.

Recourse should only be had to travaux préparatoires when it is necessary to discover the will of the parties with regard to matters which affect their interests alone. A legal institution, a convention, once established, acquires a life of its own and evolves not in accordance with the ideas or the will of those who drafted its provisions, but in accordance with the changing conditions of the life of peoples.

A single example will suffice to show the correctness of this assertion. Let us assume that in a commercial convention there is a stipulation that all questions relating to maritime trade are to be governed by the principles of international law in force. These principles may have been followed by the parties for a century, perhaps, without any disputes arising between them; but one of the parties may, at the present time, by reason of the changes which have recently taken place in such matters, come to Court to claim that the century-old practice hitherto followed should be changed on the ground that it must be held that the will of the parties is no longer the same as it was at the time when the convention was signed. This is in many ways similar to the rebus sic stantibus clause which is so well known in the law of nations.

It is, moreover, to be observed that out-and-out reliance upon the rules of logic is not the best method of interpretation of legal or conventional texts, for international life is not based on logic; States follow, above all, their own interests and feelings in their relations with one another. Reason, pushed to extremes, may easily result in absurdity. [p127]

It is also necessary to bear in mind the fact that certain fundamental legal conceptions have changed and that certain institutions and certain problems are not everywhere understood in the same way: democracy is differently understood in Europe and in America, and in the countries of the Eastern group and those of the Western group in Europe; the institution of asylum is not understood in the same way and is not governed by the same rules in Europe and in Latin America; the Polar question, particularly in the Antarctic, is not looked at in the same way in America as on other continents, and so forth.

Finally, it is necessary to take into consideration the consequences of the interpretation decided upon in order to avoid anomalies.

Applying the foregoing considerations to the determination of the scope of Iran's adherence to the provisions of Article 36, paragraph 2, of the Statute of the Court, this adherence must be inter-preted as giving the Court jurisdiction to deal with the present case. The scope of this adherence is not to be restricted by giving too great an importance to certain grammatical or secondary considerations. Justice must not be based upon subtleties but upon realities.

I shall not dwell on this point, because I think it is necessary to consider other elements, perhaps more important than the will of the Parties, in order to decide as to the Courtis jurisdiction, as will subsequently be seen.

III

Iran's nationalization of the oil industry and the "reserved domain" of that State

The Iranian Government, in its "Observations préliminaires", filed on February 4th, 1952, expressly asserted that the nationalization of the oil industry which it had put into effect was a measure exclusively within its reserved domain and that the Court therefore had no jurisdiction to deal with this case.

It is necessary in the first place briefly to examine the nature of the reserved domain, its origin and its present state.

This domain was established by classical international law as a natural consequence of the individualistic regime and of the absolute sovereignty of States upon which this law was founded.

This reserved domain covered a very wide field. In particular, States could, without regard to the will or the interests of other States, do the following:

(a) Every State could set up the internal political organization which it considered the most suitable without being accountable to anybody. [p128]
(b) It could enact such laws as it considered necessary, even if these were contrary to international law, and its courts were required to apply only these laws.
(c) It could freely determine who were its nationals.
(d) It could, in entire freedom, determine the civil rights of its nationals and those of foreigners residing on its territory, often differentiating in important respects between these two categories.
(e) Foreigners were in all respects subject to the authority of the State in which they resided and had no redress even if they were prejudiced as the result of the action of that State.
(f) Each State could, by virtue of what was called its domaine eminent, make such use as it desired of the natural resources of its territory, which might or might not be the subject of exploitation concessions to private persons and which might be reclaimed by the State if it so desired.
(g) It could freely exercise its sovereign rights over the whole extent of its territory, free from any obligation towards other States or towards the international community. It could, in particular, take or refrain from taking the measures necessary to ensure internal order, carry out surveillance of its coasts, facilitate navigation, etc.
(h) Each State could, as it pleased, conclude treaties with other States without any means existing for their modification or abrogation.

From the middle of the 19th century, as the result of the appearance of important factors which had not previously existed, the traditional individualistic regime of the absolute sovereignty of States began to give place to a new regime, that of interdependence, which gave rise, as I have said, to the law of social interdependence. This resulted in the beginning of the total or partial internation-alization of all the matters referred to above as within the reserved domain. It is now admitted that a State which, in the exercise of its sovereignty, causes damage to another State, must indemnify that other State. Moreover, the concept of abus du droit, of which I shall have more to say later, is beginning to be introduced into international law. As a result of these various factors, the reserved domain of States has been modified and considerably reduced; in many cases it is possible to present a claim against a State relating to matters which it alleges to be within its reserved domain.

I shall merely give one example: although it is true that every State may establish the internal organization which it chooses, this organization must nevertheless be such that the State can fulfil its international obligations; if the State does not do so, it cannot be admitted as a Member of the United Nations or it may be expelled [p129] from the United Nations (Articles 4 and 6 of the Charter) and, in any event, if by reason of defects in its internal organization it causes injury to another State, it is under an obligation to compensate that State.

IV

Nature of the intervention by the United Kingdom Government in the present case.

This point is of cardinal importance.

The United Kingdom Government applied to the Court on May 26th, 1951, in order to protect the interests of the Anglo-Iranian Oil Company, an English company, on the ground that Iran, by nationalizing the oil industry, had violated the rights of that Company, rights derived, in particular, from the Concession Agreement of 1933 concluded between the Company and Iran.

The United Kingdom Government is therefore not appearing in this case in defence of its own interests, but to protect the interests of its nationals, which is a very different matter.
In accordance with the international law in force, a State may formulate a claim against another State in three cases:

(a) When one of its rights has been violated by that State.
(b) To protect the rights of its nationals if these rights have been disregarded or violated by that State.
(c) To defend the rights of a State which has entrusted it with this defence because it cannot directly undertake its own defence, for instance, if it has broken off diplomatic relations with the State which has violated its rights.

The position of the claimant State is quite different in each of the three cases.

In the first case, that is to say, where the State is acting in defence of its own interests, attention must be confined to the agreements which have been concluded between the two States.

In the second case, the claimant State acts in virtue of a right conferred by the law of nations and universally recognized in practice, the right of diplomatic protection of its nationals. In accordance with this law, the action of the claimant State cannot be met by any of the arguments that could be raised against it if it were acting on its own behalf: the only objections which can be raised to such a claim are those which are based upon international law or which result from the nature of the right which the claimant relies on.

No difficulty arises in respect of the third case. The State against which the claim is made can, as against a State acting on behalf of the claimant State, rely only upon conventions or agreements concluded between the last-named State and itself.

It must be pointed out as regards diplomatic protection that, according to the new international law, it may assume three different [p130] forms which depend upon the organ before which that protection is exercised: (a) direct protection or claim against a State ; (b) protection before the Security Council of the United Nations; (c) protection before the International Court of Justice.

These three aspects of diplomatic protection will disappear or will undergo changes when the new international law clearly establishes the international rights of the individual, i.e. those rights which he will be entitled to invoke directly against a State without resorting to the diplomatic protection of the country of which he is a national.

V

What is the scope of Article 36, paragraph 2, of the Statute of the Court? Is the Court competent to deal with matters other than those specifically indicated in that Article?

These questions, in my opinion, constitute the crucial point of the present case.

The arguments which we have heard proceeded from the basis, which was regarded as indisputable, that the Court's jurisdiction is determined solely by Article 36, paragraphs 1 and 2, of its Statute and that it is consequently derived almost entirely from the consent of the Parties. This explains the long arguments as to the scope of Iran's adherence to the provisions of that Article.

This view is incorrect.

It should be pointed out, in the first place, that Articles 36 and 38 of the Statute of the Court, in Chapter II relating to the competence of the Court, are very defective. Article 38, which reproduces Article 38 of the Statute of the Permanent Court of International Justice, has long been the subject of strong criticism, of which no account was taken at the San Francisco Conference when that Article was revised. It is therefore for the International Court of Justice to determine its true scope. The same must be said of Article 36.

That article, Article 36, refers to disputes which may arise between States; these relate to rights flowing from agreements concluded between these States or from rules established by international law with regard to given questions (land domain, maritime domain, etc.). What are involved therefore are disputes ordinarily relating to instruments to which two or more States are parties.

But in addition to such rights there are others, directly established by international law, which have not been sufficiently brought out in the present case to determine the Court's jurisdiction. These rights do not result from the will of States or from other juridical acts, but from the revitalized conscience of the people which takes account of the general interest. These rights do not create [p131] direct obligations between States; their existence may not give rise to discussion but must be protected in the event of their violation.

Among these rights, it is necessary to mention in particular those which are said to be fundamental rights of States (the right to independence, to sovereignty, to equality, etc.), as well as certain other rights conferred by the law of nations, such as that of the protection of nationals, the right to be indemnified for injuries, and so forth.

Article 36 of the Statute of the Court does not refer to the rights falling within this second category, for they do not give rise to disputes and, perhaps for this reason, no thought was given to them. But Article 36 does not exclude them from the Court's jurisdiction; if this had been the intention, it would have been stated expressly.

How then is this gap to be filled, or in short, how is the Court's jurisdiction with regard to this second category of rights to be determined? In order to do this, it is necessary to have recourse to the spirit of the Charter of the United Nations, of which the Statute of the Court forms an integral part (Article 92 of the Charter), and to the general principles of the law of nations. It is moreover necessary to have regard to the international consequences which might result from a restrictive interpretation of Article 36.

The Charter seeks to add to the prestige of the law of nations, as appears from the Preamble, paragraph 3, from Article 1, paragraph 1, of Chapter I, from Article 2, paragraph 3, as well as from Article 13(a) and from Articles 36 and 38. International law and the International Court of Justice are, at the present time, closely linked together: it is impossible to conceive of an international Court which does not apply the law of nations, or of this law without a Court to apply it.

In accordance with the spirit of the Charter, and with the general principles of international law, all the rights 01 States must be fully recognized and protected and the conflicts to which they may give rise must be settled by peaceful means.

There is a fundamental difference between classical international law and the new international law with regard to the means available to States to assert the two categories of rights indicated above.

Under classical international law, disputes between States arising from conventions or facts giving rise to legal relations, or from rules established by the law of nations on given matters, had to be settled by means freely chosen by the parties; but if the parties could not agree as to these means, the dispute remained unresolved and consequently the stronger State could to some extent impose its will upon the weaker. [p132]

The same is true with regard to the exercise of a right expressly recognized by the law of nations, that is to say those rights which fall within the second category referred to above. Here again, if some peaceful settlement is not reached, a strong State can impose its will upon a weak State; and if the latter be the claimant, its right remains of no practical value.

In the new international law the matter is wholly different. In accordance with this law, and in particular with the spirit of the Charter, all disputes between States must be resolved by peaceful means, and all the rights recognized by the law of nations must be respected and must have a sanction.

To this end, the Charter created an international organization comprising, among other organs, the Security Council and the International Court of Justice.

