24 July 1964

 

General List No. 50

 
     

international Court of Justice

     
 

Barcelona Traction, Light and Power Company, Limited

 
     

Belgium

 

v. 

Spain

     
     
 

Judgement

 
     
  Return Home
 
 
     
     
 
BEFORE: President: Sir Percy Spender;
Vice-President: Wellington Koo;
Judges: Winiarski, Badawi, Spiropoulos, Sir Gerald Fitzmaurice, Koretsky, Tanaka, Bustamante y Rivero, Jessup, Morelli, Padilla Nervo, Forster, Gros;
Judges ad hoc: Armand-Ugon, Ganshof van der Meersch
   
PermaLink: http://www.worldcourts.com/icj/eng/decisions/1964.07.24_barcelona_traction.htm
   
Citation: Barcelona Traction, Light and Power Company, Limited (Belg. v. Spain), 1964 I.C.J. 6 (July 24)
   
Represented By: Belgium: M. Yves Devadder, Legal Adviser to the Ministry of Foreign Affairs
and External Trade, as Agent;
assisted by
Mme Suzanne Bastid, Professor at the Paris Faculty of Law and Economics;
M. Henri Rolin, Professor emeritus at the Law Faculty of the Free University of Brussels and professeur associé at the Strasbourg Law Faculty, Advocate at the Brussels Court of Appeal;
M. Georges Sauser-Hall, Professor emeritus of the Universities of Geneva and Neuchâtel ;
M. Jean Van Ryn, Professor at the Law Faculty of the Free University of Brussels and Advocate at the Belgian Court of Cassation;
M. Angelo Piero Sereni, Professor at the Bologna Faculty of Law, Advocate at the Italian Court of Cassation, Member of the New York State and Federal Bars;
Sir John Foster, Q.C., Member of the English Bar;
Mr. Elihu Lauterpacht, Member of the English Bar and Lecturer at Cambridge University, as Counsel;
M. Michel Waelbroeck, Lecturer at the Free University of Brussels, as Assistant Counsel and Secretary;
M. Leonardo Prieto Castro, Professor at the Madrid Law Faculty;
M. Jose Girón Tena, Professor at the Valladolid Law Faculty, as Expert-Counsel in Spanish law;

Spain: M. Juan M. Castro-Rial, Legal Adviser to the Ministry of Foreign Affairs, as Agent;
assisted by
M. Roberto Ago, Professor of International Law at the University of Rome;
M. Paul Guggenheim, Professor of International Law at the University of Geneva;
M. Antonio Malintoppi, Professor of International Law at the Uni-versity of Camerino;
M. Paul Reuter, Professor of International Law at the University of Paris;
Sir Humphrey Waldock, C.M.G., O.B.E., Q.C., Chichele Professor of Public International Law, University of Oxford, as Advocates and Counsel;
M. Maarten Bos, Professor of International Law at the University of Utrecht;
M. Jorge Carreras, Professor of Procedural Law at the University of Pamplona;
M. Eduardo G. de Enterria, Professor of Administrative Law at the University of Madrid, Maître des requêtes, Conseil d'Etat;
M. Federico de Castro y Bravo, Professor of Civil Law at the Uni-versity of Madrid, Legal Adviser, Ministry of Foreign Affairs;
M. Antonio de Luna Garcia, Professor of International Law at the University of Madrid, Legal Adviser, Ministry of Foreign Affairs;
M. Jose Maria Trias de Bes, Professor emeritus of International Law at the University of Barcelona, Legal Adviser, Ministry of Foreign Affairs, as Counsel;
M. Mariano Baselga y Mantec!!!ôn, First Secretary at the Spanish Embassy at The Hague, as Secretary.

 
     
 
 
     
 

[p.6]
The Court,

composed as above,

delivers the following Judgment :

On 19 June 1962, the Belgian Ambassador to the Netherlands handed to the Registrar an Application instituting "new proceedings in the dispute between the Belgian Government and the Spanish Government [p9] concerning the Barcelona Traction, Light and Power Company, Lim-ited". The Application refers to an earlier Application by the Belgian Government against the Spanish Government, dated 15 September 1958 and concerning the said company. The latter Application, which was filed on 23 September 1958, was followed by the filing by the Parties of a Memorial and Preliminary Objections, and, subsequently, by a discontinuance referring to Article 69 of the Rules of Court, a discontinuance which the Respondent stated, in accordance with the same Article, that it did not oppose. By an Order of 10 April 1961 the Court directed that the case be removed from the Court's list.

The Application of the Belgian Government of 19 June 1962 seeks reparation for damage claimed to have been caused to a number of Belgian nationals, said to be shareholders in the Barcelona Traction, Light and Power Company, Limited, a company under Canadian law, by the conduct, alleged to have been contrary to international law, of various organs of the Spanish State in relation to that company and to other companies of its group. To found the jurisdiction of the Court the Application relies on Article 17 of the Treaty of Conciliation, Judicial Settlement and Arbitration between Belgium and Spain, signed on 19 July 1927, and on Article 37 of the Statute of the Court.

In accordance with Article 40, paragraph 2, of the Statute of the Court, the Application was communicated to the Spanish Government. 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 and the Counter-Memorial were fixed by an Order of 7 August 1962. The Memorial was filed within the time-limit fixed. Within the time-limit fixed for the filing of the Counter-Memorial, which expired on 15 March 1963, the Spanish Government filed Preliminary Objections submitting that the Court was without jurisdiction and that the claim was inadmissible. Accordingly, an Order of 16 March 1963, which recited that by virtue of Article 62, paragraph 3, of the Rules the proceedings on the merits were suspended, fixed a time-limit for the presentation by the Belgian Government of a written statement of its Observations and Submissions on the Objections. That statement was presented within the time-limit thus fixed, which expired on 15 August 1963. The case then became ready for hearing in respect of the Preliminary Objections.

M. W. J. Ganshof van der Meersch, Professor at the Brussels Faculty of Law, Avocat général to the Belgian Court of Cassation, and M. Enrique C. Armand-Ugon, former President of the Supreme Court of Justice of Uruguay and a former Member of the International Court of Justice, were respectively chosen by the Belgian Government and the Spanish Government, in accordance with Article 31, paragraph 3, of the Statute, to sit as Judges ad hoc in the present case.

On 11 to 25 March, 1 to 23 and 27 to 29 April, and 4 to 15 and 19 May 1964, hearings were held in the course of which the Court [p10] heard the oral arguments and replies of M. Castro-Rial, Agent, M. Reuter, Sir Humphrey Waldock, MM. Guggenheim, Ago, Malintoppi, Counsel, on behalf of the Spanish Government; and of M. Devadder, Agent, MM. Rolin, Van Ryn, Sereni, Mme Bastid, Mr. Lauterpacht, M. SauserHall, Counsel, on behalf of the Belgian Government.

In the written proceedings, the following Submissions were presented by the Parties:
On behalf of the Government of Belgium,
in the Application:

"May it please the Court:

1. to adjudge and declare that the measures, acts, decisions and omissions of the organs of the Spanish State described in the present Application are contrary to international law and that the Spanish State is under an obligation towards Belgium to make reparation for the consequential damage suffered by Belgian nationals, individuals or legal persons, being shareholders of Barcelona Traction;
2. to adjudge and declare that this reparation should, as far as possible, annul all the consequences which these acts contrary to international law have had for the said nationals, and that the Spanish State is therefore under an obligation to secure, if possible, the annulment of the adjudication in bankruptcy and of the judicial and other acts resulting therefrom, obtaining for the injured Belgian nationals all the legal effects which should result for them from this annulment ; further, to determine the amount of the compensation to be paid by the Spanish State to the Belgian State by reason of all the incidental damage sustained by Belgian nationals as a result of the acts complained of, including the deprivation of enjoyment of rights and the expenses incurred in the defence of their rights;
3. to adjudge and declare, in the event of the annulment of the consequences of the acts complained of proving impossible, that the Spanish State shall be under an obligation to pay to the Belgian State, by way of compensation, a sum equivalent to 88 per cent. of the net value of the business on 12 February 1948;this compensation to be increased by an amount corresponding to all the incidental damage suffered by the Belgian nationals as the result of the acts complained of, including the deprivation of enjoyment of rights and the expenses incurred in the defence of their rights";

in the Memorial:

"May it please the Court:

I. to adjudge and declare that the measures, acts, decisions and omissions of the organs of the Spanish State described in the [p11] present Memorial are contrary to international law and that the Spanish State is under an obligation towards Belgium, to make reparation for the consequential damage suffered, by Belgian nationals, individuals or legal persons, being shareholders of Barcelona Traction;

II. to adjudge and declare that this reparation should, as far as possible, annul all the consequences which these acts contrary to international law have had for the said nationals, and that the Spanish State is therefore under an obligation to secure, if possible, the annulment by administrative means of the adjudication in bankruptcy and of the judicial and other acts resulting therefrom, obtaining for the said injured Belgian nationals all the legal effects which should result for them from this annulment; further, to determine the amount of the compensation to be paid by the Spanish State to the Belgian State by reason of all the incidental damage sustained by Belgian nationals as a result of the acts complained of, including the deprivation of enjoyment of rights and the expenses incurred in the defence of their rights;

III. to adjudge and declare, in the event of the annulment of the consequences of the acts complained of proving impossible, that the Spanish State shall be under an obligation to pay tothe Belgian State, by way of compensation, a sum equivalent to88 per cent, of the sum of $88,600,000 arrived at in paragraph 379of the present Memorial, this compensation to be increased by an amount corresponding to all the incidental damage suffered by the said Belgian nationals as the result of the acts complained of, including the deprivation of enjoyment of rights, the expenses incurred in the defence of their rights and the equivalent in capital and interest of the amount of Barcelona Traction bonds held by Belgian nationals and of their other claims on companies in the group which it was not possible to recover owing to the acts complained of."

On behalf of the Government of Spain,

in the Preliminary Objections,
on the first Preliminary Objection:

"May it please the Court, to adjudge and declare:
that it has no jurisdiction to admit or adjudicate upon the claim made in the Belgian Application of 1962, all jurisdiction on the part of the Court to decide questions relating to that claim, whether with regard to jurisdiction, admissibility or the merits, having come to an end by the letters of the Belgian and Spanish Governments respectively dated 23 March and 5 April 1961 which the Court placed on record in its Order of 10 April 1961";

[p12] on the principal second Preliminary Objection:

"May it please the Court,
to adjudge and declare:
that it has no jurisdiction to entertain or decide the claims advanced in the Application and the Memorial of the Belgian Government, Article 17 of the Treaty of Conciliation, Judicial Settlement and Arbitration not having created between Spain and Belgium a bond of compulsory jurisdiction in respect of the International Court of Justice which could enable the Belgian Government to submit an Application to that Court";

on the alternative second Preliminary Objection:

"May it please the Court,
to adjudge and declare:
that it has no jurisdiction to entertain or decide the claims advanced in the Belgian Application and Memorial, the dispute raised by Belgium having arisen from and relating to situations and facts prior to the date on which the jurisdiction of the Court could have produced its effects in relations between Spain and Belgium (14 December 1955)";

on the third Preliminary Objection:

"May it please the Court,
to adjudge and declare:
that the claim advanced by the Belgian Government in its Application and Memorial, in each and every one of the three submissions in which it is expressed, is definitively inadmissible for want of capacity on the part of the Belgian Government in the present case, in view of the fact that the Barcelona company does not possess Belgian nationality and that in the case in point it is not possible to allow diplomatic action or international judicial proceedings on behalf of the alleged Belgian shareholders of the company on account of the damage which the company asserts it has suffered" ;

on the fourth Preliminary Objection:

"May it please the Court,
to adjudge and declare :
that the Application filed by the Belgian Government concerning the alleged damage caused to Barcelona Traction by the measures of which it has been the object on the part of the organs of the Spanish State is definitively inadmissible for want of utilization of the local remedies." [p13]

On behalf of the Government of Belgium,

in the Observations and Submissions in reply to the Preliminary Objections,

on the first Preliminary Objection:
"May it please the Court,
to adjudge and declare that the arguments put forward by the Spanish Government are inadmissible in so far as that Government relies on alleged ambiguities which it did not remove as it was in duty bound and able to do;
that these arguments are in any case unfounded and that the discontinuance of the proceedings instituted by the Application of 15 September 1958 is no bar to the institution of a new application, the dispute between the Parties not having been the subject of any settlement and persisting to the present day";

on the principal second Preliminary Objection:

"May it please the Court,
to adjudge and declare that the Preliminary Objection No. 2 is inadmissible;
in the alternative, that it has jurisdiction to hear and determine the claims put forward by the Belgian Government in its Application founded on Article 17, paragraph 4, of the Spanish-Belgian Treaty of 1927 and Article 37 of the Statute of the International Court of Justice";

on the alternative second Preliminary Objection:

"May it please the Court,
to dismiss the alternative Preliminary Objection No. 2 raised by the Spanish Government and declare that it has jurisdiction to deal with the dispute submitted to it by the Belgian Government's Application";

on the third Preliminary Objection:

"May it please the Court:
to dismiss the Preliminary Objection No. 3 raised by the Spanish Government and declare that the claim of the Belgian Government is admissible;
in the alternative, to defer a decision on this Objection No. 3 and join it to the merits"; [p14]

on the fourth Preliminary Objection:

"May it please the Court:
to declare Objection No. 4 to be unfounded, or if not to join it to the merits and defer a decision on it in so far as it applies to certain of the complaints against the decisions of the Spanish judicial authorities made in the Belgian Government's claim."

In the oral proceedings the following Submissions were presented by the Parties:

On behalf of the Government of Belgium,
at the closure of the hearing on 23 April 1964:

"May it please the Court
to adjudge and declare that the arguments put forward by the Spanish Government in support of Preliminary Objection No. 1 are inadmissible in so far as that Government relies on alleged ambiguities which it did not remove as it was in duty bound and able to do;
that these arguments are in any case unfounded and that the discontinuance of the proceedings instituted by the Application of 15 September 1958 is no bar to the institution of a new application, the dispute between the Parties still persisting today;
to adjudge and declare that the principal Preliminary Objection No. 2 is inadmissible;
in the alternative, to declare that it is not well-founded and to adjudge and declare that the Court has jurisdiction to hear and determine the claims put forward by the Belgian Government by an Application relying on Article 17, paragraph 4, of the Spanish-Belgian Treaty of 19 July 1927 and Article 37 of the Statute of the International Court of Justice;
to dismiss the alternative Preliminary Objection No. 2 raised by the Spanish Government;
to adjudge and declare that the Court has jurisdiction to hear and determine the claims put forward by the Belgian Government by an Application relying on Article 17, paragraph 4, of the Spanish-Belgian Treaty of 19 July 1927 and Article 37 of the Statute of the International Court of Justice, there being no ratione temporis restriction which can be validly advanced to deny such jurisdiction;
to dismiss as irrelevant in the present proceedings Preliminary Objection No. 3 in so far as it is based on alleged protection by the Applicant Government of the Barcelona Traction Company incorporated under the laws of Canada;[p15]
furthermore, to dismiss the said objection in so far as it seeks to deny the Applicant Government the right in the present case to take up the case of its nationals, natural and juristic persons, who are shareholders of Barcelona Traction;
in the alternative, to join the third Objection to the merits ;
to dismiss Preliminary Objection No. 4;
in the alternative, should the Court consider in respect of certain complaints that it cannot find that sufficient use has been made of the local means of redress relating to them without examining the content and validity of the Spanish judicial decisions by which the remedies in fact sought were disposed of, to join the objection to the merits."

On behalf of the Government of Spain,

at the closure of the hearing on 8 May 1964:

"May it please the Court:
For any of these reasons, and all others set out in the written and oral proceedings, or for all of these reasons,

Firstly, since any jurisdiction of the Court to decide issues relating to the claim formulated in the new Belgian Application of 1962, either to competence, to admissibility or to the merits, came to an end as a result of the letters of the Belgian and Spanish Governments, respectively dated 23 March and 5 April 1961, which the Court placed on record in its Order of 10 April 1961;

Secondly, since the Court is without jurisdiction to deal with the present case, the jurisdictional clause of Article 17 of the Treaty of Conciliation, Judicial Settlement and Arbitration of 19 July 1927 not having created between Spain and Belgium a jurisdictional nexus enabling the Belgian Government to submit the Barcelona Traction dispute to the International Court of Justice;

Thirdly, since the Belgian Government is without capacity in the present case, having regard to the fact that the Barcelona Traction company, which is still the object of the claim referred to the Court, does not possess Belgian nationality; and having regard also to the fact that no claim whatsoever can be recognized in the present case on the basis of the protection of Belgian nationals, being shareholders of Barcelona Traction, as the principal of these nationals lacks the legal status of a shareholder of Barcelona Traction, and as international law does not recognize, in respect of injury caused by a State to a foreign company, any diplomatic protection of shareholders exercised by a State other than the national State of the company; [p16]

Fourthly, since the local remedies and procedures were not used by Barcelona Traction, as required by international law;

to adjudge and declare:
that the Application filed by the Belgian Government on 14 June 1962 and the final Submissions presented by it are definitively inadmissible."

***

In the present case, the Applicant Government alleges injury and damage to Belgian interests in a Canadian registered company, known as the Barcelona Traction, Light and Power Company, Limited, resulting from treatment of the company in Spain said to engage the international responsibility of the Respondent Government. In opposition to the Belgian Application, the Respondent Government has advanced four objections as being objections in respect of the competence of the Court or the admissibility of the claim, and as having a preliminary character. Briefly summarized, these objections are:

(1) that the discontinuance, under Article 69, paragraph 2, of the Court's Rules, of previous proceedings relative to the same events in Spain, disentitled the Applicant Government from bringing the present proceedings;

(2) that even if this was not the case, the Court is not competent, because the necessary jurisdictional basis requiring Spain to submit to the jurisdiction of the Court does not exist;


(3) that even if the Court is competent, the claim is inadmissible because the Applicant Government lacks any jus standi to intervene or make a claim on behalf of Belgian interests in a Canadian company, assuming that the Belgian character of such interests were established; and

(4) that even if the Applicant Government has the necessary jus standi, the claim still remains inadmissible because local remedies in respect of the alleged wrongs and damage were not exhausted.

**

First Preliminary Objection

The original Belgian Application to the Court in respect of the events said to engage the responsibility of the Respondent Government and to entitle the Applicant Government to intervene, was filed on 23 Sep-[p17] tember 1958, and was followed in due course by the deposit of a Belgian Memorial, and of a set of Spanish preliminary objections having the same character as the second, third and fourth Preliminary Objections in the present case. Before the Belgian observations on these objections were received however (the proceedings on the merits having been suspended under Article 62, paragraph 3, of the Rules), the representatives of the private Belgian and Spanish interests concerned decided to engage in negotiations for a settlement. In connection with this decision, and in circumstances which will be more fully stated later, the Applicant Government informed the Court on 23 March 1961 that "at the request of Belgian nationals the protection of whom was the reason for the filing of the Application in the case [and] availing itself of the right conferred upon it by Article 69 of the Rules of Court [it was] not going on with the proceedings instituted by that Application". Nothing more was stated in the notice as to the motives for the discontinuance, and nothing as to the Applicant's future intentions. Since the case fell under paragraph 2 of Article 69 of the Rules (the Respondent having taken a step in the proceedings) the discontinuance could not become final unless, within a time-limit to be indicated by the Court, no objection should be received from the Respondent Government. Within the time-limit so fixed, however, a notification was in fact received from that Government stating that it "had no objection to the discontinuance". No motivation or condition was attached to this notification, and on 10 April 1961 the Court made an Order in the terms of Article 69, paragraph 2, "recording the discontinuance of the proceedings and directing the removal of the case from the list". In due course discussions between representatives of the private interests concerned took place but, no agreement being reached, the Application introducing the present proceedings was filed on 19 June 1962.

*

The Applicant Government maintains that the discontinuance recorded by the Court's Order of 10 April 1961 was no more than a termination of the then current proceedings before the Court; and that the negotiations in view of which it was made having broken down, the Applicant was fully entitled to bring new proceedings in regard to the same matters of complaint. The Respondent Government, on the other hand, contends that, both in principle and in the light of the circumstances obtaining, this discontinuance precluded the Applicant Government from bringing any further proceedings, and in particular the present ones.

The main arguments advanced by the Respondent in support of its contention are as follows:
Firstly, that a discontinuance of proceedings under Article 69 of the Rules is in itself a purely procedural act, the real import of which can [p18] only be established by reference to the surrounding circumstances— the fact that it does not contain an express renunciation of any further right of action not being conclusive;

secondly, that in principle however, a discontinuance must be taken to involve such a renunciation unless the contrary is stated, or the right to take further action is expressly reserved;

thirdly, that in the present case there was an understanding between the Parties that the discontinuance did involve such a renunciation and would be final, not only as regards the current proceedings but also for the future;

fourthly, that even if there was no such understanding, the Applicant Government conducted itself in such a way as to lead the Respondent to believe that the discontinuance would be, in the above-mentioned sense, final, but for which the Respondent would not have agreed to it, and in consequence of which the Respondent suffered prejudice;
finally—a contention of a somewhat different order—that the introduction of new proceedings in regard to the same matters of complaint was incompatible with the spirit and economy of the treaty under which the Applicant sought to found the jurisdiction of the Court.

