18 November 1960

General List No. 39

international Court of Justice

Arbitral Award Made by the King of Spain on 23 December 1906

Honduras

v. 

Nicaragua

Judgment

[p.192]

The Court,

composed as above,

delivers the following Judgment:

On 1 July 1958, the Minister of Honduras in the Netherlands delivered to the Registry on behalf of his Government an Application of the same date, instituting proceedings before the Court with regard to a dispute between the Republic of Honduras and the Republic of Nicaragua concerning the Arbitral Award made by the King of Spain on 23 December 1906.

The Application relies on the Washington Agreement of 21 July 1957 between the Parties with regard to the procedure to be followed in submitting the dispute to the Court; the Application states, furthermore, that the Parties have recognized the compulsory jurisdiction of the Court on the basis of Article 36, paragraph 2, of its Statute.

In accordance with Article 40, paragraph 2, of the Statute, the Application was communicated to the Minister for Foreign Affairs of Nicaragua. In accordance with paragraph 3 of the same article, the other Members of the United Nations and the non-member States entitled to appear before the Court were notified.

Time-limits for the filing of the Memorial, the Counter-Memorial, the Reply and the Rejoinder were fixed by Order of 3 September 1958; the time-limit for the filing of the Rejoinder was later extended by Order of 7 October 1959. The case became ready for hearing on the filing of the last pleading on 4 January 1960.

Dr. Roberto Ago, Professor of International Law at the University of Rome, and Professor Francisco Urrutia Holguin, Ambassador of Colombia, were respectively chosen, in accordance with [p 195] Article 31, paragraph 3, of the Statute, to sit as Judges ad hoc in the present case by the Government of Honduras and the Government of Nicaragua.

On 15, 16, 17, 19, 20, 21, 22, 23, 24, 27, 28, 29 and 30 September and on 1, 3, 4, 6, 7, 10 and 11 October i960 public hearings were held in the course of which the Court heard successively the oral arguments and replies of M. José Angel Ulloa, Agent, M. Paul De Visscher, M. Paul Guggenheim and Mr. Herbert W. Briggs, Counsel, on behalf of the Government of Honduras, and M. José Sansôn-Terân, Agent, Mr. Philip C. Jessup, M. Gaetano Morelli, M. Camilo Barda Trelles, M. Antonio Malintoppi, Counsel, M. Diego M. Chamorro, co-Agent, and M. Henri Rolin, Counsel, for the Government of Nicaragua.

In the course of the written and oral proceedings, the following submissions were presented by the Parties:

On behalf of the Government of Honduras,

in the Application:

"May it please the Court:

To communicate the present Application instituting proceedings to the Government of the Republic of Nicaragua, in accordance with Article 40, paragraph 2, of the Statute of the Court, and Article 2 of the Agreement of 21 July 1957 between the Foreign Ministers of Honduras and Nicaragua;

To adjudge and declare, whether the Government of Nicaragua appears or not, after considering the contentions of the Parties:

1. that failure by the Government of Nicaragua to give effect to the arbitral award made on 23 December 1906 by His Majesty the King of Spain constitutes a breach of an international obligation within the meaning of Article 36, paragraph 2 (c), of the Statute of the International Court of Justice and of gênerai international law;

2. that the Government of the Republic of Nicaragua is under an obligation to give effect to the award made on 23 December 1906 by His Majesty the King of Spain and in particular to comply with any measures for this purpose which it will be for the Court to determine;

The Government of the Republic of Honduras reserves in a general way the right to supplement and modify its submissions. In particular it reserves the right to request the Court to indicate practical measures to ensure compliance by Nicaragua with the judgment to be delivered by the Court";

in the Memorial:

"May it please the Court:

To communicate the present Memorial to the Government of the Republic of Nicaragua, in conformity with Article 43 of the Statute of the Court; [p 196]

To adjudge and declare, whether the Government of Nicaragua appears or not, after considering the contentions of the Parties:

1. that failure by the Government of Nicaragua to give effect to the arbitral award made on 23 December 1906 by His Majesty the King of Spain constitutes a breach of an international obligation within the meaning of Article 36, paragraph 2 (c), of the Statute of the International Court of Justice and of general international law;

2. that the Government of the Republic of Nicaragua is under an obligation to give effect to the award made on 23 December 1906 by His Majesty the King of Spain and in particular to comply with any measures for this purpose which it will be for the Court to determine.

The Government of the Republic of Honduras reserves in a general way the right to supplement and modify its submissions. In particular it reserves the right to request the Court to indicate practical measures to ensure compliance by Nicaragua with the arbitral award of His Majesty the King of Spain.

Honduras reserves the further right to ask the Court to fix the amount of reparation which Nicaragua shall pay to Honduras in conformity with Article 36, paragraph 2 (d), of the Statute of the Court";

in the Reply:

"May it please the Court:

Whether the Government of Nicaragua appears or not:

1. To reject the submissions of Nicaragua;

2. To adjudge and declare that failure by the Government of Nicaragua to give effect to the Arbitral Award made on 23 December 1906 by His Majesty the King of Spain constitutes a breach of an international obligation within the meaning of Article 36, paragraph 2 (c), of the Statute of the International Court of Justice and of general international law; and that this non-execution involves a consequent obligation to make reparation;

3. To adjudge and declare that the Government of the Republic of Nicaragua is under an obligation to give effect to the Award made on 23 December 1906 by His Majesty the King of Spain and in particular to comply with any measures for this purpose which it will be for the Court to determine.

The Government of the Republic of Honduras reserves in particular the right to request the Court to indicate practical measures to ensure compliance by Nicaragua with the arbitral award of His Majesty the King of Spain";

at the hearings, as final submissions:

"May it please the Court:

I. To adjudge and declare that the Government of the Republic of Nicaragua is under an obligation to give effect to the arbitral award made on 23 December 1906 by His Majesty the King of Spain. [p 197]

II. Furthermore, to place on record the reservation which the Government of Honduras formulates in regard to its right to ask for compensation in respect of the prejudice that has been caused to it as a result of the non-execution of the said arbitral award.

III. To reject the submissions of Nicaragua.

The Government of Honduras will be able to give these submissions a final character, to modify them or to supplement them after hearing the statement of the opposing Party."

On behalf of the Government of Nicaragua, in the Counter-Memorial:

"May it please the Court,

Rejecting the submissions of Honduras,

I. To adjudge and declare that, without prejudice to what is said in paragraph II, Nicaragua violated no undertaking in failing to execute the decision of King Alfonso XIII, dated 23 December 1906, its Government having pointed from the beginning to the obscurities and contradictions which made this execution impossible and having expressed readiness to submit to arbitration or mediation the disagreement between itself and the Government of Honduras concerning the validity of the said so-called arbitral decision.

II. To adjudge and declare that the decision given by King Alfonso XIII is not an arbitral award made in conformity with the Gamez-Bonilla Treaty of 7 October 1894, and thereby possessed of binding force:

because the above-mentioned treaty had expired at the time when the King accepted the office of sole arbitrator, a fortiori when he gave his decision described as 'arbitral';

because this 'arbitral' decision of King Alfonso XIII was given by him as sole arbitrator in flagrant breach of the provisions of the Gamez-Bonilla Treaty; because the impugned decision is vitiated by essential errors;

because by this decision the King exceeded his jurisdiction; because it is not supported by an adequate statement of reasons.

III. To adjudge and declare that the so-called 'arbitral' decision is in any case incapable of execution by reason of its obscurities and contradictions.

IV. To adjudge and declare in consequence that Nicaragua and Honduras are in respect of their frontier in the same legal situation as before 23 December 1906.

V. To adjudge and declare in consequence that, as all phases of the disagreement have not been settled by the Judgment of the Court, the Parties are bound, in accordance with the agreement reproduced in the resolution of 5 July 1957 of the Council of the Organization of American States, to conclude an additional agreement within a period of three months [p 198] from the date of the delivery of the Judgment, with a view to submitting forthwith the disagreement concerning their frontier to the arbitral procedure provided by the Pact of Bogota";

in the Rejoinder:

"May it please the Court,

to reject the submissions of Honduras;

to find in favour of Nicaragua on the submissions which it made to the Court in its Counter-Memorial";

at the hearings, as final submissions:

"Whereas, in its submissions at the hearing filed on 15 September i960, the Government of Honduras asks the Court to adjudge and declare that the Government of the Republic of Nicaragua is under an obligation to give effect to the arbitral award made on 23 De-cember 1906 by His Majesty the King of Spain;

Whereas binding force can obviously be attributed to the royal decision invoked only if it in fact constitutes a valid award;

Whereas therefore, contrary to what was pleaded by Counsel for Honduras, the Court, to be able to adjudicate on the submissions of that Party, must necessarily first verify whether the document produced embodies an instrument which in fact offers the consti-tuent elements of an arbitral award and, if so, whether the said award is valid;

Whereas according to doctrine and to jurisprudence he who relies upon an arbitral award in international proceedings as in private proceedings is under an obligation to prove that the person or body giving the decision described as an award was invested with the powers of an arbitrator and that the said person or the said body really acted within the limits of the powers possessed;

Whereas Honduras has not furnished such proof, whilst the contrary follows from the facts of the case;

Whereas furthermore the acts and declarations of organs of Nicaragua, relied upon by Honduras as recognitions or acquiescences rendering inadmissible the enumeration of the causes of nullity specified in the submissions of Nicaragua of 5 May 1959 have neither the signification nor the effect attributed to them by Honduras;

Whereas moreover the omissions, contradictions and obscurities of the award which were denounced from the very first by Nicaragua would suffice to prevent the execution demanded;

For these reasons,

May it please the Court,

Rejecting the submissions of Honduras,

I. To adjudge and declare that the decision given by King Alfonso XIII on 23 December 1906 invoked by Honduras does not possess the character of a binding arbitral award; [p 199]

II. To adjudge and declare that the so-called 'arbitral' decision is in any case incapable of execution by reason of its omissions, contradictions and obscurities;

III. To adjudge and declare in consequence that Nicaragua and Honduras are in respect of their frontier in the same legal situation as before 23 December 1906;

IV. To adjudge and declare in consequence that, as all phases of the disagreement have not been settled by the Judgment of the Court, the Parties are bound, in accordance with the agreement reproduced in the resolution of 5 July 1957 of the Organization of American States, to conclude an additional agreement within a period of three months from the date of the delivery of the Judgment, with a view to submitting forthwith the disagreement concerning their frontier to the arbitral procedure provided by the Pact of Bogota."

***

On 7 October 1894 Honduras and Nicaragua concluded a Treaty —hereinafter referred to as the Gamez-Bonilla Treaty—Articles I to XI of which are as follows:

[Translation from the Spanish revised by the Registry]

"Article I

The Governments of Honduras and Nicaragua shall appoint representatives who, duly authorized, shall organize a Mixed Boundary Commission, whose duty it shall be to settle in a friendly manner all pending doubts and differences, and to demarcate on the spot the dividing line which is to constitute the boundary between the two Republics.

Article II

The Mixed Commission, composed of an equal number of members appointed by both parties, shall meet at one of the border towns which offers the greater conveniences for study, and shall there begin its work, adhering to the following rules:

1. Boundaries between Honduras and Nicaragua shall be those lines on which both Republics may be agreed or which neither of them may dispute.

2. Those lines drawn in public documents not contradicted by equally public documents of greater force shall also constitute the boundary between Honduras and Nicaragua.

3. It is to be understood that each Republic is owner of the territory which at the date of independence constituted, respectively, the provinces of Honduras and Nicaragua.

4. In determining the boundaries, the Mixed Commission shall consider fully proven ownership of territory and shall not [p 200] recognize juridical value to de facto possession alleged by one party or the other.