If the Statute of the Court were intended to limit the powers of the Court solely to the solution of disputes relating to rights of the first category referred to above, it would, as I have said, have expressly so provided. The Court then would be, in effect, a mere international court of arbitration. It would have been better, in these circumstances, to have confirmed the Permanent Court of Arbitration set up in 1899, which has the advantage of being composed of judges selected in each case by the parties themselves. But the present Court is, according to its Statute, a Court of justice and, as such, and by virtue of the dynamism of international life, it has a double task: to declare the law and develop the law. Its first task includes the settlement of disputes between States as well as the protection of the rights of those States as recognized by the law of nations. As regards the Court's second task, namely, the development of law, it consists of deciding the existing law, modifying it and even creating new precepts, should this be necessary. This second mission is justified by the great dynamism of international life. The Third Session of the General Assembly of the United Nations has recognized the Court's rights to develop international law in its Resolution No. 171. The Institute of International Law has on its side in the recently held Session at Siena expressly recognized this right of the Court. In creating a commission, the Institute unanimously adopted the following Resolution: [Translation] "The Institute of International Law, keenly aware of the growing importance of the International Court of Justice and of its role in the development of international law...." In discharging this task the Court must not proceed in an arbitrary manner, but must seek inspiration in the great principles of the new international law.

With regard to the protection of these rights, it is unnecessary to ascertain whether the complainant or the State against which the claim is made has or has not accepted the jurisdiction of the Court, or whether it is or is not a Member of the United Nations. Every State in the world is to-day a member of the international [p133] community, or rather, of the international society ; all are subject to the law of nations and have the rights and obligations laid down by that law. It is impossible to suppose that a State not a Member of the United Nations, or one which has not accepted the jurisdiction of the Court, should be able to violate the rights of other States and that it should not be possible to bring it before the Court; or, conversely, that a State which is a Member of the United Nations should be able so to act with regard to a non-member State.

The Court, in its Advisory Opinion of April nth, 1949, on "Reparations for Injuries suffered in the Service of the United Nations" expressly adopted the above-mentioned point of view. It held that "in the event of an'agent of the United Nations in the performance of his duties suffering injury in circumstances involving the responsibility of a State which is not a member, the United Nations, as an Organization, has the capacity to bring an international claim against the responsible de jure or de facto government with a view to obtaining the reparation due in respect of the damage caused to the United Nations".

It must be noted that in that Opinion, the Court actually created the law.

The State responsible may therefore be brought before the Court without its being necessary to inquire whether it has or has not accepted the jurisdiction of the Court or whether it has adhered to the provisions of Article 36 (2) of its Statute.

If the United Nations brought before the Court a claim against a State on the grounds above referred to, could it be possible for the Court to reject the claim brought by this Organization, on the basis of Article 34 (1) of the Statute, which provides that: "only States may be parties in cases before the Court", and on the ground that the United Nations are not a State? This would be nonsense.

It should be pointed out too, with regard to rights of the second category above referred to, that the new international law has reinforced and amplified the rights which already existed and it has recognized or conferred others which are of great importance and which have no existence in classical international law. I shall mention but three, because they are closely linked with the sub-stance of the present dispute: that of the protection of nationals, which is reinforced, that resulting from a denial of justice and that resulting from an abus du droit. This last concept, which is relatively new in municipal law (it finds a place in the Civil Codes of Germany and Switzerland) is finding its way into international law and the Court will have to give it formal recognition at the appropriate time.

Efforts are moreover being made at the present time to establish a universal declaration of the rights of the individual, and in order to give these rights protection on an international level, it is sought to create a special Court. It is clear that it will be enough for the [p134] State concerned to present itself before that Court or, failing that, before the International Court of Justice for it to obtain satis-faction.

Lastly, if the Court should hold that it lacks jurisdiction whenever rights of the second category of which I have spoken are concerned, very important cases might occur in which such a holding of lack of jurisdiction would cause disappointment and would considerably damage the prestige of this tribunal.

In conclusion, the Court should interpret and even develop Article 36 of its Statute in the sense indicated above.

In conclusion, I shall merely indicate briefly certain other observations with regard to the jurisdiction of the Court for the purpose of completing what may be caljed a general theory of the Court's competence.

(1) The Court is competent to give an opinion on all questions submitted to it by the Security Council or the Assembly of the United Nations. Its jurisdiction results from the fact that the Court is one of the organs of the United Nations (Article 7 of the Charter).

(2) Many international relations have at the present time a political as well as a juridical aspect ; this was recognized by the Court in its Advisory Opinion of May 28th, 1948. In such cases, the Court must consider both these aspects of cases submitted to it.

(3) It may happen that a dispute has entirely separate juridical and political aspects. In such a case, the Court is competent to deal with the juridical aspect and the Security Council is competent to deal with the political aspect.

(4) If a case submitted to the Court should constitute a threat to world peace, the Security Council may seise itself of the case and put an end to the Court's jurisdiction. The competence of the Council results from the nature of the international organization established by the Charter, and from the powers of the Council.

VI

Conclusions

The following conclusions result from the legal considerations which I have set out, in the case now before the Court:
(1) The Court has jurisdiction to deal with the claim presented against Iran by the United Kingdom by reason of the Iranian Declaration of adherence to the provisions of Article 36, paragraph 2, of the Statute of the Court.

(2) The Court has jurisdiction, in particular, because the United Kingdom is not acting in the present case in defence of its own interests, but to protect the interests of one of its nationals, the Anglo-Iranian Oil Company. [p135]

Since the United Kingdom is exercising this right of protection, it cannot be met with arguments as to the scope of the Iranian Declaration of adherence to the provisions of Article 36, paragraph 2, of the Statute of the Court, because what is involved is not a dispute between these two countries, but the exercise of a right recognized by the law of nations.

(3) In view of the nature of the reserved domain at the present day, the Court's jurisdiction cannot be limited by the Iranian contentions with regard to this domain.

(4) The Court has a very wide jurisdiction for the protection of rights directly conferred upon States by international law (those relating to the protection of nationals, to reparation for injury unjustly suffered, to denials of justice, to abus du droit, etc.). Its jurisdiction in this connection cannot be limited by the non-adherence of the State against whom the claim is made to the provisions of Article 36, paragraph 2, of the Statute of the Court.

The exercise of some of these rights may constitute the merits of the dispute between the United Kingdom and Iran.

(Signed) A. Alvarez. [p136]


DISSENTING OPINION OF JUDGE HACKWORTH

The controversy between the United Kingdom and Iran in its present stage relates exclusively to the question whether the Court has jurisdiction to entertain the complaint of the United Kingdom that its national, the Anglo-Iranian Oil Company, has been denied, through the nationalization of its properties in Iran in 1951, treatment in conformity with international law. Iran denies, and the United Kingdom affirms, that the Court is competent to entertain the complaint.

The Iranian Declaration accepting compulsory jurisdiction of the Permanent Court of International Justice, under Article 36 of its Statute (now applicable to this Court under Article 36 (5) of the present Statute) was signed on October 2nd, 1930. It was approved by a legislative act on June 14th, 1931, and ratification of the Declaration was notified to the League of Nations on September 19th, 1932.

The pertinent part of the Declaration states that compulsory jurisdiction of the Court is accepted, on condition of reciprocity, with respect to:

“…any disputes arising after the ratification of the present declaration with regard to situations or facts relating directly or indirectly to the application of treaties or conventions accepted by Persia and subsequent to the ratification of this declaration".

The present controversy revolves around the question whether this Declaration relates to treaties and conventions generally, to which Iran is a party, or only to those to which that country has become a party since the ratification of the Declaration.

***

I agree with the conclusion of the Court that the Declaration applies only to treaties and conventions accepted by Iran subsequent to the ratification of its Declaration. I do not, however, consider that, in reaching this conclusion, it was necessary or even permissible for the Court to rely upon the Iranian Parliamentary Act of approval as evidence of the intention of the Iranian Government, since that was a unilateral act of a legislative body of which other nations had not been apprised. National courts may, as a matter of course, draw upon such acts for municipal purposes, but this Court must look to the public declarations by States made for international purposes, and cannot resort to municipal legislative enact-[p137] ments to explain ambiguities in international acts. The fact that this was a public law which was available after 1933 to people who might have had the foresight and the facilities to examine it, is no answer. When a State deposits with an international organ a document, such as a declaration accepting compulsory jurisdiction of the Court, upon which other States are expected to rely, those States are entitled to accept that document at face value; they are not required to go back to the municipal law of that State for explanations of the meaning or significance of the international instrument. Such a procedure would in many cases lead to utter confusion. This is not a case of drawing upon the travaux préparatoires of a bilateral or multilateral agreement to explain ambiguities. Had the Act of Parliament been attached to the instrument of ratification filed by Iran with the League of Nations, a different situation would have been presented. Other States would thus have been on notice of the discrepancy between the Declaration and the act of approval. But this was not done.

I also agree with the Court that the Concession Agreement between Iran and the Anglo-Iranian Oil Company, Limited, of 1933, cannot be regarded as a treaty or convention in the international law sense, and consequently cannot be regarded as coming within the purview of the Iranian Declaration.

***

I regret that I cannot agree with the conclusion of the Court that the United Kingdom is not entitled for jurisdictional purposes, to invoke, by virtue of the most-favoured-nation clauses in earlier treaties between that country and Iran, provisions of treaties concluded by Iran with other countries subsequent to the ratification of its Declaration accepting jurisdiction of the Court.

The conclusion that the treaty containing the most-favoured-nation clause is the basic treaty upon which the United Kingdom must rely amounts, in my judgment, to placing the emphasis on the wrong treaty, and losing sight of the principal issue. The gravamen of the complaint of the United Kingdom Government is that Iran has not accorded to a British national, the Anglo-Iranian Oil Company, the benefits of international law and that, as a result, the Company has suffered a denial of justice. The provisions with respect to the application of the principles of international law are not to be found in the most-favoured-nation [p138] clause of the earlier treaties of 1857 and 1903 between Iran and the United Kingdom, but are embodied in the later treaties between Iran and Denmark of 1934; between Iran and Switzerland of that same year, and between Iran and Turkey of 1937. It is to these treaties and not to the most-favoured-nation clause that we must look in determining the rights of British nationals in Iran. These then are the basic treaties. The most-favoured-nation clause in the earlier treaties is merely the operative part of the treaty structure involved in this case. It is the instrumentality through which benefits under the later treaties are derived. It is in these later treaties that we find the ratio decidendi of the present issue.

This conclusion will the more clearly appear if we further examine the treaty provisions in the light of what has just been said.

Article IX of the Treaty of Peace of March 4th, 1857, between Great Britain and Persia, provides:

"The High Contracting Parties engage that, in the establishment and recognition of Consuls-General, Consuls, Vice-Consuls and Consular Agents, each shall be placed in the dominions of the other on the footing of the most-favoured nation; and that the treatment of their respective subjects, and their trade, shall also, in every respect, be placed on the footing of the treatment of the subjects and commerce of the most-favoured nation."

Similar provisions are contained in Article 2 of the Commercial Convention of May 27th, 1903, between the two countries.