*

Before examining these various contentions, the Court will deal with certain preliminary matters.

The present case is one in which the Court is called upon for the first time to consider the effect of a discontinuance followed by new proceedings. This is because, ordinarily, discontinuances have been final in fact, whether or not they would have proved to be so in law had an attempt to bring further proceedings been made. Sometimes a discontinuance, though in form unilateral, and therefore notified under Article 69 of the Rules, has been consequent on a settlement of the dispute; in other cases the claimant State has had reasons, which appeared to it to be of a final character, for not continuing to attempt to prosecute its claim before the Court; in others yet, it might well have been that, the current proceedings once discontinued, the jurisdictional basis for instituting new ones would no longer have been available.

But, in the opinion of the Court, these various considerations are essentially fortuitous in character; and the fact that past discontinuances have in practice proved "final" cannot of itself justify the conclusion that any a priori element of finality inherently attaches to them. This can readily be demonstrated by reference to circumstances in which the Court considers that no question could arise as to the right to institute further proceedings following upon a discontinuance, quite [p19] irrespective of whether any reasons for it were given, or any right of further action reserved. That this might be the case was indeed expressly recognized in the Respondent's written Preliminary Objections where, in discussing possible motives for a discontinuance, it was stated that—

"For example, it may be that an applicant discontinues proceedings begun by him only because he finds that he has committed an error of procedure and intends to institute a new action right away."

Similar possibilities are that the claimant State might have failed to give certain notices which, under an applicable treaty, had to be given before any valid application to the Court could be made; or the claimant State might discover that although it thought local remedies had been exhausted, this was not in fact the case. Again, in a claim on behalf of an individual, evidence might come to light indicating that he was not, after all, a national of the claimant State, leading to a discontinuance; but subsequently it might be found that this evidence was inaccurate. There are many other possibilities. It is, moreover, clear that in certain of these cases, the discontinuing party could have no foreknowledge of whether the defect or disability leading to the discontinuance would subsequently be cured, in such a way as to remove the obstacle to the renewal of the suit.

The existence of these possibilities suffices in itself to show that the question of the nature of a discontinuance cannot be determined on any a priori basis, but must be considered in close relationship with the circumstances of the particular case. In consequence, each case of discontinuance must be approached individually in order to determine its real character. There would therefore be little object in the Court's entering upon any exhaustive discussion of the theory of discontinuance as it is provided for by Articles 68 and 69 of the Court's Rules. But certain points may be noticed by way of clarification.

Both the inherent character of these provisions and their drafting records show that the main object which they have in view is to provide a procedural facility, or rather—since it would in any event never be practicable to compel a claimant State to continue prosecuting its case—to reduce the process of discontinuance to order. But these provisions are concerned solely with the "how", not with the "why", of the matter. They impose no conditions as to the basis on which a discontinuance may be effected other than (in cases coming under Article 68) that the parties shall be in agreement about it, or (in those coming under Article 69, paragraph 2) that the respondent party has no objection; for it is clear that there are few limits to the motives that might inspire a discontinuance, and these two Articles are not concerned with that aspect of the matter. [p20]

One difference between the two provisions is, however, significant. Whereas Article 68 contemplates a discontinuance which not only is (in effect) an agreed one, but also takes the form of an agreed communication to the Court, Article 69 on the other hand contemplates a notification to the Court which, whether it results from an agreed settlement of the dispute or from some other cause, always takes the form of a unilateral communication from the applicant or claimant party, which is either immediately effective, if the case comes under paragraph 1 of Article 69 (the respondent party having taken no step in the proceedings), or which (if such a step has been taken) becomes effective in the absence of any objections from the respondent party within the time-limit fixed by the Court. The respondent can of course signify expressly its non-objection, but is in no way obliged to do so. Thus, whereas in cases coming under Article 68 the act of discontinuance is to all intents and purposes a joint act, in those coming under Article 69 it is an essentially unilateral act, whatever may underlie it, and even though acquiescence is necessary before it can actually take effect. Under Article 69, any notifications, whether of intention to discontinue, or in acceptance of discontinuance, are notifications made to the Court and not passing between the parties, so that any understandings between them (and such may certainly exist) must precede and be sought for outside the act of discontinuance itself.

The right of objection given to a respondent State which has taken a step in the proceedings is protective, to enable it to insist on the case continuing, with a view to bringing about a situation of res judicata; or in other words (perhaps more pertinent for the present case), to enable it to ensure that the matter is finally disposed of for good.

The role of the Court, there being no objection to the discontinuance, is simply to record it and to remove the case from its list. In connection with the discontinuance itself, the Court is not called upon to enquire into the motives either of the discontinuing or of the respondent party: Article 69 does not impose any obligation on the parties to give reasons either for the wish to effect the discontinuance, or for not objecting to it.

One further element regarding the process of discontinuance which may be noticed, is that the evidence of the drafting records of Articles 68 and 69 goes to show that in addition to making provision for what was an evidently necessary procedural faculty, the aim was to facilitate as much as possible the settlement of disputes—or at any rate their non-prosecution in cases where the claimant party was for any reason indisposed to discontinue. This aim would scarcely be furthered however, if litigants felt that solely by reason of a discontinuance on their part they would be precluded from returning to the judicial process before the Court, even if they should otherwise be fully in a position to do so. [p21]

It is against this background that the Court must now consider the contentions advanced by the Respondent Government in the present case.

In the light of what has been said about the nature of the process of discontinuance, the Court can accept the first of these contentions, which is to the effect that giving notice of discontinuance is a procedural and, so to speak, "neutral" act, the real significance of which must be sought in the attendant circumstances, and that the absence of express renunciation of any further right of action is inconclusive, and does not establish in itself that there has not been such a renunciation, or that the discontinuance is not being made in circumstances which must preclude any further proceedings.

But for the very reason that the Court thinks this to be a correct statement of the legal position, it cannot accept the Respondent's second principal contention, namely that a discontinuance must always and in principle be taken as signifying a renunciation, unless the contrary is indicated or unless the right to start new proceedings is expressly reserved. The two conceptions are mutually contradictory: a notice of discontinuance of proceedings cannot both be in itself a purely pro-cedural and "neutral" act, and at the same time be, prima facie and in principle, a renunciation of the claim. There is no need to discuss this contention any further, except to say that, in view of the reasonable and legitimate circumstances which, as has already been seen, may motivate a discontinuance, without it being possible to question the right of further action, the Court would, if any presumption governed the matter, be obliged to conclude that it was in the opposite sense to that contended for by the Respondent; and that a discontinuance must be taken to be no bar to further action, unless the contrary clearly appeared or could be established. The problem is however incorrectly formulated if it is asked (as it constantly has been in the present case) what the "effect" of a discontinuance is; for the effect of a discontinuance must always and necessarily be the same—to put and end to the current set of proceedings. In this, precisely, lies its essentially procedural character. The real question is not what the discontinuance does—which is obvious—but what it implies, results from or is based on. This must be independently established, except in those cases where, because the notice itself gives reasons, or refers to acts or undertakings of the parties, or to other circumstances, its import is clear and apparent.

In the present case, the notice of discontinuance given by the Applicant Government, contained no motivation apart from such implications (and they could be various) as might be drawn from the statement that it was made at the request of the Belgian nationals whose protection had led to the presentation of the original Application in the case. On the other hand, the notice was very clearly related, and [p22] confined, to that Application, the date and character of which were specified. It was "the proceedings instituted by that Application" to which the notice referred, and nothing else.
In these circumstances, the Court considers that, if the notice itself left it open whether or not it involved or was consequent on a renunciation of all further right of action, its terms are nevertheless such as to place upon the Respondent Government the onus of establishing that it meant or was based upon something more than appeared on the face of it, namely a decision to terminate the then current proceedings before the Court, subject to the Respondent's assent.

***

In seeking to discharge this onus the Respondent has put forward two contentions:

The first is to the effect that there was an understanding between the Parties about the discontinuance; and the foundation for it lies in the fact that when, after the original proceedings had been started, the representatives of the Belgian interests concerned approached the representatives of the Spanish interests with a view to re-opening negotiations, they were met with a firm refusal to do so unless the case before the Court were first brought to a definite end; that a Belgian offer for a suspension of the proceedings was rejected as insufficient, and a "final withdrawal of the claim" was demanded; that the Belgian representatives thereupon undertook to request their Government to effect a final discontinuance of the proceedings; that it was perfectly well understood on the Belgian side that the Spanish side meant and assumed that the discontinuance would operate as putting a final end to the claim, or at any rate to any further right of action; and that the Spanish representatives would not have agreed to negotiate on any other basis, nor the Respondent Government to refrain from objecting to the discontinuance under Article 69, paragraph 2, of the Rules of Court.

On the Belgian side, it was denied that anything more was intended or could reasonably be inferred from the Belgian statements, or from the terms of the notice of discontinuance itself (which was before the Respondent Government when it signified its non-objection), than a simple, though final, termination of the then current proceedings— particularly having regard to the prospective negotiations about to be embarked upon.
The Court notes that, although there were various contacts at the governmental level, the exchanges relied on took place initially almost entirely between the representatives of the private interests concerned. In so far as the Governments were privy to these exchanges, it was evidently, at that stage, only on an unofficial basis. In order that the [p23] Governments on either side should in any way be committed by these exchanges, it would be necessary to show that the representatives of the private interests acted in such a manner as to bind their Govern-ments. Of this there is no evidence: indeed on the Spanish side the apparently very cautious nature of the contacts between the authorities and the private interests negatives the possibility. In this connection the Court recalls that at one stage of the oral hearing, the Parties were invited by the Court to clarify the situation by indicating how far the acts of the representatives of the private interests were adduced as engaging the responsibility of the Governments; but no really clear light was thrown on the matter.

In the circumstances, the Court sees no reason to depart from the general rule that, in relation to an understanding said to exist between States parties to a litigation before it, and to affect their rights in that litigation, it can only take account of the acts and attitudes of governments or of the authorized agents of governments; and, in the present case, the Court can, at the governmental level, find no evidence of any such understanding as is alleged by the Respondent. Indeed it seems to have been above all on the part of the latter that the greatest reluctance to become involved in any understanding over the discontinuance was manifested.

Quite apart from these considerations however, the Court finds the various exchanges wholly inconclusive. It seems that the Parties were deliberately avoiding a problem they were unwilling to come to grips with, lest by doing so they should shatter the foundation of their interchanges. The Respondent Government must have realized that an immediate refusal would result from any official request that the Applicant Government, in discontinuing the current proceedings, should definitely renounce, or undertake that it did renounce, all further right of action. As far as the Applicant was concerned, if it did not intimate that it reserved the right to bring further proceedings, should the negotiations fail, it equally avoided suggesting that it renounced that right. The desire felt on the Spanish side not to negotiate whilst proceedings were actually in progress before the Court, involving injurious charges against Spanish authorities and nationals, was fully met by the discontinuance effected, and nothing more was needed for that purpose. Furthermore, it does not appear reasonable to suppose that on the eve of difficult negotiations, the success of which must be uncertain, there could have been any intention on the Belgian side to forgo the advantage represented by the possibility of renewed proceedings. In the face of this, only very clear proof of the understanding alleged by the Respondent would suffice, and none is forthcoming.

The Court considers that in any case, and whatever ambiguities may have existed in the private and official exchanges involved, the onus of making its position clear necessarily lay on the Respondent Government; for it was that Government which had the right of objection to [p24] the discontinuance, under Article 69, paragraph 2, of the Rules—a right expressly given to respondent parties for their protection, and for the purpose, inter alia, of enabling them to prevent what has occurred in the present case. There is nothing to prohibit conditions being attached to any abstention from exercising this right, but the Respondent Government attached no conditions other than, implicitly, the one already satisfied by the notice of discontinuance, that the proceedings begun by the Belgian Application of September 1958 should be brought to an end—as they were.

***

A second contention, having the character of a plea of estoppel, was advanced by the Respondent Government in seeking to discharge the onus of proof referred to above. This was to the effect that, independently of the existence of any understanding, the Applicant Government by its conduct misled the Respondent about the import of the discontinuance, but for which the Respondent would not have agreed to it, and as a result of agreeing to which, it had suffered prejudice. Accordingly, it is contended, the Applicant is now estopped or precluded from denying that by, or in consequence of, the discontinuance, it renounced all further right of action.

This plea meets at the outset with two difficulties. In the first place, it is not clear whether the alleged misleading conduct was on the part of the Applicant Government itself or of private Belgian parties, or in the latter event, how far it is contended that the complicity or responsibility of the Applicant Government is involved. In the second place, the Court does not consider that the alleged misleading Belgian representations have been established, any more than was the alleged understanding between the Parties about the implications of the discontinuance. Nevertheless, since this aspect of its first Preliminary Objection has been more strongly insisted upon by the Respondent Party than perhaps any other, the Court will consider it.

Without doubt, the Respondent is worse off now than if the present proceedings had not been brought. But that obviously is not the point, and it has never been clear why, had it known that these proceedings would be brought if the negotiations failed, the Respondent would not have agreed to the discontinuance of the earlier proceedings in order to facilitate the negotiations (the professed object); since it must not be overlooked that if the Respondent had not so agreed, the previous proceedings would simply have continued, whereas negotiations offered a possibility of finally settling the whole dispute. Given that without the Respondent's consent to the discontinuance of the original proceedings, these would have continued, what has to be considered now is not the present position of the Respondent, as compared with what it would have been if the current proceedings had never been brought, [p25] but what its position is in the current proceedings, as compared with what it would have been in the event of a continuation of the old ones.

In making this comparison, the essential point is that the Respondent Government had entered certain preliminary objections in the earlier proceedings which, if successful (and it was presumably hoped to succeed on them), would necessarily have brought the case to an end, and have prevented not only a decision about, but even any discussion at all of the allegations made against Spanish nationals and authorities. But so equally would successful negotiations have prevented this. At the same time, the Respondent Government ran no risk, for if the negotiations were not successful, and the case started again, it would still be possible once more to put forward the previous preliminary objections. Consequently, irrespective of whether the case would begin again or not, it cannot be seen what the Respondent stood to lose by agreeing to negotiate on the basis of a simple discontinuance, or why it would not have agreed had it realized that this alone, without a substantive renunciation, was involved. The explanations given seem to the Court unconvincing.

As to the prejudice alleged, the only point that appears to require examination arises from the fact that in bringing the new proceedings the Applicant Government had the advantage of being able to frame its Application and ensuing Memorial with a foreknowledge of the probable nature of the Respondent's reply—a foreknowledge which a claimant State might not, at that stage of the proceedings, ordinarily possess, even though, normally, previous negotiations and diplomatic exchanges would have given it considerable information about the opposing legal position. The scope of the Court's process is however such as, in the long run, to neutralize any initial advantage that might be obtained by either side. As regards the substance, in so far as the Applicant Government was, for the purposes of its Application in the present proceedings, able to modify the presentation of its claim in order to take account of objections advanced by the Respondent in the original proceedings, it appears to the Court that the Applicant could, in the light of those objections, have done exactly the same thing for the purposes of its final submissions in those proceedings themselves, which would have continued. The Applicant is always free to modify its submissions and, in fact, the final submissions of a party frequently vary from those found in the written pleadings. Consequently the Court is not able to hold that any true prejudice was suffered by the Respondent.

***
A final, though different order of contention advanced by the Respondent in support of its first Preliminary Objection, was that the present proceedings were contrary to the spirit and economy of the [p26] Hispano-Belgian Treaty of 19 July 1927, the jurisdictional clauses of which are relied on by the Applicant as conferring competence on the Court. The character of this Treaty is fully considered in connection with the second Preliminary Objection, and it will suffice to say here that according to its terms, before a dispute can be submitted to adjudication, various preliminary stages have to be gone through. These stages were in fact gone through in connection with the original and discontinued proceedings, and they were repeated in connection with the present proceedings. The contention now advanced is that it cannot have been the intention of the Treaty that the same processes should be gone through twice in relation to the same claim, and that the present proceedings are consequently out of order, on the basis of the very instrument on which the Applicant founds the jurisdiction of the Court.

The Court is sensible of the element of artificiality involved in the repetition of the Treaty processes in regard to the same matters of complaint. But if the right to bring new proceedings exists, apart from this, it would seem difficult to hold that precisely because it does, the jurisdictional basis for its exercise is thereby destroyed.

It has been argued that the first set of proceedings "exhausted" the Treaty processes in regard to the particular matters of complaint, the subject of those proceedings, and that the jurisdiction of the Court having once been invoked, and the Court having been duly seised in respect of them, the Treaty cannot be invoked a second time in order to seise the Court of the same complaints. As against this, it can be said that the Treaty processes are not in the final sense exhausted in respect of any one complaint until the case has been either prosecuted to judgment, or discontinued in circumstances involving its final renunciation—neither of which constitutes the position here. If, for instance, to recall an illustration given earlier (and other instances are possible) proceedings brought under the Treaty were discontinued because it was found that local remedies had not been exhausted (and it is of course at the moment of the application to the Court that they require to be), it would be difficult to contend that (this deficiency being remedied) a new application could not be made in the case, merely because it would have to be preceded by a repetition of the Treaty processes. This contention therefore cannot be accepted.

For all of the foregoing reasons, the Court holds that the first Preliminary Objection must be rejected.

***


Second Preliminary Objection (Principal Aspect)

Although, for the reasons given in connection with the first Preliminary Objection, the discontinuance of the action in the original proceedings before the Court did not disentitle the Belgian Government [p27] from commencing the present proceedings, it is nevertheless essential that a valid jurisdictional basis for these should exist. In order to establish this, the Applicant Government relies on the combined effect of Article 37 of the Statute of the Court and the fourth paragraph of Article 17 of the Hispano-Belgian Treaty of Conciliation, Judicial Settlement and Arbitration, signed on 19 July 1927, and kept in force by means of tacit renewals taking place at ten-yearly intervals, the latest having occurred in 1957. This Treaty, which will henceforth be called the 1927 Treaty, provided by its Article 2 for a reference to adjudication of all disputes between the parties, involving a disagreement about their legal rights. For this purpose, and if the methods of conciliation also provided for by the Treaty failed, or were not utilized, the parties were in each case to draw up a compromis. If, however, agreement could not be reached upon the terms of a compromis within a certain period, then the fourth paragraph of Article 17 of the Treaty, now invoked by the Applicant Government, provided that:

[Translation]

". . . either Party may, on the expiry of one month's notice, bring the question direct before the Permanent Court of International Justice by means of an application".

In combination with this provision, the Applicant invoked Article 37 of the Statute of the Court, the relevant portion of which in the English text, reads as follows:

"Whenever a treaty or convention in force provides for reference of a matter... to the Permanent Court of International Justice, the matter shall, as between the parties to the present Statute, be referred to the International Court of Justice."

In the light of this provision, it was contended by the Applicant that, the 1927 Treaty being "a treaty... in force", and both the Parties in dispute being parties to the Statute of the International Court of Justice, that Court must, by virtue of Article 37, be deemed to have replaced the Permanent Court in the relations between the Parties, for the purposes of such a provision as the fourth paragraph of Article 17 of the Treaty—henceforth to be called Article 17 (4); and accordingly that (the necessary time-limits having expired) this provision gave the Applicant the right to bring the case unilaterally before the Court.

This view was contested by the Respondent Government, on the ground that although the 1927 Treaty might as such still be in force, the jurisdictional obligation represented by Article 17 (4) had necessarily lapsed on the dissolution of the former Permanent Court on 18 April 1946, since this brought about the disappearance of the judicial organ to which Article 17 (4) referred; that no previous substitution [p28] of the present for the former Court had been effected by virtue of Article 37 before that date, Spain not being then a party to the Statute; and that, in consequence, the 1927 Treaty had ceased to contain any valid jurisdictional clause by the time Spain did become a party to the Statute upon admission to the United Nations in December ig55. Thus, even if Spain would then in principle have become bound by Article 37, there did not in the instant case, so it was contended, exist at that date any clause of compulsory jurisdiction in respect of which that provision could operate to confer jurisdiction on the present Court, and since Article 37 could only apply to jurisdictional clauses already in force, it could not operate to bring a former clause into force again, which occurrence would require for its realization the express consent of both parties, given de novo.

Another way of stating what was basically the same contention, was to say that Article 37 only applied in the relations between parties to the Statute which had become such through original membership of the United Nations, or at least by acquiring membership (or by otherwise becoming a party to the Statute), previous to the dissolution of the Permanent Court in April 1946; for only in their case had the substitution of the present Court for the Permanent Court been able to take place at a time when the jurisdictional clauses in respect of which this was to occur were themselves still in force. Once any such clause had lapsed by reason of the disappearance of the Permanent Court, there could be no substitution of forum; or rather, any question of substitution became pointless, since the basic obligation of compulsory adjudication itself no longer existed. Moreover, only those States which had already become parties to the Statute before the dissolution of the Permanent Court could be regarded as having given a true consent to the process involved—that is a consent directly given in respect of jurisdictional clauses still indubitably in force. Anything else, it was contended, would be a fiction.