5. In case of lack of proof of ownership the maps of both Republics and public or private documents, geographical or of any other nature, which may shed light upon the matter, shall be consulted; and the boundary line between the two Republics shall be that which the Mixed Commission shall equitably determine as a result of such study.

6. The same Mixed Commission, if it deems it appropriate, may grant compensations and even fix indemnities in order to establish, in so far as possible, a well-defined, natural boundary line.

7. In studying the plans, maps and other similar documents which the two Governments may submit, the Mixed Commission shall prefer those which it deems more rational and just.

8. In case the Mixed Commission should fail to reach a friendly agreement on any point, it shall record this fact separately in two special books, signing the double detailed record, with a statement of the allegations of both parties, and it shall continue its study in regard to the other points of the line of demarcation, disregarding the above referred point until the limit at the extreme end of the dividing line is fixed.

9. The books referred to in the preceding clause shall be sent by the Mixed Commission, one to each of the interested Governments, for its custody in the national archives.

Article III

The point or points of the boundary line which may not have been settled by the Mixed Commission referred to in this Treaty, shall be submitted, no later than one month after the final session of the said Commission, to the decision, without appeal, of an arbitral tribunal which shall be composed of one representative for Honduras and another for Nicaragua, and of one Member of the foreign Diplomatic Corps accredited to Guatemala, the latter to be elected by the first two, or chosen by lot from two lists each containing three names, and proposed one by each party.

Article IV

The arbitral Tribunal shall be organized in the city of Guatemala within twenty days following dissolution of the Mixed Commission, and within the next ten days shall begin its work, which is to be recorded in a Minutes Book, kept in duplicate, the majority vote constituting law.

Article V

In case the foreign Diplomatic Representative should decline the appointment, another election shall take place within the following ten days, and so on. When the membership of the foreign Diplomatic Corps is exhausted, any other foreign or Central Amer-[p 201]-ican public figure may be elected, by agreement of the Commissions of Honduras and Nicaragua, and should this agreement not be possible, the point or points in controversy shall be submitted to the decision of the Government of Spain, and, failing this, to that of any South American Government upon which the Foreign Offices of both countries may agree.

Article, VI

The procedure and time-limit to which the arbitration shall be subject, are as follows:

1. Within twenty days following the date on which the acceptance of the third arbitrator shall have been notified to the parties, the latter shall present to him, through their counsel, their pleadings, plans, maps and documents.

2. Should there be pleadings, he shall submit these, within eight days following their presentation, to the respective opposing counsel, who shall have a period of ten days within which to rebut them and to present any other documents they may deem appropriate.

3. The arbitral award shall be rendered within twenty days following the date on which the period for rebutting pleadings shall have expired, whether these have been presented or not.

Article VII

The arbitral decision, whatever it be, rendered by a majority vote, shall be held as a perfect, binding and perpetual treaty between the High Contracting Parties, and shall not be subject to appeal.

Article VIII

This Convention shall be submitted in Honduras and in Nicaragua to constitutional ratifications, the exchange of which shall take place in Tegucigalpa or in Managua, within sixty days following the date on which both Governments shall have complied with the stipulations of this article.

Article IX

The provision in the preceding article shall in no way hinder the immediate organization of the Mixed Commission, which shall begin its studies no later than two months after the last ratification, in conformity with the provisions of the present Convention, without prejudice to so doing prior to the ratifications, should these be delayed, in order to take advantage of the dry or summer season.

Article X

Immediately following exchange of ratifications of this Convention, whether the work of the Mixed Commission has begun or not, the Governments of Honduras and Nicaragua shall appoint their representatives, who, in conformity with Article IV, shall constitute [p 202] the arbitral Tribunal, in order that, by organizing themselves in a preliminary meeting, they may name the third arbitrator and so communicate it to the respective Ministers of Foreign Affairs, in order to obtain the acceptance of the appointee. If the latter should decline to serve they shall forthwith proceed to the appointment of another third arbitrator in the manner stipulated, and so on until the arbitral Tribunal shall have been organized.

Article XI

The periods stipulated in this Treaty for the appointment of arbitrators, the initiation of studies, the ratifications and the exchange thereof, as well as any other periods herein fixed, shall not be fatal nor shall they in any way produce nullity.

The object of these periods has been to speed up the work; but if for any reason they cannot be complied with, it is the will of the High Contracting Parties that the negotiation be carried on to its conclusion in the manner herein stipulated, which is the one they deem most appropriate. To this end they agree that this Treaty shall be in force for a period of ten years, in case its execution should be interrupted, within which period it may be neither revised nor amended in any manner whatever, nor the matter of boundaries be settled by any other means."

The Mixed Boundary Commission provided for in Article I of the Treaty met from 24 February 1900 onwards and succeeded in fixing the boundary from the Pacific Coast to the Portillo de Teotecacinte; it was however unable to agree on the boundary from that point to the Atlantic Coast and recorded its disagreement at its meeting of 4 July 1901. With regard to the latter section of the boundary, the King of Spain handed down, on 23 December 1906, an arbitral award—hereinafter referred to as the Award—the operative part of which reads as follows:

[Translation from the Spanish revised by the Registry ]

"I do hereby declare that the dividing line between the Republics of Honduras and Nicaragua from the Atlantic to the Portillo de Teotecacinte where the joint Commission of Boundaries abandoned it in 1901, owing to their inability to arrive at an understanding as to its continuation at their subsequent meetings, is now fixed in the following manner:

The extreme common boundary point on the coast of the Atlantic will be the mouth of the River Coco, Segovia or Wanks, where it flows out in the sea close to Cape Gracias a Dios, taking as the mouth of the river that of its principal arm between Hara and the Island of San Pío where said Cape is situated, leaving to Honduras the islets and shoals existing within said principal arm before reaching the harbour bar, and retaining for Nicaragua the southern shore of the said principal mouth with the said Island of San Pío, and also the bay and town of Cape Gracias a Dios and the arm or estuary called Gracias which flows to Gracias a Dios Bay, between the mainland and said Island of San Pío. [p 203]

Starting from the mouth of the Segovia or Coco, the frontier line will follow the vaguada or thalweg of this river upstream without interruption until it reaches the place of its confluence with the Poteca or Bodega, and thence said frontier line will depart from the River Segovia, continuing along the thalweg of the said Poteca or Bodega upstream until it joins the River Guineo or Namasli.

From this junction the line will follow the direction which corresponds to the demarcation of the Sitio de Teotecacinte in accordance with the demarcation made in 1720 to terminate at the Portillo de 7'eotecacinte in such manner that said Sitio remains wholly within the jurisdiction of Nicaragua."

Following upon a series of exchanges between the two Governments, some of which will be referred to later, the Foreign Minister of Honduras in a Note dated 25 April 1911 brought to the notice of the Foreign Minister of Nicaragua certain steps taken by Honduras in execution of the Award and made a proposal relating to the demarcation of a certain part of the boundary line in accordance with the concluding portion of the operative clause. In reply to this Note, the Foreign Minister of Nicaragua, in a Note dated 19 March 1912, challenged the validity and binding character of the Award. This gave rise to a dispute between the Parties.

Subsequently, the two Governments made several attempts at settlement by direct negotiation or through the good offices or mediation of other States, but these were all unfruitful. The good offices of the United States of America in 1918-1920 did not succeed. The Irias-Ulloa protocol of 21 January 1931, negotiated directly between the two Governments, failed of ratification. Nor was the joint mediation of Costa Rica, the United States of America and Venezuela in 1937 productive of positive result. Certain incidents between the two Parties having taken place in 1957, the Organization of American States, acting as a consultative body, was led to deal with the dispute with the result that on 21 July 1957, Honduras and Nicaragua reached an agreement at Washington by virtue of which they undertook to submit:

"to the International Court of Justice, in accordance with its Statute and Rules of Court, the disagreement existing between them with respect to the Arbitral Award handed down by His Majesty the King of Spain on 23 December 1906, with the understanding that each, in the exercise of its sovereignty and in accordance with the procedures outlined in this instrument, shall present such facets of the matter in disagreement as it deems pertinent."

The Foreign Ministers of Honduras and Nicaragua attached the following statements to the Agreement as Appendices A and B thereto: [p 204]

"Appendix 'A'

STATEMENT OF THE MINISTER OF FOREIGN AFFAIRS OF HONDURAS ON THE POSITION OF HIS GOVERNMENT IN RESORTING TO THE INTERNATIONAL COURT OF JUSTICE

Honduras is submitting to the International Court of Justice its claim against Nicaragua that the Arbitral Award of His Majesty the King of Spain handed down on 23 December 1906 be carried out, basing its stand on the fact that the Arbitral Award is in force and is unassailable. Honduras has maintained and continues to maintain that Nicaragua's failure to comply with that arbitral decision constitutes, under Article 36 of the Statute of the International Court of Justice and in accordance with the principles of international law, a breach of an international obligation.

The foregoing reference to the position of Honduras in this proceeding is only of a general nature and in no wise constitutes a definition or limitation of the matter to be submitted to the Court, or a formula that restricts in any way the exercise of the right that Honduras will maintain in the action before the Court.

Appendix 'B'

STATEMENT OF THE MINISTER OF FOREIGN AFFAIRS OF NICARAGUA ON THE POSITION OF HIS GOVERNMENT IN APPEARING BEFORE THE INTERNATIONAL COURT OF JUSTICE

Nicaragua, when it appears before the International Court of Justice, will answer the claim of Honduras, presenting reasons, actions, and facts, and opposing the exceptions that it considers appropriate, in order to impugn the validity of the Arbitral Award of 23 December 1906, and its compulsory force, and also invoking all those rights that may be in its interest. Nicaragua has maintained and now maintains that its boundaries with Honduras continue in the same legal status as before the issuance of the above-mentioned Arbitral Award.

The foregoing reference to the position of Nicaragua in this proceeding is only of a general nature and in no wise constitutes a definition or limitation of the matter to be submitted to the Court, or a formula that restricts in any way the exercise of the right that Nicaragua will maintain before the Court."

***
By the Application instituting proceedings in the present case, Honduras asks the Court inter alia to declare that Nicaragua is under an obligation to give effect to the Award. This request was maintained in the final Submissions presented by Honduras at the hearing.

In its final Submissions presented at the hearing, Nicaragua asks the Court to reject the Submissions of Honduras and to adjudge and declare inter alia that the decision given by King Alfonso XIII on [p 205] 23 December 1906, invoked by Honduras, does not possess the character of a binding arbitral award and that the so-called "arbitral" decision is in any case incapable of execution by reason of its omissions, contradictions and obscurities.

Honduras alleges that there is a presumption in favour of the binding character of the Award as it presents all the outward appearances of regularity and was made after the Parties had every opportunity to put their respective cases before the Arbitrator. It contends that the burden lay upon Nicaragua to rebut this presumption by furnishing proof that the Award was invalid.

Nicaragua contends that, as Honduras relies upon the Award, it is under an obligation to prove that the person giving the decision described as an award was invested with the powers of an arbitrator, and it argues that the King of Spain was not so invested inasmuch as:

(a) he was not designated arbitrator in conformity with the provisions of the Gâmez-Bonilla Treaty, and

(b) the Treaty had lapsed before he agreed to act as arbitrator.

***
In support of the first contention, Nicaragua has argued that the requirements of Articles III and V of the Gâmez-Bonilla Treaty were not complied with in the designation of the King of Spain as arbitrator. It has urged that, before the two national arbitrators could proceed to this designation, it was necessary to exhaust the membership of the foreign Diplomatic Corps accredited to Guatemala and thereafter to attempt to come to an agreement on any other foreign or Central American public figure for the purpose of constituting a three-man arbitral tribunal.