This is not a unique most-favoured-nation clause, peculiar to a capitulatory regime, such as obtained in Persia during that era. It is wholly reciprocal in character. It is the sort of provision that is to be found in many treaties of commerce and navigation, ancient and modern. But that which is even more significant is the fact that in 1928, at a time when Persia was terminating the extraterritorial privileges of aliens, there was an exchange of notes, on May 10th, between the British Minister to Persia and the Persian Acting Foreign Minister, by which it was agreed that the most-favoured-nation provisions of Article IX of the Treaty of 1857 should remain in force. This has not been questioned by Iran.

The Treaty of Friendship, Establishment and Commerce, concluded between Iran and Denmark on February 20th, 1934, provides in Article IV that:

"The nationals of each of the High Contracting Parties shall, in the territory of the other, be received and treated, as regards their persons and property, in accordance with the principles and [p139] practice of ordinary international law. They shall enjoy therein the most constant protection of the laws and authorities of the territory, for their persons, property, rights and interests."

Similar provisions are contained in Article I of the Establishment Convention of April 25th, 1934, between Iran and Switzerland, and in Article I of the Establishment Convention of March 14th, 1937, between Iran and Turkey.

It will thus be apparent, using the Danish Treaty as the criterion, that Danish nationals in the territory of Iran and their property are entitled by Article IV of the Treaty of 1934 to be treated "in accordance with the principles and practice of ordinary international law".

The United Kingdom is entitled, by virtue of the most-favoured-nation provisions quoted above, to claim for British nationals in Iran no less favourable treatment than that promised by Iran to Danish nationals.

The Government of the United Kingdom has contended that the treatment accorded by Iran to the Anglo-Iranian Oil Company is not in keeping with the requirements of international law, and has invoked the Danish Treaty.

The Court is not called upon to say whether this contention is or is not warranted. It need only say, for present purposes, whether these treaty provisions to which Iran has subscribed bring the case within the purview of the Iranian Declaration accepting compulsory jurisdiction of the Court.

I readily agree with the majority that the most-favoured-nation provisions of the earlier treaties and the provisions of the later treaties are interrelated and must be considered together in order that benefits under the latter may be claimed. But I cannot accept, for reasons which follow, the conclusion that the necessity for invoking the earlier treaties as a means of claiming benefits under the later ones, constitutes a bar to the exercise of jurisdiction by the Court under the Iranian Declaration. This it seems to me is giving far more weight to the restrictive features of the Iranian Declaration than is warranted.

One cannot dispute the fact that the jurisdiction of the Court is a limited one. Acceptance of jurisdiction by States is purely a voluntary act on their part; and it necessarily follows that, unless a State has by special agreement, by treaty or convention, or by a declaration made under the Optional Clause of Article 36, paragraph 2, of the Statute, accepted jurisdiction, the Court is without jurisdiction.

On the other hand, when a State has filed a declaration under the Optional Clause of Article 36 of the Statute accepting jurisdiction, it has performed a voluntary act. It has voluntarily and unilaterally [p140] notified the world that it is prepared to submit certain classes of disputes to judicial examination by this Court.

Iran took full advantage of its liberty of action under the Statute by submitting a declaration, adroitly drafted, limited in scope to a comparatively narrow category of cases, and further safeguarded by three specific exceptions and a reservation, not pertinent to the present discussion. We are concerned with the meaning and scope of this Declaration. Precisely we are concerned with the meaning of the undertaking by Iran to accept the jurisdiction of the Court with respect to disputes arising after ratification of the Declaration with regard to situations or facts

“…relating directly or indirectly to the application of treaties or conventions accepted by Persia and subsequent to the ratification of this declaration".

It is common knowledge that this dispute arose after ratification of the Declaration. It is also common knowledge that it relates "directly or indirectly" to the application of treaties or conventions accepted by Iran. The pivotal question is whether the treaties or conventions relied upon by the United Kingdom were accepted by Iran "subsequent to ratification" of the Declaration.

It is no part of the functions of the Court to give to such a declaration a broader meaning or a more restrictive meaning than the State itself has seen fit to prescribe. Our duty is to find that plain and reasonable meaning which more nearly comports with the purpose of the State as disclosed by the language which it itself has employed.

I find nothing in the Iranian Declaration to suggest that it is necessary that action under it shall be premised exclusively on a single treaty. I find nothing to suggest that it is necessary that such an action shall be based on a treaty between the plaintiff State and the defendant State. The Declaration, though drafted with meticulous safeguards, does not specify any such condition, nor does it specify that in considering a dispute as to the application of a treaty or convention accepted by Iran subsequent to the ratification of the Declaration, an earlier treaty may not be drawn upon. This would indeed have been a strange limitation. All that the Declaration requires in order that the dispute shall fall within the competence of the Court, is that it shall relate to the application of treaties or conventions accepted by Iran subsequent to the ratification of the Declaration, and nothing more.

The Danish Treaty answers this description. It is in that Treaty and not in the most-favoured-nation clause that the substantive [p141] rights of British nationals are to be found. Until that Treaty was concluded, the most-favoured-nation clauses in the British-Persian treaties were but promises, in effect, of non-discrimination, albeit binding promises. They related to rights in future There was a right to claim something but it was an inchoate right. There was nothing to which it could attach itself unless and until favours should be granted to nationals of another country. But when Iran conferred upon Danish nationals by the Treaty of 1934 the right to claim treatment "in accordance with the principles and practice of ordinary international law", the right thereupon ipso facto became available to British nationals. This new right—based on international law concepts—came into existence not by virtue of the earlier treaties alone or even primarily, but by them plus the new treaties which gave them vitality. The new treaty is, in law and in fact, the fountain-head of the newly-acquired rights.

***

To summarize, the United Kingdom has a right to claim the benefits of the Danish Treaty of 1934. It matters not that that right was acquired through the operation of a most-favoured-nation clause of a treaty anterior to the ratification of the Iranian Declaration. The important thing is that it is a right acquired subsequent to ratification of that Declaration. It is the later treaty, and not the most-favoured-nation clause, that embraces the assurance upon which reliance is sought to be placed. A conclusion that jurisdiction does not lie, amounts, in my judgment, to giving to the restrictive features of the Iranian Declaration a more far-reaching scope than is warranted by the language there used.

(Signed) Hackworth. [p142]


DISSENTING OPINION OF JUDGE READ

I regret that I am unable to concur in the judgment of the Court in this case, and that it has become necessary for me to state the reasons which have led me to the conclusion that the objections to the jurisdiction of this Court, raised by Iran, should be overruled.

Before examining the Persian Declaration, it is necessary to decide upon the method of approach to the problem of interpretation. There are no specific rules of international law which bear directly on the issues which the Court must decide. There are, however, important general principles, which need to be taken into account in the circumstances of this case.

The first principle was applied by this Court in its Opinion— Admission to the United Nations, I.C.J. Reports 1950, page 8—and stated in the following words:

"The Court considers it necessary to say that the first duty of a tribunal which is called upon to interpret and apply the provisions of a treaty, is to endeavour to give effect to them in their natural and ordinary meaning in the context in which they occur. If the relevant words in their natural and ordinary meaning make sense in their context, that is an end of the matter. If, on the other hand, the words in their natural and ordinary meaning are ambiguous or lead to an unreasonable result, then, and then only, must the Court, by resort to other methods of interpretation, seek to ascertain what the parties really did mean when they used these words."

The second principle is, in reality, a special aspect of the first. It was applied by this Court in its Opinion—Peace Treaties II, I.C.J. Reports 1950, page 229—and stated in the following words:

"It is the duty of the Court to interpret the Treaties, not to revise them."

I am unable to accept the contention that the principles of international law which govern the interpretation of treaties cannot be applied to the Persian Declaration, because it is unilateral. Admittedly it was drafted unilaterally. On the other hand, it was related, in express terms, to Article 36 of the Statute, and to the declarations of other States which had already deposited, or which might in the future deposit, reciprocal declarations. It was intended to establish legal relationships with such States, consensual in their character, within the regime established by the provisions of Article 36. [p143]

There is an additional consideration which, strictly speaking, is not a principle, but a rejection of a fallacious theory.

It has been contended that the Court should apply a restrictive construction to the provisions of the Declaration, because it is a treaty provision or clause conferring jurisdiction on the Court. Further, it has been suggested that a jurisdictional clause is a limitation upon the sovereignty of a State, and that, therefore, it should be strictly construed.

The making of a declaration is an exercise of State sovereignty, and not, in any sense, a limitation. It should therefore be construed in such a manner as to give effect to the intention of the State, as indicated by the words used; and not by a restrictive interpretation, designed to frustrate the intention of the State in exercising this sovereign power.

In support of the contention that a restrictive interpretation should be applied, it is possible to cite certain obiter dicta of the Permanent Court; and, particularly, statements made in two cases—the Free Zones Case, Series A/B, No. 46, page 138, and in the Phosphates of Morocco Case, Series A/B, No. 74, page 23. It should, however, be observed that in neither of these cases did the Court rely upon restrictive interpretation as the basis of its decision.

Article 38 of the Statute is mandatory, and not discretionary. It requires the Court to apply judicial decisions as a subsidiary means for the determination of rules of law. The expression "judicial decisions" certainly includes the jurisprudence of this Court and of the Permanent Court. I have no doubt that it includes the principles applied by the Court as the basis of its decisions. It is, however, equally clear that it cannot possibly be construed as requiring this Court to apply obiter dicta.

It would take too long to review the jurisprudence of the Permanent Court and of this Court. I have been unable to find any case in which either Court relied upon a restrictive interpretation to a jurisdictional clause as a basis for its judgment. I am satisfied that both Courts have decided jurisdictional questions in conformity with the principles, as stated above. Indeed, both Courts have, within the limitations established by those principles, given liberal interpretations to jurisdictional clauses, designed to give full effect to the intentions of the parties concerned. It is sufficient to refer to one decision of this Court. In the Ambatielos Case— I.C.J. Reports 1952, page 28—this Court upheld its jurisdiction, notwithstanding that a restrictive construction of the jurisdictional clause would have led, inevitably, to an opposite result.

These is a further and compelling reason for rejecting the theory of restrictive interpretation of jurisdictional clauses. This Court is in a different position from that which was occupied by the Permanent Court. This Court is directly bound by the provisions of the [p144] Charter, and it is "the principal judicial organ of the United Nations". It cannot ignore the Preamble of the Charter, and its statement of Purposes and Principles. It cannot overlook the fact that the acceptance of the compulsory jurisdiction of the Court is one of the most effective means whereby Members of the United Nations have sought to give practical effect to the Preamble and to the Purposes and Principles. I should be failing in my duty, as a judge, if I applied a rule of interpretation, designed to frustrate the efforts of the Members to achieve this object.

***

In the light of these considerations, it becomes necessary to consider whether Iran, by virtue of the Declaration of 1932, has consented to the exercise of jurisdiction by this Court in the sort of case which has been brought by the United Kingdom.

It will be convenient to begin with the question whether the United Kingdom is entitled to rely upon the application of the provisions of treaties concluded, after the ratification of the Decla-ration, between Iran and third States, and invoked by virtue of most-favoured-nation clauses contained in older British treaties.