There were other ways in which the Spanish contention was or could be put, some of which will be noticed later; but however it might be put, it always involved at bottom the same basic contention, that the dissolution of the Permanent Court brought about the final extinction of all jurisdictional clauses providing for recourse to that Court, unless they had already, previous to this dissolution, been transformed by the operation of Article 37 of the Statute into clauses providing for recourse to the present Court; and that in respect of any jurisdictional clause not thus transformed previous to the dissolution of the Permanent Court, Article 37 was, thereafter, powerless to effect the transformation.

*

This line of reasoning was not put forward by the Respondent Government in the original diplomatic exchanges between the Parties. [p29] It was first advanced after the decision given by the Court on 26 May 1959, in the case concerning the Aerial Incident of 27 July 1955 (Israel v. Bulgaria) (I.C.J. Reports 1959, p. 127). This case had reference, not to Article 37 but to Article 36, paragraph 5, of the Statute; and not to a treaty, such as the Hispano-Belgian Treaty of 1927, but to a unilateral declaration in acceptance of the compulsory jurisdiction of the former Permanent Court, made under the "optional clause" of its Statute (paragraph 2 of Article 36). It was however contended by the Respondent that the legal considerations applicable in that case were applicable also in the present one; and the arguments advanced by the Respondent were, mutatis mutandis, similar in character to those advanced on behalf of Bulgaria in that case. The Court will therefore consider this matter.

The Court notes in the first place that the decision in the Israel v. Bulgaria case was confined entirely to the question of the applicability of Article 36, paragraph 5, in a somewhat unusual situation; that it made only one passing and routine reference to Article 37 and noticeably avoided any finding on, or even consideration of the case of that provision, the position of which it was evidently intended to leave quite open. The Court moreover considers that there are differences between the two cases which require that the present one should be dealt with independently and on its merits. Not only is a different category of instrument involved—an instrument having a conventional form, not that of a unilateral declaration—but the essential requirement of being "in force", which in the cases contemplated by Article 36, paragraph 5, bore directly on the jurisdictional clause—the unilateral declaration itself—is, in Article 37, formally related not to the clause as such, but to the instrument—the treaty or convention—containing it, from which follow certain consequences to be noticed later.

Nor can the Court be oblivious to other differences which cannot but affect the question of the need for the Court to make an independent approach to the present case. The case of Israel v. Bulgaria was in a certain sense sui generis. As some of the separate but concurring opinions show (and as is evident in other ways), it might have been decided—and still in favour of Bulgaria—on grounds which would not have involved the particular issue of the effect of the dissolution of the Permanent Court on the continued existence and validity of a declaration not previously "transformed" into an acceptance of the compulsory jurisdiction of the present Court. Moreover, any decision of the Court, relative to Article 37, must affect a considerable number of surviving treaties and conventions providing for recourse to the Permanent Court, including instruments of a political or technical character, and certain general multilateral conventions of great importance that seem likely to continue in force. It is thus clear that the decision of the Court in the present case, whatever it might be, would be liable to have far-reaching effects. This is in no way a factor which should be [p30] allowed to influence the legal character of that decision: but it does constitute a reason why the decision should not be regarded as already predetermined by that which was given in the different circumstances of the Israel v. Bulgaria case.

*
It will be convenient at this point to mention briefly the question of the other cases cited in the course of the proceedings, in which Article 36, paragraph 5, or 37, of the Statute have been involved. None is directly in point; for, with the exception of the declaration of Thailand in the case concerning the Temple of Preah Vihear, Preliminary Objections (I.C.J. Reports 1961, p. 17), all the jurisdictional clauses concerned related to countries which were original Members of the United Nations and parties to the Statute, so that the various processes provided for by the Statute had already been completed as regards these clauses before the extinction of the Permanent Court. In the Temple of Preah Vihear case, Thailand had deposited a declaration purporting to accept the present Court's compulsory jurisdiction, by means of a "renewal" of a previous declaration of 1940, accepting that of the former Permanent Court. As Thailand had only become a Member of the United Nations and a party to the Statute after the disappearance of that Court, it was argued, in the light of the Israel v. Bulgaria decision, that the 1940 declaration had ipso facto lapsed and become extinguished, and was consequently incapable of "renewal", so that the 1950 declaration purporting to effect such a renewal was without legal validity. The Court however decided the matter on a different basis, holding that, in sending in its notice of renewal, Thailand must have intended to accept the jurisdiction of a court of some kind— and this could only have been the present one since, as Thailand knew, the former Court no longer existed. Hence, despite the language of "renewal", the notice (on its correct interpretation) 6perated as a direct acceptance of the compulsory jurisdiction, made in relation to the present Court. Consequently, irrespective of whether or not the previous declaration relative to the Permanent Court had lapsed, Thailand had accepted the compulsory jurisdiction of the present Court. It is clear that this case has no relevance whatever to the present one.

In the light of the foregoing considerations therefore, the Court must decide the present case independently and without further reference to Article 36, paragraph 5, or to the previous cases which have, in one way or another, involved that provision or Article 37 of the Statute— even though in three of them, the Court did actually apply Article 37.

***[p31]

Although it will be necessary to revert to the matter at a later stage, it is desirable at this point to say something about what appear to have been the objects and purposes of Article 37 at the time when the Statute was being drafted in the period April-June 1945.

Historically, two main considerations appear to have moved the drafters. In the first place, owing to the decision to create an international court of justice which would in law be a new entity, and not a continuation of the existing Permanent Court, the dissolution of the latter became essential, for it would not have been a tolerable situation for two such Courts to be co-existing. The disappearance of the Permanent Court was in any event certain to occur in fact, for lack of machinery to replace its Judges, but it was not known precisely when this disappearance, either as a fact or as the result of a formal dissolution, would come about. At the same time, there were then in existence a very large number of treaties, conventions and other instruments, bilateral and multilateral, containing jurisdictional clauses providing for recourse to that Court. If therefore nothing had been inserted in the new Statute to meet this situation, and to meet it automatically and in advance, the preservation of these clauses would have been left to the uncertain action of the individual parties to the various instruments concerned.

It was this situation that Article 37 was designed to meet, and the governing concept evidently was to preserve as many jurisdictional clauses as possible from becoming inoperative by reason of the prospective dissolution of the Permanent Court; and moreover, to do this by a process which would automatically substitute the new Court for the Permanent Court in the jurisdictional treaty relations between all Members of the United Nations and other parties to the Statute, thus avoiding the necessity for piecemeal action by special agreement between the parties to the various instruments. The intention therefore was to create a special regime which, as between the parties to the Statute, would automatically transform references to the Permanent Court in these jurisdictional clauses, into references to the present Court.

In these circumstances it is difficult to suppose that those who framed Article 37 would willingly have contemplated, and would not have intended to avoid, a situation in which the nullification of the jurisdictional clauses whose continuation it was desired to preserve, would be brought about by the very event—the disappearance of the Permanent Court—the effects of which Article 37 both foresaw and was intended to parry; or that they would have viewed with equanimity the possibility that, although the Article would preserve many jurisdictional clauses, there might be many others which it would not; thus creating that very situation of diversification and imbalance which it was desired to avoid.

Whether Article 37 was aptly framed to carry out these objectives remains for consideration; but that such were the objectives, and the [p32] motives influencing the drafting, the Court can hardly doubt. This conclusion finds strong support in a second historical consideration. As is well known, Article 37 represented, so far as treaties and conventions were concerned, a compromise between two extreme and opposed schools of jurisdictional thought. There were, on the one hand, those who wanted to insert in the Statute of the new Court a clause of universal compulsory jurisdiction, automatically applicable to all disputes between parties to the Statute, of whatever kind and howsoever arising. Such a clause would have rendered the insertion of jurisdictional clauses in particular treaties or conventions unnecessary except for any special purpose, and would have rendered a provision such as Article 37 unnecessary also, or caused it to be differently drafted. On the other hand, there were those who were opposed to the idea of compulsory jurisdiction in any form, and considered that the Court should only be competent in cases brought before it with the express consent of the parties, given ad hoc.

The compromise between these two points of view which Article 37 represented (so far as jurisdictional clauses in treaties and conventions were concerned) involved the rejection of the notion of a universal compulsory jurisdiction; but on the other hand (and for that very reason) it also involved the preservation at least of the already existing field of conventional compulsory jurisdiction. It was a natural element of this compromise that the maximum, and not some merely quasi optimum preservation of this field should be aimed at.

***

With this background in mind, the Court will now consider the text of Article 37. Looking simply at its actual language, the Court sees it primarily as a provision conferring jurisdiction upon the International Court of Justice in respect of a certain category of disputes, and which mentions the Permanent Court for one purpose and one only—namely that of defining or identifying the category of dispute covered. Only three conditions are actually stated in the Article. They are that there should be a treaty or convention in force; that it should provide (i.e., make provision) for the reference of a "matter" (i.e., the matter in litigation) to the Permanent Court; and that the dispute should be between States both or all of which are parties to the Statute. No condition that the Permanent Court should still be in existence at any given moment is expressed in the Article. The conclusion, in so far as it is to be based on the actual language of Article 37 must be that the 1927 Treaty being in force; it being a treaty which contains a provision for a reference of the matter in dispute to the Permanent Court; and the Parties to the dispute both being parties to the Statute—then, as between them, the matter is to be. ("shall be") referred to the Inter-[p33] national Court of Justice, or (according to the French text) that Court is to be the competent forum.

Two central issues evidently arise here. One, which will be considered later, is whether, although the words "in force" are directly related to the treaty or convention as such, they must nevertheless be regarded as relating also, and independently, to the jurisdictional clause as such. The other main issue is, what is the meaning to be ascribed to the phrase "provides for". Clearly this cannot mean "provides for" operationally, here and now, for the Permanent Court no longer being in existence, no treaty could still provide for that. It follows that to impart rationality to the term "provides for" in its context, it must be read in a figurative sense, almost as if it had been put between inverted commas, and as denoting a treaty or convention still in force as such, containing a clause providing, or making provision for, a reference to the Permanent Court, this being simply a convenient method of defining or identifying the category of dispute in respect of which jurisdiction is conferred upon the International Court of Justice.

It was however argued that since Article 37, wherever it was applicable, transferred jurisdiction from the Permanent Court to the present Court, it was necessary that the former Court should still be in existence at the moment of the transfer; for otherwise there would no longer exist any jurisdiction to be transferred. But the Court considers that Article 37 did not in fact operate to effect any "transfer" of jurisdiction as such. What was created was a new Court, with a separate and independent jurisdiction to apply in the relations between the parties to the Statute of that new Court. In the field of the jurisdictional clauses of treaties and conventions already in force, referring to the Permanent Court, the modus operandi could, technically, have been to annex to the Statute a list of all such instruments. Such a listing eo nomine would have left no doubt that any listed treaty was covered, so long as it remained in force, irrespective of the date at which the parties became parties to the Statute, and independently of the continued existence of the Permanent Court. Instead of any such cumbrous procedure, the same result was achieved by resort to the common factor involved in all these jurisdictional clauses, namely the provision they contained for reference to the Permanent Court. By mentioning this, Article 37 identified and defined the category involved, and nothing else was needed.

*

The Court will now turn to the question of the scope to be given to the words "in force" in Article 37. According to the actual text, this phrase relates solely to the treaties and conventions in question, and as such. But this cannot be considered as finally conclusive in itself, because it is necessary to take into consideration not only what [p34] this provision was intended to do, but also what it was not intended to do. It was intended to preserve a conventional jurisdictional field from a particular threat, namely the extinction which would otherwise follow from the dissolution of the Permanent Court. But that was all it was intended to do. It was not intended to create any new obligatory jurisdiction that had not existed before that dissolution. Nor, in preserving the existing conventional jurisdiction, was it intended to prevent the operation of causes of extinction other than the disappearance of the Permanent Court. In this sense but, however, in this sense only, is it correct to say that regard must be had not only to whether the treaty or convention is still in force, but also to whether the jurisdictional clause it contains is itself, equally, still in force. And precisely because it was the sole object of Article 37 to prevent extinction resulting from the particular cause which the disappearance of the Permanent Court would represent, it cannot be admitted that this extinction should in fact proceed to follow from this very event itself. Such a possibility would not only involve a contradiction in terms, but would run counter to the whole intention and purpose of the Article.

The argument to the contrary is based on seeking to draw a distinction between those States which became parties to the Statute previous to the dissolution of the Permanent Court, and those which became parties afterwards. But that is not an independent argument, for the alleged distinction is itself only a part, or another aspect, of the same fundamental question, namely the effect of that dissolution on the status of these jurisdictional clauses—since the sole relevance of the date of admission to the United Nations, if it was subsequent to the dissolution, is whether there still remained in existence any jurisdictional clause in respect of which Article 37 could take effect. It is in this way alone that any distinction between different parties to the Statute could be introduced; for otherwise it must be entirely arbitrary, and it is not recognized by Article 37 itself which, on the contrary, speaks of the "parties to the present Statute", not the "present parties to the Statute". Except for the supposed effects of the dissolution, therefore, the ordinary rule of treaty law must apply, that unless the treaty or provision concerned expressly indicates some difference or distinction, such phrases as "the parties to the Statute" or "the parties to the present convention", or "the contracting parties", or "the Members of the Organization", apply equally and indifferently to cover all those States which at any given time are participants, whatever the date of their several ratifications, accessions or admissions, etc.

Consequently, since the Court cannot, for reasons already stated, accept the dissolution of the Permanent Court as a cause of lapse or abrogation of any of the jurisdictional clauses concerned, it must hold that the date at which the Respondent became a party to the Statute is irrelevant.

*[p35]

Certain other considerations serve to reinforce this view; for if it is clear from what was said earlier about the origins of Article 37, that the aim was to be comprehensive, it is equally clear that to admit what may for convenience be called the "dissolution" argument, would not only be to make serious inroads upon that objective, but quite possibly—for all that those who were drafting Article 37 could tell at the time—to defeat almost entirely its intended purpose.

In the period April-June 1945, it was impossible to forecast when the Permanent Court would be dissolved, or when—or on the basis of how many ratifications—the Charter of the United Nations would come into force. Circumstances delaying the latter event, or causing it to occur on the basis of only a relatively small number of ratifications, might have given rise to a situation in which, if the "dissolution" argument were correct, many, or possibly even most, of the jurisdic-tional clauses concerned would have fallen outside the scope of Article 37, a result which must have been contrary to what those who framed this provision intended. It was suggested in the course of the oral hearing that these possibilities, had they threatened to materialize, could and would have been avoided by taking steps to postpone the dissolution of the Permanent Court. This however serves only to show what the real intentions of Article 37 must have been—namely to make any such postponement unnecessary because, whatever the date of the coming into force of the Charter, or of the dissolution of the Permanent Court, and whatever the date at which a State became a party to the Statute, Article 37 would ensure in advance the preservation of the relevant jurisdictional clauses, by causing them to confer competence on the present Court, as between parties to its Statute. This was its purpose.

***

It has been objected that the view set forth above leads, in such a case as that of the Respondent Government, to a situation in which the jurisdictional clause concerned, even if in existence, is necessarily inoperative and cannot be invoked by the other party to the treaty containing it; and then, after a gap of years, suddenly it becomes operative again, and can be invoked as a clause of compulsory jurisdiction to found proceedings before the Court. It is asked whether, in these circumstances, any true consent can be said to have been given by the Respondent Government to the exercise of jurisdiction by the Court in this class of case.

Noting in passing that this situation results from the act of the Respondent itself in applying for membership of the United Nations [p36] which, upon admission, entailed, by virtue of Article 93, paragraph 1, of the Charter of the United Nations, becoming a party to the Statute, the Court would observe that the notion of rights and obligations that are in abeyance, but not extinguished, is perfectly familiar to the law and represents a common feature of certain fields.

In this connection, and as regards the whole question of consent, the Court considers the case of the reactivation of a jurisdictional clause by virtue of Article 37 to be no more than a particular case of the familiar principle of consent given generally and in advance, in respect of a certain class of jurisdictional clause. Consent to an obligation of compulsory jurisdiction must be regarded as given ipso facto by joining an international organization, membership of which involves such an obligation, and irrespective of the date of joining. In consequence, States joining the United Nations or otherwise becoming parties to the Statute, at whatever date, knew in advance (or must be taken to have known) that, by reason of Article 37, one of the results of doing so would, as between themselves and other parties to the Statute, be the reactivation in relation to the present Court, of any jurisdictional clauses referring to the Permanent Court, in treaties still in force, by which they were bound. It is the position maintained by the Respondent Government which would create inequality, and discriminate in favour of those entering the United Nations, or otherwise becoming parties to the Statute, after April 1946, particularly as regards the obligations contained in the jurisdictional clauses of important general multilateral conventions, thus giving rise to just the kind of anomaly Article 37 was intended to avoid.

The Respondent Government, in the course of the diplomatic correspondence preceding the original proceedings before the Court, and in particular in the Notes exchanged in the period May 1957 to February 1958, implicitly recognized the competence of the Court for the purposes of Article 17 (4) of the 1927 Treaty, and challenged the right of the Applicant Government to resort to the Court only on grounds connected with the third and fourth Preliminary Objections in the present case. It did not demur when the Applicant stated that the International Court of Justice had been substituted for the Permanent Court in Article 17 (4) of the Treaty. It did not even broach the possibility that there might be a. question as to the competence of the Court qua forum. If this attitude was based on the assumption that Article 37 of the Statute—by which the Respondent had by then become bound— conferred jurisdiction on the Court (an assumption the correctness of which the reasoning of the decision in the Israel v. Bulgaria case might appear to call in question), then the present finding of the Court, that this assumption was in fact correct, operates to restore the basis on which the Respondent itself appears originally to have recognized the same thing. [p37]

***

The Court has thought it desirable to base itself up to this point wholly on considerations relating to Article 37 of the Statute which, in its opinion, would (in the absence of any relevant special factor) be applicable to the case of all the jurisdictional clauses in the treaties and conventions to which Article 37 applies. In the case of treaties having the character of the Hispano-Belgian Treaty of 1927, however, there are special features which afford additional support for the con-clusions arrived at on the basis of Article 37 alone.

Article 17 (4) of the Treaty was discussed between the Parties in the course of the written and oral proceedings, largely in relation to the question of its "severability" from the rest of the Treaty. Into this question, which has implications reaching far beyond the scope of the present case, the Court does not consider it necessary to go. What must be true, on any view of the matter, is that Article 17 (4) is an integral part of the Treaty as a whole; and its judicial fate cannot be considered in isolation.

It is at this point necessary to note that Article 17 (4), the relevant terms of which are cited above, had as its primary object in the scheme of the 1927 Treaty, what was more a matter of mechanics—namely to indicate in what circumstances, and at what precise point in the attempt to dispose of the dispute, either party would have the right to take the matter to the Court. This right was to be exercisable if the (optional) conciliation procedure provided for by the Treaty had not been made use of, or had failed; and if agreement had not been reached within a certain period on the terms of a compromis for the submission of the dispute by mutual consent to the Court or to arbitration; and if, thereupon, a month's notice was given of the intention to take the matter to the Court unilaterally.

The basic obligation to submit to compulsory adjudication, however, was and is carried by two other provisions of the Treaty, namely Article 2, and the first paragraph of Article 17. The relevant paragraph of Article 2 reads as follows:

[Translation ]

"All disputes of every kind between the High Contracting Parties with regard to which the Parties are in conflict as to their respective rights, and which it may not have been possible to settle amicably by the normal methods of diplomacy, shall be submitted for decision to an arbitral tribunal or to the Permanent Court of International Justice."

The Treaty then goes on to provide for the conciliation procedure, and continues in Article 17 (1) to reaffirm the essence of Article 2 as follows: [p38]

[Translation]

"In the event of no amicable agreement being reached before the Permanent Conciliation Commission, the dispute shall be submitted either to an Arbitral Tribunal or to the Permanent Court of International Justice, as provided in Article 2 of the present Treaty."

In the light of these provisions, it would be difficult either to deny the seriousness of the intention to create an obligation to have recourse to compulsory adjudication—all other means of settlement failing— or to assert that this obligation was exclusively dependent on the existence of a particular forum, in such a way that it would become totally abrogated and extinguished by the disappearance of that forum. The error of such an assertion would lie in a confusion of ends with means— the end being obligatory judicial settlement, the means an indicated forum, but not necessarily the only possible one.