The record shows that on 2 December 1899, the two national arbitrators designated the Mexican Chargé d'affaires in Central America, Federico Gamboa, as third member of the arbitral tribunal. In April 1902, he was recalled from Guatemala. On 21 August 1902, the two national arbitrators designated the Mexican Minister to Central America, Cayetano Romero, as third member of the tribunal. He left Guatemala for reasons of health without having accepted or rejected the designation. There is no record of any proceedings taken by the national arbitrators thereafter for the purpose of organizing the arbitration until 2 October 1904. On that date the two national arbitrators, José Dolores Gâmez and Alberto Membreno, met in the City of Guatemala with the Spanish Minister to Central America, Pedro de Carrere y Lembeye, and, as stated in the Minutes of the meeting, "having verified their full powers and with the express consent of their Governments appointed the Spanish Minister to be the chairman of a meeting preliminary to the arbi-[p 206]tration which is to consider and settle the pending boundary question". At that meeting, "by common consent and the requirements of Articles III and IV of the Gámez-Bonilla Treaty having previously been complied with" (de común acuerdo y previos los trámites que prescriben los artículos 3° y 4° del Tratado Gámez-Bonilla) the King of Spain was designated as arbitrator.

It has been suggested that this mention of Article IV was by mistake in place of Article V. Be that as it may, what was meant was that the procedure laid down in the Treaty to be followed antecedent to the designation of the King of Spain as arbitrator had already been complied with. In these circumstances, an allegation that such was not in fact the case must be established by positive proof. No such proof has been placed before the Court.

In the opinion of the Court it was within the power of the arbitrators to interpret and apply the articles in question in order to discharge their function of organizing the arbitral tribunal. Whether they had in fact exhausted the membership of the Diplomatic Corps accredited to Guatemala and failed to reach agreement on the election of any other foreign or Central American public figure or whether they had considered such steps as optional and unlikely to lead to a fruitful result, the fact remains that after agreeing that the relevant articles of the Treaty had been complied with they agreed to proceed to the designation of the King of Spain as arbitrator. The Court, therefore, concludes that the requirements of the relevant articles of the Gámez-Bonilla Treaty as interpreted by the two national arbitrators had already been complied with when, at the meeting of 2 October 1904, it was agreed by common consent that the King of Spain be designated as arbitrator and that he should be requested on behalf of both Governments to undertake the task.

On 4 October 1904, the Spanish Minister sent telegrams to the Presidents of Honduras and Nicaragua stating that it had been agreed to designate the King of Spain as arbitrator in the case.

On 6 October 1904, the President of Honduras expressed his satisfaction at the designation of the King of Spain to decide the question of boundaries of Honduras and Nicaragua, and expressed the hope that the King would accept the task.

On 7 October 1904, the President of Nicaragua replied that it would "be satisfactory and an honour for Nicaragua if H.M. the King of Spain will accept the designation of arbitrator to settle the boundaries dispute between Honduras and Nicaragua".

On 17 October 1904, the acceptance of the King of Spain was communicated to the Spanish Minister in Central America, who immediately dispatched telegrams to the Presidents of Honduras and Nicaragua informing them of the King's agreement "to be the [p 207] arbitrator in the question of the boundaries between Nicaragua and Honduras".

In his Note of 21 December 1904, addressed to the Spanish Minister of State, the Foreign Minister of Nicaragua renewed in the name of his Government "to His Majesty the King of Spain the expression of my deep gratitude for the generosity shown" in accepting his "designation as arbitrator to settle the question of boundaries between Nicaragua and Honduras".

In his Report to the National Legislative Assembly dated 30 November 1905, the Foreign Minister of Nicaragua stated:

"At a meeting in Guatemala City in October 1904, under the presidency of His Excellency the Minister for Spain to Central America, the moment came to elect the third arbitrator who is to settle the affair definitively. His Majesty King Alfonso XIII of Spain was elected as the third arbitrator, the two arbitrators voting in favour, and no choice could have been more appropriate. The affair is now brought to the august cognizance of His Catholic Majesty, who has already appointed a commission of investigation made up of distinguished persons.
………………………………………………………………………………………………

I have already declared in the chapter referring to Honduras that His Majesty King Alfonso XIII is the arbitrator who is to settle our boundary question; I am glad to add that the August Sovereign of the Mother Country has generously informed the Nicaraguan Government, through his Minister of State, that he feels it a very great pleasure to have been appointed to settle the question pending between these two American Republics, for which he has a warm sympathy. For this we are very grateful to the Spanish Monarch and his enlightened Government."

No question was at any time raised in the arbitral proceedings before the King with regard either to the validity of his designation as arbitrator or his jurisdiction as such. Before him, the Parties followed the procedure that had been agreed upon for submitting their respective cases. Indeed, the very first occasion when the validity of the designation of the King of Spain as arbitrator was challenged was in the Note of the Foreign Minister of Nicaragua of 19 March 1912.

In these circumstances the Court is unable to hold that the designation of the King of Spain as arbitrator to decide the boundary dispute between the two Parties was invalid.

***

In support of its second contention, namely, that the Gamez-Bonilla Treaty had lapsed before the King of Spain agreed to act as arbitrator, Nicaragua argues that the Treaty came into effect on 7 October 1894, the date on which it was signed, and that, by [p 208] virtue of Article XI, it lapsed ten years later, on 7 October 1904. As the King of Spain agreed to act as arbitrator on 17 October 1904, his designation as arbitrator took effect ten days after the Treaty had, according to Nicaragua, ceased to be in force. On this view of the matter, it is contended that the whole proceeding before the King of Spain as arbitrator and his decision of 23 December 1906 was null and void and of no effect whatever. The reply of Honduras is that the Treaty did not come into effect till the exchange of ratifications between the Parties, which was effected on 24 December 1896, and that consequently the period of ten years laid down in Article XI of the Treaty expired on 24 December 1906. According to Honduras, therefore, the arbitral proceedings were completed, and the Award was handed down, during the currency of the Treaty.

It is argued on behalf of Nicaragua that Article IX of the Treaty, which provided that the requirements laid down in Article VIII with regard to ratifications and the exchange thereof should not hinder the immediate organization of the Mixed Commission, meant that the period of time specified in Article XI commenced to run, not as from the date of the exchange of ratifications, but as from the date of signature of the Treaty. Honduras, on the other hand, relies upon Article IX as making provision for an exception to the coming into effect of the Treaty, which was to await the exchange of ratifications, the object of the exception being that the organization of the Mixed Commission need not be delayed pending the coming into force of the Treaty on the date of the exchange of ratifications.

There is no express provision in the Treaty with regard to the date on which it was to come into force. Taking into consideration the provisions of Articles VIII, IX and X, the Court is of the view that the intention of the Parties was that the Treaty should come into force on the date of exchange of ratifications and that the ten-year period specified in Article XI should begin to run from that date but that, in the meantime, in pursuance of Article IX, the immediate organization of the Mixed Commission might be proceeded with. That this was the intention of the Parties is put beyond doubt by the action taken by the two Parties by agreement in respect of the designation of the King of Spain as arbitrator. Agreement on the designation of the King of Spain as arbitrator was reached on 2 October 1904. The Court finds it difficult to believe that the Parties, or one of them, had in mind an interpretation of the Treaty according to which the period provided for in Article XI should expire five days later and that the Treaty should then lapse. Indeed, on the very day on which, according to the present submission of Nicaragua, the Treaty expired, the President of Nicaragua stated in his telegram to the Spanish Minister to Central America that it would be satisfactory and an honour for Nicaragua if the King of Spain would accept his designation as arbitrator to settle the boundary dispute between Honduras and Nicaragua. This [p 209] furnishes a clear indication that Nicaragua did not regard the Treaty as having lapsed on that day.

Some support for Nicaragua's contention was sought to be drawn from the suggestion made by the Spanish Minister to Central America to the President of Honduras on 21 October 1904 and to the President of Nicaragua on 24 October 1904 that the period of the Treaty might be extended. In the opinion of the Court, the time at which this initiative was taken shows that it did not carry with it any implication that the Treaty had expired on 7 October 1904. In actual fact, no action was taken to extend the duration of the Treaty. This furnishes confirmation of the view which the Court takes that the Treat}' was not due to expire till ten years after the date of the exchange of ratifications, that is to say, on 24 December 1906. Had this not been so, the two Governments, when confronted with the suggestion made by the Spanish Minister to Central America, would either have taken immediate appropriate measures for the renewal or extension of the Treaty or would have terminated all further proceedings in respect of the arbitration on the ground that the Treaty providing for arbitration had already lapsed. On the contrary, the two Governments proceeded with the arbitration and submitted their respective cases to the arbitrator. This shows that the intention of the Parties had been that the Treaty should come into force on the date of the exchange of ratifications.

Again, it may be noted that no objection was taken before the King of Spain to his proceeding with the arbitration on the ground that the Gamez-Bonilla Treaty had already expired. Indeed, the very first allegation that the Treaty had expired on 7 October 1904 was made as late as 1920 during a mediation procedure undertaken by the Government of the United States of America in an effort to resolve the boundary dispute between Honduras and Nicaragua.

The Court, therefore, concludes that the Gamez-Bonilla Treaty was in force till 24 December 1906, and that the King's acceptance on 17 October 1904 of his designation as arbitrator was well within the currency of the Treaty.

***

Finally, the Court considers that, having regard to the fact that the designation of the King of Spain as arbitrator was freely agreed to by Nicaragua, that no objection was taken by Nicaragua to the jurisdiction of the King of Spain as arbitrator either on the ground of irregularity in his designation as arbitrator or on the ground that the Gamez-Bonilla Treaty had lapsed even before the King of Spain had signified his acceptance of the office of arbitrator, and that Nicaragua fully participated in the arbitral proceedings before the King, it is no longer open to Nicaragua to rely on either of these contentions as furnishing a ground for the nullity of the Award. [p 210]

***
Honduras is thus seeking execution of the Award made on 23 December 1906 by the King of Spain who, in the opinion of the Court, was validly designated arbitrator by the Parties during the currency of the Gamez-Bonilla Treaty. Nicaragua urges that even under those conditions the Award is a nullity and seeks to establish the nullity of the Award on the grounds that it was vitiated by:

(a) excess of jurisdiction;

(b) essential error;

(c) lack or inadequacy of reasons in support of the conclusions arrived at by the Arbitrator.

Nicaragua also contends that the Award is in any case incapable of execution by reason of its omissions, contradictions and obscurities.

Honduras contends that the conduct and attitudes of Nicaragua show that it accepted the Award as binding and that in consequence of that acceptance and of its failure to raise any objection to the validity of the Award for a number of years, it is no longer open to Nicaragua to question the validity of the Award on the grounds alleged or indeed on any ground at all. Honduras further contends that the Award is clear and definite and is not incapable of execution.

As already stated, the Award was handed down on 23 December 1906. On 24 December 1906 the President of Nicaragua received a telegram from the Nicaraguan Minister in Madrid, which summarized the operative clause of the Award as follows:

"Boundary begins mouth principal arm River Segovia leaving to Nicaragua Island San Pio, with the bay and the town of Gracias and arm called Gracias; line follows Segovia upstream until encounters Guineo; thereafter boundary takes direction corresponding Sitio Teotecacinte, according to marking established 1720, finishing at Portillo de Teotecacinte, said Sitio remaining entirely to Nicaragua."

On the next day, the President of Nicaragua sent the following telegram to the President of Honduras:

"Through a cable of today's date I have taken cognizance of the arbitral award made by the King of Spain in the matter of the delimitation of the frontier. Having regard to this decision, it appears that you have won the day, upon which I congratulate you. A strip of land more or less is of no importance when it is a question of good relations between two sister nations. The irksome question of the delimitation of the frontier has been resolved in such a satisfactory manner thanks to friendly arbitration. I hope that in the future no obstacle will disturb the good relations between our respective countries." [p 211]

In a Note dated 9 January 1907, addressed to the Spanish Chargé d'affaires in Central America, the Foreign Minister of Nicaragua expressed the appreciation of his Government "for the graciousness of the King of Spain who, by his arbitral award, has terminated our frontier dispute with the neighbouring state of Honduras".