The United Kingdom has invoked the provisions of the most-favoured-nation clause of the Treaty of 1857, Article IX, which provides "that the treatment of their respective subjects, and their trade, shall also, in every respect, be placed on the footing of the treatment of the subjects and commerce of the most-favoured-nation". It will be observed that this clause was fully reciprocal, conferring rights and privileges on both parties. On the abandonment of the regime of capitulations in 1928, these provisions were maintained, by exchange of notes.

The United Kingdom Government thus bases its case on the provisions of three treaties concluded by Persia with Denmark and Switzerland in 1934 and by Iran with Turkey in 1937. For the purpose of this opinion it will be sufficient to consider the provisions of the treaty with Denmark, which was accepted by Persia after the ratification of the Declaration.

The Danish treaty, in Article IV, contained the following provision:

"The nationals of each of the High Contracting Parties shall, in the territory of the other, be received and treated, as regards their persons and property, in accordance with the principles and practice of ordinary international law. They shall enjoy therein the most constant protection of the laws and authorities of the territory for their persons, property, rights and interests...."

There can be no doubt that legally, by virtue of the invocation of the provisions of the Denmark treaty, Iran is under a treaty obligation to treat British nationals "in accordance with the principles and practice of ordinary international law". [p145]

The mere existence of a case based upon the Danish treaty invoked by virtue of a most-favoured-nation clause would not justify the Court in finding that it had jurisdiction. It is necessary that it should be a case coming within the scope of the Persian Declaration. For this purpose it is necessary to proceed upon the assumption that the Court has decided that the Declaration must be interpreted as applying only to treaties or conventions accepted by Persia after the ratification of the Declaration.

In dealing with this aspect of the case it is possible to concentrate upon a few words in the Declaration. I do not mean that we should ignore the context; but, for the moment, we should examine closely the following words:

“…with regard to situations or facts relating directly or indirectly to the application of treaties or conventions accepted by Persia".

Our problem is to determine whether the Anglo-Iranian Oil Company dispute relates directly or indirectly to the application of the Danish treaty, one which admittedly was accepted by Persia after the ratification of the Declaration.
There is no doubt that the dispute and the facts relate directly to the application of the Treaty of 1857. It is however, equally clear that they relate indirectly to the application of the provisions of the Danish treaty which have been invoked by virtue of the most-favoured-nation clauses.

Here it is necessary to go back to the principles to which I referred in the earlier part of this opinion.

The fact that jurisdiction depends on the will of the parties makes it necessary to consider what the will of the Persian Government was at the time when it made the Declaration. That will was expressed in the words used, and in order to determine it, the first principle must be applied. It is necessary to give effect to the words used in their natural and ordinary meaning in the context in which they occur. The second principle is equally important. It is my duty to interpret the Declaration and not to revise it. In other words, I cannot, in seeking to find the meaning of these words, disregard the words as actually used, give to them a meaning different from their ordinary and natural meaning, or add words or ideas which were not used in the making of the Declaration.

If the words "directly or indirectly" had been omitted from the Declaration, it would have been possible to assume that the jurisdiction was restricted to situations or facts which related directly to treaties or conventions accepted by Persia. But the words "directly or indirectly" were not omitted from the Declaration; and any attempt to construe it by ignoring this expression would amount to revision which a judge cannot do. Further, to give the words "directly or indirectly" some different and artificial meaning would again amount to a revision and would be beyond [p146] my powers as a judge. Similarly, any attempt to suggest that there is to be found in the Declaration, considered as a whole, a positive intention to exclude disputes on the ground that they may be to some extent based upon the provisions of earlier treaties would again be an attempt to revise the Declaration by the incorporation of words that are not there.

There are two considerations that strongly support the interpretation which is based on the natural and ordinary meaning of the words used. The first is that the Persian Government was certainly aware, at the time of the Declaration, of the existence of the most-favoured-nation clause referred to above. There were doubtless others. It must have had under consideration the possibility, or even the probability, of disputes arising which would relate directly to the application of such clauses and indirectly to the application of subsequent treaties or conventions. In drafting the Declaration, deliberate use was made of the disjunctive "or", which has an unequivocal meaning. There can be no doubt that the Persian Government envisaged a system of compulsory jurisdiction which would be broad enough to include disputes arising in this way. Assuming such an intention, I do not know of any way in which it could have been more clearly indicated than by using this expression "directly or indirectly".

It is, of course, true that the drafting of the Declaration was imperfect; and that it is possible, by purely grammatical argument, to attribute a different and unrealistic meaning to this expression. But I cannot rely on purely grammatical interpretation. While the grammatical construction may be open to criticism, there can be no real doubt as to what the draftsman had in mind when he delib-erately interpolated the expression "directly or indirectly" in the middle of the text. He certainly meant to ensure that the scope of the Declaration should be broadened so as to cover disputes and facts having an indirect relationship with the treaties or conventions in question.

The second consideration is that the arguments which have been advanced as leading the Persian Government to exclude the older treaties from the compulsory jurisdiction of the Court could have no conceivable application to compulsory jurisdiction relating to those modern treaty provisions which had nothing to do with the regime of capitulations which were applicable indirectly through the medium of most-favoured-nation clauses. Here it must be borne in mind that, at the date of the Declaration, Article IX of the Treaty of 1857 no longer had the character of a provision of an old treaty of the regime of capitulations. Originally, it possessed that character; but in 1928 the United Kingdom concurred in a denunciation of the objectionable provisions of the Treaty. The two States agreed, by exchange of notes, to maintain the most-favoured-nation clause, Article IX, pending the negotiation and conclusion [p147] of a new treaty of commerce and navigation. In reality, the most-favoured-nation clause relied upon by the Applicant is founded upon a new agreement, accepted by Persia before the ratification, but after the disappearance of the regime of capitulations.

Further, the most-favoured-nation clauses were reciprocal in character, and entirely consistent with the new and independent status which was resulting from the denunciation of capitulations. They furnished the keys which unlocked the doors for Persian merchants in the four corners of the earth, and protected them while engaged in their far-flung trading enterprises. They were essential to the national economy. The fact that their provisions were kept alive, by special stipulations, after the ending of capitulations in 1928, is proof that the Persian Government, far from grouping them with the treaties of the old regime, regarded them in an entirely different light.

There is nothing in the context which could justify the rejection of the natural and ordinary meaning to the words under consideration. Certain arguments have, however, been presented in the course of the oral proceedings. It has been contended that this claim is based upon the most-favoured-nation clause. Of course it is. This claim has a direct basis in the most-favoured-nation clauses and an indirect basis in the Danish treaty invoked by virtue of their provisions. The argument is completely irrelevant because the task of the Court is the very simple one of deciding whether Persia by this Declaration consented to the exercise of jurisdiction in disputes relating directly or indirectly to the application of treaties accepted by Persia.

In view of these considerations, I have reached the conclusion that the United Kingdom is entitled to invoke the provisions of the Danish treaty as a basis for the jurisdiction of the Court. It must however be understood that, in reaching this conclusion, I do not want to prejudge the merits. I cannot consider, in a preliminary proceeding, whether the subject-matter of the dispute comes within the scope of these provisions, because this question has not been discussed by counsel and because it is essentially a part of the merits. Accordingly, and subject to this reservation, I have concluded that the present claim is one which is based indirectly on the application of the Danish treaty, which was accepted by Persia after the date of the Declaration. Accordingly, the Iranian Objection to the Jurisdiction, as regards this part of the case, should be overruled, or at most joined to the merits.

***

In view of the foregoing conclusion, it is unnecessary for me to discuss that part of the judgment of the Court which upholds the Iranian objection on the ground that the Declaration limits the jurisdiction of the Court to disputes relating to treaties or conventions accepted by Persia after the date of the Declaration. [p148]

***

It is, however, necessary for me to discuss the part of the judgment which relates to the 1933 Agreement.

This agreement was referred to in clause (c) of the United Kingdom Submission No. 4 as follows:

"The treaty stipulation arising out of the settlement in 1933, through the mediation of the Council of the League of Nations, of the international dispute between the United Kingdom and Persia, the conditions of which settlement are contained in the Concession Convention concluded by the Imperial Government of Persia with the Anglo-Persian Oil Company in that year."

The United Kingdom claim on the merits, as set forth in the Application and in the Memorial, relates, in an important part, to breaches of this "treaty stipulation". In this part of the case on the merits, the United Kingdom contended, in the Memorial, that the 1933 Concession embodied "the substance of an implied agreement between the Government of the United Kingdom and the Iranian Government because there was an implied agreement between these two Governments (fully operative as creating an obligation in international law) to the effect that the Iranian Government undertook to observe the provisions of its concessionary convention with the Company".

To my mind, the merits of a dispute consist of the issues of fact and law which give rise to a cause of action, and which an applicant State must establish in order to be entitled to the relief claimed. In every dispute which is founded upon the breach of a treaty obligation, the applicant must establish the existence and scope of the treaty, as well as the facts which constitute the breach, in order to justify a tribunal in according the relief which it has requested.

It is, therefore, clear that the question as to whether such an implied agreement arose between the two Governments in 1933, one fully operative as creating an obligation in international law, is an essential element of the United Kingdom claim on the merits. It is a question partly of fact and partly of mixed fact and law.

It is equally clear that this question goes to the jurisdiction as well as to the merits.

It does not follow, however, that, because it goes to the jurisdiction, it can be decided on Preliminary Objection.

The Statute provides, in Article 36 (6):

"In the event of a dispute as to whether the Court has jurisdiction, the matter shall be settled by the decision of the Court." [p149]

There is nothing in the Statute providing for summary procedure by way of preliminary objection. There can be no doubt that the normal course, contemplated by this article, is that "the decision of the Court", in disputes as to jurisdiction, should be in accordance with the course of procedure prescribed by Chapter III of the Statute. The exceptional provisions of Rule 62 can only be construed as enabling the Court to deal summarily with those questions of jurisdiction which can be settled without prejudging matters which are a part of the merits. They cannot possibly be construed as authorizing the Court to decide, in preliminary proceedings, issues of law or fact which are essential elements of both jurisdiction and merits, or which are inextricably linked with the merits of the case. This is undoubtedly the basis of the rule in the Losinger Case—Series A/B, No. 67, at pages 23, 24—and it is confirmed by the instances in which the Permanent Court refused to deal, in preliminary proceedings, with questions of jurisdiction which concerned or were closely related to issues of law or fact that formed part of the merits. Without attempting an exhaustive reference to the jurisprudence of the Permanent Court, reference can be made to three cases in which this course was adopted as a basis for decision: Prince von Pless, Series A/B, No. 52, at page 16; Pajzs, Csaky, Esterhazy Case, Series A/B, No. 66, at page 9 ; The Railway Line Panevezys-Saldutiskis, Series A/B, No. 75, at pages 55, 56.

It is impossible to overlook the grave injustice which would be done to an applicant State, by a judgment upholding an objection to the jurisdiction and refusing to permit adjudication on the merits, and which, at the same time, decided an important issue of fact or law, forming part of the merits, against the applicant State. The effect of refusal to permit adjudication of the dispute would be to remit the applicant and respondent States to other measures, legal or political, for the settlement of the dispute. Neither the applicant nor the respondent should be prejudiced, in seeking an alternative solution of the dispute, by the decision of any issue of fact or law that pertains to the merits.