This double aspect appears particularly clearly on the basis of the several jurisdictional clauses of the 1927 Treaty, taken as a whole; and these considerations furnish the answer to the contention that the obligation of compulsory adjudication in the Treaty was so indissolubly bound up with the indication of the Permanent Court as the forum, as to be inseparable from it, and incapable of continued existence in the absence of that Court. On the very language of Articles 2 and 17 (1), this is not the case. An obligation of recourse to judicial settlement will, it is true, normally find its expression in terms of recourse to a particular forum. But it does not follow that this is the essence of the obligation. It was this fallacy which underlay the contention advanced during the hearings, that the alleged lapse of Article 17 (4) was due to the disappearance of the "object" of that clause, namely the Permanent Court. But that Court was never the substantive "object" of the clause. The substantive object was compulsory adjudication, and the Permanent Court was merely a means for achieving that object. It was not the primary purpose to specify one tribunal rather than another, but to create an obligation of compulsory adjudication. Such an obligation naturally entailed that a forum would be indicated; but this was consequential.

If the obligation exists independently of the particular forum (a fact implicitly recognized in the course of the proceedings, inasmuch as the alleged extinction was related to Article 17 (4) rather than to Articles 2 or 17 (1)), then if it subsequently happens that the forum goes out of existence, and no provision is made by the parties, or otherwise, for remedying the deficiency, it will follow that the clause containing the obligation will for the time being become (and perhaps remain indefinitely) inoperative, i.e., without possibility of effective application. But if the obligation remains substantively in existence, [p39] though not functionally capable of being implemented, it can always be rendered operative once more, if for instance the parties agree on another tribunal, or if another is supplied by the automatic operation of some other instrument by which both parties are bound. The Statute is such an instrument, and its Article 37 has precisely that effect.

Accordingly, "International Court of Justice" must now be read for "Permanent Court of International Justice" in Articles 2 and 17 of the Treaty. The same applies in respect of Article 23, under which the Court is made competent to determine any disputed question of interpretation or application arising in regard to the Treaty; and similar substitutions in Articles 21 and 22 would follow consequentially.

***

Second Preliminary Objection (Subsidiary Aspect)

The Respondent Government also advanced a subsidiary plea in relation to its second Preliminary Objection, which requires to be considered only if the Court should reject the objection in its principal aspect. Since the Court does reject it, it must now consider this subsidiary plea. This was to the effect that the dissolution of the Permanent Court having extinguished Article 17 (4) of the 1927 Treaty, or at any rate deprived it of its force, then if (contrary to the principal contention of the Respondent) Article 37 of the Statute operated to re-activate this clause upon Spain's admission to the United Nations in December 1955, what in consequence came into existence at that date was a new or revised obligation between the Parties; and that just as the original obligation only applied to disputes arising after the Treaty date, so the new or revised obligation could only apply to disputes arising after the date of Spain's admission to the United Nations, creative of that obligation. Since the dispute had in fact arisen previous to that date, it was accordingly not covered; or could only be regarded as covered by a retroactive application of the obligation which its terms, as they must now be deemed to stand, excluded.

In the Respondent's written Preliminary Objections, what was postulated as emerging in 1955 was not merely a new jurisdictional obligation but a whole new "treaty". In the Respondent's Final Submissions, however, as lodged at the end of the oral hearing, what was referred to was a "revised" Article 17 (4) of the 1927 Treaty. It is in fact clear that no new Treaty as such could have emerged in 1955, because it was common ground in the case that, apart from the question of Article 17 (4), the Treaty of 1927 had never ceased to be in force, and had been operative throughout. At the most, therefore, what might have happened in 1955 was that the Treaty was amended by the inclusion in it of a new or revised jurisdictional clause, providing [p40] for a reference to the International Court of Justice instead of to the former Permanent Court. However, as the Respondent's Submissions recognize, the limitation ratione temporis regarding the cases which were justiciable under the Treaty was contained in, or arose from Articles 1 and 2, and from the Final Protocol to the Treaty. As these provisions had ex hypothesi never ceased to be in force, they would have applied automatically to any new or revised obligation when the latter arose. This must have been so, for otherwise the revised Treaty would have contained two independent and incompatible sets of requirements ratione temporis; but in truth, it continued to contain only one set, since the "revised" obligation (as stated in the Respondent's Final Submissions) related to Article 17 (4), which itself contained no requirement ratione temporis, while the "revision" related only to the substitution of the present for the former Court. It follows that any new or revised obligation could only operate ratione temporis in the same way as the original one, and therefore it must cover all disputes arising after the Treaty date.
However, it is not necessary to rely on this conclusion, for in the opinion of the Court, the grounds on which the second Preliminary Objection has been rejected in its principal aspect, necessarily entail its rejection in its subsidiary aspect also. These grounds are that the basic obligation to submit to compulsory adjudication was never extinguished by the disappearance of the Permanent Court, but was merely rendered functionally inoperative by the lack of a forum through which it could be implemented. What therefore happened in 1955, when this lacuna was made good by Spain's admission to the United Nations, was that the operation of the obligation revived, because the means of implementing it had once more become available; but there was neither any new creation of, nor revision of the basic obligation. Its operation having revived, by virtue of Article 37 of the Statute, this obligation could only function in accordance with the terms of the Treaty providing for it, as the Parties must be deemed to have intended, and it consequently continued to relate (as it always had done) to any disputes arising after the Treaty date.

Alternatively, to refer to another part of the grounds on which the objection in its principal aspect was rejected, once Article 37 was applicable, the Court became, in the language of that provision, competent as between parties to the Statute to adjudicate on any matter which, under a treaty or convention in force, would have fallen to be referred to the Permanent Court had it still existed and had Article 37 never been framed. The present case is such a matter.

For the reasons given, therefore, the Court rejects the second Preliminary Objection both in its principal and in its subsidiary aspects.

***[p41]

Third and fourth Preliminary Objections


Having decided, in rejecting the first Preliminary Objection, that the discontinuance of the original proceedings did not bar the Applicant Government from reintroducing its claim, and having determined, in rejecting the second Preliminary Objection, that the Court has jurisdiction to entertain the Application, the Court has now to consider the third and fourth Preliminary Objections which involve the question of whether the claim is admissible.

In considering whether these Preliminary Objections should be upheld, the Court recalls the fact that the Applicant has submitted alternative pleas that these objections, unless rejected by the Court, should be joined to the merits. It will therefore be appropriate at this point to make some general observations about such joinders. These are effected under Article 62, paragraph 5, of the Rules of Court, which reads as follows:

"After hearing the parties the Court shall give its decision on the objection or shall join the objection to the merits. If the Court overrules the objection or joins it to the merits, it shall once more fix time-limits for the further proceedings."

Since this paragraph repeats verbatim the like provision in the 1936 Rules of the Permanent Court of International Justice, it is pertinent to take note of the various reasons which that Court gave for deciding to join a preliminary objection to the merits.

In the Pajzs, Csáky, Esterházy case (Hungary v. Yugoslavia), the Court, on 23 May 1936, issued an Order joining the Yugoslav objections to the merits because "the questions raised by the first of these objections and those arising out of the appeal as set forth in the Hungarian Government's submissions on the merits are too intimately related and too closely interconnected for the Court to be able to adjudicate upon the former without prejudging the latter"; and because "the further proceedings on the merits ... will place the Court in a better position to adjudicate with a full knowledge of the facts upon the second objection" (P.C.I.J., Series A /B, No. 66, p. 9).

Shortly after this, in the Losinger case, the Court, in an Order dated 27 June 1936, stated with reference to a plea to the jurisdiction made in that case, that such a plea "may be regarded ... as a ... defence on the merits, or at any rate as being founded on arguments which might be employed for the purposes of that defence". Consequently,

"the Court might be in danger, were it to adjudicate now upon the plea to the jurisdiction, of passing upon questions which appertain to the merits of the case, or of prejudging their solution".
[p42]

Therefore, the Court concluded, the objection to the jurisdiction should be joined to the merits, so that "the Court will give its decision upon it, and if need be, on the merits, in one and the same judgment". The Court went on to say in regard to another objection, relating to the admissibility of the suit, that "the facts and arguments adduced for or against the two objections are largely interconnected and even, in some respects, indistinguishable". Accordingly, this objection also was joined to the merits (P.C.I. J., Series A /B, No. 67, pp. 23-24).

In the Panevezys-Saldutiskis Railway case, the Court, in its Order of 30 June 1938, joining two preliminary objections to the merits, said that—

"at the present stage of the proceedings, a decision cannot be taken either as to the preliminary character of the objections or on the question whether they are well-founded; any such decision would raise questions of fact and law in regard to which the Parties are in several respects in disagreement and which are too closely linked to the merits for the Court to adjudicate upon them at the present stage".

Two further reasons which were given were that—

"if it were now to pass upon these objections, the Court would run the risk of adjudicating on questions which appertain to the merits of the case or of prejudging their solution"

and that—

"the Court may order the joinder of preliminary objections to the merits, whenever the interests of the good administration of justice require it" (P.C.I.J., Series A /B, No. 75, pp. 55-56).

The present Court has been guided by like considerations in the two cases in which it has had occasion to join the preliminary objections to the merits. In the case of Certain Norwegian Loans, the Court, on the basis of an understanding between the Parties to that effect, joined the preliminary objections to the merits "in order that it may adjudicate in one and the same judgment upon these Objections and, if need be, on the merits" (I.C.J. Reports 1956, p. 74).

In the case concerning Right of Passage over Indian Territory, the Court found that both the elucidation of the facts, and the legal effect or significance of certain practices and circumstances, would be involved in pronouncing on one of the preliminary objections, and that the Court could therefore not pronounce upon it "without prejudging the merits". In regard to another objection, the Court said that "having [p43] heard conflicting arguments" it was "not in a position to determine at this stage" certain issues which had been raised. It further found that in regard to certain other questions, it was not "in possession of sufficient evidence to enable it to pronounce on these questions", and that to attempt an evaluation of certain factors involved, "although limited to the purposes of the Sixth Preliminary Objection, would entail the risk of prejudging some of the issues closely connected with the merits" {I.C.J. Reports 1957, pp. 150-152).

*

The Permanent Court of International Justice drew attention to an important aspect of the matter when, as mentioned above, it said that "the Court may order the joinder of preliminary objections to the merits, whenever the interests of the good administration of justice require it". But the safeguarding of the rights of respondent States is equally an essential part of "the good administration of justice", and it is in the interests of the respondents that the Rules of Court should contain Article 62 permitting the filing of preliminary objections. It must not be overlooked however, that respondents are given broad powers by this provision, since merely by labelling and filing a plea as a preliminary objection they automatically bring about the suspension of the proceedings on the merits (paragraph 3 of Article 62). This assures the respondent State that the Court will give consideration to its objection before requiring it to respond on the merits; the Court takes no further step until after hearing the parties (paragraph 5 of Article 62—see the discussion on this point by the Permanent Court in 1936, P.C.I.J., Series D, Third Addendum to No. 2, pp. 646-649). The attitude of the respondent State is however only one of the elements that the Court may take into consideration; and paragraph 5 of the Article simply provides that, after the hearing, "the Court shall give its decision on the objection or shall join the objection to the merits".

In reaching its conclusion, the Court may decide that the objection does not in fact have a preliminary character, and that therefore, without prejudice to the right of the respondent State to raise the same question at another stage of the proceedings, if such there be, the objection cannot be entertained as a "preliminary objection". Again, the Court may find that the objection is properly a preliminary one as, for example, to the jurisdiction of the Court, and it may dispose of it forthwith, either upholding it or rejecting it. In other situations, of which examples are given in the cases referred to above, the Court may find that the objection is so related to the merits, or to questions of fact or law touching the merits, that it cannot be considered separately without going into the merits (which the Court cannot do while proceedings on the merits stand suspended under Article 62), or without prejudging the merits before these have been fully argued. In these latter situations, the Court will join the preliminary objection to the [p44] merits. It will not do so except for good cause, seeing that the object of a preliminary objection is to avoid not merely a decision on, but even any discussion of the merits. On the other hand, a joinder does not in any respect indicate that the objection has been ignored. Indeed, as happened in the case of Certain Norwegian Loans, the Court, at the stage of the merits, to which the objections had been joined, upheld an objection to the jurisdiction, and therefore did not adjudicate upon the merits at all.
The Court will proceed to consider the third and fourth Preliminary Objections with these considerations in mind.

***

By its third Preliminary Objection the Respondent Government denies the jus standi of the Applicant Government in the present proceedings, and its legal capacity to protect the Belgian interests on behalf of which it claims, the Belgian national character of most of these being also contested. The grounds of the objection can be stated in various ways, but briefly its main basis is that the acts complained of, said to engage the international responsibility of the Respondent Government, took place not in relation to any Belgian natural or juristic person but to the Barcelona Traction company, which is a juristic entity registered in Canada, the Belgian interests concerned being in the nature of shareholding interests in that company. In these circumstances, it is contended that (citing a passage from the Respondent's final Submissions) "international law does not recognize, in respect of injury caused by a State to a foreign company, any diplomatic protection of shareholders exercised by a State other than the national State of the company". Hence, it is said, no claim can be made by the Applicant Government. The latter, for its part, contests the view of international law thus put forward, and asserts its right to intervene on behalf of Belgian nationals, shareholders in the company.

Put as stated above, the objection evidently has a preliminary character or aspect. But it can also be put in another way, which does not directly raise the question of the Applicant Government's jus standi—or does so only at one remove. It can be asked whether international law recognizes for the shareholders in a company a separate and independent right or interest in respect of damage done to the company by a foreign government; and if so to what extent and in what circumstances and, in particular, whether those circumstances (if they exist) would include those of the present case. Put in this way, the question appears as one not simply of the admissibility of the claim, but of substantive legal rights pertaining to the merits which are not confined solely to such matters as whether the acts complained of took place, and if so what their legal effect was, internationally: [p45] or rather, this latter question itself constitutes the greater part of the real issue in this case, and pertains to the substantive legal merits. In short, the question of the jus standi of a government to protect the interests of shareholders as such, is itself merely a reflection, or consequence, of the antecedent question of what is the juridical situation in respect of shareholding interests, as recognized by international law. Where, in a case such as the present one, a government is not merely purporting to exercise diplomatic protection, but to make a claim before an international tribunal, it necessarily invokes rights which, so it contends, are conferred on it in respect of its nationals by the rules of international law concerning the treatment of foreigners. Hence the question whether international law does or does not confer those rights is of the essence of the matter. In short, a finding by the Court that the Applicant Government has no jus standi, would be tantamount to a finding that these rights did not exist, and that the claim was, for that reason, not well-founded in substance.

If the Court were to take the view that the issues raised by the Respondent's third Preliminary Objection had no other character than that of substantive issues relating to the merits, it would have to declare the objection irreceivable as such, and the issues it involved as being part of the merits. Since however the objection clearly has certain aspects which are of a preliminary character, or involves elements which have hitherto tended to be regarded in that light, the Court will content itself with joining the objection to the merits.

By way of illustration of the sort of situation which the Court considers to exist here, in regard to the question of joinder—and it is not suggested that there are any other analogies—it may be recalled that when in the Panevezys-Saldutiskis Railway case the Permanent Court joined two preliminary objections to the merits, it said in its Order of 30 June 1938 that at the preliminary stage it could not even decide "as to the preliminary character of the objections" (P.C.I. J., Series A /B, No. 75, p. 56); and subsequently on the merits said that:

"Though it is true that an objection disputing the national character of a claim is in principle of a preliminary character, this is not so in the actual case before the Court" (P.C.I. J., Series A /B, No. 76, p. 17).

It is evident that certain kinds of objections (of which the second Objection in the present case affords an example) are so unconnected with the merits that their wholly preliminary character can never be in doubt. They could arise in connection with almost any set of facts imaginable, and the Court could have neither reason nor justification for not deciding them at once, by way either of acceptance or rejection. Any such clear cut situation is, however, far from existing as regards [p46] the third Preliminary Objection in the present case, and the same thing is even more true of the fourth Objection.

The third Objection involves a number of closely interwoven strands of mixed law, fact and status, to a degree such that the Court could not pronounce upon it at this stage in full confidence that it was in possession of all the elements that might have a bearing on its decision. The existence of this situation received an implicit recognition from the Parties, by the extent to which, even at this stage, they went into questions of merits, in the course of their written and oral pleadings. Moreover, it was particularly on behalf of the Respondent that it was sought to justify the process of discussing questions of merits, as involving matters pertinent to or connected with the third and fourth Objections, which the Respondent had itself advanced.

The Court is not called upon to specify which particular points, relative to the questions of fact and law involved by the third Objection, it considers an examination of the merits might help to clarify, or for what reason it might do so. The Court will therefore content itself by saying that it decides to join this objection to the merits because—to quote the Permanent Court in the Pajzs, Cs!!!aky, Esterh!!!azy case (P.C.I. J., Series A /B, No. 66, at p. 9)—"the ... proceedings on the merits ... will place the Court in a better position to adjudicate with a full knowledge of the facts"; and because "the questions raised by ... these objections and those arising ... on the merits are too intimately related and too closely interconnected for the Court to be able to adjudicate upon the former without prejudging the latter".

***

As regards the fourth Preliminary Objection, the foregoing considerations apply a fortiori for the purpose of requiring it to be joined to the merits; for this is not a case where the allegation of failure to exhaust local remedies stands out as a clear-cut issue of a preliminary character that can be determined on its own. It is inextricably interwoven with the issues of denial of justice which constitute the major part of the merits. The objection of the Respondent that local remedies were not exhausted is met all along the line by the Applicant's contention that it was, inter alia, precisely in the attempt to exhaust local remedies that the alleged denials of justice were suffered. This is so obvious on the face of the pleadings, both written and oral, that the Court does not think it necessary to justify it further at this stage, by any statement or consideration of the events in question, which can be left until the merits are heard.

Accordingly, the Court decides to join the third and fourth Preliminary Objections to the merits.
[p47]

For these reasons,

THE COURT,

by twelve votes to four,
rejects the first Preliminary Objection;

by ten votes to six,
rejects the second Preliminary Objection;

by nine votes to seven,
joins the third Preliminary Objection to the merits;

by ten votes to six,
joins the fourth Preliminary Objection to the merits.

Done in English and French, the English text being authoritative, at the Peace Palace, The Hague, this twenty-fourth day of July, one thousand nine hundred and sixty-four, in three copies, one of which will be placed in the archives of the Court and the others transmitted to the Government of the Kingdom of Belgium and to the Government of the Spanish State respectively.

(Signed) Percy C. Spender,
President.
(Signed) Garnier-Coignet,
Registrar.

President Sir Percy Spender makes the following declaration:

I concur in the Judgment of the Court. I wish, however, to say a few words on the second Preliminary Objection of the Government of Spain.

Whilst the text of Article 37 of the Court's Statute is quite different to that of Article 36 (5), which was the subject of examination in Israel v. Bulgaria, and its terms are, in my view, so clear as to admit of no doubt as to their meaning, it is difficult to discern any decisive distinction in principle between Article 36 (5) and Article 37 in relation to the cardinal questions raised by the second Preliminary Objection.

For my part, for reasons which appear in the Joint Dissenting Opinion in Israel v. Bulgaria, to which I continue to adhere, I would, apart from other considerations referred to in the Court's Judgment, be compelled to reject this Preliminary Objection.[p48]

Judge Spiropoulos makes the following declaration :

I regret that I am unable to share the view of the Court in regard to the second, third and fourth Preliminary Objections.

As to the second Preliminary Objection, my position is determined by the Court's Judgment in the case concerning the Aerial Incident (Israel v. Bulgaria). Starting from the concept that the purpose of Article 37 of the Statute of the Court is the same as that of Article 36, paragraph 5, and basing myself on the considerations of the Judgment in question, I consider that the Court should have found that it is without jurisdiction.

As to the third Preliminary Objection, I think the Court should have considered as relevant the arguments on which the Spanish Government founds its third Preliminary Objection.

Judge Koretsky makes the following declaration:

I agree with the Judgment and its reasoning. I venture to make some additional observations as regards the first Preliminary Objection.

Much has been said in the written documents and in the oral proceedings about discontinuance of the action (désistement d'action) and discontinuance of the proceedings (désistement d'instance). But this dichotomy is unknown to the Rules of Court. Articles 68 and 69 know only discontinuance of the proceedings in its two possible forms— either by mutual agreement of the parties (Article 68), or by unilateral declaration of the applicant (Article 69).

Under Article 68 the parties inform the Court in writing either that they have concluded an agreement as to the settlement of the dispute or that they are not going on with the proceedings, whilst under Article 69 the applicant informs the Court that it is not going on with the proceedings. In either case the Court directs the removal of the case from its list. Under Article 68 however it officially records the conclusion of the settlement or the mutual agreement to discontinue, whilst under Article 69 it officially records the discontinuance of the proceedings.

The conclusion of a settlement is not the discontinuance of an action (if one tried to understand the latter expression as the abandonment of a substantive right), for a settlement is usually the realization of a right which was in dispute. A dispute may subsequently arise in connection with the implementation of this settlement giving rise (possibly) to new proceedings.