On 28 January 1907, the full text of the Award was published in the Official Gazette of Nicaragua.

On 1 December 1907, the President of Nicaragua, in his message to the National Legislative Assembly of Nicaragua, stated as follows:

"On 23 December 1906, His Majesty the King of Spain made the Arbitral Award in the matter of the delimitation of the frontier between this Republic and that of Honduras. My Government has noted with satisfaction that this important dispute has been terminated by the highly civilized method of arbitration and, although it accepts this decision with pleasure, it has given instructions to Minister Crisanto Medina with a view to requesting a relevant clarification since this decision contains some points that are obscure and even contradictory."

In the course of his report (Memoria) to the National Legislative Assembly of Nicaragua, dated 26 December 1907, covering the period between 1 December 1905 and 30 November 1907, the Foreign Minister of Nicaragua, José Dolores Gâmez, referring to Honduras, stated: "Our long-standing question of boundaries with this sister Republic, which, as you will remember, we had submitted to arbitration by the King of Spain, was finally settled by the latter on 23 December 1906, on which date he made his Award." He went on to explain that, despite every effort that had been made by the Government of Nicaragua to obtain a more favourable decision, the decision was somewhat disappointing. The report continued: "The Award in question also contains contradictory concepts which make it difficult to put it into effect, for which reason our Minister in Spain has been instructed to ask for a clarification to avoid possible difficulties in the interpretation of these concepts by the parties interested in the case." The report then stated that, if satisfactory light was not thrown by the King upon the points submitted to him, a friendly approach would be made to the Government of Honduras so that "these final details" might be settled in all harmony and to the satisfaction of both countries. The report affirmed "that the irksome question of frontiers which has preoccupied us for so many years and which might at any moment have impaired the good relations which have always attached us to our Honduran brothers, has been settled. Boundary questions are normally of a very serious and dangerous character, and as a rule they leave in their wake feelings of deep resentment which are difficult to overcome. For that reason we must rejoice at the friendly solution we have been able [p 212] to find in the settlement of so delicate a question, whatever lines of demarcation have today been laid down for our frontiers with Honduras." In conclusion the report sounded a note of caution for the future with regard to the seeking of settlements by arbitration without appeal.

The section of the report dealing with Spain set out the Award in full.

The National Legislative Assembly of Nicaragua took note of the report and by decree of 14 January 1908 approved "the acts of the executive power in the field of foreign affairs between' 1 December 1905 and 26 December 1907".

On 25 April 1911, the Foreign Minister of Honduras addressed a Note to the Foreign Minister of Nicaragua pointing out that

"it would be desirable to demarcate the small portion of the line which, in conformity with the last paragraph of the Arbitral Award, extends from the junction of the River Poteca or Bodega with the River Guineo or Namasli as far as the Portillo de Teotecacinte, since the Arbitral Award fixed the rest of the line along natural boundaries; for this purpose, as soon as the time is thought opportune, my Government will approach Your Excellency's Government with a view to carrying out this demarcation by agreement."

Early in September 1911, certain Nicaraguan papers carried a report attributed to the Ministry of Foreign Affairs of Nicaragua that one of its representatives, who was then in Europe, had been instructed to request the King of Spain for a clarification of the Award. The Honduran Charge d'affaires in Nicaragua thereupon approached the Foreign Minister of Nicaragua and enquired whether the newspaper report was accurate. According to the Note of the Honduran Charge d'affaires dated 8 September 1911, addressed to his own Foreign Minister, a document presented to the Court by Nicaragua, the Foreign Minister of Nicaragua replied that the press reports were not true and

"that all that he had intimated to the journalists was that, together with the Charge d'affaires, he was engaged in examining whatever had any reference to fixing, in accordance with the Award, the line of demarcation running from the junction of the Poteca or Bodega River as far as the Portillo de Teotecacinte; and that everything would be done in a satisfactory manner in view of the sincere and cordial relations existing between the Governments of Honduras and Nicaragua."

It follows from the facts referred to above that Nicaragua took cognizance of the Award and on several occasions between the date of the Award and 19 March 1912 expressed its satisfaction to Honduras that the dispute concerning the delimitation of frontiers [p 213] between the two countries had been finally settled through the method of arbitration.

Nicaragua urges that, when the President of Nicaragua dispatched his telegram of 25 December 1906 to the President of Honduras, he was not aware of the actual terms of the Award. From the telegram of the Minister of Nicaragua in Madrid of 24 December 1906, the President of Nicaragua had however learned where the boundary line was to begin under the Award, and the course it was to follow in order to join up with the point reached by the Mixed Boundary Commission. The President's own telegram to the President of Honduras shows that he considered that the Award was on the whole in favour of Honduras, and he gave expression to his feeling that the loss of a certain area of territory was not too serious a sacrifice as against the strengthening of friendly relations between the two countries. In any event, the full terms of the Award must have become available to the Nicaraguan Government fairly soon since the Award was published in the Official Gazette of Nicaragua on 28 January 1907. Even thereafter, the attitude of Nicaragua towards the Award continued to be one of acceptance, subject to a desire to seek clarification of certain points which would facilitate the carrying into effect of the Award. This desire was, however, not carried beyond the giving of certain instructions to the Nicaraguan Minister in Madrid and no request for clarification was in fact submitted to the King of Spain. Changes of Government in Nicaragua and Honduras did not bring about any change in this attitude till March of 1912 when the Foreign Minister of Nicaragua, in his reply dated 19 March 1912 to the Note of the Foreign Minister of Honduras, dated 25 April 1911, for the first time raised the question of the validity of the Award on the grounds that the King of Spain had not been validly designated arbitrator, that the Award did not comply with the conditions laid down by the Gamez-Bonilla Treaty and that it was not "a clear, really valid, effective and compulsory Award".

***

In the judgment of the Court, Nicaragua, by express declaration and by conduct, recognized the Award as valid and it is no longer open to Nicaragua to go back upon that recognition and to challenge the validity of the Award. Nicaragua's failure to raise any question with regard to the validity of the Award for several years after the full terms of the Award had become known to it further confirms the conclusion at which the Court has arrived. The attitude of the Nicaraguan authorities during that period was in conformity with Article VII of the Gamez-Bonilla Treaty which provided that the arbitral decision whatever it might be—and this, in the view of the Court, includes the decision of the King of Spain as arbitrator— [p 214]

"shall be held as a perfect, binding and perpetual Treaty between the High Contracting Parties, and shall not be subject to appeal".

Nicaragua, however, contends that having in Appendix B of the Washington Agreement of 21 July 1957 made the reservation that, "when it appears before the International Court of Justice, it will answer the claim of Honduras, presenting reasons, actions and facts, and opposing the exceptions that it considers appropriate, in order to impugn the validity of the Arbitral Award of 23 December 1906, and its compulsory force, and also invoking all those rights that may be in its interest", it is entitled to ask the Court for a decision on the grounds of nullity put forward by it against the Award. The reply of Honduras to this contention is that the effect of Appendix A and Appendix B to the Washington Agreement was no more than to leave it open to the Parties to present their respective cases to the Court in any manner permissible to them under international law and the Statute and Rules of Court, that Nicaragua was free to submit to the Court any grounds on which it placed reliance in order to establish the nullity of the Award but that it was equally open to Honduras to submit that, having regard to the conduct and attitudes of Nicaragua, the Court was not called upon to pronounce on all or some of those grounds. The Court is inclined to the view that the Honduran contention is well-founded.

However, even if there had not been repeated acts of recognition by Nicaragua which, as the Court has found, debars it from relying subsequently on complaints of nullity and even if such complaints had been put forward in proper time, the Award would, in the judgment of the Court, still have to be recognized as valid. The Court will proceed to indicate very briefly the reasons for arriving at this conclusion. Before doing so, the Court will observe that the Award is not subject to appeal and that the Court cannot approach the consideration of the objections raised by Nicaragua to the validity of the Award as a Court of Appeal. The Court is not called upon to pronounce on whether the arbitrator's decision was right or wrong. These and cognate considerations have no relevance to the function that the Court is called upon to discharge in these proceedings, which is to decide whether the Award is proved to be a nullity having no effect.

Nicaragua's first complaint is that the King of Spain exceeded his jurisdiction by reason of non-observance of the rules laid down in Article II of the Gamez-Bonilla Treaty. It is contended in the first place that the arbitrator failed to observe the rules laid down in paragraphs 3 and 4 of that Article. The first of these two rules states that "each Republic is owner of the territory which at the date of Independence constituted respectively the provinces of Honduras and Nicaragua". The rule in paragraph 4 calls upon the arbitrator to consider "fully proven ownership of territory" and precludes recognition of "juridical value to de facto possession [p 215] alleged by one party or the other". Nicaragua contends that the arbitrator fixed what he regarded as a natural boundary line without taking into account the Laws and Royal Warrants of the Spanish State which established the Spanish administrative divisions before the date of Independence. In the judgment of the Court this complaint is without foundation inasmuch as the decision of the arbitrator is based on historical and legal considerations (derecho histórico) in accordance with paragraphs 3 and 4 of Article II.

With regard to the same complaint, Nicaragua, in the second place, stresses that the arbitrator purported to exercise his discretion in granting compensations in order to establish, in so far as possible, a well-defined natural boundary line as provided for in paragraph 6 of Article II of the Treaty. Nicaragua contends that this discretion was, under the said paragraph, vested in the Mixed Boundary Commission and could not be exercised by the arbitrator. In exercising this discretion, the arbitrator, it is urged, exercised a power which he did not possess, or which, if conferred upon him, he exercised far beyond its legitimate limit. The Court is unable to share this view. An examination of the Treaty shows that the rules laid down in Article II were intended not only for the guidance of the Mixed Commission to which they expressly referred, but were also intended to furnish guidance for the arbitration. No convincing reason has been adduced by Nicaragua in support of the view that, while the remaining paragraphs of Article II were applicable to the arbitrator, paragraph 6 was excluded and that, if it was not excluded, the arbitrator, in applying it, exceeded his powers. In the view of the Court, the arbitrator was under obligation to take into account the whole of Article II, including paragraph 6, to assist him in arriving at his conclusions with regard to the delimitation of the frontier between the two States and, in applying the rule in that paragraph, he did not go beyond its legitimate scope.

The Court, having carefully considered the allegations of Nicaragua, is unable to arrive at the conclusion that the King of Spain went beyond the authority conferred upon him.

Nicaragua next contends that the Award is a nullity by reason of "essential error". The Court has not been able to discover in the arguments of Nicaragua any precise indication of "essential error" which would have the effect, as alleged by Nicaragua, of rendering the Award a nullity. Under paragraph 7 of Article II of the Gámez-Boniila Treaty, "in studying the plans, maps and other similar documents which the two Governments may submit", the arbitrator was to prefer those which he "deems more rational and just". The instances of "essential error" that Nicaragua has brought to the notice of the Court amount to no more than evaluation of documents and of other evidence submitted to the arbitrator. The appraisal of the probative value of documents and [p 216] evidence appertained to the discretionary power of the arbitrator and is not open to question.

The last ground of nullity raised by Nicaragua is the alleged lack or inadequacy of reasons in support of the conclusions arrived at by the arbitrator. However, an examination of the Award shows that it deals in logical order and in some detail with all relevant considerations and that it contains ample reasoning and explanations in support of the conclusions arrived at by the arbitrator. In the opinion of the Court, this ground is without foundation.