It is for these reasons that I have reached the conclusion that the Court is not competent, in preliminary proceedings and under the relevant provisions of the Statute and Rules, to decide whether or not an international agreement arose between the two Governments in 1933, one fully operative as creating an obligation in international law. I have reached the conclusion that the competence of the Court, at this stage, is limited to deciding whether the alleged international agreement, assuming that the United Kingdom's contentions as regards its nature and scope are well founded, is a treaty or convention within the meaning of the Declaration. [p150]

Accordingly, I am compelled to conclude that the aspect of this Objection which relates to the existence and scope of the alleged international agreement should be joined to the merits.

In view of the decision of the Court as regards the Iranian Objection No. 3, it is unnecessary for me to give my reasons for rejecting the other Iranian Objections, Nos. I, 2, 4, 5 and 6.

(Signed) J. E. Read. [p151]


DISSENTING OPINION OF JUDGE LEVI CARNEIRO

[Translation]

1. The first question which the Court ought, logically, to consider is the request for the joinder of the Objection to the merits, which was strongly urged by counsel for the United Kingdom.

The Court has not granted the request, and I agree with that decision. However, as I have already pointed out in the Ambatielos case (Greece v. United Kingdom), I think it is necessary, in deter-mining the Court's jurisdiction in the present case, to examine certain questions, or certain facts, which may be related to the merits and which are not disputed.

Such a summary appraisal of these questions—without considering them in detail or prejudging them—is sometimes necessary in order to decide the preliminary question.

In the present case, this necessity is more than ever imposed on us by the very nature of the questions that have already been raised, in particular by the multiplicity of "grounds for lack of jurisdiction'. I shall have something to say, later on, about the invocation of "general principles of ordinary international law" and about the scope of that question, which must now be considered and which is linked with the merits of the case.

In its Judgment on the Objection to its jurisdiction in the case concerning Polish Upper Silesia, the Permanent Court declared that it would consider certain questions

"even if this enquiry involves touching upon subjects belonging to the merits of the case ; it is, however, to be clearly understood that nothing which the Court says in the present Judgment can be regarded as restricting its entire freedom to estimate the value of any arguments advanced by either side on the same subjects during the proceedings on the merits".

Nobody could have described with greater accuracy than was done by counsel for the Government of Iran, in the present case, the rules governing the exercise of this right. He said very truly that: "The Court may consider, in its examination of the Preliminary Objection, such elements of the merits as are necessary therefor"; and that this examination "will no doubt be preferably directed to elements of the merits which are not in dispute" ; their selection, he added, is a "question of restraint, prudence and the proper administration of justice, for it is not possible to have watertight compartments for preliminary objections and the merits". {Oral arguments, Distr. 52/131 bis, p. 13.)

In the present case, the Parties were obliged, owing to the interlocking character of the questions, to make use of arguments which might, in theory, be regarded as outside the scope of the Objection [p152] to the jurisdiction. A decision on the Objection could not be arrived at in any other way.

2. Here another preliminary observation is called for. Emphasis has been laid, with a view to excluding any action by the Court, on the strictly private character of the present dispute : it is concerned with a Concession Agreement between the Government of Iran and a British company.

But it is rather the case that this contract—which the British Government in its Memorial even sought to regard as a sort of international treaty—possesses very considerable interest from an international standpoint; it may be said that it is of international significance.

I accept the argument of the Iranian Government that this Concession Agreement was neither framed nor approved by the League of Nations or by its Council in 1933. It is, however, the fact that the dispute between the Iranian Government and the British Government in regard to the revocation of the earlier Concession Agreement was brought to the knowledge of the League of Nations, and that the latter manifested an interest in the preparation of the present contract.

I also admit that, according to statements made by members of the British Government in Parliament, which were brought to the knowledge of the Court by the Iranian "Observations préliminaires" (pp. 33-34), that Government owns a majority of the shares of the Anglo-Iranian Oil Company, and this fact was known to the Iranian Government.

From another point of view, it is common knowledge that, now more than ever, all questions connected with the extraction of oil provoke certain international reactions, which are all the more pronounced in the case of a country having a geographical situation such as that of Iran.

In Article 22 of the Concession Agreement of 1933, it was laid down that if the arbitrators appointed by the parties were unable to agree, an umpire was to be nominated by the President or the Vice-President of the Permanent Court. The two Governments— British and Iranian—communicated this provision to the Registrar of the Court (Oral arguments, p. 103).

Lastly, the Iranian Government laid stress in its statements on the significance of the contract of 1933 as an expression of the political domination exercised by the United Kingdom over Iran, and it described the movement for the nationalization of the oil industry, i.e. the revocation of that contract, as a "national liberation". I shall show later on, that measures for nationalization are often of considerable international interest.

In view of all these circumstances, I do not believe that the Concession Agreement of 1933 can be regarded simply as a private [p153] convention, or that the act by which it was cancelled can be regarded as a purely private matter.

It is true that Article 36, paragraph 2, sub-paragraph (a), of the Statute, only refers to "the interpretation of a treaty", though it ought to have said "the interpretation of any international engagement"—which would be more in consonance with the wide terms of sub-paragraph (b) which reads: "any question of international law". The wording which I would prefer seems all the more justified when it is borne in mind that sub-paragraph (c) of the same article 36, paragraph 2, speaks of "the existence of any fact which, if established, would constitute a breach of an international obligation", and that sub-paragraph (d) speaks of: "the nature or extent of the reparation to be made for the breach of an international obligation". If the Court can have jurisdiction in regard to the consequences of an international engagement, how can it be argued that its jurisdiction cannot extend to the interpretation of all international engagements, or that it must in all cases be limited to the interpretation of treaties?

And if the purpose of the Court's intervention is the legal solution of international disputes, how can such intervention be excluded in a case which threatens international peace, simply because there is no question of the interpretation of an inter-state treaty?

Since the Iranian declaration recognizes the compulsory jurisdiction of the Court for disputes "with regard to situations or facts relating directly or indirectly to the application of treaties or con-ventions accepted by Persia", we might regard the jurisdiction as having been accepted, in the cases referred to, with regard to all "conventions", provided that they have an international signifi-cance—even if they have not been signed by the representatives of the two Governments. The contract of the Anglo-Iranian Company might be regarde'd as a "convention" of an international scope— even though it is not itself international—and the dispute that has arisen would then fall within the Court's jurisdiction.

Such an interpretation of Iran's declaration might, however, result in giving it a scope wider than that of the jurisdiction of the Court, which is limited by Article 36, paragraph 2; that is to say, the jurisdiction would be extended to the interpretation of any "international engagement"; this I would regard as desirable, but it is not yet a fact. As the Concession Agreement of 1933 is not a treaty, it follows that the dispute in regard to its execution does not constitute a ground for the Court's jurisdiction. However, I have thought it useful to draw attention to this point because I hope that the Court's jurisdiction will evolve in the direction indicated, by decisions or by legislation. These considerations ought even now to influence the evolution of the Court's jurisprudence.

3. As it is admitted that the Court's jurisdiction results from the agreement of States, it becomes necessary to determine in what [p154] manner Iran accepted that jurisdiction. The scope of the Persian Government's Declaration of October 2nd, 1930, ratified on September 19th, 1932, has been the subject of lengthy arguments.

On behalf of the Iranian Government, it has been contended that the words "et postérieurs à la ratification de cette déclaration" relate to "traités ou conventions". In that case, only disputes arising in regard to situations or facts relating to the application of treaties subsequent to September 19th, 1932, would come within the jurisdiction of the Court.

On behalf of the British Government, it was argued that the words "et postérieurs à la ratification" relate to "situations ou faits". According to that interpretation, the Court would have jurisdiction for all disputes, subsequent to the ratification of the Declaration, relating to situations or facts, which were also subsequent to that ratification, in regard to the application of treaties, of whatever date, accepted by Persia.

Even from a grammatical point of view, reasons were advanced in favour of each of these two conflicting interpretations. True, in the present case, historical and political considerations should be allowed greater weight than points of grammatical interpretation. All the more so because the document in question was perhaps drafted by a person who was not entirely familiar with the niceties of the French language. But it is also true that a number of historical and political arguments were presented in support of each of the respective interpretations.

From the point of view of international law, the Iranian Government contended that the limitations set forth in the Declaration should not be construed restrictively, because they are matters within the sphere of national sovereignty.

I regard as more relevant than that argument another which might have been employed against it: namely, that limitations on the terms of Article 36 of the Statute are not authorized—and are even excluded—by that provision of the Statute. In point of fact, Article 36, paragraph 2, allows States to declare that they accept the Court's jurisdiction "in all legal disputes, concerning" the subjects indicated in sub-paragraphs (a), (b), (c), (d).

The jurisdiction cannot be accepted subject to the exclusion of one or more of these categories. Paragraph 3 of Article 36 of the Statute specifies the only conditions which States may impose, viz., that of reciprocity on the part of one or more States, and of a limitation in time.

In my opinion, it is impossible to allow any other restrictions or conditions. However, it is a fact that, in practice, other restrictions to Article 36 have been admitted, in the declarations made by different nations. Thus undue facility has been afforded for accepting the Court's jurisdiction—subject to restrictions which make it doubtful or open to challenge. The Court cannot ensure the
[p155] observance of the Statute if it rejects acceptances of its jurisdiction subject to conditions which are not authorized by the Statute. The Persian declaration is itself a good example of the latitude which has been allowed, because it is strictly confined to treaties "accepted by Persia"—a subjective condition which it is very difficult to appraise. Thus, the Court finds its action delayed and restricted by the terms of these clauses, and by the controversies which they engender as to the extent of its jurisdiction.

4. I have sought to ascertain whether the Court's jurisdiction may not rest on some other basis which would avoid the controversy regarding the interpretation of the Iranian declaration; in other words, whether—even if one accepts the Iranian interpretation according to which the Court's jurisdiction is limited to disputes arising from treaties subsequent to September 19th, 1932—there is not some other foundation for its jurisdiction in the present case.

I have refrained from construing the Iranian declaration or determining the scope of the exchange of notes of 1928. Even among the treaties signed by Persia between 1929 and 1937, which .are invoked by the British Government, I confined my attention to those which are "subsequent to the ratification of the declaration", in other words, subsequent to September 19th, 1932. That description covers the treaties concluded by Persia with Denmark on February 20th, 1934, with Switzerland on April 25th, 1934, and with Turkey on March 14th, 1937.

Another instrument which is subsequent to the ratification of the Iranian declaration is the Concession Agreement of April 29th, 1933. As I have already observed (paragraph 2), I do not regard it as a treaty, in" spite of the circumstances referred to above.

5. As a result, I have been able to reduce the controversy to narrow limits: I will admit, argumentandi gratia, that the Iranian declaration only accepts the jurisdiction of the Court in respect of treaties subsequent to September 19th, 1932. It is therefore necessary to consider whether the treaties with Denmark, Switzerland and Turkey comply with that condition and are applicable to British nationals, and also whether the British Government has reasonable ground for complaining of a breach of the Persian Government's obligation in regard to the treatment of British nationals.