It is to be recalled that the heading for Articles 68 and 69 is "Settlement and Discontinuance". At the time of the deliberations on the Rules of Court in 1935 Judge Fromageot (P.C.I.J., Series D, Acts and[p49] Documents concerning the Organization of the Court, Third Addendum to No. 2, pp. 313 et seq.) said that he "wished to change the heading of the whole section. The word 'agreement' was not sufficiently explicit as an indication of its contents." He was of the opinion that the section should have been headed: "Settlement and abandonment of proceedings."

The emphasis on the settlement of the dispute in Article 68 and in the heading of the section was to all appearances not accidental. Generally speaking, the main task of the Court is to settle disputes between States. Article 33 of the Charter in the section headed "Pacific settlement of disputes" provides that "the parties to any dispute ... shall ... seek a solution by [among the peaceful means mentioned there] judicial settlement".

In Article 68 settlement occupies the first position. In the light of the Court's task in the settlement of disputes, we have to resolve the procedural questions in this case, especially the question of the consequences of the discontinuance of the proceedings, the question of the permissibility of a reinstitution of the proceedings after discontinuance.

The discontinuance of the proceedings in this case was in a sense a conditional one. Though the Belgian Government made no reservation of its substantive rights the conditionality of the discontinuance is evident. One may consider this conditionality as tacit (from a formal point of view), implied, but the documents show that a withdrawal of the proceedings instituted before the Court was demanded of Belgium as a precondition for the opening of negotiations proper (Preliminary Objections, Introduction, paragraph 4, and Observations, paragraph 25); it was then evident that the demand was related to Belgium's Application to the Court, but not to the substantive right, about which the proceedings were instituted. About what then was it intended to carry on negotiations if it be considered that the Belgian Government, by the withdrawal of its Application, decided not to remove an obstacle to promising negotiations but to abandon even its (and its nationals') substantive rights? If no substantive rights existed there would be no subject for negotiations. And we may conclude that discontinuance of the proceedings does not involve an abandonment of a corresponding substantive right. Discontinuance even by mutual agreement is not necessarily a pactum de non petendo, which supposes not only discontinuance of a given action but an obligation not to sue at all, which is tantamount to the abandonment of the claim. And it has not been proved in this case that the renunciation of a substantive right has taken place.


Judge Jessup makes the following declaration:

I am in full agreement with the Court that no one of the Preliminary Objections could be upheld at this stage, and that the first two must [p50] be rejected now for reasons stated in the Judgment. I am also in accord with what the Court has to say about the general considerations which govern a decision to join a preliminary objection to the merits. I agree that those general considerations require that the third and fourth Preliminary Objections should be joined to the merits. Consequently, in order to be consistent with those general considerations, conclusions of law applicable to arguments involved in those two objections, even though I would find them capable of formulation now, may appropriately be deferred until a subsequent stage of the case.

Vice-President Wellington Koo and Judges Tanaka and Bustamante y Rivero append Separate Opinions to the Judgment of the Court.

Judge Morelli and Judge ad hoc Armand -Ugon append Dissenting Opinions to the Judgment of the Court.

(Initialled) P.S.
(Initialled) G.-C. [p51]
















Separate Opinion of Vice-President Wellington Koo

1. I am in complete agreement with the Court's findings on the first, second and fourth Preliminary Objections and with the general line of reasoning which has led up to them, except on one point in connection with the second Objection which calls for some elucidation on my part. As regards the third Preliminary Objection, I regret to be unable to concur in the Court's conclusion in favour of a joinder to the merits. It is my view that this objection should have been rejected. Accordingly, I propose to state the reasons for my opinion in the two respects.

I

2. The Judgment in referring to the reliance of the Respondent upon the decision of the Court in the Israel v. Bulgaria case in support of the second Preliminary Objection points out a number of differences between that case and the present one. In so far as this is done for the purpose of making an independent approach to the instant case on its merits, it can be easily understood. But, as I look at it, calling attention to these differences does not imply, nor do they themselves justify an implication of, any justification of the decision in the former case, concerning which my views remain the same as stated in the Joint Dissenting Opinion appended to the Judgment in that case.

3. The differences which have been noted in the present Judgment on the second Preliminary Objection are, in my view, only of an incidental character as regards the point in issue. The two situations arising from Article 36 (5) of the Statute in relation to the Bulgarian declaration of acceptance under Article 36 and from Article 17 (4) of the Hispano-Belgian Treaty of 1927 in relation to Article 37 are basically similar, if not identical, so far as the question of the transfer of the compulsory jurisdiction from the old Court to the new Court is concerned. Both depend upon the factor of being "still in force", independently of the disappearance of the Permanent Court, which was taken for granted. This term, which, as regards declarations of acceptance mentioned in Article 36 (5), was originally drafted in English and rendered in French as "pour une durée qui n'est pas encore expirée", constitutes the requisite condition for the said transfer. As regards Article 37, the condition is in fact the same for it calls for "a treaty or convention in force [which] provides for reference of a matter to a tribunal to have been instituted by the League of Nations, or to the [p52] Permanent Court of International Justice". The dissolution of both the League and the Court had been known and they were expected to be on their way to disappearance. The purpose of Article 37 and Article 36 (5) is the same: it is to preserve as far as possible the com-pulsory jurisdiction arrangements in force apart from the expected dissolution of the League and the Court. The form of the instrument in which the compulsory jurisdiction provision is embodied is immaterial. Whether this provision forms the whole subject-matter of a given instrument or is only one of the provisions of a treaty or convention for pacific settlement of disputes by specified bodies, or whether it constitutes a special provision in a general treaty or convention on other matters, is of no decisive importance as regards the transfer of the jurisdiction under Article 37. What matters is that the treaty or convention should in such case continue to be in force. This continuation of validity refers to the instrument as a whole; so long as the instrument itself remains in force, so long does the provision for compulsory jurisdiction, just as under Article 36 (5) of the new Statute, the declarations of acceptance made under Article 36 of the old Statute, are considered to remain in force so long as the period for which they were made has not expired. Article 17 (4) of the 1927 Treaty, like the Bulgarian declaration of acceptance, may have been temporarily inoperative due to the dissolution of the Permanent Court of International Justice, but this transient factor of inapplicability had been taken for granted and had been the very reason for the provisions of Article 37 just as it had been, in respect of declarations of acceptance under Article 36, for those of Article 36 (5). In other words the whole purpose of both provisions was intended to discount the effect of the dissolution of the old Court and make possible the effective transfer of its compulsory jurisdiction to the new Court.

4. Moreover, on closer examination it will be found that the argument of differentiation between the Aerial Incident case and the present case does not explain away the former decision. From the juridical point of view there is really no distinction as regards the principle of transfer from the old Court to the new Court. Only the two sources of the obligation to submit to compulsory jurisdiction are different. In the case of the declarations of acceptance made under Article 36, paragraph 2, of the old Statute, like similar declarations made under the identically numbered provision of the new Statute, their effectiveness depended upon the extent of concordance of the terms between any two given acceptances, having due regard to the respective reservations and limitations on the principle of reciprocity, whereas the jurisdictional clauses, to which Article 37 is applicable, derive from the mutual consent and agreement of the contracting parties in bilateral or multilateral instruments. But the process of the transfer itself and the legal [p53] effect of the transfer once consummated, are the same in both situations, just as the purpose of the two provisions in the Statute in question is identical. Only, in the instant case, as the Judgment has rightly pointed out, the basic obligation of submitting to compulsory adjudication is clearly stipulated in Articles 2 and 17 (1) of the 1927 Treaty just as in Article 23 in respect of "any disputes arising as to the interpretation of execution of the present Treaty", while the provision of Article 17 (4) is of a functional character as regards the tribunal for such adjudication, as is also the case in respect of the tribunal mentioned in Articles 21 and 22 for the determination of certain matters.

5. Such being the situation in the instant case, the difference in legal effect, if any, is one of degree as regards the validity or strength of the source of the obligation and not one of kind. For this reason there is even greater justification to uphold the validity of the transfer of the compulsory jurisdiction under Article 37 than under Article 36, paragraph 5. It does not warrant any implication that the decision in the Aerial Incident case was equally justifiable in law.

II

6. The third Preliminary Objection undoubtedly raises important questions of law and fact. In principle I fully endorse judicial caution as a sound policy in the interest of good administration of justice and the Court certainly has full discretionary power to decide on a joinder for good reasons, as the Court has affirmed in the present Judgment.

7. In the instant case I am, however, of the opinion that this objection could and should have been adjudicated upon. The elaborate written pleadings and the lengthy oral hearing have brought out clearly and almost exhaustively the various issues involved and the searching, though conflicting, arguments of the two Parties. While the Applicant has asked the Court, as the alternative to dismissal, to join the third Preliminary Objection to the merits, the Respondent has urged that the issue raised by it "is wholly ripe for decision" and that the alternative Belgian request for the joinder of this objection to the merits cannot be justified.


8. In the light of the submissions of the Parties on the third Preliminary Objection, two principal questions are involved at the outset: (a) one of law and (b) one of fact, the other issues raised being subordinate to and dependent upon the answers to the two questions for their solution. The question of law can be stated thus: does international law recognize the right of a State to protect its nationals, [54] natural or juristic persons, being shareholders in a foreign company, for damage or injury to them through an internationally illicit act done to the company by a third State? And the question of fact centring on two crucial points: are the shares in Barcelona Traction registered on its books in the name of nominees of American nationality and claimed by the Applicant as belonging to natural and juristic persons of Belgian nationality found prima facie to be owned by them, and have these persons sustained damage through damage caused to the said company by internationally wrongful acts, measures or omissions of the organs of the Respondent Government?


9. If the answer to the question of law is found to be in the negative and nevertheless the facts and circumstances of the case appear to be weighty and serious, judicial caution and sound administration of justice would dictate a joinder to the merits in order to make two deter-minations at the second phase of the proceedings, if it should finally take place. First, to determine whether the facts and circumstances of the instant case are juridically adequate to constitute a valid ground for recognizing the Applicant's capacity or jus standi before the Court. If they are found to be inadequate for the purpose, the claim of the Applicant must be held to be inadmissible and the third Preliminary Objection must be sustained. If they are found to be adequate, it would then be in order to make the second determination, namely whether the facts and circumstances of the instant case are of such a particular character as to warrant the finding by the Court of another exception to the existing recognized rule of protection of a company only by its national State.

10. If, on the other hand, the answer to the same question of law is found to be in the affirmative and the essential facts alleged by the Applicant constitute prima facie a valid ground for recognizing its capacity, a jus standi in the instant case, the said objection must be rejected at the present stage of the proceedings. Such a finding, however, would still leave it open to the Respondent at the later phase of the proceedings on the merits, if it should finally take place, to refute and disprove the alleged facts by counter-evidence. If the Respondent, in the opinion of the Court, succeeds in the task, a finding will of course be made to reject the Applicant's claim on the merits.


11. In brief, the primary question of law raised by the third Preliminary Objection consists in determining first of all whether under modern international law there exists a general right on the part of a State to protect its nationals, shareholders in a foreign company, vis-a-vis a third State independently of the general rule of protection by States of their national companies and of the recognized exception to it as noted above. It centres on the point whether modern inter-[p55] national law sanctions such a general right of intervention as claimed by the Applicant on behalf of Belgian shareholders. I propose now to consider this question.

A

12. The introduction of the concept of private legal entities in international law in the form of corporate bodies is a natural sequel to its emergence in municipal law. Since there are almost as many different kinds of corporate entities as there are different systems of municipal law under which they are constituted and since their activities have been growing in complexity as well as in kind, the problem of protecting their legitimate interests in international law has been assuming increasing importance as well as endless complexity.

13. This idea of protection is fundamental and appears to be common ground between the two schools of advocates on the subject. Their difference of view relates to the manner and extent of its implementation in international law. What is pertinent to the question under consideration, however, is to determine which is the more reasonable and practical view as regards protection of the shareholders by their national State in a foreign company. Should this protection be confined to the shareholders in a foreign company which is of the nationality of the "offending State"? Should it be limited again to such a case where the said foreign company has been dissolved or is practically defunct? Should there be an additional requirement that the said shareholders must be owners of a majority of the total number of shares of the company or at least a substantial proportion of them? What is the criterion for constituting a substantial proportion? Or what is the bearing and effect of the attitude of the State, the nationality of which is possessed by the company, upon the right of the national State of its shareholders to protect their interests? Has it intervened or has its intervention been energetic or not?

14. I am inclined to think that while the positive answers to them may be interesting or useful, they do not constitute essential elements to a general rule of protection of the national shareholders of the intervening State (still less to the particular issue under consideration).


15. Foreign investments constitute one form of property, rights or interests, and as such are in principle entitled to the protection of international law. Since the kinds and methods of such investment are numerous and varied, and since they are still in the process of expansion and development, it is inevitable that at the present stage of their evolution new circumstances and unfamiliar features will be encountered in the protection of such rights and interests in the inter-
[p56] national field. But in essence they all fall within the compass of the general rule of diplomatic and judicial protection of international law. What is really involved is the basic principle of protection, which has been so clearly affirmed by the Permanent Court of International Justice in the Mavrommatis case when it declared :

"It is an elementary principle of international law that a State is entitled to protect its subjects, when injured by acts contrary to international law committed by another State, from whom they have been unable to obtain satisfaction through the ordinary channelsFN1."
------------------------------------------------------------------------------------------------------------
FN1 P.C.I.J., Series A, No. 2, p. 12.
------------------------------------------------------------------------------------------------------------
Moreover, international law, which is primarily founded on the generally recognized principles of law and justice, attaches less importance to form and appearance than municipal law. Where it is a question of protection of property, rights and interests, it is the proper function of international law to ascertain where and to what extent they exist, and to accord recognition to realities rather than to forms and appearance. As stated by this Court in the Reparation for Injuries Suffered in the Service of the United Nations, Advisory Opinion of 11 April 1949 "throughout its history, the development of international law has been influenced by the requirements of international life ... FN2". Max Huber, Rapporteur on British claims against Spain in the Spanish Zone of Morocco, observed :
---------------------------------------------------------------------------------------------------------------------
FN2 I.C.J. Reports 1949, p. 178.
---------------------------------------------------------------------------------------------------------------------


"... Malgré le fait que beaucoup de systèmes de droit admettent l'existence indépendante de sociétés en nom collectif, la jurisprudence prépondérante des tribunaux reconnaît la possibilité de distinguer entre les parts contributives des sociétaires, d'un côté, et la société même de l'autre. Le droit international qui, dans ce domaine, s'inspire essentiellement des principes de l'équité, n'a établi aucun critère formel pour accorder ou refuser la protection diplomatique à des intérêts appartenant à des personnes de natio-nalité différente... FN3"
------------------------------------------------------------------------------------------------------------
FN3 Quoted by John Thomas Miller Jr., Du traitement par les gouvernements des intérêts étrangers dits substantiels des sociétés, 1950, p. 82.
------------------------------------------------------------------------------------------------------------

16. The right of a State to protect a company which possesses its nationality by diplomatic intervention or by recourse to international judicial settlement against another State for wrongful acts toward the company involving its international liability is generally recognized by international law. This rule is evidently derived by analogy from the principle that— [p57]

"By taking up the case of one of its subjects and by resorting to diplomatic action or international judicial proceedings on his behalf, a State is in reality asserting its own rights—its right to ensure in the person of its subjects, respect for the rules of inter-national law FN1."
------------------------------------------------------------------------------------------------------------
FN1 P.C.I.J., Series A, No. 2, p. 12.
------------------------------------------------------------------------------------------------------------

But this analogy, by the very nature of the corporate personality, is only approximate and cannot be pushed too far. It has been generally accepted because it facilitates protection abroad by its so-called national State. But it could not have been, and was obviously not intended to be, an all-in-all prescription for the protection of the various categories of rights and interests embodied in a corporate entity, the owners of which often have several different nationalities. Moreover, as a matter of fact, even in municipal law the shareholders are entitled, in certain circumstances, to take action in their own names in respect of injuries to a corporate entity. This principle is not only to be found in the decisions of the English and United States courts but is also recognized in the jurisprudence and law of associations under the Continental system FN2.
---------------------------------------------------------------------------------------------------------------------
FN2 J. Mervyn Jones, "Claims on Behalf of Nationals who Are Shareholders in Foreign Companies", in British Yearbook of International Law, 1949, Vol. XXVI, pp. 232-234.
---------------------------------------------------------------------------------------------------------------------

17. As the concept of corporate personality has become more complex and the activities of modern private corporations of different kinds have rapidly grown in variety and range, often extending to the territories of many States with different municipal law systems, their organization has taken on many forms of structure with an increasing number of constituent and associated elements. They often have subsidiaries with varying degrees of ownership and different classes of shareholders with differentiated rights of voting and sharing in the profits or dividends. Because of this fact of rapid growth and development of modern joint stock companies and corporations, the problem of their protection has likewise become more complex.

18. In my view the foregoing general considerations are useful to keep in mind when examining the points at issue in respect of the third Preliminary Objection.


19. It may be true, as contended by counsel for the Respondent, that international jurisprudence provides no precedent to support the Applicant's claim of the right of protection of the interests of its nationals, shareholders in a foreign company, against the wrongful acts of a third State done to the company. But it is to be noted that the cases of arbitral awards examined by the Parties were mostly decided several [p58] decades ago whereas the progress and development of corporate organization and activities in international commerce and finance have overtaken their applicability and have created new and unprecedented conditions which in turn constantly give rise to hitherto unknown problems in international law for fair and equitable solution.

20. For this reason, the original simple rule of protection of a company by its national State has been found inadequate and State practice, treaty regulation and international arbitral decisions have come to recognize the right of a State to intervene on behalf of its nationals, shareholders of a company which has been injured by the State of its own nationality, that is to say, a State where it has been incorporated according to its laws and therefore is regarded as having assumed its nationality.

21. Whether this recognition may be regarded as an exception to the rule of protection of a company by its own national State or as a supplementary rule of protection of the shareholders of a company is immaterial; nor, in my view, is it a point of great consequence that this recognition is sometimes qualified by the requirement that such protection must be conditioned by the extinction or the practically defunct state of the company in question. The important point to note is that the national State of the shareholders is recognized to have the right to protect them irrespective of whether they are to be regarded merely as beneficial owners of the rights, property and interests of the company or as virtual successors to the defunct or practically defunct company.


22. It is true, as has been contended by the Respondent, that this right of protection has been recognized because the wrongdoing State being the national State of the particular company, there would otherwise be no possibility of redress under international law. But it is equally true that the raison d'étre of this recognition is to secure redress for the damage caused to the shareholders, and the particular rule allowing only the national State of the company to exercise its protection is set aside, precisely for this predominant purpose of effective protection of the legitimate interests of the shareholders of the company who are nationals of the intervening State. If this is true, it follows that the original rule authorizing only the national State of the company to exercise diplomatic protection of its property, rights and interests is more of the nature of a particular rule for the protection of the company as such rather than a general rule to apply to the protection of all kinds of rights and interests, both individual and corporate, grouped within the juridical entity of the company. This being so, [p59] the national State of the shareholders of a foreign company is a fortiori, entitled to exercise protection on their behalf.

23. For convenience sake or as a matter of policy, the national State of the shareholders of a foreign company may leave their protection to the national State of the foreign company to exercise the right of protection on its behalf as a first step. But this right is neither an exclusive right nor a preferential right. There is no fundamental reason why the national State of the shareholders of the company should be denied the right to undertake their protection vis-a-vis the third State having caused damage to the company and consequently to its shareholders. This protection may be undertaken, for the purpose of obtaining redress, either jointly with the national State of the company or simultaneously with and independently of it. It is for the shareholders' national State to determine as a matter of policy what step is to be taken and when it is to be taken for the purpose. It may well be that the action taken by the company's own State is effective in securing redress for the company and therefore also for the shareholders from the State causing the damage to it; and in that event, the State of the shareholders will see no need to intervene on their behalf. But if the action of the national State of the company is fruitless or if it is disinclined to take steps to protect the company or discontinues its intervention without securing the desired result, there is no good reason why the national State of the shareholders should be precluded from exercising its own right to intervene on their behalf for effective protection.

24. Perhaps in one instance the interests of the shareholders may not be protectable in international law; that is, if the wrongdoing State is one of which the shareholders of a foreign company so injured are nationals. In such a" case it is not only impossible to conceive of an international claim to protect the interests of the shareholders as such against their own State, if they own all the shares of the company, but the said State can also justifiably disclaim international responsibility toward the national State of the injured company on the same ground as that on which the national State of a company injured by itself declines responsibility by affirming that under international law a State cannot, at least in theory, injure itself or claim against itself. For possible protection, the interests of the shareholders would have to depend upon the attitude and effort of the national State of the company in asserting its right of diplomatic intervention in favour of the company as such. For, on the principle stated by the Court in the Mavrommatis case in claiming for redress of an injury caused to its nationals by a foreign State, a State is really asserting its own right to ensure respect for international law by the foreign State in the person of its nationals, the national State of the company in question could perhaps insist upon redress being accorded to the injured company so as to repair also the losses to the shareholders by the wrongdoing [p60] national State of the shareholders, but it would be confronted by the argument of lack of genuine interests on its part, to which international law attaches primary importance.