***

It was further argued by Nicaragua that the Award is not capable of execution by reason of its omissions, contradictions and obscurities, and that therefore on this ground the Court must reject the submission of Honduras praying that the Court should adjudge and declare that Nicaragua is under an obligation to give effect to the Award.

The operative clause of the Award fixes the common boundary point on the coast of the Atlantic as the mouth of the river Segovia or Coco where it flows out into the sea, taking as the mouth of the river that of its principal arm between Hara and the Island of San Pío where Cape Gracias a Dios is situated, and directs that, from that point, the frontier line will follow the thalweg of the river Segovia or Coco upstream without interruption until it reaches the place of its confluence with the Poteca or Bodega and that thence the frontier line will depart from the river Segovia or Coco continuing along the thalweg of the Poteca or Bodega upstream until it joins the river Guineo or Namasli. From this junction, the line will follow the direction which corresponds to the demarcation of the Sitio of Teotecacinte in accordance with the demarcation made in 1720 to terminate at the Portillo de Teotecacinte in such manner that the said Sitio remains wholly within the jurisdiction of Nicaragua.

Nicaragua has argued that the mouth of a river is not a fixed point and cannot serve as a common boundary between two States, and that vital questions of navigation rights would be involved in accepting the mouth of the river as the boundary between Honduras and Nicaragua. The operative clause of the Award, as already indicated, directs that "starting from the mouth of the Segovia or Coco the frontier line will follow the vaguada or thalweg of this river upstream". It is obvious that in this context the thalweg was contemplated in the Award as constituting the boundary between the two States even at the "mouth of the river". In the opinion of the Court, the determination of the boundary in this section should give rise to no difficulty.

Nicaragua argues further that the delimitation in the operative clause leaves a gap of a few kilometres between the point of deparas [p 217]ture of the frontier line from the junction of the Poteca or Bodega with the Guineo or Namasli up to the Portillo de Teotecacinte, which was the point to which the Mixed Commission had brought the frontier line from its western boundary point. An examination of the Award fails to reveal that there is in fact any gap with regard to the drawing of the frontier line between the junction of the Poteca or Bodega with the Guineo or Namasli and the Portillo de Teotecacinte.

In view of the clear directive in the operative clause and the explanations in support of it in the Award, the Court does not consider that the Award is incapable of execution by reason of any omissions, contradictions or obscurities.

For these reasons,

The Court,

by fourteen votes to one,

finds that the Award made by the King of Spain on 23 December 1906 is valid and binding and that Nicaragua is under an obligation to give effect to it.

Done in English and in French, the English text being authoritative, at the Peace Palace, The Hague, this eighteenth day of November, one thousand nine hundred and sixty, in three copies, one of which will be placed in the archives of the Court and the others transmitted to the Government of the Republic of Honduras and the Government of the Republic of Nicaragua, respectively.

(Signed) Helge Klaestad,
President.

(Signed) Garnier-Coignet,
Registrar.

Judge Moreno Ouintana makes the following Declaration:

Although I am in agreement with the virtually unanimous opinion of my colleagues with regard to the decision reached in this case, I consider that it should have been arrived at by a different procedural method. As a representative on this Court of a Spanish-American legal system and confronted with a dispute between two Spanish-American States, I believe that the legal questions which are of particular concern to them should have been dealt with in the first place. I refer in particular to that provided for in Article II paragraph 3, of the Garnez-Bonilla Treaty, which relates to the [p 218] application by the arbitrator of the principle of uti possidetis juris which for more than a century has governed the territorial situation of the Spanish-American States. By reason of its importance this principle called for initial attention by the Court since Nicaragua based a major ground of nullity of the Award of the King of Spain on the arbitrator's failure to observe it.

Again, the case essentially involves the validity or invalidity of an international legal act. The Judgment might therefore with advantage have established the intrinsic regularity of the Award, after having analysed its extrinsic regularity, instead of—as it does—resting the solution of the case in advance upon acquiescence in the Award by the Parties. This latter situation, in the present case, in which one of the Parties contends for the nullity of the Award, is of no more than subsidiary importance. It provides a procedural argument based on a situation of fact, but it does not provide an adequate legal ground upon which to base the Judgment.

Furthermore, the features of the case do not put in issue the good faith of the unsuccessful party. Nicaragua, during the half century in which the Award was not implemented and in which the question of its non-implementation was not referred by Honduras to any international tribunal, may have had reasons, although ill-founded, for believing in the nullity of that legal act. A number of attempts by Nicaragua to obtain an arbitral decision to that effect remained unsuccessful. There was nothing to prevent the Court from so finding. Honour was due to the State which, together with the successful party and with Costa Rica, Guatemala and El Salvador, gave so splendid an example of devotion to the cause of law in setting up in 1907 the Central American Court of Justice, the first example in the world of an international judicial tribunal. The technical function of the Court is not incompatible with that of rendering in its judgments peace to the spirit, particularly in the case of sovereign States. Pax est justitia.

Judge Sir Percy Spender appends to the Judgment of the Court a statement of his Separate Opinion.

M. Urrutia Holguin, Judge ad hoc, appends to the Judgment of the Court a statement of his Dissenting Opinion.

(Initialled) H. K.

(Initialled) G.-C.





[p 219]
SEPARATE OPINION OF SIR PERCY SPENDER

I agree that the Award is valid and that Nicaragua is under an obligation to give effect to it. Since however my approach to certain of the issues involved in these proceedings varies in some respects from that which the Court has adopted, I desire to state in summary form my views on the main issues.

***
The validity of the Award depends initially upon the sovereign consent of the two States that an award may be made. The nature and the conditions of such consent are contained in the Gamez-Bonilla Treaty which was to be in force for a period of ten years.

Nicaragua has contended that this period of time began to run as from the date of signature of the Treaty and that accordingly the Treaty had expired at the time the King of Spain accepted the office of sole arbitrator and a fortiori when the Award was made.

I agree with the conclusion of the Court that the period of time that the Treaty was to be in force began to run as from the date of the exchange of ratifications made under Article VIII thereof.

This contention of Nicaragua is accordingly without substance.

***

Nicaragua next contends that the King of Spain never possessed the capacity of a sole arbitrator; that what purported to be his appointment was in breach of the provisions of the Treaty and was totally devoid of all validity.

I do not find it necessary to determine whether the King's appointment involved any non-compliance with the provisions of the Treaty. Although I incline strongly to the view that the appointment was irregular, this contention of Nicaragua fails because that State is precluded by its conduct prior to and during the course of the arbitration from relying upon any irregularity in the appointment of the King as a ground to invalidate the Award.

Having failed to challenge the competency of the King as sole arbitrator before or during the course of the arbitration but, on the contrary, having invited him to make an award on the merits, Nicaragua was thereafter precluded, from contesting the regularity of the appointment.

All the relevant facts relating to that appointment were known to it when it participated in the arbitration. Each State party to [p 220] the arbitration proceedings was entitled to place faith upon the deliberate conduct of the other State in the course of such proceedings. Nicaragua cannot be permitted to be placed in the position where, had the Award been satisfactory from its point of view, it could have accepted it, if not be free to disregard it as a nullity.

It would be contrary to the principle of good faith governing the relations between States were it permitted now to rely upon any irregularity in the appointment to invalidate the Award. Its con-duct up to the moment the Award was made operated in my opinion so as to preclude it thereafter from doing so, irrespective of any subsequent conduct on its part.
I rest my opinion on this ground.

***

As to the contentions of Nicaragua that the Award is null on the grounds of

(a) Excess of jurisdiction

(b) Essential error

(c) Lack or inadequacy of reasons in support of the Award,

I agree that Nicaragua, by reason of its conduct subsequent to the Award being made, is precluded from relying upon any one of these contentions to invalidate the Award. I place particular importance upon the fact that Nicaragua, for many years after the terms of the Award became known to it, failed to raise any question whatever as to its validity.

I rest my opinion on this aspect of the case exclusively on the ground of preclusion. It is unnecessary to determine whether but for this preclusion any of these contentions of Nicaragua would have afforded a cause of nullity. To attempt to do so would be, in my view, an irrelevant excursion.

***

Finally, I agree that the contention of Nicaragua that the Award, by reason of obscurities and contradictions alleged by it, is incapable of execution, is without substance. No reason appears which would prevent the Award being carried into effect.

(Signed) Percy Spender.

[p 221]
DISSENTING OPINION OF JUDGE URRUTIA HOLGLTN

[Translation]

I regret that I am unable to concur in the Judgment of the Court.

I must state my personal conclusions on: I. The legal doctrines involved.

II. The different concepts in America and in Europe as to the exercise of the right of States to contest arbitral awards.

III. The uti possidetis juris rule which in America excluded decisions in equity.

IV. Possible defects giving rise to nullity and acts of acquiescence in the Award of the King of Spain of 23 December 1906.

I. Legal doctrines

During the course of the present proceedings both Nicaragua and Honduras have set forth legal theories, as to which certain observations should be made:

Effects of the nullity of arbitral awards

In international law, there are not some defects which are "sanabiles" and others which are "insanabiles", the reason being that there is no compulsory international jurisdiction by means of which the causes of nullity may be put right. The absence in international law of such a body cannot confer an automatic character upon nullity, allow a State to be judge in its own case and to declare itself free from any obligation to carry out an award, just as on the other hand it cannot confer an automatic character on an absolute presumption of the validity of the award nor confer the right to require its execution without permitting the verification of its validity when the other party validly raises grounds of nullity.

In a conflict between the rights of the State which invokes the nullity of an arbitral award and of the State which relies upon res judicata, the only recourse at the disposal of the countries is to ask an international court to decide the question whether there is a judgment having binding force.

In Latin America, in all the cases referred to in Part II in which the award was disputed, its execution was suspended and the question of its validity referred to the decision of a new arbitrator— as, moreover, in the present case, where Counsel for Honduras explained (at the meeting of 7 October) that the country which he represented claimed the execution of the award, but that the obligation to give effect to the award resulted only from

"a finding by the Court of its binding force". [p 222]

The Court was asked to consider the cases in which acts of acquiescence, estoppel, or the belated raising of grounds of nullity might limit the right of a State to dispute the validity of an award or might deprive it of that right.

(i) Acquiescence. To see what effect acquiescence may have in regard to an award the validity of which is disputed, it is necessary to define the possible limits of acquiescence, and to see whether it is within the power of acquiescence to revive the non-existent effects of an award which is void.

In civil law there are acts which are null and void which cannot be given life even by subsequent acceptance by the parties. In international law, however, States are sovereign and are bound by no limitation upon their acceptance of or agreement to anything whatsoever.

States may agree, if they think fit, to the carrying out of the provisions of a null and void award, but in that case the cause and the legal basis of the provisions of the award are not to be found in the award which is a nullity, but in the valid agreement between two Sovereign States.

If there are in the award itself any essential defects of which the parties cannot know before they receive the text of the award, it is possible to regard as acquiescence only some formal decla-ration by the competent organ of the State making clear that it expressly renounces the right to dispute the validity of the award.

In treaties which submit a question for decision "without appeal" by an arbitrator or a court, the parties renounce the right to bring proceedings "on appeal", but they cannot in advance renounce the right ever to contest a future award, the contents of which they do not know, on the ground that it is a nullity.

(ii) Estoppel. The objection on the grounds of good faith which exists in almost all legal systems and which prevents a party from profiting by its own misrepresentation and which, in Anglo-Saxon law, is known as estoppel, would be applicable in the present case if it were proved that the action and behaviour of one of the States caused the other State to place reliance upon its acts of acquiescence and to believe in its renunciation of its right to dispute the validity of the award.

(iii) Belated raising of grounds of nullity. So far there does not exist in international law any uniform custom which makes it possible to assert that inaction on the part of States which may have interest in invoking a ground of nullity involves any presumption of their renunciation of the right to contest the validity of an award.