6. When reduced to these terms, the question becomes simplified and acquires an added importance, as it involves a doctrinal issue of the highest significance. It does not merely raise the issue whether the Court has, or has not, jurisdiction in the present case. It seeks to determine the role of the Court as the guardian of the [p156] principles of international law and of the international organization—perhaps even to justify its existence.

7. In the Treaty of March 4th, 1857, between Persia and the United Kingdom, it was provided, in Article IX, that

"the treatment of their respective subjects, and their trade, shall also, in every respect, be placed on the footing of the treatment of the subjects and commerce of the most-favoured nation".

In the Treaty of February 9th, 1903, the two Governments agreed (Article II) that the subjects of both countries and their imports into each other's territories

"shall continue to enjoy under all conditions most-favoured-nation treatment".

It is interesting to note that in the text of the latter treaty, as published in the Felix Stoerk collection (Nouveau Recueil general de traites, 2nd Series, Vol. XXXI, p. 506), the words relating to "subjects" which appear in the official publications (British and Foreign State Papers, Vol. XCVI, p. 51 ; Treaty Series No. 10) are omitted.

Subsequently, in a number of treaties—28 xi 1928, 17 11 1929, 9 v 1929, 29 x 1930, 20 11 1934, 25 iv 1934, and 14 in 1937—Iran undertook to grant to the nationals of Egypt, Germany, Belgium, Czechoslovakia, Denmark and Switzerland, and by exchanges of notes at different dates, to the nationals of Turkey, the United States, the Netherlands and Italy, treatment in accordance "with the principles and practice of ordinary international law", "as regards their persons and their property".

The United Kingdom Government contends that this guarantee is extended to British nationals, in virtue of these treaties and of the most-favoured-nation clause, and that the behaviour of the Iranian Government towards the British "Anglo-Iranian Oil Company", which gave rise to the dispute which is the subject of the Application, constitutes a breach of general international law.
It appears to me that, in these circumstances, the dispute comes within the terms of the Iranian Declaration accepting the Court's jurisdiction—even if one admits the interpretation now placed upon it by the Iranian Government. The three treaties—with Denmark, Turkey and Switzerland—which guarantee the observance of international law—were signed in the years 1934 and 1937, that is, subsequently to the ratification of the Iranian declaration.

8. In spite of the clarity of this conclusion, several weighty objections to it have been put forward. Some of these objections have been abandoned, but this fact, together with the multiplicity of the objections, is striking evidence of the persistence of the efforts to weaken the conclusion submitted. [p157]

In the course of the oral arguments, two objections were put forward. It was contended that the duty of conforming to general international law in the treatment of British nationals did not arise from the Treaties of 1934 and 1937, but from much earlier treaties—the Treaties of 1857 and 1903—which contained the most-favoured-nation clause: the latter Treaties were said to be the principals, the others only accessories. It was further contended that the Act nationalizing the exploitation of oil did not contravene any rule of general international law ; in other words, that the Government of Iran, though bound to accord the guarantees of general international law to the British nationals, was not debarred from nationalizing the exploitation of oil, in regard to which it had concluded a contract in 1933 with a British company.

I am unable to accept either of these two objections.

9. As to the first objection, it seems to me to be clear that British nationals received from Iran a guarantee of "the principles and practice of ordinary international law", not by virtue of the old Treaties of 1857 and 1903 which preceded the Iranian Declaration, but as the result of the Treaties of 1934 and 1937, which were subsequent to the Declaration. From this point of view, the principal instruments are the two last treaties, not the two earlier ones. The first two treaties established the most-favoured-nation clause; but this clause, by itself, would not give British nationals the guarantee of "the principles and practice of international law". This guarantee they received, by virtue of the most-favoured-nation clause contained in the earlier treaties, when the same guarantee was given to the nationals of Denmark, of Turkey and of Switzerland. This clause operated to enlarge, to extend to British nationals, the concessions granted to other foreigners by the Treaties of 1934 and 1937. This enlargement of the scope of the three later Treaties did not take effect, and could not take effect, before the ratification of these Treaties. But these are treaties which are "postérieurs", subsequent to the Iranian Declaration. The dispute which arose from the allegation that this guarantee had been violated is thus within the terms of the Declaration, even if one accepts the interpretation put upon it in the present proceedings by the Iranian Government.

The manner in which a most-favoured-nation clause operates is well known. It does not take effect by itself alone; it operates in due course upon the later treaty which grants some advantage to another nation, and it immediately extends the same advantage to the favoured nation.

The effect of the clause is, therefore, as Visser has said, complementary. (Ito, La clause de la nation la plus favorisée, p. 36.) By itself it confers no rights; it can have no application and remains useless. Rights or advantages granted to a third State do not exist, [p158] either for the benefit of that State itself or for that of the favoured State before they are expressly conceded. Again, the rights or advantages do not subsist for the favoured State if the concession made to another State should be abrogated. (Raphael A. Farra, Les effets de la clause, etc., p. 67; Josef Ebner, La clause de la nation, etc., pp. 149-150; Marcel Sibert, Traites de droit international public, II, p. 255.) That is, the clause does not have any permanent effect—its effect is merely contingent and is dependent on the continued existence of another treaty the scope of which it enlarges.

Oppenheim considers it a legal rule, "but a legal rule the content of which is uncertain, because dependent upon a future event, namely concessions to be granted to third States". {La clause de la nation, etc., p. 26.) The clause is merely a conditional guarantee of a future concession, a promise or an engagement to grant to a State or to its nationals the same advantages as are granted or may be granted to other States and to the nationals of other States.

It can be seen that it was Iran's treaties with Denmark, Turkey and Switzerland, in 1934 and 1937, and not the Treaties of 1857 and 1903 with the United Kingdom, which gave British nationals, in respect of their persons and their property, the guarantee of the general principles of international law. The present dispute relates to the violation of these guarantees, that is to say, it has direct reference to the application of treaties subsequent to the ratification of the Declaration of October 2nd, 1930. For this reason, even accepting the Iranian construction of this Declaration, the present case is within the Court's jurisdiction.

10. Before dealing with the second objection, I should like to indicate the importance of the question which it raises.

In accordance with what I have said, the Court has before it an allegation of a positive breach of the provisions of two treaties subsequent in date to the Iranian Declaration of 1932; this allegation would appear prima facie to be well founded. This is sufficient to satisfy me that, even adopting the interpretation put by the Iranian Government upon its Declaration of acceptance of the Court's jurisdiction, the Court has jurisdiction in the present case. There has been a breach of the provisions of a treaty in reliance upon which British nationals have invested large sums of money in the territory of Iran, sums which have indeed brought them immense profits, of which they are now dispossessed without any immediate compensation. This is a breach of the fundamental principles of modern international law, of principles recognized by the legal systems, the decisions and the jurisprudence of civilized countries.

For this reason I consider that the second objection brings the dispute to its culminating point, by the denial, in the present case, of a breach of international law. [p159]

11. This objection raises a question of the greatest juridical interest which also requires to be considered since the Parties argued it at length and with great skill; it is said that what is involved in the present case is "nationalization" and not mere "expropriation": that these are two very different things ; that in the case of nationalization complete indemnity is not required and that the nationalization does not contravene any principle of international law. It is said that there is no "positive rule of the law of nations relating to nationalization", that it is a political act. On this ground, too, it is contended that the Court lacks competence.

It is, however, undeniable that nationalization and expropriation are sometimes linked. Nationalization may entail expropriation. When "the setting-up of a public service absorbs a private undertaking there will be expropriation of the latter. The setting-up of a public service is not expropriation; but in many cases it presupposes it." (Henry Laufenberger, L'intervention de l'État en matière économique, pp. 268-269.)

The Iranian law of May 1st specifically decreed: "expropriation of the Anglo-Iranian Company". Moreover, nationalization is not always an exclusively political act; it may indeed raise certain questions which are purely legal questions—such as that which arises in the present case: can a State carry out nationalization, expropriate a concession, when it has bound itself to respect it always? In other words, can a State renounce or restrict the exercise of its "police power"? Of course, this is not a question which can be considered at the present time: it relates entirely to the merits of the case.

Even in the case of expropriation there is the preliminary act of the declaration of the public need or the public interest, which is generally regarded as a political question outside the scope of judicial appraisal.

12. I recognize that nationalization, in certain cases and in some of its aspects, is not the concern of international law, particularly if there is no discrimination between nationals and foreigners. The Iranian Government indeed sought to show that its laws had not discriminated in this way. I recognize that the two Nationalization Acts do not contain a single word indicating such discrimination. But, indeed, what is involved is "nationalization", and not State-acquisition [étatisation] which is often designated by the same word. And that must mean the exclusion of foreigners. Indeed, I believe that the two Iranian laws were applied only to the British company: the law of May 1st provides for the expropriation of that company alone.

13. It has been said that most of the arbitral awards which have been invoked and which lay down that compensation shall be complete, if not paid in advance, were made during the last [p160] century, and doubt, was expressed as to whether "in the middle of the twentieth century this Court is entitled to say that there exists at the present day a rule of international law, in accordance with the practice of civilized nations, which prohibits States from claiming that their nationalization laws should take precedence over the rights of individual foreigners derived from concessionary instruments".

Reliance has been placed upon the research work on nationalization carried out by the Institute of International Law, in the course of which the conclusion was reached that it was desirable, de lege ferenda, "to lay down some legal rules of such a nature as to secure for individual rights that minimum of protection which existing positive international law fails to provide". I would point out that the first draft of M. de La Pradelle - the same professor who, as it has been said, would like to sweep away, in the face of the modern phenomenon of nationalization, all the old decisions relating to expropriation—and the final draft, both published in the Annuaire of the Institute of International Law for 1950, pages 67-132 (while taking the view that in the case of nationalization "such conditions are permissible as are not prohibitive: it shall suffice if the public interest is involved, and if the amount of compensation is based upon the means of the debtor, such means to be ascertained in a reasonable manner, and payment to be spread over a normal period of time"), that these drafts recognized, at the same time, the international character of the act of nationalization, by providing as follows : "it is for the State itself to deal with threats to its external economy caused by internal measures of the nationalizing State, and to seek redress therefor" (Article 12). In so providing, the draft rejected the rule according to which an international tribunal can only be seised after all local remedies have been exhausted (Article 13).

The basic provision of the draft was Article 5:

"Nationalization, as a unilateral act in the exercise of sovereignty, shall respect obligations validly undertaken, whether by treaty or by contract. Failing such respect there will be a denial of justice giving the right not merely to payment of compensation based upon value, but to damages of a punitive character."

Article 9 added the following:

'' Foreigners are entitled to international treatment even in the event of such treatment conferring greater rights than national treatment."

The draft provided for the exercise of jurisdiction by special tribunals exercising special technical jurisdiction (Article 13). All these provisions were incorporated in the final draft of the resolution. [p161]

It is true that the matter was again discussed this year at the conference which met at Siena. Far more "advanced" suggestions were put forward. This advance in doctrine is less far-reaching than that proposed in the matter of legislation or in the jurisprudence of this Court.