25. However, if there are other shareholders of a different nationality or nationalities from that of the shareholders of the wrongdoing State, the claims of their national States obviously cannot be met with the same refusal to acknowledge international responsibility for its wrongful act.

26. What I have said above shows that the rule of protection of a company by its national State and the rule of protection of its shareholders by their national State are really not, and cannot be, exclusive of each other. These two rights are based on different concepts; they are different and independent of each other. They co-exist. They are complementary and equally necessary from the standpoint of international law, though the right of a State to protect a company incorporated under its laws is limited to the needs arising from the nature of the corporate personality only FN1.
---------------------------------------------------------------------------------------------------------------------
FN1 See De Visscher (Ch.), "De la protection diplomatique des actionnaires d'une société contre l'Etat sous la législation duquel cette société s'est constituée", in Revue de droit international et de législation comparée, 1934, pp. 641-642.
---------------------------------------------------------------------------------------------------------------------


27. The so-called exception, mentioned above, in favour of protection of the shareholders by their national State, to the general rule of protection of a company by its national State, in my view is not an exception. On examination it will be found to be of the nature of a separate rule for the protection of the interests of the shareholders in a foreign company by their national State. It is independent of the first rule and co-exists with it. It is only incidentally by circumstances connected with it. It is different from the right of the national State of the foreign company. Like the latter it flows indirectly from the general right of a State to protect its nationals and their property, rights and interests on the territory of a foreign State. It is a natural corollary of the principles of international law regarding fair treatment by a State of aliens on its territory and diplomatic protection by their national State for redress of wrongful acts committed by the foreign State in breach of its international obligations.

28. For if the rule of protection of a company only by its national State even in respect of the interests of its shareholders were of the nature of a general and absolute rule, then in the case of the injury to a company with foreign shareholders having been caused by its own [p61] national State, that should be the end of the matter, since it is affirmed that a State cannot incur international liability toward itself. Yet the Respondent admits and agrees that in such a case international liability attaches to the national State of the company for having caused damage to its foreign shareholders through the corporate body, though the wrongful act has been directed to the company only. This recognition of the right of diplomatic protection of a State of its nationals, shareholders in a foreign company, already sanctioned by State practice, international arbitral awards and treaty stipulations, constitutes in fact a rule in application of the general principle of diplomatic protection of nationals by their own State in international law. In other words, the interests of shareholders are recognized by international law as entitled to protection by their national State in the same way as the other property, rights and interests of its nationals are protected.

29. The Respondent has also argued that such dual or multiple protection by the national State of the company and the national State or States of the shareholders will cause inconvenience and even confusion internationally. It is pertinent to cite as an appropriate answer what this Court has stated in the Reparation for Injuries, Advisory Opinion, of 1949 when referring to the possibility of competition between the State's right of diplomatic protection and the Organization's right of functional protection, as follows:


"In such a case, there is no rule of law which assigns priority to the one or to the other, or which compels either the State or the Organization to refrain from bringing an international claim. The Court sees no reason why the parties concerned should not find solutions inspired by goodwill and common sense. ...
Although the bases of the two claims are different, that does not mean that the defendant State can be compelled to pay the reparation due in respect of the damage twice over FN1."
------------------------------------------------------------------------------------------------------------
FN1 I.C.J. Reports 1949, pp. 185-186.
------------------------------------------------------------------------------------------------------------

The argument of confusing multiple protection therefore has no merit.

30. In the present case it will also be relevant to recall that in the early years following the declaration of bankruptcy of Barcelona Traction by the Reus court on 12 February 1948, Canada, the national State of the company, intervened actively to protect its interests. The efforts of the Canadian Government, however, showed a change [p62] of attitude as time went on. By late 1951 the Canadian Secretary of State for External Affairs told the Spanish Consul in Canada that "Canadian interests in this case are so slight that it is of little interest to us" FN1. In a letter of 19 July 1955 replying to Mr. Arthur Dean, attorney for Sidro, who had urged that "a vigorous inquiry" from several ambassadors in Madrid, including the Canadian Ambassador, "would be most helpful in bringing about a favourable result", the Canadian Secretary of State for External Affairs declined to accept the suggestion and stated: "The Canadian Government has not been prepared actually to intervene in this matter to make representations to the Spanish Government as to the measures which ought to be taken toward a settlement FN2."
---------------------------------------------------------------------------------------------------------------------
FN1 Letter, dated 12 February 1952 from the Belgian Ambassador in Madrid to the Belgian Minister of External Trade, document filed by the Belgian Government on 5 May 1964.
FN2 Document filed by the Belgian Government on 5 May 1964.
---------------------------------------------------------------------------------------------------------------------
31. In connection with the issue of the right of a State under international law to protect its nationals, shareholders in a foreign company, against a third State, an incidental question of law has been debated by the Parties in the present case as to whether this right, if it exists, is not limited to legal shareholders but extends to beneficial owners of shares. The question relates to the system of registering the shares of a particular company in its books in the names of the nominees. This is usually authorized by statutory law or sanctioned by commercial practice in the economically more advanced countries where capital for investment abroad as well as at home is more abundant. Technically the registered shareholders are legal owners of the shares so registered, but it would be obviously unjust and incorrect, in the light of the intent and purpose of the municipal law which provides for such a system of registration, which recognizes the equitable title of the beneficial owner, and which as a fact must be taken into consideration by international law, to disregard the interests of the beneficial or real owners, if in the event of the particular company having suffered damage caused by the wrongful acts of a foreign State, the national State of the real owners of the shares in question should be denied the right of protecting them on the international plane, even if the national State of the nominees, who are the registered owners, should decline, for considerations of policy or expediency, to intervene with the wrongdoing State to protect its own nationals, the registered owners of the shares in a given case.
32. International law, being primarily based upon the general principles of law and justice, is unfettered by technicalities and for-malistic considerations which are often given importance in municipal [p63] law. As has already been stated above, the fundamental right of diplomatic intervention of a State to protect its nationals against another State and to seek redress for them for any wrongful act on its part aims generally to protect the genuine interests of its nationals. It is the reality which counts more than the appearance. It is the equitable interest which matters rather than the legal interest. In other words it is the substance which carried weight on the international plane rather than the form.

33. The salient issue of the whole question, from the point of view of international law, is the right of protection of a State of the legitimate interests of its nationals, shareholders in a foreign company, against a wrongdoing third State. In regard to the evolution of a rule of customary international law there always exists the possibility of a difference of opinion as to the degree of uniformity of the facts and the regularity of their occurrence necessary to warrant, on this basis of reasoning, an affirmation of its existence. This is obviously because, in the absence of a generally accepted norm for evaluating the factors, it must depend, to a certain extent, upon a subjective appreciation, both of the recurrence of the same facts and of the rapid development of foreign investments in the international community, in arriving at a conclusion FN1. In my view the evidence placed before the Court has not established the existence of any rule denying recognition of the existence of the interests of shareholders or beneficial owners of shares in a foreign company or prohibiting their protection by their national State or States by diplomatic intervention or recourse to international adjudication. On the contrary there is seen a substantial body of evidence of State practice FN2, treaty arrangements FN3 and arbitral decisions FN4 to warrant the affirmation of the inexplicit existence of a rule under international law recognizing such a right of protection on the part of any State of its nationals, shareholders in a foreign company, against another wrongdoing State, irrespective of whether that other State is the national State of the company or not, for injury sustained by them through the injury it has caused to the company.
---------------------------------------------------------------------------------------------------------------------
FN1 See De Visscher, Interprétation judiciaire, pp. 219-251.

FN2 For cases see Alexandre-Charles Kiss, "La protection diplomatique des actionnaires dans la jurisprudence et la pratique internationales", in Travaux et Recherches de l'Institut de Droit comparé de l'Université de Paris, 1960. Vol. XVIII, pp. 178-210.

FN3 For treaty arrangements, see Daniel Vignes, "La protection des actionnaires dans les conventions internationales bilatérales", ibid., pp. 211-241.

FN4 For a review of cases see J. Mervyn Jones, "Claims on Behalf of Nationals who Are Shareholders in Foreign Companies", in British Yearbook of International Law, 1949, Vol. XXVI, pp. 237-254.
---------------------------------------------------------------------------------------------------------------------

[p64]

B

34. Having determined the general question of law as above, it remains now to consider the question of fact, namely whether the evidence placed before the Court justifies a conclusion that the Applicant has established its jus standi in the instant case. The main facts alleged by the Applicant consist of the following: (1) ownership by Belgian nationals of shares in Barcelona Traction and their holding of the capital of the company amounting to 88 per cent., both on 12 February 1948, the date on which Barcelona Traction was declared bankrupt, and on 14 June 1962, the date of the Application filed on 19 June 1962 instituting the present proceedings; (2) the order of the Reus court of 12 February 1948 declaring Barcelona Traction bankrupt; (3) the seizure of the property and other assets of Ebro, Barcelonesa and other subsidiaries of the company; (4) the mediata y civilissima seizure of the shares of the subsidiaries belonging to Barcelona Traction kept in Toronto; (5) the printing and issuance of new shares in substitution of them ; (6) the holding of a general shareholders' meeting on the basis of their possession by the bankruptcy organs; (7) the replacement of the originally appointed legal representatives before the Spanish courts; (8) the appointment of new boards of directors for the subsidiaries; (9) the holding of a private meeting of creditors and the appointment of the trustees for the liquidation of the capital of Barcelona Traction; and (10) the sale of the subsidiaries through the newly created shares to Fecsa, belonging to the March group on 4 January 1952.

35. Whether the foregoing facts are all true as alleged; or what is the precise character or actual amount or value of the interests owned by Belgian nationals, both natural and juristic persons; or how the damage has been caused to them; or to what extent it has been actually sustained by them—these are all questions which essentially belong to the merits. At the present stage of the proceedings it is sufficient, in my view, to note that the facts alleged by the Applicant have not been denied by the Respondent. This being so, and in the light of the question of law determined above, it is proper to conclude that prima facie the Applicant has established its jus standi and that the third Preliminary Objection should have been rejected.

(Signed) Wellington Koo [p65]
Separate Opinion of Judge Tanaka


The following observations are limited to the Court's opinion on the second principal Preliminary Objection raised by the Respondent Government.

I can completely agree with the conclusion of the Court in rejecting this objection. Furthermore, I cannot deny the well-foundedness of the reasons by which the Court reached this conclusion. Nor do I hesitate to say that these reasons in general are in themselves sufficient to overrule this Preliminary Objection.

However, to my regret, I cannot agree with the Court's choice of reasons. To reach a conclusion there may be found many concurrent reasons upon which a decision of the Court can be based. Some of them may be more immediate, essential and straightforward than others which are of indirect and subsidiary importance and serve simply to corroborate the principal reasons.

The choice of reasons as grounds for a decision, however, is necessarily subject to a limitation which is required by the nature of judicial activities. I am well aware that some consideration should be given to the existence of precedents in regard to a case which the Court is called upon to decide. Respect for precedents and maintenance of the continuity of jurisprudence are without the slightest doubt highly desirable from the viewpoint of the certainty of law which is equally required in international law and in municipal law. The same kind of cases must be decided in the same way and possibly by the same reasoning. This limitation is inherent in the judicial activities as distinct from purely academic activities.

On the other hand, the requirement of the consistency of jurisprudence is never absolute. It cannot be maintained at the sacrifice of the requirements of justice and reason. The Court should not hesitate to overrule the precedents and should not be too preoccupied with the authority of its past decisions. The formal authority of the Court's decision must not be maintained to the detriment of its substantive authority. Therefore, it is quite inevitable that, from the point of view of the conclusion or reasoning, the minority in one case should become the majority in another case of the same kind within a comparatively short space of time.

What I want particularly to emphasize is not only the concrete appropriateness of the conclusion, namely the operative part of each decision, but the reasoning upon which the conclusion is based. The more important function of the Court as the principal judicial organ of the United Nations is to be found not only in the settlement of concrete disputes, but also in its reasoning, through which it may contribute to the development of international law. It seems hardly necessary to [p66] say that the real life of a decision should be found in the reasoning rather than in the conclusion.

Therefore, the above-mentioned choice of reasons by which the Court disposes of a matter in issue becomes important. It affects the intrinsic value and weight of a reason on the basis of which a concrete issue is dealt with.

***

In the light of these short preliminary remarks I shall consider the matter at issue as regards the choice of reasons by which the Court has disposed of the second Preliminary Objection raised by the Respondent Government.

There is not the slightest doubt that this objection denying the Court's jurisdiction in the present case has been motivated and inspired by the existence of two precedents, namely the Judgments in the Aerial Incident case of 26 May 1959 (I.C.J. Reports 1959, p. 127), and the Temple of Preah Vihear case of 26 May 1961 (I.C.J. Reports 1961, p. 17).

First I shall consider the Court's Judgment in the Aerial Incident case, which marked the starting point of the subsequent history of the jurisdictional matter with which we are concerned.

In this case the Bulgarian Government raised a preliminary objection denying the validity of the Declaration of 12 August 1921, by which Bulgaria accepted the compulsory jurisdiction of the Permanent Court of International Justice. This Declaration, the Bulgarian Government insisted, "ceased to be in force on the dissolution of the Permanent Court" of International Justice on 18 April 1946 and therefore "cannot accordingly be regarded as constituting an acceptance of the compulsory jurisdiction of the International Court of Justice, by virtue of Article 36, paragraph 5, of the Statute of that Court". The Government of Israel, on the other hand, to establish the jurisdiction of the Court in that case, invoked the Bulgarian Declaration of 1921 and Article 36, paragraph 5, of the Statute and the fact that Bulgaria became a Member of the United Nations on 14 December 1955 and accordingly a party to the Statute.

The Court upheld this objection and ruled that it had no jurisdiction in the case.

I quote a passage of the Judgment which seems most clearly to indicate its essential reasons:

"At that date [namely, 14 December 1955], however, the Bulgarian Declaration of 1921 was no longer in force in consequence of the dissolution of the Permanent Court of International Justice in 1946. The acceptance set out in the Declaration of the compulsory jurisdiction of the Permanent Court of International [p67] Justice was thereafter devoid of object since that Court was no longer in existence. The legal basis for that acceptance in Article 36, paragraph 2, of the Statute of the Permanent Court of International Justice, ceased to exist with the disappearance of that Statute. Thus, the Bulgarian Declaration had lapsed and was no longer in force" (I.C.J. Reports 1959, p. 143).

This ruling of the Court was based on two main reasons which were concerned with the interpretation of Article 36, paragraph 5. The one was the recognition of the destructive effect of the dissolution of the Permanent Court on 18 April 1946 upon the Bulgarian Declaration of 1921. The other was the distinction made between original and non-original Members of the United Nations concerning the interpretation of Article 36, paragraph 5, of the Statute.

Although this Judgment was given in consideration of the particular circumstances of the case and its binding force was limited to the parties and to this particular case (Article 59 of the Statute), it has exercised tremendous influence upon the subsequent course of the Court's juris-prudence and the attitude of parties vis-a-vis the jurisdictional issues relative to this Court.

The first repercussion of the Judgment in the Aerial Incident case may be seen in the Judgment in the Temple of Preah Vihear case delivered on 26 May 1961, precisely two years after the delivery of the Judgment in the Aerial Incident case.

It is to be noted that the repercussion is found not in the conclusion of the Judgment itself, but in the argument of the party raising a preliminary objection to the Court's jurisdiction, and in the reasoning of the Court in disposing of this objection.

The question at issue was concerned with the effect of the Thai Declaration of 20 May 1950 which renewed for a period of ten years the Declaration of 3 May 1940, constituting the ten-year renewal of a Declaration dated 20 September 1929, accepting the compulsory jurisdiction of the Permanent Court of International Justice. The question was whether the 1950 Declaration of Thailand was valid by the operation of Article 36, paragraph 5, notwithstanding the dissolution of the Permanent Court on 18 April 1946 and the fact that Thailand became a Member of the United Nations and thus a party to the Statute on 16 December 1946, eight months after the dissolution of the Permanent Court.

One may recognize that Thailand was legally in an analogous position with Bulgaria in regard to the application of Article 36, paragraph 5, except that, while the Bulgarian Declaration was made for an indefinite period, the Thai Declaration covered a period of ten years with the possibility of renewal. Accordingly, it was quite natural that, when the Thai Government raised a preliminary objection denying the jurisdiction of the Court by excluding the application of Article 36, [p68] paragraph 5, to that declaration, it did nor fail to refer to the Judgment in the Aerial Incident case.

The Preliminary Objection and Submissions of Thailand on this point read as follows:

"(i) that the Siamese declaration of the 20th September, 1929 lapsed on the dissolution of the Permanent Court of International Justice on the 19th April, 1946, and thereafter could not be renewed;

(ii) that the Thai declaration of the 20th May, 1950 purported to do no more than renew the said declaration of the 20th September, 1929, and so was ineffective ab initio;

(iii) that consequently Thailand has never accepted the compulsory jurisdiction of the International Court of Justice under Article 36, paragraph 2, of the Statute".


It is not unreasonable to suppose that this objection of Thailand was encouraged by the Judgment in the Aerial Incident case. However, differently from that case, the objection was not successful for the cause of Thailand. The Court, although it recognized its jurisdiction in the case, reached its conclusion not by way of the application of Article 36, paragraph 5, but by recognizing the validity of the Thai Declaration of 1950 as made independently under Article 36, paragraphs 2 to 4 (I.C.J. Reports 1961, p. 29).

It is to be noted that in the Temple of Preah Vihear case the Court did not establish its jurisdiction by considering the question whether or not the dissolution of the Permanent Court resulted in the lapse of the Thai Declaration of 1940, renewed in 1950. This question was left untouched and the matter was decided by stressing the particularity of the case, which was different from the Aerial Incident case.

Furthermore, the Court's interpretation that the Thai Declaration of 1950 should be considered as independent from that of 1940 does not seem quite in conformity with the text of the declaration which renewed the previous declaration, and with the real intention of Thailand from which the historical continuity between the two declarations is undeniable. From this viewpoint the solution presented by the Judgment does not seem quite satisfactory.

The question of the effect of the dissolution of the Permanent Court in the light of an interpretation of Article 36, paragraph 5, upon which the preliminary objection was based, should have been reconsidered by the Court.

There remained for the Court the following alternatives: either the Court would comply with the principle enunciated by the Judgment in the Aerial Incident case and uphold this objection, or it would overrule this principle and reject the objection.[p69]

In the case of the second alternative the Joint Dissenting Opinion of Judges Sir Hersch Lauterpacht, Wellington Koo and Sir Percy Spender appended to the Judgment in the Aerial Incident case (I.C.J. Reports 1959, PP. 156 et seq.) might naturally have much importance in deciding this issue.

This Joint Dissenting Opinion, different from the Court's opinion, firstly denied the lapsing effect of the dissolution of the Permanent Court upon the Bulgarian Declaration of 1921 by the interpretation and application of Article 36, paragraph 5, and secondly, it did not distinguish between original and non-original Members of the United Nations regarding the matter of transfer of compulsory jurisdiction. The fundamental idea upon which this opinion rested was nothing but the substantial identity of the old and the new Court and the continuity of their jurisdiction notwithstanding the dissolution of the old Court. Whether the conclusion was negative or positive, the Court should have tackled and solved this essential question without confining itself to reasons of a subsidiary character.

That the Court's attitude vis-á-vis the Temple of Preah Vihear_case was influenced by the preoccupation of not impairing the authority of the Judgment in the Aerial Incident case is very probable. Respect for precedents and maintenance of jurisprudence are important considerations required in judicial activities. But the choice of reasons for a decision is no less important, as I said above. From this viewpoint the Court should have chosen in the Temple case more essential, more immediate reasons in deciding the matter at issue.
This is one reason why Judge Sir Gerald Fitzmaurice and myself appended a Declaration to the Judgment in the Temple of Preah Vihear case (I.C.J. Reports 1961, pp. 36 et seq.; cf. Declaration of Judge Wellington Koo, ibid., p. 36).

Thus the doctrine of lapse by dissolution which was incorporated in the Judgment in the Aerial Incident case has remained intact. It has offered a powerful tool to those States which were not inclined to submit to the compulsory jurisdiction of the Court by the application either of Article 36, paragraph 5, or of Article 37 of the Statute. It has become an indirect obstacle to the Court in choosing reasons.