In private law there are rules relating to prescription and limitation but in general, in almost all legal systems, an exception is made in respect of the rights of the State, which are held not to be barred by the passage of time. [p 223]

In international relations, in certain cases the challenging of an award by the State concerned has been immediate. In other cases, several years have elapsed before it was disputed. In the St. Law-rence River case, the award made in 1814 was contested in a Note of 1831 and the contestation was accepted in 1842. In the case between Venezuela and Colombia, the King of Spain's award was rendered in 1891. Venezuela originally accepted the award but in 1917 secured the agreement of Colombia to the submission of the question of the validity of the award to the Swiss Federal Council. Costa Rica's contestation of President Loubet's award of 1897 was not brought before Chief Justice White until 1910.

In America, in eleven bilateral treaties on general arbitration signed before 1911, a procedure for re view on the ground of the nullity of the award was provided for. In two of those treaties, a time-limit of from three to six months was laid down for bringing the proceedings, and in the other cases it was simply stated that they should be brought before the carrying out of the award.

II. Different concepts in America and in Europe as to the exercise of the right of states to contest arbitral awards

The rules and customs generally accepted in America were in 1894 and 1907 far from being those which may be regarded as the most desirable for giving greater authority to arbitration in the international law of 1960.

Whereas in Europe there had only been recourse to arbitration in the nineteenth century with the greatest precautions and on the basis of special agreements signed in respect of each particular case, America was in advance of the times and had, between 1847 and the Second Hague Conference, signed more than two hundred general treaties of arbitration. In forty-eight of these compulsory arbitration was provided for in respect of territorial questions.

That explains why at the Hague Conference of 1907 (only Mexico had been invited to the 1899 Conference) the American representatives: (1) urged the ideal approved in America of compulsory arbitration, even for territorial questions, (2) insisted that it should be restricted to legal decisions, and (3) supported the establishment of a body to verify the validity of awards. In 1907 European prudence, on the contrary, sought to confine the notion of arbitration: (1) to questions which did not involve the honour or the essential interests of States, (2) to arbitration all the rules for which had been laid down in the special agreement, and (3) to awards against which the possibility of any type of remedy was resisted.

Faced with the difficulties presented, in i960, by the interpretation of the intention of the parties in signing a treaty in 1894, the [p 224] circumstances in which certain proceedings took place in 1904, or the significance of the actions of American States in 1906, the Court cannot lose sight of the fact that the diplomatic history of the evolution of the principle of arbitration in America is more authoritative than the literal or textual examination of documents.

In the case with which we are dealing, it is of particular importance not to pass a judgment on the acts or behaviour of the parties in their attempts to ask for explanations or to verify the validity of awards, without studying the customs which, as regards those aspects of arbitration procedure, were accepted in America at that time.

Although the existence of grounds of nullity in respect of arbitral awards was recognized by the Institut de Droit international as long ago as 1875, the idea has been accepted in Europe only with very marked reserve.
At the Hague Peace Conferences in 1899 and 1907 the possibility of calling in question the validity of an award was deleted from the two draft Conventions in view of the difficulty of suggesting any authority which should adjudicate upon the issue of validity. The reserve up till 1907 with regard to this aspect of the evolution of the law in Europe is explained in the course of lectures by Professor Borel on "Voies de recours centre les sentences arbitrates" (1935, II), and M. Lammasch expressed this European reticence when in 1914 he proposed that proceedings to upset awards should only be allowed with the consent of the arbitrator.

In America, on the other hand, as early as 1899, arbitration treaties had been signed containing clauses which provided for review of awards on grounds of nullity.

In a series of treaties of which the first two were signed in 1899 with Paraguay and with Uruguay, Argentina accepted arbitration by tribunals whose award could be challenged in the event of falsification of documents or "error of fact" resulting from the procedure or from the documents submitted to the arbitrator.

Before the Hague Conference, four other treaties on the same lines were signed: by Bolivia and Peru in 1902, by Argentina and Bolivia in 1902, by Brazil in 1907, by Chile in 1902, and two others in 1911 and 1912 between Colombia and Argentina and between Argentina and Ecuador.

In 1902 and 1905 Brazil signed general arbitration treaties with Bolivia and Peru, in which a new aspect of the nullity of awards was provided for, namely the case where, in whole or in part, the award was based on an error of fact; and in 1907 Peru and Colombia went further, and allowed review in cases where the award was allegedly based on a "positive or negative" error of fact.

Historical circumstances explain these two tendencies:

In Europe, up to the beginning of the present century, resort was as a rule had to arbitration only for the settlement of questions [p 225] relating to concessions, claims or compensation which, in sixteen out of twenty-two cases cited between 1850 and 1910, had to be paid by American countries on the basis of arbitral awards more often than not manifestly unjust or vitiated by defects rendering them nullities, and it is understandable that the European countries were not inclined to weaken the principle of res judicata nor to accept a change in the rule as to the execution without appeal of awards which had been so successful from their point of view.

In America, on the other hand, the legal abuses to which these arbitrations gave rise resulted in the express recognition of the right of States to challenge the validity of arbitral awards in the eleven treaties signed between 1899 and 1912, mentioned above, and in all arbitrations regarding territorial boundaries where the awards were disputed, and which were the following:

(a) The boundary case between Colombia and Venezuela in which the King of Spain's arbitral award was accepted by the parties in 1891 but in which another arbitration by the Swiss Federal Council was agreed upon in 1917 to decide all the questions relative to the King's award.

(b) President Loubet's award of 1897 in the case between Costa Rica and Panama, which was disputed by Costa Rica and never carried out.
(c) The award by Chief Justice White in 1910, in the proceedings between Panama and Costa Rica in respect of President Loubet's award, which was held by Panama to be vitiated and a nullity and was never carried out.

(d) The validity of the award of 1909 by President Figueroa Alcorta in the frontier dispute between Bolivia and Peru, which was contested by Bolivia. As A. Sanchez de Bustamante explained in his opinion on the question of Costa Rica and Panama, page 11:

"The Award rendered by Dr. Figueroa Alcorta on 9 July 1909 immediately gave rise to a protest by Bolivia, on the ground that the arbitrator had exceeded his powers and had not kept to the terms of the Agreement ... despite ill-informed passions which were dangerously over-excited, both at Buenos Aires and at Lima patriotism in the end finished by seeing reason, the Peruvian Government renounced part of the advantages which the arbitrator's award offered to it, and dealt directly with its former opponent to arrange in a friendly way the boundary of their respective possessions."

(e) The United States disputed and today still disputes the validity of the award of 1910 in the Chamizal case with Mexico. Mexico has still not been able to obtain either the carrying out of the award or agreement to submit the question of its validity to the consideration of another tribunal. [p 226]

(f) In a matter where not only American countries were concerned, but also Great Britain, the United States disputed the King of Holland's award on the St. Lawrence River boundary; that country's objections were accepted by the other side and the award had no effects.

In several cases arising between American countries and bearing upon claims which were submitted to arbitration, the right to verify the validity of the award was also recognized (Akra Silver Mining in 1898, Paraguay Navigation Company in i860, the Orinoco case in 1904), but, in disputes regarding national sovereignty and territorial questions, the contestation was in all cases accepted or submitted to the decision of a new arbitrator.

III. Arbitrations agreed to on the basis of "uti possidetis juris" could only be on a strict basis of law and excluded decisions in equity

The countries of Latin America whose constitutions had fixed their boundaries on the basis of the uti possidetis juris existing at the time when they became independent envisaged only strictly legal decisions when they undertook to submit the delimitation of their boundaries to arbitration.

This rule which the parties laid down for recourse to arbitration was not merely academic but a condition precedent sine qua non which had its origin in the actual constitutions of the States.

The reason why Colombia, Costa Rica, Venezuela, Nicaragua, Honduras, Peru and Ecuador applied to the King of Spain is explained in the decision of the Swiss Federal Council in the pro-ceedings concerning the Award rendered by the King of Spain in 1891 in the dispute between Colombia and Venezuela:
"When the Spanish colonies of Central and South America proclaimed their independence in the second decade of the nineteenth century, they adopted a principle of constitutional and international law to which they gave the name of uti possidetis juris of 1810 for the purpose of laying down the rule that the boundaries of the newly established republics should be the frontiers of the Spanish provinces which they were succeeding. This general principle offered the advantage of establishing an absolute rule that in law no territory of the former Spanish America was without an owner. Although there were many regions that had not been occupied by the Spanish and many regions that were unexplored or inhabited by uncivilized natives, these regions were regarded as belonging in law to the respective republics that had succeeded the Spanish provinces to which these lands were connected by virtue of old royal decrees of the Spanish mother country. These territories, although not occupied in fact, were by common agreement considered as being occupied in law by the new republics from the very beginning. Encroachments and ill-timed efforts at colonization beyond the frontiers, as well as de facto occupation, became ineffective and of no legal consequence." [p 227]

The countries which asked the King of Spain to interpret the uti - possidetis juris in accordance with the titles of Spanish sovereignty thus did so because they thought that he was the best qualified authority to interpret his own legal rules, but they certainly did not think of entrusting to "his equity" the interpretation of constitutional clauses which had in fact been approved for the very purpose of throwing off the Spanish yoke.

IV. Possible defects giving rise to nullity and acts of acquiescence in the award of the king of spain

Of the four arbitrations entrusted to the King of Spain by these countries, that between Colombia and Venezuela could not be carried out until the decision of 1923 in the new proceedings before the Swiss Federal Council. The arbitration between Colombia and Costa Rica was withdrawn from the King's consideration in 1896, shortly after his Award in the previous case, and the King himself in 1910 declined to give a decision in the arbitration between Peru and Ecuador twenty-three years after the matter had been submitted to him. The fourth arbitration is that between Honduras and Nicaragua.

On the basis of the principles set forth in the foregoing parts, and bearing also in mind the historical reasons which explain the origin of this arbitration, let us consider the King's Award of 23 December 1906 for the purpose of ascertaining

(a) whether the extrinsic defects of the Award entail its nullity;

(b) whether there are intrinsic defects evident in the Award, and whether Nicaragua has forfeited the right conferred upon it by international law to rely on those grounds of complaint, either by reason of her acquiescence or because of their belated submission.

(a) Extrinsic defects

The Court considers that the extrinsic defects of the Award resulting from the arbitrator's lack of powers are covered by Nicaragua's subsequent acts of acquiescence.

I consider that the extrinsic defects do not entail the nullity of the Award, for different reasons:

(1) The appointment of the King was irregular, since not all the procedures laid down by the Treaty were complied with. The arbitrators were not authorized to jump from Article III to the end of Article V, leaving out of account mandatory provisions which it was not within their duties nor their competence to be able to change.

(2) There are other manifest irregularities, such as that of the intervention of the Spanish Minister, M. Carrere y Lembeye, in the choice of the King of Spain as sole arbitrator, since if the tribunal provided for in the Gamez-Bonilla Treaty had already [p 228] been set up on 2 October 1904, M. Carrere y Lembeye was himself the third arbitrator and the tribunal, once constituted, could not give up its duties and transfer them to a new arbitrator. If, on the contrary, what was involved was merely a preparatory meeting, the Honduran and Nicaraguan arbitrators had no need of M. Carrere y Lembeye, who could not take part in the discussions of the tribunal unless he had already been appointed third arbitrator.

The procedural irregularities at the meetings of 2, 10 and 18 October were not, however, in contradiction with the chief object of the Gamez-Bonilla Treaty, which was to submit the question to a procedure which envisaged the possibility, provided for in Article V, of appointing the Spanish Government as arbitrator.