The fact that these lengthy discussions took place in the Institute of International Law proves the repercussions of nationalization upon international law. The multiplicity of treaties providing for compensation payable to foreigners by reason of acts of nationalization in various European countries, and the fact that payments have been effected between governments, also confirm the fact that nationalization frequently assumes the character of a problem of international law.

14. It is inevitable that everyone of us in this Court should retain some trace of his legal education and his former legal activities in his country of origin. This is inevitable, and even justified, because in its composition the Court is to be representative of "the main forms of civilization and of the principal legal systems of the world" (Statute, Article 9), and the Court is to apply "the general principles of law recognized by civilized nations". (Statute, Article 38 (1) (c).)

In this connection I may be permitted to point out that in Brazil, in spite of the advance made in social legislation and in spite of certain restrictions placed upon the rights of owners of property, in particular with regard to letting, the jurisprudence of the Supreme Court provides strict guarantees for the payment to the expropriated property owner of just, full and prior compensation. With regard to nationalization, the present Constitution, promulgated by the National Assembly in 1946, provides as follows:
"The Federal Union may intervene in the economic sphere and monopolize certain industries or activities, by means of special law. The intervention shall be based upon the public interest, and shall be limited by the fundamental rights assured in this Constitution." (Article 146.)

Among the constitutional guarantees is included that of the right of property, subject to a right of expropriation "for public necessity or utility, or social interest, with prior and just compensation in money". (Article 141, para. 16.)

I am fully aware that measures of nationalization are in every country inspired by the conception of ownership by the State, so that compensation may even be withheld as a measure of punishment of the former owners for the attitude adopted by them (Joyce Gutteridge, "Expropriation and Nationalization")), in The International and Comparative Law Quarterly, January 1952, pp. 14-28). [p162]

15. It may be that in the present case we are not concerned with the "positive law of nations", which is the law strictly laid down in treaties or conventions. There is no treaty which mentions, in a detailed manner, every one of the "principles of international law" which States are bound to observe. The "principles of ordinary international law" precede, inspire and govern treaties; they flow from treaties, from doctrine and from the general legal system. In present-day law, there is no finer or more fruitful principle than that providing for the distribution of burdens and of damage suffered. Where damage has been suffered by a member of the community in the interests of the latter it would be unjust that that member alone should bear the full burden of the sacrifice.

In my opinion the same principle must apply in the case of nationalization of enterprises already established. If the interests of the community are invoked, in such cases, in order to justify payment of less than full compensation, contrary to the practice adopted in cases of expropriation, we must nevertheless recognize that such a justification cannot be put forward as applying to foreigners who, by the very fact of nationalization, have been cast from the national community in whose favour nationalization has been carried out. There is no reason why, as may well be contended in the case of citizens of the nationalizing country, foreigners should be subjected to a "more extensive sacrifice" than is involved in the case of expropriation. This follows from the principles governing the treatment of foreigners, principles recognized by present-day international law.

It cannot be said that present-day conditions of international life have done away with the proposition here expounded. On the contrary, I think that they have given added weight to this proposition which has become a prerequisite of international co-operation in the economic and financial fields. When there are so many countries in need of foreign capital for the development of their economy, it would not only be unjust, it would be a grave mistake to expose such capital, without restriction or guarantee, to the hazards of the legislation of countries in which such capital has been invested.

16. I take it that the first duty of the Court is to ensure the observance of international law and to further its development. Upon an initial examination of the present case, I cannot exclude the possibility—the possibility, at least—that the Government of Iran has violated "the principles and practice of ordinary international law" which it had undertaken to observe in relation to British nationals. On the contrary, there are very strong indications of such a violation.

I agree that it is not sufficient, in order to establish the jurisdiction of the Court, merely to invoke the "principles of international law" guaranteed by the treaties to which reference has been made. It is necessary to ascertain whether the invocation of these principles is admissible. [p163]

The distinguished Counsel of the Iranian Government reminded us of the "consistently followed principle" of the Permanent Court, "according to which it is not sufficient for an applicant to invoke treaties .... in order to be entitled, on this pretext, to submit to the Court claims not related to the legal basis upon which reliance is placed. The Court must ascertain whether prima facie such a relationship exists." (Oral Arguments, Distribution 52/131, p. 60.)

Without, at this stage, examining the acts and contentions of the Iranian Government further than is necessary for the purpose of arriving at a decision on the Preliminary Objection, I deem it essential to note the violation or, at least, the apparent violation, of the general principles of ordinary international law, by a denial of justice, by the failure to honour the indisputable guarantees granted to British nationals in Iran. This preliminary examination is also necessary to show that certain propositions of the Iranian Government, designed to exclude the jurisdiction of the Court, are ill-founded.

We must consider the situation upon which the Court has to adjudicate. It will be seen that if this case, in spite of its relevance, its gravity, and the evidence it provides of violations of international law, is held to be outside the jurisdiction of the Court, the Statute should be amended in order to ensure that the defect thus revealed may be remedied for the future.

17. The law of May 1st provides for "the dispossession" of the Company. How was this effected ? By legal proceedings ? Manu militari? I do not know.

I note that the Iranian Government, in its "Observations", refers to the British Company as the "former Company". This is the expression used in the law of May 1st : "former", or in French, "ancienne". This indicates that the Company is regarded as having ceased to exist as a result of the Nationalization Decrees.

The Iranian Observations state that no legislative assembly can be bound by previous assemblies. If this were so, the existence of vested rights could be denied. A quotation from Jéze is relied upon. This quotation, which appears in the Iranian pleading and which is said to be supported by Duguit, Hauriou and Barthélemy, is evidence of the extent of the Iranian understanding of the action of Parliament. According to this understanding, vested rights do not exist. Parliament could, at any time, in its discretion, annul the concessionary contract of the Anglo-Iranian Oil Company.

But the Respondent has failed to read attentively the words of Jéze which are set out on page n of the pleading. He [Jéze] refers to "a general, impersonal legal situation".
The quotation is not concerned with individual situations or concessional contracts, as in the case of the Anglo-Iranian Oil Company. With regard to such situations the theory of Jéze, if I am [p164] not mistaken, is entirely in the opposite sense. This is what he says in the same work:

"The individual legal situation cannot be modified by the law. The legal act which has created this situation cannot be retracted, revoked, or modified by a law. Once a legal act has created, in a regular manner, an individual right or an individual obligation, that right and that obligation cannot be interfered with by Parliament, irrespective of whether the latter acts in the capacity of legislator or of administrative authority. These rights and obligations must remain intact." (Pp. 180-181.)

It is also incorrect to say that the theory of Jèze is supported by three other eminent French writers, quite apart from the fact that it has not the meaning which has been ascribed to it. The opinions of Duguit, Hauriou and Barthélémy are referred to by Jèze in another part of his work and on a different question.

The argument has been taken even further : it has been said and repeated (paragraphs 9 and 27 of the Observations) that the Iranian Government always considered the 1933 Concession to be "null and void". It has been contended that "the invalid Concession of 1933 and all its Articles disappeared automatically". As a result, it is said, Articles 21 and 22 of the "so-called Concession" have become non-existent. It would seem, however, that the aforesaid Article 21 is capable even of preventing the Nationalization Decree; and Article 22 provides mandatorily and in the widest terms, that "any differences between the Parties of any nature whatever, and in particular any differences arising out of the interpretation of this Agreement and of the rights and obligations therein contained .... shall be settled by arbitration". The same Article lays down detailed rules governing the constitution of the arbitration tribunal.

The Iranian Government states expressly that it refuses to appoint an arbitrator and to accept the procedure laid down in Article 22. It justifies this decision by the contention that the Concession granted to the Anglo-Iranian Oil Company is null and void. This contention would appear to be ill-founded because neither the Iranian laws of March 15th and 20th, 1951, nor that of May 1st of the same year, provided for the dissolution of the Anglo-Iranian Oil Company or the annulment of its contract, nor could they, in fact, do so. Even if the annulment of the contract could have been decreed, for the purpose of nationalizing the oil industry, by the unilateral act of one of the parties to the contract— the Iranian Government—it would not follow that this act would exclude the jurisdiction of the arbitral tribunal provided for in Article 26 of this contract. It could be argued that that tribunal would retain jurisdiction to decide as to the effects and the questions resulting from this act and to assess the compensation payable, and also to decide whether it considers such compensation to be legitimate. [p165]

This question, however, is concerned with the merits of the case. The Court would be competent, in the event of the Preliminary Objection being overruled, to determine only whether or not there exists a duty to submit the dispute to arbitration.

In any event, the argument that any possibility of applying Article 26 should be excluded at this stage appears to be ill-founded; this possibility might even continue to exist in the event of the contract being revoked, because in that case the application of Article 26 would be necessary. I cannot believe that the arbitrary revocation of the concessionary contract, and thereby of Article 26, can be invoked for the purpose of excluding the jurisdiction of the Court to determine the validity of that act of revocation.

The Iranian law of May 1st, without expressly mentioning Article 26 of the Concession Agreement, provided for a commission of five deputies and five senators, to be elected by the two Houses of Parliament, together with the Minister of Finance, which commission would be charged with the examination "by the Government" of the claims of the Government itself, and of the "rightful claims" of the Company. The conclusions and suggestions of this commission were to be submitted to Parliament for its approval. The commission was to complete its work and to present its report to Parliament before July 31st, 1951; that is, ten and a half months ago. Thus, the claims, even of the Government, and those of the Company, the "ex-Company", which are "rightful", are to be deter-mined by a Parliamentary commission. In a case such as the present, which is said to be concerned with "national liberation", and in which popular passions are inflamed, I cannot conceive that the representatives of the people can possibly have the detachment essential to make the necessary decisions.

Counsel for Iran told the Court that the Company should present its claims to this commission, await its decision, and if it did not accept that decision, institute proceedings in the local courts. This solution, however, was ruled out by Article 26 of the 1933 Contract, which provided that an arbitration tribunal should determine all questions arising under the contract. The refusal to set up this tribunal constitutes a denial of justice on the part of the Iranian Government. I agree with the observation in the report of the Committee, quoted by Freeman, to the effect that a refusal by a competent judge to act constitutes a denial of justice. (Denial of Justice, p. 688.)

I see in this a grave violation of international law, particularly since the decision of the Parliamentary commission, essentially political in character, having been approved by Parliament, would become law and would not be required to respect any right whatever of the British company.

Indeed, the Iranian constitutional law of October 8th, 1907, as set out in the well-known book by Peaslee Constitutions of Nations, p. 207, provides, in Article 6, that: [p166]

"The life and property of foreigners resident in Iran are secured and guaranteed, except in those cases in which the laws of the realm make exceptions." (My italics.)

In present-day constitutional law I do not know of a more striking example of violation of one of the fundamental principles of international law.

18. It is true that the Government of Iran has not rejected the idea—at least the idea, or the principle of compensation. Two propositions have been referred to, and, at first sight, they may appear quite reasonable and worthy of consideration. But some of the Iranian arguments seek to justify a reduction of the compensation payable to an amount not exceeding the value of the physical property, or a reduction of the amount of compensation to nothing, by deducting from it large sums which the Company is said to have improperly received, or on account of the excessive profits it is said to have made.