***

The thesis of lapse by dissolution has appeared for the third time in the second principal Preliminary Objection put forward by the Respondent Government in the present case. The Judgment in the Aerial Incident case has become the core of the argument of the Respondent Government in denying the validity of the jurisdictional clause contained in the Treaty of Conciliation, Judicial Settlement and Arbitration of 19 July 1927 between Belgium and Spain. The position[p70] of the Respondent Government is to deny the jurisdiction of the Court by referring to the principles enunciated by the Judgment in the Aerial Incident case regarding the interpretation of Article 36, paragraph 5, of the Statute. The attitude of the Applicant Government vis-a-vis the Judgment in the Aerial Incident case, on the other hand, seems to be that it avoids challenging this Judgment openly and tries to attain the same purpose, namely justification of the jurisdiction of the Court, by another means. This means is to emphasize the difference between the two cases. The difference is found in the fact that, whereas a declaration referred to in Article 36, paragraph 5, is of a unilateral character and simply aims at the acceptance of the compulsory jurisdiction, and is furthermore intimately connected with the Statute of the Permanent Court, the jurisdictional clause with which Article 37 is concerned, is of a bilateral character and is incorporated in a treaty or convention which has a wider purpose than a declaration under the optional clause. Therefore, the jurisdictional clause in the Treaty of 1927, unlike the Bulgarian declaration of 1921, would not be subject to the annihilating effect of the dissolution of the Permanent Court.

On the other hand, the validity of the Treaty of 1927 as a whole is not denied by the Parties.

The result thereof is that the Parties have gone into the question of the severability of the provisions of a treaty: the Spanish Government is in favour of severability provided this does not come into conflict with the validity of the remaining parts of the treaty, namely the parts relative to conciliation and arbitration; the Belgian Government is in favour of inseverability of the treaty in order to save the validity of the jurisdictional clause as an integral part of the Treaty of 1927.

Thus the discussions deviated in the wrong direction by dealing with a question which does not seem to be relevant to the interpretation of Article 37 of the Statute, the main legal issue in the second principal Preliminary Objection.

The Court's viewpoint seems to support, in general, the contention of the Belgian Government resting upon the emphasis of a difference between Article 36, paragraph 5, and Article 37 of the Statute in so far as the interpretation of these two provisions is concerned.

I shall now consider the question whether Article 37 can be interpreted differently from Article 36, paragraph 5, in regard to the effect of the dissolution of the Permanent Court. The question is concerned with the identity or divergence of these provisions:

It is quite true that there exist many points of difference between Article 36, paragraph 5, and Article 37 of the Statute, for example, the wording, the source of compulsory jurisdiction, the unilateral character of the declaration and the bilateral character of the jurisdictional clause incorporated in a treaty, etc. The question, however, is whether these differences are relevant to a decision of the matter at issue, namely the effect of the dissolution of the Permanent Court on the fate of [p71] declarations made under the optional clause and jurisdictional clauses in treaties.

In a matter of this kind we cannot assert absolutely that one thing is identical with or different from the other. There may be found many elements of similarity and difference. What matters is from what viewpoint they are identical or different. The decision as to whether one thing is identical or not with the other depends upon the position from which one regards the matter. Therefore, the decision is relative to the viewpoint one adopts.

Concerning the matter at issue, namely the question of identity or diversity between Article 36, paragraph 5, and Article 37 of the Statute, the criterion should be sought in the viewpoint of the essential purpose of both provisions, i.e., the continuity of the acceptance of compulsory jurisdiction. If these provisions are identical in this fundamental purpose, they may be considered as identical notwithstanding the possible difference in many other respects which are not related to the purpose itself.

Now, nobody would dare deny the fact that the above-mentioned purpose is common to Articles 36, paragraph 5, and 37. Consequently, the Court, called upon to give an interpretation on Article 37 in regard to the second principal Preliminary Objection, could not have ignored the existence of the Judgment in the Aerial Incident case, whatever the conclusion of the Court might be: either to follow or to overrule this precedent. The Court should have met the question which is common to Articles 36, paragraph 5, and 37, instead of dealing with the present case independently of the Aerial Incident case.

The Court should have made its position clear on the jurisdictional matter, vis-a-vis the Judgment in the Aerial Incident case as involving an issue which is of the same legal nature as the present case. That is what is dictated by the value and importance of the matter at issue.

I am not unaware of the fact that, while there now exists no optional clause declaration which needs to be saved by the operation of Article 36, paragraph 5, a large number of treaties and conventions containing a jurisdictional clause are still in existence. In the former case this issue, namely the question of the interpretation of Article 36, paragraph 5, may have lost all practical value; accordingly, the Judgment in the Aerial Incident case would do no harm to the interpretation of Article 36, paragraph 5, even if it should be overruled.
However, consideration should be given not only to the practical significance of the Court's decisions but also to their theoretical meaning and value. I consider that the Court should have dealt primarily with the Judgment in the Aerial Incident case as this involved the same legal question as the present issue rather than evade it because it was an inconvenient obstacle. General international law might have benefited by such an attitude of the Court by finding a common solution [p72] to the jurisdictional question which has arisen or might arise concerning Articles 36, paragraph 5, and 37.

***

So far as my view on the interpretation of Article 36, paragraph 5, is concerned, I agree fundamentally with the view put forward in the above-mentioned Joint Dissenting Opinion appended to the Judgment in the Aerial Incident case. Not only do I share the view of this Opinion as an interpretation of Article 36, paragraph 5, but I agree with the view of its authors which does not make a distinction between the interpretation of Article 36, paragraph 5, and Article 37 (I.C.J. Reports 1959, pp. 180-182) so far as the effect of compulsory jurisdiction is concerned.

It is unnecessary to describe the content of this Opinion in detail. I would rather limit myself to stressing some of its essential points from my own viewpoint.

What I have to say below is concerned with the interpretation of Article 36, paragraph 5, which constitutes the subject of that Opinion, but this can be applied mutatis mutandis to the interpretation of Article 37.

The principal question we are confronted with is the effect of the dissolution of the Permanent Court of International Justice upon the compulsory jurisdiction accepted by a unilateral declaration under Article 36, paragraphs 2 to 4 of the Statute. It has a bearing on the interpretation of Article 36, paragraph 5, which stipulates:

"Declarations made under Article 36 of the Statute of the Permanent Court of International Justice and which are still in force shall be deemed, as between the parties to the present Statute, to be acceptances of the compulsory jurisdiction of the International Court of Justice for the period which they still have to run and in accordance with their terms."

Nobody can deny that the purpose of this provision is the preservation of the effect of compulsory jurisdiction accepted in regard to the old Court under the regime of the new Court. The alleged effect of the lapse of declarations by the dissolution of the Permanent Court shall be considered from this point of view, namely the purpose of Article 36, paragraph 5.

The theory of "lapse" advanced by the Bulgarian Government and supported by the Judgment in the Aerial Incident case is based on the great significance attached to the fact of the dissolution of the Permanent Court. It presupposes the existence of some difference between the old and new Courts. If some differences between the two Courts, either fundamental or in detail, exist then declarations made [p73] under the old Court could not be expected to continue the same effect in regard to the new Court. In this case the dissolution of the Permanent Court might have a serious effect upon the fate of the said declarations.

Now there is no doubt that not only in their fundamental purpose but in every detail, namely from the viewpoint of organization, composition and procedure, the old and the new Court are identical with each other; the latter being the exact counterpart or copy of the former. They do not differ except in name. The continuance of substantially the same Court, differing only in name, has never been contested, even by those who sought to deny the compulsory jurisdiction of the International Court.

The continuity between the two Courts under a different name guaranteed the subsistence of the same jurisdictional rights and obligations of the declarant States. There would seem to be no inconvenience or disadvantage to the parties concerned. Presumably if when the switchover from one Court to the other was carried out no change of name had been effected, no one, in this case, would contend for the lapse of an already existing declaration.

Furthermore, it should be noted that the dissolution of the Permanent Court did not occur suddenly but had been anticipated and that there was no temporal gap between the dissolution of the old Court and the creation of the new one.

Consequently, the real circumstances are not so much the transfer of jurisdiction from the old Court to the new one as the replacement of the former by the latter. The acceptances by the declarant States of the compulsory jurisdiction remain unchanged. Accordingly there did not occur the "transfer of jurisdiction" nor the "automatic succession" (in the proper sense of the terms). The circumstances concerning the dissolution of the Permanent Court being such, it does not seem to be in conformity with the true intention of the parties or with a common-sense conclusion to attach the lapsing effect to the fact of the dissolution of the Permanent Court. Nor does there exist here any material change in the compulsory jurisdiction originally accepted. It matters only that declarations are "still in force" or "faites ... pour une durée qui n'est pas encore expirée" (Article 36, paragraph 5).

From what is indicated above, I may conclude that Article 36, paragraph 5, simply affirms the true and reasonable intention of declarant States and does not impose any new obligations upon them. This provision is nothing but the expression of what is required by logic and reason. This provision may be conceived as an authentic interpretation concerning the law on jurisdictional matters.

If the dissolution of the Permanent Court could have so important an effect upon declarations accepting the compulsory jurisdiction, the legislators of this provision would have expressly mentioned this matter. However, the term "dissolution" does not appear in Article 36, paragraph 5. It is certain that they did not approve the destructive effect of dissolution. What they contemplated must have been, on [p74] the contrary, to save the effect of declarations accepting the compulsory jurisdiction by excluding the possible erroneous construction of the effect of the dissolution. Such construction is radically opposed to the purpose inherent in Article 36, paragraph 5.
The real and only obstacle to the continuance of the compulsory jurisdiction existing with regard to some States is the fact that they did not become Members of the United Nations and accordingly parties to the Statute of the International Court before the dissolution of the Permanent Court. In this case one of the most important conditions required for acceptance of compulsory jurisdiction is lacking. But this condition can be fulfilled by admission to the United Nations and ipso facto becoming a party to the Statute of the International Court of Justice.
Thus, upon the basis of the already existing objective condition, namely declarations accepting the compulsory jurisdiction of the Permanent Court, the compulsory jurisdiction can become effective, being completed by the fulfilment of a subjective condition, namely membership of the United Nations and party to the Statute.

So long as this subjective condition is unrealized, the declaration remains inoperative or "dormant"; it has not become null and void by the effect of the dissolution of the Permanent Court. The cause of the fact that temporarily the declaration remains inoperative, is found not in the effect of the dissolution, but in the lack of the capacity of the declarant State.

From what has been stated above, it is clear that the dissolution of the Permanent Court cannot have such an important effect as to decide the fate of declarations having accepted the compulsory jurisdiction of the Permanent Court by those States which were not original Members of the United Nations, or did not become Members before the dissolution of the Permanent Court. Therefore the doctrine of the "lapse" first put forward by the Bulgarian Government in the Aerial Incident case, and reiterated by the Thai Government in the Temple of Preah Vihear case regarding Article 36, paragraph 5, of the Statute (and finally invoked by the Spanish Government regarding Article 37) is quite illusory and unsound. This doctrine, I am inclined to consider, might have been artificially devised by those parties who, in concrete cases, did not want to submit themselves to the compulsory jurisdiction which they had accepted and the effective continuance of which they had never doubted before.

The logical fallacy of this doctrine is clear. As is indicated above, the replacement of the Permanent Court by the International Court in itself does not possess any negative effect on the continuance of the declaration accepting the compulsory jurisdiction, owing to the existence of exact identity between these two juridical organs. This is a sociological fact underlying the legal issue. However, these organs [p75] have a distinct legal existence. Accordingly, to carry out smoothly the "transfer of jurisdiction" or the "automatic succession" between the old and the new Court a legislative measure or technique had to be adopted. This is precisely the purpose which was intended to be realized by Article 36, paragraph 5, and which is in conformity with the presumed intention of reasonable declarant States. It is evidently a contradiction to invoke the lapsing effect of dissolution and to deny the application of this provision, because its principal aim, undoubtedly, is nothing but the exclusion of such invocation.

The objective of the preservation of the effect of declarations under the old Court, as much as possible in regard to the new Court, must govern the interpretation of Article 36, paragraph 5, of the Statute. This objective is related to the institution of compulsory jurisdiction and, thereby, linked with the ideals of justice and peace which are to prevail in the international community. Those who advocate the doctrine of the "lapse" seem to view the concept of "dissolution" as if it presents an obstacle interrupting the continuity of the natural process of cause and effect. We should beware of falling into the excess of the legal formalism of so-called "conceptual jurisprudence" of which the doctrine of the "lapse" presents a conspicuous example. Sociological and teleological approaches, I consider, are particularly needed in the field of international law.

***

What I have stated above is limited to the question of the effect of the dissolution of the Permanent Court upon the existing declarations in the light of the interpretation of Article 36, paragraph 5. With regard to another question, namely whether or not "the parties to the present Statute" within the meaning of the said Article is limited to original members of the United Nations, and therefore the signatories of the Statute, I need only refer to the above-mentioned Joint Dissenting Opinion and will not go further into the matter.

These fundamental arguments relative to the interpretation of Article 36, paragraph 5, can be applied unchanged to that of Article 37, since, as I mentioned above, so far as the fundamental objective is concerned, these provisions are exactly identical and there is no room for different interpretations of these two provisions. Accordingly, the Joint Dissenting Opinion which originally related to the interpretation of Article 36, paragraph 5, can be naturally extended to the interpretation of Article 37, in so far as common questions are concerned.

Briefly, I can agree with the opinion of the Court on the second principal Preliminary Objection, in its conclusion as well as in its reasoning. Next, it seems that the Court's view on Article 37, namely the question of the effect of the dissolution of the Permanent Court, is not essentially very different from that of the Dissenting Opinion on Article 36, paragraph 5, regarding the same question, except with regard to some points [p76] which are derived from the particularity of a jurisdictional clause incorporated in a treaty. So far as the question of the effect of the disso-lution of the Permanent Court on the compulsory jurisdiction is concerned, there should be no different answer or reasons as regards an independent unilateral declaration under the optional clause or a jurisdictional clause in a treaty. What can be said is that the reasons based on the particularity of the latter could be invoked a fortiori for the effective subsistence of the clause.

The following reasoning of the Court at the closing part of its consideration of the second principal Preliminary Objection is very convincing:

"It was this fallacy which underlay the contention advanced during the hearings that the alleged lapse of Article 17 (4) was due to the disappearance of the 'object' of that clause, namely the Permanent Court. But that Court was never the substantive 'object' of the clause. The substantive object was compulsory adjudication and the Permanent Court was merely a means for achieving that object."

This reasoning can be very precisely applied to the interpretation of Article 36, paragraph 5.

The Aerial Incident case, the Temple of Preah Vihear case, and the present case, each of them possessing some particular aspect distinguishing the one from the others, involve an important legal issue which is common to them, namely the question of the effect of the dissolution of the Permanent Court upon the fate of the compulsory jurisdiction based on the optional clause of Article 36, paragraph 2, or the jurisdictional clause incorporated in a treaty. This common question was for the first time raised by the objection advanced by the Bulgarian Government in the Aerial Incident case. The Judgment in that case upheld the objection by recognizing the lapsing effect of the dissolution upon the compulsory declaration accepted by the optional clause. Although Article 36, paragraph 5, became obsolete, the Court's reasoning in that Judgment remains, unless it should be overruled by a subsequent judgment. Although the decision of the Court has no force of res judicata except between the parties, and in respect of that particular case, its reasoning should de facto exercise lasting influence upon matters involving the same kind of question. Accordingly, the attitude of the Thai Government and the Spanish Government, each invoking the Judgment in the Aerial Incident case, respectively in the Temple of Preah Vihear case and in the present case, is quite natural, so long as the reasoning of the Judgment in the Aerial Incident case has survived without being overruled by subsequent practice.[p77]

As one who shares the view of the Joint Dissenting Opinion concerning the interpretation of Article 36, paragraph 5, I consider that the Court should have overruled the Judgment of 1959 in the Aerial Incident case by the Judgment of 1961 in the Temple of Preah Vihear case. But as I pointed out above, the Court avoided meeting that Judgment directly and dealt with the matter in a different way. Now the Court has faced the same question for the second time. It should have made its standpoint on the interpretation of Article 36, paragraph 5, clear. But the Court has refrained from doing so from the viewpoint of stressing the difference between Article 37 and Article 36, paragraph 5, and has disposed of the issue quite independently of the interpretation of the Judgment of 1959. Thus, the Court has again lost the chance of rectifying the view adopted by that Judgment.

Whereas Article 36, paragraph 5, and Article 37 are as regards their fundamental objective quite identical and their differences are unessential, the matter involved in the second principal Preliminary Objection should have been disposed of in the light of the common principle underlying these two provisions, namely the preservation under the new Court of the compulsory jurisdiction accepted during the period of the old Court.

The Court's opinion, although it rests on the difference between the two provisions, is not limited to points peculiar to the interpretation of Article 37. Its essential reason can be mutatis mutandis applied to the interpretation of Article 36, paragraph 5. Furthermore, I assume that the Court's opinion is, in its fundamental reasoning, not very far from that of the Joint Dissenting Opinion in the Aerial Incident case. The above-cited passage from the Court's reasoning may be regarded as precisely the antithesis or refutation of what was declared in the essential part of the reasoning in the Judgment in the Aerial Incident case.

I consider that the Court's emphasis upon the difference between Article 36, paragraph 5, and Article 37 is more apparent than real. The Court has been careful not to deal directly with the 1959 Judgment, but the viewpoint adopted by the Court in 1959 is substantially overruled by the present Judgment.

(Signed) Kotaro Tanaka.[p78]


Separate opinion of judge Bustamante Introduction

[ Translation ]

Introduction

This opinion expresses certain views which differ from those of the Court on the first Preliminary Objection. It also contains an expression of individual views on the third Objection, although the conclusion reached is that of the majority.

First objection

Although I share the views of the Court so far as concerns certain doctrinal aspects relating to the first Preliminary Objection, the same does not apply to the facts and conclusions. This leads me to state separately the reasons for my dissent.

There does not seem to be any doubt that Articles 68 and 69 of the Rules of Court, in conformity with Article 30 of the Statute, contemplate only the procedural aspects of discontinuance. In accordance with their purpose, the Rules do not decide substantive rights, and consequently no rule is to be found concerning the nature of discontinuance, so as to characterizing and distinguishing substantive discontinuance or abandonment of the right from discontinuance or abandonment of the proceedings. Having regard to the fact that this is the juridical framework adopted, an investigation will be necessary in each particular case into the reasons and circumstances of the discontinuance submitted to the Court in order to decide its true scope and to define its legal consequences.

In the present case, Belgium's reasons for discontinuing the first Application of 1958 had their origin in an approach by the Belgian group of shareholders in the Barcelona Traction, Light and Power Company, Limited, to the Belgian Government, such discontinuance being the prior condition imposed by M. Juan March, the head of the Spanish group of share- and bondholders in the said company, for opening private negotiations intended to settle the dispute by extra-judicial means. The Belgian group well knew that M. March was demanding a final and irrevocable discontinuance, the manifest intention of which was that the case should no longer be a matter for international adjudication.

Certainly no provision was made for what would happen in the case of the failure of the negotiations. For M. March's part, the only condition envisaged was that the Court should no longer be seised. Nevertheless, there is no reason not to suppose that, in the event of failure, some other solution might have been adopted, for example arbitration.[p79]

This was a matter for the private discussions. But there is no doubt that as from the moment when the private controversy between the two Barcelona Traction groups was brought into the field of international law through the intervention of the Belgian and Spanish States, it was for the States and not for the private groups to assume the capacity of the real parties concerned. It was for them, consequently, to define in accordance with their own judgment the scope of the discontinuance by either accepting or modifying the bases proposed by the private groups.
The versions given by each State Party are in the present case mutually contradictory. Belgium maintains that it was never its intention when discontinuing the proceedings already instituted to abandon the right to reinstitute new proceedings if the private negotiations did not succeed. Spain asserts, for its part, that it would have opposed a discontinuance which was not final, as the reinstitution of proceedings, apart from not being in accordance with March's conditions, would have placed the Spanish Government in an unfavourable position morally and legally.

But in the face of these versions of the Parties, a number of questions arise which demonstrate the complexity of the case.

(a) If Belgium had rejected M. March's condition, why did it formalize its discontinuance instead of first officially negotiating an amendment of that condition with the Spanish Government?

(b) Although Belgium, in effecting its discontinuance, used the normal procedural formula for unilateral discontinuance contained in Article 69 (2) of the Rules, did the fact that this proceeding was not accompanied by any official reservation as to the scope of the discontinuance lead Spain wrongly to suppose that M. March's condition had purely and simply been accepted?

(c) Ought, on the other hand, the hesitations shown by Belgium during the negotiations prior to the discontinuance (for example, the proposal for a mere suspension of the proceedings, the suggestion that Spain should not express its "non-objection" to the discontinuance until the end of the time-limit of six weeks to be fixed by the Court, the fact that the official letter giving notice of discontinuance speaks only of a discontinuance of the proceedings), ought such hesitations, I repeat, to have led Spain to ask Belgium beforehand for a precise explanation of the true scope of the discontinuance?


(d) Did Spain's omission to take this step imply a certainty in good faith on its part that Belgium, despite its precautions, was abiding by the agreements reached between the private groups? Or did it on the contrary imply culpable negligence or, indeed, acceptance by the Spanish Government of a merely procedural discontinuance of the proceedings already instituted?p80]

(e) To sum up, are we confronted with an erroneous interpretation by Spain of the scope of the discontinuance? If so, was this mistake, this misunderstanding, due to Belgium's own action in maintaining silence as to the true meaning of its discontinuance, one not in accordance with that proposed by M. March? Was any such mistake by Spain due, on the contrary, to the fault of its own Government, to an interpretation of the text of Belgium's notice of discontinuance running counter to its actual wording?