The fact that the two Governments accepted the appointment of the King, welcomed the choice and argued the case at Madrid, proves that they did not regard as essential the rules of procedure which had been laid down, and non-essential defects do not involve nullity.

Doubts have also been put forward as to the date when the period of ten years of the Gamez-Bonilla Treaty began to run. The intention of the parties is not clear, and different interpretations of the Treaty might be justified, if both Nicaragua and Honduras had not themselves in 1904 believed in good faith that the Treaty had not expired.

It would be questioning the President of Nicaragua's good faith to suppose that he sent a telegram on 7 October 1904, expressing his hope that the King would accept the task of arbitration, on the very day when the Treaty came to an end.

It is not acquiescence and acceptance which revalidate these irregularities, but the interpretations by the Parties in 1904 of the Gamez-Bonilla Treaty, which are definitive and which cannot now be called in question.

(b) Acquiescence and intrinsic defects of the Award

To be able to assert, as the Court does, that Nicaragua, by express declaration and by conduct, recognized the Award as valid and binding and that it is no longer open to Nicaragua to go back upon that recognition and to challenge the validity of the Award, it must first of all be established whether there are essential defects.

I. Intrinsic defects

The fundamental question on which my opinion is different from that of the majority of the Court is that of the interpretation of the rules of the special agreement set forth in Article II of the Gamez-Bonilla Treaty. Interpreting those rules in a different way, I come to the conclusion that the King exceeded his powers and, thus faced with the nullity of the Award, I cannot accord the same weight to the acts of acquiescence found by the Court. [p 220]

(i) Interpretation of the rules of the Agreement

For the reasons set forth in Parts II and III on the legal rules accepted by the American countries, I do not consider that all the paragraphs of Article II had the same importance.

The rules which constituted a condition precedent governing the whole arbitration were those of paragraphs 3 and 4 on the fixing of the boundaries in accordance with the legal titles existing at the date of independence.

This rule is strengthened by the fact that the arbitrator is expressly forbidden to recognize any juridical value to de facto possession.

These two mandatory rules were in conformity with the constitutional provisions of the two countries, and it is difficult to believe that their Parliaments ratified this Treaty while attributing to other paragraphs (5, 6 and 7) of Article II a scope which would have the effect of making them prevail over or which would be in conflict with the rule in their Constitutions.

The text adopted in paragraphs 5 and 6 of Article II of the Gamez-Bonilla Treaty was practically the same as that proposed in 1886 by Colombia and Venezuela, adopted again in the Treaty of 1886 between Nicaragua and Costa Rica, the Treaty of 1902 between Bolivia and Peru, and the Treaty of 1930 between Guatemala and Honduras.

The interpretation given both by the parties and by the arbitrators to clauses drawn up in the same terms as those of Article II of the Gamez-Bonilla Treaty is in consonance with the idea of arbitration strictly on the basis of law and does not recognize the right of the arbitrator to determine a line "according to equity".

These treaties and the interpretations put upon them are as follows:

(a) Arbitration by President Figueroa Alcorta

In 1902 Peru and Bolivia signed an arbitration agreement which laid down a rule similar to that of paragraph 4 of Article II of the Gamez-Bonilla Treaty:

"Art. 3.—The possession of a territory, although held by one of the parties, cannot have effect nor prevail against the titles or royal dispositions setting forth the contrary",

and another Article which authorized compensations in the following terms:

"Art. 4.—Only when the royal acts or dispositions do not define the dominion of a territory in clear terms shall the arbitrator decide the question according to equity, keeping as near as possible to the meaning of those documents and to the spirit which inspired them."

These two Articles gave the arbitrator indisputably fuller and clearer powers than those conferred by the Gamez-Bonilla Treaty. [p 230]

Despite these authorizations, President Figueroa Alcorta was unwilling to interpret them as a right to decide the question as a whole according to equity but merely to fix the frontier line so that it should follow those geographical features which were nearest to the legal line.

But the application even in this restricted sense of the right laid down in the arbitration agreement gave rise to protests, and Argentina and Bolivia broke off relations, but the Argentine internationalist Sanchez Sorondo in the book which he published to justify the award and the attitude of President Figueroa Alcorta explained in the following terms how this article of the agreement was interpreted by the Argentine President:

"The arbitrator was in any case a judge of law and in no sense a judge of conscience. The treaty laid down two rules to qualify the results of his historical and legal investigation. The first was direct and derived from an express title, the second was approximate and derived from the sense and the spirit of titles which were neither clear nor precise. But the equity of which the treaty speaks is not subjective but merely a matter of the interpretation of the documents submitted.

... he could not draw capricious lines based upon reasons which could not be inferred from the documents, nor settle the dispute as a mediator by the proportional division of the territory in question."

In his last recital but one, President Figueroa Alcorta confirmed that he "would settle these questions equitably, keeping as near as possible to the sense of the royal provisions".

(b) Arbitration by the King of Spain in the boundary dispute between Venezuela and Colombia

This was signed in 1881, but Venezuela refused to accept the clause which conferred the power of judging "in equity", explaining that legal decisions could be considered declaratory, whilst a decision in equity would imply a cession of territory forbidden by the federal constitution.

In 1886, Colombia secured the following clause in an additional instrument signed at Paris:

"... The arbitrator may fix the line in the way which he thinks the closest to the existing documents when, in one or another part of the line, those documents are not sufficiently clear."

The power thus conferred was similar to that laid down in the Gámez-Bonilla Treaty, yet the King only made use of it in respect of two sectors and for the following reasons: (1) in the Sarrare region, because "the Royal cédula of 1786, which must serve as the legal basis for the fixing of the boundary in the fifth sector, raises doubts in that it mentions the names of places not known today, namely the Barrancas de Sarrare and the Paso Real de los Casa-[p 231]nares"; the King chose the course of the river "Sarrare", on the basis of an interpretation of certain ancient documents which indicated that those two points lay "in the line of communication between Sarrare and the Arauca"; (2) in the second part of the sixth sector, the King accepted as title of sovereignty the Royal cedilla of 1786 and, holding that its terms were not clear enough to fix the extreme limits of the sector, he selected as boundary a line which, to the west of the Orinoco, followed the rivers Casiquiare and Rio Negro referred to in the same Royal cedilla.

Thus, in that arbitration, the King did not make use of the power which was granted to him in 1886 to depart from the legal line and to reach a decision "in equity". He confined himself to seeking in other documents the names or rivers which corresponded most nearly to the general lines of the boundaries of the Royal titles.

The King rendered this arbitral award in 1891, and it is most probable that Nicaragua and Honduras adopted the same formula in the Treaty of 1896, in the conviction that the arbitrators would not interpret this authorization otherwise than within the same limits which the King of Spain had observed in 1891.

(c) Arbitration between Guatemala and Honduras

This arbitration was only agreed upon in 1930 and it shows that, twenty-four years after the King of Spain's Award in the dispute between Honduras and Nicaragua, the countries of that part of America insisted on arbitration on the basis of strict law, refused to submit boundary questions to arbitration by equity, and accepted compensations only on specific points and only if they had been agreed upon by conciliation tribunals composed of representatives of the parties to the dispute.

Article 5 of the agreement runs as follows:

"Art. 5.—The High Contracting Parties are agreed that the only line that can be established, de jure, between their respective countries is that of the uti possidetis of 1821. Consequently it is for the Tribunal to determine this line. If the Tribunal finds that either Party has during its subsequent development acquired beyond this line interests which must be taken into consideration in establishing the final frontier, it shall modify as it may consider suitable the line of the uti possidetis of 1821 and shall fix such territorial or other compensation as it may deem equitable for one Party to pay to the other."
This agreement insists on the rule of the uti possidetis as a condition precedent, and does not authorize compensation except for territories agreed upon in advance in accordance with the uti possidetis as being "beyond this line", which is the legal one.

This right was moreover only conferred upon a conciliation tribunal of which the members were to be appointed by the two countries, for as the Honduran delegate, Dr. Mariano Vasquez, said at the meeting of 22 January 1930 at Washington: [p 232]

"An arbitration tribunal is not set up, as is well known, to reconcile interests, nor to do what is desired by one of the parties to the dispute, but to dispense justice where justice is due.

International questions of fundamental importance for countries, such as territorial boundaries, can only with difficulty be the subject of conciliation procedure and even sometimes of arbitration, because the local political effect that an adverse award might have is to be feared."

(d) Arbitration between Costa Rica and Nicaragua

Here the only authorization given, and not to the arbitrator but to a mixed commission, was to "depart slightly from the line laid down so as to find a natural boundary" (Treaty of 1858, Art. 3), a clause which, in the Treaty of 1886, was limited to one mile from the legal line.

The King could not disregard this order of importance—this hierarchy—of the different rules of Article II, since as M. Maura stated in his Rejoinder submitted to the King in 1905:

"The hierarchy of proofs is mandatory, and no public document of greater value can be in contradiction with the legal title."

I cannot concur in the Court's opinion which, while stating that the King had to follow the whole of Article II, on the one hand interprets paragraph 6 as an authorization conferred on the King and not on the Mixed Commission, and on the other hand gives this paragraph a scope which would not confine it to the power to grant compensations but which would also confer on the arbitrator the right of settling the dispute by a compromise on the facts.

The authorization to grant compensations could not apply to the arbitration by the King.

For the reasons developed by the Honduran delegate, Dr. Mariano Vasquez, at Washington on 22 July 1930, the Latin American countries were not ready to accept local compensations, once the legal line was fixed, unless they were agreed upon by mixed commissions.

The King had all the powers laid down in the Gamez-Bonilla Treaty, but on condition that that is understood to mean only those powers which were laid down for the "arbitration" stage and not those for the preliminary conciliation stage of the proceedings. Articles II, VII and IX of the Treaty cannot be interpreted as meaning that the King had to "meet" with anyone "at one of the border towns", that he was to record "in two special books" the points of disagreement, to take "decisions by a majority vote", or to "begin his studies before the rainy season".

Honduras itself rightly stated that not all the clauses of the Gamez-Bonilla Treaty could be applicable to arbitration by the King and that certain of them only concerned the arbitral tribunal. [p 233]

With regard to Article VI, for example, the President of Honduras in his telegram of 22 October to the Spanish Minister in Central America said:

"The time-limits laid down in Article VI of the Boundaries Treaty between Honduras and Nicaragua refer only to the Arbitral Tribunal... Signed Bonilla" (Annex 5 to the Nicaraguan Rejoinder).

Just as the procedures laid down in Articles II, VII and IX referred to in the previous paragraph could only apply to the conciliation procedure and Article VI to the Arbitral Tribunal, as Presi-dent Bonilla states, in the same way the authorization laid down in paragraph 6 f Article II could also not apply to the King.

But, even allowing that paragraph 6 could be applicable also to the King, to compensate does not mean to conciliate. The Dictionary of the Spanish Academy gives as the meaning of "com-pensar": to equalize in an opposite sense the effect of one thing with another. Therefore, compensation can only be granted in respect of territories that are equivalent. There is no kind of equivalence nor compensation as between the few hectares of the village of Gracias a Dios and the whole northern basin of the Segovia River, and the King made use of the power conferred by paragraph 6 not to grant compensations but to settle the dispute as mediator or arbitrator of conscience.

The interpretation of the relative importance of the rules laid down in Article II can only be that uniformly accepted by all the American countries which signed treaties containing similar articles, by the arbitrators who were called upon to apply those rules, and by the King himself in his Award of 1891 in the dispute between Colombia and Venezuela, and consequently the King exceeded his powers by the improper application of paragraph 6 of Article II of the Gámez-Bonilla Treaty.

(ii) The King committed essential errors related to the exceeding of powers in the application of the uti possidetis juris rule

It is not for the Court to review the appreciation of the probative force of the documents and other legal evidence submitted to the arbitrator.