The Court is not concerned with such questions. But I do not think that it can shut its eyes to the situation so arising: in short, in spite of certain proposals and attempts to find a solution, the Company has been dispossessed of its Concession and of all its property; the Iranian Government considers that by its own arbitrary authority the Company has been dissolved, and the Concession has ceased to exist, without any money having been paid by way of compensation. Provision has merely been made in the law, on paper, for the establishment of a fund for compensation—nobody knows whether any money at all has yet been paid into this fund; it is impossible to foresee how long it would take for this fund to reach the amount, as yet undetermined, required for compensation ; the amount, which is recognized to be due, has not yet been fixed, nor has any adequate procedure been laid down to provide for a just assessment of this amount ; the arbitration tribunal provided for in the contract has been ignored and a Parliamentary commission has been substituted for it. All this gives the impression of disguised confiscation. Does international law permit this?

19. I remain convinced, perhaps erroneously, that the most advanced tendencies of public law have not yet reached the stage where such treatment of a foreign concession and such provisions directed against the rights and property of foreign nationals can be accepted.

Nicholas R. Doman, in a study of the jurisprudence of the Permanent Court, has said: [p167]

“…it has been recognized frequently that a State has an international liability to foreign owners of expropriated property even though it acted through non-discriminatory legislation". (Columbia Law Review, 1948, p. 1132).

Perhaps we are on the way to great changes in the rules which are applicable. It may be that we shall succeed in adopting formulae reconciling the extreme views which exist (Oppenheim, International Law, Lauterpacht edition, Vol. I, para. 155d; J. P. Miller, Jr., "Du traitement par les gouvernements des intérêts étrangers, 1950, pp. 131-138).

This solution will, no doubt, be influenced by considerations arising from the internal policy of each country concerned. This does not mean that the problem is thereby excluded from international law. On the contrary, international law must contribute to this solution by asserting itself over the narrow views of Jacobin nationalism.

I shall merely recall the terms in which Freeman, without any exaggeration whatever, has summed up the generally accepted theory:

"Whatever may be said of the nature of the State's obligation to permit aliens to acquire property on its territory, it is certain that once they have been permitted to do so, international law attaches a certain quality of sanctity to the rights thus obtained, as well as to those private rights which have been acquired elsewhere." (Denial of Justice, p. 516.)
It is thus obvious that if a State ensures the "sanctity" of rights which it has allowed a foreign national to acquire, it must all the more respect the rights which it has itself conferred by virtue of a contract.

Freeman acknowledges that the State retains its "power of eminent domain" and that it can modify the rights of foreign nationals by general laws. But he observes:

".... whereas, on the other hand, any measures expropriating private property without compensation and directed against the property of aliens as such would violate international law". (Op. cit., p. 517.)

And he adds:

"Although there is some difference of opinion among text-writers, the preponderance of legal authority accepts the view that no foreigner may be deprived of his property without adequate compensation—except, of course, in the special case of judicial liquidation and analagous proceedings. This theory is generously supported by diplomatic practice and by the jurisprudence of international tribunals to such an extent that a general rule requiring compensation must be held to form a part of the positive law governing relations between States." (Op. cit., pp. 517-518.)

I would not venture to make any suggestions de lege ferenda, or to try and foresee the way in which contemporary trends may [p168] develop. Nor do I wish to exercise any influence whatever upon such trends. I would merely observe that within the United Nations —an organization of which this Court is a part, its principal judicial organ—the "International Bill of Human Rights" is being trans-formed into a binding international convention. I would point out that Article XVII of this Bill, which was approved by the General Assembly of the United Nations in December 1948, reads as follows:

"Everyone has the right to own property alone as well as in association with others. No one shall be arbitrarily deprived of his property."

20. To sum up, I am of opinion that, even if nationalization itself is considered not to be the concern of international law, the circumstances surrounding the action of the Government of Iran in the present case are such that they appear to indicate a very grave violation of the principles of international law.

21. As I have already said, other objections were put forward in addition to the first two which I have mentioned above (paragraph 8). Thus, it has been said that the treaties with Denmark, Switzerland and Turkey were "res inter alios acta", so far as the United Kingdom was concerned. But the effect of the most-favourednation clause is precisely that of making applicable to a third State, not a party to the later treaty, the provisions of that treaty. It is then no longer res inter alios.

It has been admitted in this case that the three treaties of 1934 and 1937 operated in conjunction with the treaties of 1857 and 1903. This is the only valid argument. It is well founded. But, the issue nevertheless remains within the terms of the Iranian Declaration because the latter requires (according to the Iranian interpretation) that it should apply "to situations or facts relating directly or indirectly to the application of treaties .... subsequent to the ratification". It cannot be argued—the Declaration does not so provide —that it applies only to "situations or facts" relating exclusively to the application of treaties subsequent to 1932. It is sufficient, therefore, if the facts relate to the application of the treaties of 1934 and 1937, although they may at the same time also relate to the treaties of 1857 and 1903. In the present case the application of the treaties of 1934 and 1937 results "indirectly" from the operation of the treaties of 1857 and 1903.

The argument that it was not the intention of the Iranian Government to accept this interpretation of the terms of its Declaration does not suffice to exclude that interpretation. It may be that the Iranian Government did not foresee that this result would follow from the expressions used in the Declaration. That does not matter: the important point is that it is bound by the terms used.

Similarly, the application of the Declaration by which Iran accepted the jurisdiction of the Court, cannot be excluded by reason [p169] of the fact that other treaties preceding the Declaration had been concluded with other nations, which conferred upon British nationals, by virtue of the most-favoured-nation clause, the guarantees of international law, or by reason of the fact that an agreement to the same effect was contained in the Exchange of Notes with the British Government in 1928. These earlier conventions cannot be taken into account if one accepts—as I have done for the purpose of this argument—the Iranian interpretation which requires that the treaties and conventions must be subsequent to the ratification of the Declaration. The important point is that there are three treaties subsequent to that date.

I therefore reject the argument that the British Government is not entitled to rely on the treaties of 1934 and 1937, on the ground that they already enjoyed this guarantee, for the benefit of their nationals, by virtue of the Exchange of Notes which took place in 1928. It is clear that, if one excludes the application of this Exchange of Notes on the ground that it preceded the ratification of the Declaration, the British Government is still entitled to rely on subsequent treaties. The guarantee to observe international law was given to British nationals by Iran, directly by the Exchange of Notes in 1928, and indirectly, by virtue of the application of the most-favoured-nation clause, by ten treaties with other States. In order now to exclude the jurisdiction of the Court, in the face of the violation of this clear and repeated guarantee, the Iranian Government would exclude the application of conventions prior to 1932 by contending that the Declaration accepting the jurisdiction of the Court refers only to conventions of subsequent date; at the same time, the application of conventions subsequent to 1932 is said to be excluded by the fact that the same guarantee had already-been given by a treaty prior to 1932. British nationals would thus be in a strange position: they would have the guarantee of the principles and practice of international law which Iran gave in the treaties with several States and in the Exchange of Notes with a representative of the United Kingdom, but they would be unable to invoke it before this Court. The artificiality of this argument is obvious.

It was also argued that the Treaties of 1857 and 1903, being capitulatory treaties, were revoked as a result of the abolition of the regime of capitulations : the most-favoured-nation clause is said to have disappeared. This argument, however, %vas sufficiently disposed of by pointing out that Counsel for Iran did not go as far as that and did not contest the continued operation of the clause and of Article 9 of the Treaty of 1857 and Article 2 of the Treaty of 1903 in which it is contained.

It might have been said that these two treaties were not "accepted by Persia", a condition which, as I have already said, is subjective and difficult of application. I do not think that Counsel for Iran submitted to the Court that these two treaties were affected by [p170] this condition. In any event, such a consideration would not justify the exclusion of the most-favoured-nation clause because that clause is justified precisely by the abolition of the capitulatory regime; and this abolition did not bring about the annulment of the clause. The clause is perfectly compatible with the regime of the abolition of capitulations. It was contained in some ten treaties concluded by Iran.

Another argument was to the effect that the most-favoured-nation clause confers advantages and favours, and that a guarantee to observe the principles of international law is neither. It is obvious that to accept the proposition that the guarantee of the principles and practice of international law is not an advantage, it would be necessary to give to the most-favoured-nation clause a meaning limited to the narrowest possible material interests and benefits.

Furthermore, it was sought to belittle the scope of this guarantee by describing it as an implicit rule, binding in any event, and arguing that its inclusion in a treaty had no significance. I agree that this should be the case. Respect for the principles and practice of international law is the first duty of civilized nations; without it any international organization is inconceivable. It is not necessary to lay down this rule in a treaty. In any event, it maybe considered as being expressly contained in the Charter of the United Nations.

However, if we are agreed on this proposition, we must still examine the consequences which follow from its acceptance. The first consequence would be to accept the jurisdiction of the Court in all cases in which these principles have been violated, or in which disputes concerning their application have arisen. With the exception of a few opinions of great value, this proposition is not yet generally accepted. The jurisprudence of the Court leans towards a refusal to recognize international obligations which have not been expressly provided for in a special treaty.

How, then, can it be said that a treaty which creates an express obligation to observe the principles and practice of international law is of no significance, and that this obligation is always implicit?

The last objection put forward against the application of the most favoured-nation clause for which the United Kingdom Government contends, is that the Treaties of 1857 and 1903 cannot be invoked because they preceded the ratification of the Iranian Declaration. As I have already pointed out, however, this Declaration, even if the Iranian interpretation be accepted, does not require that the dispute should relate "exclusively" to the application of treaties subsequent to 1932. The dispute may arise out of the application of a treaty subsequent to 1932 and, at the same time, out of another treaty prior to that date. This applies with greater force where, as in the present case, the earlier treaty only brings about the appli-[p171]cation of the later treaty. As I have pointed out, the rights of British nationals flow from the treaties of 1934 and 1937 which are applicable to them by virtue of the provisions contained in the Treaties of 1857 and 1903.

22. In conclusion, my first impression in this preliminary stage of the proceedings is that there have been very serious violations of the principles and practice of international law, of principles the observance of which had been guaranteed to British nationals in Iran by three treaties subsequent to the ratification of the Iranian Declaration accepting the jurisdiction of the Court. I would, there-fore, overrule the objection to the jurisdiction and hold that the Court has jurisdiction to decide as to the submission of the dispute to the arbitration tribunal, in accordance with the submission contained in paragraph (a) of the Application filed by the United Kingdom.

I am of opinion that, having regard to this conclusion, the argument of Counsel for the United Kingdom relating to forum prorogatum does not arise. The other objections of non-admissibility which were put forward by the Iranian Government would have to be considered later if the Court decided in favour of its jurisdiction. Having upheld the objection to the jurisdiction, the Court cannot deal with the other objections.

In any event, any further proceedings should be suspended until a further decision by the Security Council of the United Nations.

(Signed) Levi Carneiro.

 
     

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