But there is a great difference between the evaluation of evidence which lay within the discretionary power of the arbitrator and that of essential error committed by the King when he asserted that the Warrant which fixed the boundaries was one which in fact did not fix any boundary.

Ours are neither appeal nor revision proceedings, and the Court cannot discuss the choice which the King made of the Decree of 1791 to establish the rights of sovereignty of the two countries in 1821.

Nor can the Court discuss the King's right to seek in previous Decrees the boundaries of the provinces which did not figure in the Decree which he had chosen. [p 234]

But on the other hand we can hold -prima facie that he committed a manifest error or that he exceeded his powers in choosing, to fix the boundaries which were lacking in the Decree of 1791, the two Decrees of 1745 which expressly and formally stated that the Alcaldía of Tegucigalpa was excluded from the boundaries referred to in those decrees.

The relevant text of the Decree of 1745 which, according to the arbitrator, fixed the boundaries and which on the contrary excludes the Alcaldía Mayor of Tegucigalpa is as follows:

"As regards the Alcaldía Mayor of Tegucigalpa ... you will refrain (and take great pains to do so) from all meddling with the civil affairs of that territory..." (Annex 54 to the Nicaraguan Counter-Memorial.)

This manifest error had already been noted when the same decrees were studied by a tribunal consisting of Charles Evans Hughes, Luis Castro Ureña and Emilio Bello, in the arbitration between Honduras and Guatemala, and by the Spanish Council of State which declared in its Opinion:

"It may be considered as certain that the Royal Decrees of 1745 did not in any way change the boundaries of Nicaragua and Honduras."

The King thus committed an essential error involving an excess of jurisdiction in taking as proof of a title of sovereignty a Decree which the Spanish Council of State had itself acknowledged to fix no boundary and which, as we have seen, excluded the Alcaldía of Tegucigalpa.

(iii) The King exceeded his powers in recognizing juridical value to de facto possession established by acts of jurisdiction

Paragraph 4 of Article II of the Gámez-Bonilla Treaty precluded the recognition of "juridical value to de facto possession".

The Spanish Council of State explained in its Opinion that the Commission appointed by the King had decided, in case of lack of proof of ownership, to take into consideration acts of jurisdiction as being complementary to the study of the royal provisions.

But acts of jurisdiction could not be used except as proofs of possession, and came under the formal prohibition in paragraph 4 of Article II. And it is acts of possession which the King allows when, in recitals 14 and 15, he refers to the "expanding influence of Nicaragua" and to the "ephemeral" nature of the extension of Honduran sovereignty.

This part of the Award is, prima facie, contrary to the formal prohibition in paragraph 4 of Article II of the Treaty.

(iv) Absence of reasons
The majority of the Court holds that an examination of the Award shows that it contains ample reasoning and explanations in support of its conclusions. [p 235]

The greater part of the "recitals" in the Award merely indicate one by one the arguments which were put forward by each of the Parties.

Inadequacy of reasons is quite as serious as lack of reasons. In the present case, if the King had not found sufficient reasons to make a decision on the basis of law, he should have declined to promulgate his Award, as he did in 1910 in the case between Ecuador and Peru, instead of affirming in recital 21 that his decision "best answered the purpose by reasons of historical right, of equity and of a geographical nature..." but without indicating either why or how.

This inadequacy of reasons is not in itself sufficient to entail the nullity of the Award, but it confirms the exceeding of jurisdiction dealt with in the foregoing paragraphs and the error com-mitted by the King in rejecting the study of the other Royal titles submitted to him by the Parties.

(v) Obscurities and contradictions in the Award

Nicaragua has asked the Court to find that, even if it was valid, the Award was not capable of execution by reason of its omissions, contradictions and obscurities.

It is difficult to define which is the thalweg, the navigable arm or the principal mouth of rivers which, on land still in process of formation, often change their course. A court cannot give opinions on questions which only engineers or technicians can decide. Like the Court, I do "not consider that the Award is incapable of execution", since it is for mixed commissions, or for any other authority to whom the Parties might entrust the drawing of the boundary line, to settle problems which omissions, contradictions or obscurities in the Award present.

II. Bearing of acquiescences or inaction on the fart of Nicaragua from igo6 to 1912

With regard to Nicaragua's inaction between the years 1906 and 1912, I would make the following observations:

(a) As explained in the section on the legal considerations, the inaction of any American State in respect of appeal for the nullity of an award could only correspond to the state of evolution of international law at that period and in that region.

(b) If even the Hague Conference of 1907, while accepting the principle of the nullity of awards, refrained from endorsing it because it was not in a position to designate an authority responsible for dealing with the appeal, it is natural that at that period Nicaragua should have confined herself to considering only the possibility of obtaining explanations or at most a revision by the arbitrator himself. [p 236]

(c) As soon as the Nicaraguan Agent received the text of the Award, he submitted a note of protest, dated 25 December 1906, a note which the Spanish Government endeavoured to persuade him to withdraw.

In the months following, Nicaragua sought to bring an appeal so as to obtain either explanations or a revision.

The rules admitted today only allow of revision in the case of the discovery of a new fact; but long before the discussions as to allowing this means of recourse in Europe, and before 1907, Brazil, Argentina, Paraguay, Uruguay, Bolivia, Peru, Chile and later Colombia and Ecuador signed general bilateral arbitration treaties which recognized the right of revision of the Award by the same arbitrator in the case of "errors of fact resulting from the proceedings". This concept of "revision" is certainly different from the one accepted today, but in 1906 and 1907 it was a form of appeal accepted by all the countries in the foregoing list. It is therefore understandable that, at that period, Nicaragua only thought of proposing that form of appeal. A too favourable circumstance obliged her however, as a matter of tact and scruple, not to make any such appeal in the earlier years: M. Maura, who was Nicaragua's Counsel during the arbitration proceedings, became Prime Minister of Spain shortly after the Award of 23 December 1906, and it would have been neither proper nor admissible, as Minister Gamez explained, to ask her own Counsel, now become Prime Minister, to suggest to the King that he should revise the Award.

Other historical facts also show that Nicaragua and Honduras between 1906 and 1912 believed in good faith that the problem of the carrying out of the Award would not even arise.

It was only in 1911 that the question of the carrying out of the Award was raised for the first time by Honduras and that Nicaragua declared that it was a nullity and later proposed arbitration to decide as to its validity.

The theory of estoppel cannot be invoked against Nicaragua because she had not brought a nullity appeal between 1906 and 1912, unless it is also invoked against Honduras who, during the same period, seemed to have renounced requiring the carrying out of the Award. It cannot be said that Nicaragua's attitude between 1906 and 1912 caused Honduras to believe that the Award was accepted.

(d) From 1912 to 1957 Nicaragua continually proposed to submit the verification of the validity of the King's Award to fresh arbitration. In 1914 she proposed arbitration by the President of the United States of America. In 1918 she accepted the proposal made by President Bertrand of Honduras to submit the question to President Wilson, but Honduras withdrew her offer. Nicaragua accepted but Honduras refused to accept the arbitration proposals put forward by the Department of State of the United States of America in 1921 and 1923 and the proposal put forward by Nica-[p 237]ragua to the commission of mediation of Costa Rica, the United States of America and Venezuela in 1937-1938. The Irias-Ulloa Protocol which, on the other hand, accepted the carrying out of the Award, was signed in 1931 by the Nicaraguan Government, but was not ratified by the Nicaraguan Parliament. The verification of the validity of the Award could not be submitted to the decision of an international court before 1957 because Honduras maintained that Article VI of the Pact of Bogota did not allow the Court to deal with questions "already settled" by arbitral awards within the framework of compulsory jurisdiction. It was not until 1957 that through the intervention of the Organization of American States Honduras accepted the Court's jurisdiction. All these facts have been mentioned during the oral proceedings by the Nicaraguan Agent without Honduras having raised any objections.
As to the acquiescences relied upon by the Court, they do not constitute a formal renunciation of the right to challenge the validity of the Award.

(a) President Zelaya's telegram of 25 December to the President of Honduras does not fulfil the requirements of proof of renunciation of a nullity appeal.

(b) The note sent by Minister Gamez to the Spanish Charge d'affaires on 9 January 1907, as he himself explained to Minister Medina on the twenty-first of the same month, was a mere acknowledgment and conventional expression of respectful thanks to the King, since M. Medina had already on 25 December submitted his note of protest direct to the Minister of State at Madrid.

(c) The publication of the complete text of the Award in the Nicaraguan Official Journal on 28 January 1907 cannot be upheld as an argument, since publications given by way of information in the newspapers, even if they are official, have never yet been considered as proofs of engagements on the part of States.

(d) The declaration made by the President of Nicaragua to the Nicaraguan Assembly on 1 December 1907 cannot be held as a proof of renunciation of bringing an appeal against the Award. On the contrary it implies such an appeal, since it ends with the following sentence:

"... it has instructed Minister Crisanto Medina to request a clarification of a few points in this decision which are obscure and even contradictory…”

(e) The report to the National Assembly of 26 December 1906 could only have constituted a proof of renunciation of disputing the validity of the Award if the Government had expressly so stated and the Assembly had approved that renunciation. But on the contrary, in this report it is said: [p 238]

"Unfortunately, in this arbitral Award, as in so many similar cases, so-called political expediency, that is to say the very simple device of bisecting the dispute in order to prove to the Parties that the arbitrator has the same consideration and esteem for both of them, has prevailed over legal arguments and historical bases."

This report thus takes note of the exceeding of jurisdiction in the Award and cannot be considered as a renunciation of contesting it.

(f) The approval given by the Nicaraguan Legislative Assembly on 14 January 1908 of "the acts of the executive power in the field of foreign affairs between 1 December 1905 and 26 December 1907" has never legally existed. The photostatic copy of the Official Journal submitted to the Court shows that the Foreign Affairs Committee of the Assembly submitted a draft resolution in that sense, a draft which only had a first reading, but which was never discussed in a-second reading nor definitively approved. If the proposal had been approved, then it would inevitably also cover the note of protest from Minister Medina of 25 December 1906, the instructions sent to M. Medina by the notes of 1 February 1907 from President Zelaya and of 21 February and 14 October from Minister Gamez, instructing him to ask for "explanations" and, if possible, even the "revision" (reforma) of the Award.

(g) As Minister of the Interior, General Moncada neither was nor could be the competent organ to pledge his country's responsibility in the matter of a nullity appeal against an arbitral award, and his telegram of 23 March 1911 cannot therefore be held as proof of renunciation of a nullity appeal.

(h) The Note of Honduras dated 25 April 1911, and signed by the Foreign Minister, cannot in any way commit Nicaragua. The text of the Nicaraguan reply to that Note might possibly have committed Nicaragua, but in fact the only reply was a note dated 27 November 1911 by M. Chamorro to the Honduran Charge d'affaires, M. Medal, in which he confined himself to stating that he had not concluded his study of the question.

(i) The information sent on 8 September 1911 by the Honduran Charge d'affaires, M. Medal, to his Minister regarding his visit to M. Chamorro was not a Note coming from Nicaragua but from a Honduran official, and cannot therefore be a proof serving to show Nicaragua's renunciation of disputing the Award.

There is thus, in these documents or declarations, no proof of renunciation on the part of Nicaragua of disputing the validity of the Award, the intrinsic defects of which in my opinion entail its nullity.

Certain of these declarations might indicate the intention to accept the Award but none of them can be adopted as proof of [p 239] "an undertaking by a State" to renounce its right to challenge the validity of the Award within the meaning required by the rules of law set out in Chapter I.

For the foregoing reasons, I arrive at the conclusion that the intrinsic defects studied in Chapter IV entail the nullity of the arbitral Award made by the King of Spain on 23 December 1906.

(Signed) Urrutia Holguin.