Sufficient tangible evidence to elucidate these uncertainties is, in my view, lacking in these proceedings. Contrary to what the Court has decided, I do not feel able to express any categorical judgment on this objection. I admit that it might perhaps be possible to arrive at a conclusion on the basis merely of inferences or deductions forming part of a logical process, but not on the basis of duly proven facts. The records of the interviews between the Belgian Ambassador and the Spanish Minister for Foreign Affairs on the eve of the discontinuance are vague and incomplete. It would not be surprising if there were more explicit documentary evidence which has not yet been submitted to the Court. In addition, it is reasonable to suppose that more definite representations on all these matters may have passed between the two Governments. Accordingly, it does not seem to me to be unlikely that if the Court, in the exercise of its powers, were proprio motu to ask the Parties to furnish it with any relevant document or piece of information—a suitable questionnaire would be drawn up for this purpose—it might be found possible to throw light on one or more of the questions raised above. I naturally accept that in each case the onus of proof is placed on one of the parties, but it is also true that the overriding interests of justice give the Court the faculty of taking such steps as are possible to induce the parties to clarify what is not sufficiently clear.

Seeing that, for other reasons, which I shall set out elsewhere, the first Objection cannot, in my view, be decided at this preliminary stage of the proceedings without the risk of encroaching on the merits of the case, I had thought that, were the Court so to wish, it could have taken advantage of a joinder of the objection to the merits to seek proprio motu at the second stage of the proceedings to obtain further evidence of the circumstances surrounding the negotiation of the discontinuance between the Parties. There would thus perhaps be a better chance— at the time of the final judgment—for deciding the first Objection raised by the Respondent Party with full knowledge of the facts.

***

In the course of its argument the Spanish Government referred to the fact that the Belgian Government had availed itself of the discon-[p81] tinuance in order to introduce various changes in the text of its second Application by comparison with the first one, with a view to improving its legal position, after studying the Preliminary Objections raised by Spain in the first proceedings; the result of this being to upset the balance between the Parties to the detriment of the position of Spain, since no prior notice was given by Belgium that its discontinuance of itself signified a reservation, that of its right subsequently to reinstitute proceedings (Preliminary Objections, first Objection, para. 107).

During the hearings, Sir Humphrey Waldock, Counsel for Spain, replying to a question put by one of the Judges of the Court (hearing of 27 April) referred to the moral and material prejudice which the Spanish State felt that it had suffered through the reinstitution of the Application after the discontinuance (hearing of 4 May).

It was no doubt with such considerations in mind that the Spanish Government, in the 14th recital concerning the first Objection in the Submissions which it filed at the closure of the hearing on 8 May 1964, maintained that—

"the discontinuance of the Belgian Government in the proceedings started by its Application of 15 September 1958, without that discontinuance having been accompanied by any reservation concerning its right to reinstitute the claim which had been the subject of that Application, necessarily supposed that it waived its arguments in defence against the Spanish Preliminary Objections and agreed to arrest in limine litis the proceedings which it had instituted".
Moreover, recitals 15 to 17 of the Spanish Submissions on the first Objection deny that a second application is compatible with the system of peaceful settlement stipulated by the Hispano-Belgian Treaty of 1927, the first proceedings—closed by virtue of the discontinuance— having exhausted the remedies provided for in that Treaty (hearing of 4 May). In reality, all these allegations imply a denial of Belgium's right after its discontinuance again to take up the protection of the shareholders whom it considers as its nationals; this brings the subject of the first Preliminary Objection close to that of the third, which concerns Belgium's jus standi. (See recitals 2 to 6 of the Submissions of the Spanish Government on the third Objection, hearing of 8 May.)

In order for the Court to be able to reach a decision on these points the nature of the Belgian discontinuance would inevitably have to be defined and, moreover, certain matters would have to be passed upon which touch on the merits. In fact, in order to conclude that the application of the Treaty of 1927 must be held as finally closed or exhausted with regard to the new Application, a finding with respect to the substantive nature of the discontinuance would first be necessary, [p82] in the sense that the discontinuance by Belgium involved an abandonment of the disputed right. But such a finding could not be made at the moment, as I have already said, so long as sufficient additional information has not been gathered to supplement the so far insufficient evidence of the facts alleged. Moreover, the denial by Spain of the right of the Belgian State to rely on the 1927 Treaty in order to reinstitute proceedings after the discontinuance cannot be separated from the question of Belgium's jus standi, which forms the subject of the third Objection. In reality, in this first Objection Belgium's jus standi to reintroduce the action in regard to which the discontinuance was filed is denied. The Court cannot consequently pass on the present applicability of Article 17 (4) of the 1927 Treaty without first passing on the legitimacy of Belgium's intervention as the national State of its shareholders (jus standi). But such a decision also requires that other questions contained in the third Objection be settled first, such as that of the precise position of the Canadian Government and that of whether exceptional circumstances really deprived the Canadian Barcelona Traction Company of all possibility of exercising its right of taking legal action to defend the interests of the Belgian shareholders. As these problems touch upon the very merits of the Application, they could not be settled at a preliminary stage of the proceedings without prejudging the merits; and it is no doubt for this reason that the Court has decided in favour of joining the third Objection to the merits.
This very close relationship between the first and the third Objections decided me to take the view that the first Objection should be joined to the merits, its examination and an endeavour to obtain additional evidence on the facts being reserved for the second stage of the proceedings, with a view to a decision on this objection in the final judgment. Consequently I voted against the rejection of the first Objection at this preliminary stage of the proceedings.

***

Third objection

The examination of the third Preliminary Objection made it clear to the Court that a decision could not be taken in respect of it during this preliminary stage of the proceedings because the existence or nonexistence of Belgium's jus standi in this case cannot be properly considered without at the same time prejudging the merits of the Application.
Nevertheless, I am of the opinion that before deciding to join the objection to the merits it should have been ascertained that no more direct means existed for resolving the third Objection straight away at the preliminary stage of the proceedings.[p83]

The following is my reasoning: the two Parties have shown that they agree on the fact that a general rale of international law exists with regard to the diplomatic and judicial protection of commercial limited liability companies which have been injured by the State in which they conduct their business, this rule being that the exercise of the right of protection belongs preferentially to the national State of the company. Since in the present case Barcelona Traction is a company incorporated under Canadian law, its protection ought in principle to be exercised by the State of Canada.

The record shows (Preliminary Objections, Preliminary Objection No. 3, heads 4 and 8; Belgian Observations, para. 129) that from 1948 to 1955 the Canadian Government to a certain extent exercised such protection as against the Spanish Government, either independently or through the British Government. But official interventions by the Canadian Government ceased at a certain moment and were not thereafter resumed. Moreover, Canada did not react in any way at the time of the Belgian Application of 1958 nor at the time of the new Application of 1962.

Taking these circumstances into account, can it be said that they are sufficient to conclude that intervention by Canada has definitely come to an end? In my view, no; because at no time was there any explicit or official statement by the Canadian Government in this connection and because its protection of Barcelona Traction was limited to the diplomatic field and international judicial means were not resorted to.

There are, certainly, reasons for presuming that Canada might not perhaps have had the intention of continuing its representations to Spain on behalf of Barcelona Traction; but this mere presumption is not in my view sufficient grounds for abandoning the general rule of international law which has been mentioned and holding that a third State—Belgium—has a supplementary right of protection on behalf of the shareholders in the company.

It is true that during the hearings a question was put to the Parties by one of the Judges of the Court as to whether they could supply any information concerning the attitude of the Canadian Government subsequent to the dates of certain communications which appear in the record. However, this enquiry produced no appreciable result (hearing of 27 April). I think that further steps should be taken and concrete questions put to the Parties, who should be asked to supply any relevant document or information concerning Canada's final decision. It seems to me that the Parties, as the sovereign States concerned, can find means to inform themselves more or less directly on this subject. The advantage of such further clarification would be to provide a final answer to the question of whether or not the specific rule of international law concerning the diplomatic and judicial protection of companies is susceptible of application in the present case. In the event of a negative result, the joinder of the third Objection to the merits would be [p84] inevitable in order to ascertain to what extent the intervention of the Belgian State, taking the circumstances into account, may emerge as well-founded, with a view to the establishment of its jus standi to exercise, either in an alternative capacity or—as Belgium claims— independently in its own right, the protection of its national shareholders in a foreign company.
On the basis of the foregoing, I would have been in favour, before this preliminary stage of the proceedings was closed, of the Court's making an order putting certain questions, to which the Parties would have had to reply, in which they would have been asked to supply the Court with any relevant document or information which would help to establish the position of the Canadian State with regard to the judicial and diplomatic protection of the Canadian Barcelona Traction Company in the future. But since the majority of the Court has decided in favour of immediate joinder to the merits and since the further clarification to which I have referred will still be possible in the course of the second stage of the proceedings, I subscribe to the decision of the Court so far as concerns the joinder of the third Objection to the merits in order that it may be resolved in the final judgment, since I share the view that any decision with regard to the third Objection, taken as a whole, must involve passing on the actual merits of the dispute.

(Signed) J.L. Bustamante R.[p85]





Dissenting Opinion of Judge Morelli

[Translation ]

It is my opinion that of the four objections presented by the Spanish Government as preliminary objections, it is solely on the second that it was open to the Court to take a decision at the present stage of the proceedings. The Court should have upheld this objection and declared that it has no jurisdiction.

The other objections, although presented by the Spanish Government as preliminary objections, do not really possess the character of preliminary objections, because they all raise questions which directly and solely concern the merits of the case. This being so, it was not in my opinion open to the Court to take a decision on those objections, as it has done on the first by dismissing it. Nor was it open to the Court to do what it has done in connection with the third and fourth objections in deciding to join those two objections to the merits. For joinder to the merits, within the meaning of Article 62, paragraph 5, of the Rules of Court, implies the preliminary nature of the objection, and in my opinion this condition is not met in respect of the so-called preliminary objections in question.

I consider that the first, third and fourth objections should have been declared inadmissible as preliminary objections. This would have left it open to Spain to raise the same questions once again, as questions which in fact relate to the merits, in the further proceedings.

It is quite true that the Court's decision to join the third and fourth objections to the merits is not in respect of its practical consequences very far removed from what in my view would have been a more correct decision by the Court declaring those two objections inadmissible as preliminary objections. There is, however, a fundamental distinction between joinder to the merits and a declaration of inadmissibility, and this distinction will I hope clearly emerge from the considerations I propose to devote to the subject of preliminary objections in general.

I shall begin my Dissenting Opinion with a first part dealing with the question of the Court's jurisdiction. I shall first of all describe what I consider to be the operation of Article 37 of the Statute and then go on to show that this Article did not operate in respect of the fourth paragraph of Article 17 of the Hispano-Belgian Treaty of 19 July 1927. In the second part I shall pass on to the above-mentioned general considerations on the subject of preliminary objections. The third part will be devoted to discontinuance in general and to the application in respect of the first Spanish Preliminary Objection, which relates to the discontinuance, of the general considerations on the subject of preliminary objections. The application of those considerations to the [p86] third and fourth Spanish Preliminary Objections will be dealt with in the fourth and fifth parts.

I. On the Jurisdiction of the Court
(Second Preliminary Objection)

1. Article 37 of the Statute of the International Court of Justice has a relationship which might be called both historical and verbal with Article 37 of the Statute of the Permanent Court, some of the terms of that Article being used by Article 37 of the Statute of the present Court. In spite of this there is a radical difference between the two provisions in respect of their functions.

Article 37 of the Statute of the Permanent Court is of the nature of a provision serving purely to interpret other provisions, namely clauses in treaties which provide for reference to a tribunal to be established by the League of Nations. It is a provision which may be regarded as supplementary to other provisions which themselves, on the other hand, possess the character of principal provisions. Jurisdiction is created by these latter provisions, that is to say by the treaty clauses providing for reference to a tribunal to be established by the League of Nations. By the operation of Article 37 of the Statute of the Permanent Court, and for the parties to that Statute, jurisdiction thus created is to be deemed jurisdiction conferred upon the Permanent Court.

Unlike Article 37 of the Statute of the Permanent Court, which, as already stated, is a provision supplementing other provisions which had already—though only partially—created a certain jurisdiction, Article 37 of the Statute of the International Court has importance in itself, and serves an independent purpose. Article 37 of itself creates new jurisdictional rules, namely rules conferring a certain jurisdiction upon the International Court of Justice, although it refers back to other provisions to determine the conditions of its own operation and the content of the jurisdictional rules it seeks to create.

2. Article 37 of the present Statute speaks of two categories of provisions: (a) provisions for reference of a matter to a tribunal to have been instituted by the League of Nations; and (b) provisions for reference of a matter to the Permanent Court.

By its mention of the latter, Article 37 effects what is called the "transfer" of the Permanent Court's jurisdiction to the International Court of Justice.

The transfer formula is short and convenient, and there is no objection to its use provided its meaning is defined. It must be borne in mind that jurisdiction is conceivable only in relation to the organ on which it is conferred; this means that it is not possible to consider the [p87] jurisdiction of one organ as capable of being actually transferred to another. In fact new jurisdiction is conferred on a particular organ by means of a reference to the provisions governing the jurisdiction pertaining to another.

Now it is perfectly possible to conceive of the creation of jurisdiction by means of a reference to provisions which are no longer in force, or even by means of a reference to formulae which never had any legal validity. However, when the term transfer is used what is meant is that there is a certain relationship between two different jurisdictions, from two points of view. In the first place there is a relationship in respect of the content of the provisions governing the two jurisdictions and the conditions of their application. These provisions are identical except as regards the specification of the organ on which jurisdiction is conferred. Secondly, transfer denotes a chronological relationship between the two jurisdictions. A new jurisdiction is created, linking up with another jurisdiction which still exists at the time when the new one is created, but which is abolished as from that moment, by the very fact of the creation of the new jurisdiction.

It is not only by its reference to treaties or conventions explicitly providing for reference of a matter to the Permanent Court that Article 37 creates new jurisdictional rules. The same operation is effected by the reference to treaties or conventions providing for reference of a matter to a tribunal to have been instituted by the League of Nations. Even in respect of this latter reference, Article 37 does not have the purely interpretative character of the similarly worded provision in Article 37 of the Statute of the Permanent Court. It might be said that by this reference also Article 37 of the present Statute effected the transfer to the International Court of jurisdiction already conferred upon the Permanent Court, in view of the fact that treaties providing for reference to a tribunal to have been established by the League of Nations had, by the operation of Article 37 of the Statute of the Permanent Court, to be interpreted as referring to the jurisdiction of that Court.

4. Thus, Article 37 of the present Statute lays down autonomous rules creating the Court's jurisdiction, although for this purpose it refers back, in a certain fashion, to other provisions. As I have said already, it is quite possible, in general, for a jurisdictional rule, or more generally any legal ruie at all, to refer back to provisions which are no longer in force; and it is even possible for a legal rule to refer to formulae which never had legal validity. But that is not the case with Article 37, since this refers to treaties or conventions and adds that such treaty or convention must be "in force". We thus have to determine the meaning to be attributed to this term, particularly with regard to the time at which such treaty or convention must be in force.

This term is found in other provisions of the Statute of the Court, [p88] such as Article 35, paragraph 2, and Article 36, paragraph 1. The same term was also to be found in Article 37 of the Statute of the Permanent Court. But this obviously does not mean that the expression "in force" in Article 37 of the present Statute must necessarily have the same significance and scope as in the other provisions I have just mentioned. It is necessary to have regard to the character and content of the different provisions in which the term is used.

5. Article 35, paragraph 2, of the Statute confers on the Security Council the function of laying down the conditions under which the Court shall be open to the States not parties to the Statute, but "subject to the special provisions contained in treaties in force". These are provisions by which the subject-matter is already governed, independently of the reference made to such provisions in Article 35, paragraph 2, which confines itself to reserving them. As provisions which govern the subject-matter, independently, they must, of course, be provisions which are in force with relation to the date which is regarded as decisive for that purpose and which is not specified at all in Article 35, paragraph 2. The expression "in force" used in that paragraph may therefore be considered as quite superfluous.

The same observation may be made concerning the term "in force" used in Article 36, paragraph 1, of the Statute, which states that the jurisdiction of the Court comprises, inter alia, all matters specially provided for "in treaties and conventions in force". Far from itself creating jurisdiction for the Court, the provision contained in Article 36, paragraph 1, in fact merely makes reference to other sources of jurisdiction, separate from the Statute, namely to special or general agree-ments, among which treaties and conventions are mentioned. It is perfectly clear, even were it not specified in Article 36, paragraph 1, that by this must be meant treaties and conventions in force: in force at the time when such treaty or convention has to be applied, namely at the time of the proceedings. The questions of the more precise determination of the point in time which is decisive for this purpose (application or judgment) is left open by the term "in force". The fact is that in using the term, Article 36, paragraph 1, does not specify any particular point in time when stating that the treaties and conventions to which it refers must be in force. The term is therefore superfluous.

As regards Article 37 of the Statute of the Permanent Court I have already said that it is a provision that is purely interpretative of other treaty provisions. It was by these provisions (interpreted, of course, in accordance with Article 37) that jurisdiction was created. To speak in this connection, as did Article 37, of a treaty or convention "in force" added nothing whatsoever and in no way influenced the manner in which Article 37, as an interpretative rule, had to operate.[p89]

Unlike Articles 35, paragraph 2, and 36, paragraph 1, of the Statute of the International Court, and Article 37 of the Statute of the Permanent Court, where the term "in force" refers to provisions which themselves govern the subject, Article 37 of the present Statute uses this term in relation to provisions which do not govern the subject in question. The subject in question is the jurisdiction of the International Court of Justice. That jurisdiction derives from rules which Article 37 itself creates, by means of a reference to provisions concerning a completely different subject, namely the jurisdiction of the Permanent Court. Thus, the indication that these latter provisions must be in force is by no means superfluous or redundant, but is of substantive importance for the operation of Article 37.

5. It might be considered that, by referring to treaties or conventions "in force", the intention of Article 37 is to make some particular specification concerning the actual substance of the rules it seeks to create— to the effect that these rules, concerning the jurisdiction of the present Court, would have validity in point of time identical to that of the provisions concerning the jurisdiction of the Permanent Court to which Article 37 refers. According to this interpretation, the meaning of the expression "in force" in Article 37 would be very close to that of the same expression in Article 36, paragraph 1. Just as Article 36, paragraph 1, provides that the International Court may be seised on the basis of a treaty only if that treaty is in force, Article 37 would mean that the International Court may be seised on the basis of a rule created by Article 37 only if a treaty concerning the jurisdiction of the Permanent Court is in force. Thus neither of the provisions just mentioned would be understood to refer to any particular point in time in its specification as to the treaty concerned being in force.

This interpretation is not tenable, however. Its logical consequence would be that the jurisdictional rules created by Article 37 would have operated only over a very brief period—namely until 18 April 1946, the date when the Permanent Court was dissolved: taking into account the principle of perpetuatio jurisdictionis, they would have applied solely to proceedings instituted prior to that date. This would be so unless the term "in force" were to be understood in a very special sense—namely as meaning that a provision concerning the jurisdiction of the Permanent Court did not cease to be in force as a result of the dissolution of that Court; or unless the term "in force" were applied not specifically to the clause relating to the jurisdiction of the Permanent Court, but to the treaty as a whole in which the clause is contained.
But this is not all. According to the interpretation which I have been considering, the jurisdictional rules created by Article 37 would not, in reality, have operated even during the brief period I mentioned, [p90] for the very simple reason that Article 37, by the very fact of pre-scribing the transfer of the jurisdiction of the Permanent Court to the International Court, automatically entailed the extinction of the treaty clauses relating to the jurisdiction of the Permanent Court. This excludes the simultaneity of jurisdiction on the part of both Courts which is required by the interpretation under consideration. In order to give meaning to Article 37 it would be necessary to assume, for the purposes of that Article, that there was in force, not a clause which was really in force, but a clause which would have been in force had Article 37 not operated.

6. All this makes it necessary to put an entirely different construction upon the term "in force" in Article 37 of the Statute. This term does not relate to the content of the jurisdictional rules created by Article 37, but rather to the technical process by which those rules are created, namely to the actual operation of Article 37.

Article 37 hinges the creation of certain jurisdictional rules (rules conferring jurisdiction upon the International Court) on the existence of treaties or conventions concerning the jurisdiction of the Permanent Court, which must be in force in order for Article 37 to produce its intended effect.

The treaties and conventions referred to by Article 37 must be in force in relation to a particular point of time. That is, at the time of the entry into force of the Statute, the time when the legal operation for which the Statute provides in Article 37 is effected.

This follows from the actual terms of Article 37. That Article predicates a treaty or convention in force which "provides" for reference of a matter to a tribunal to have been instituted by the League of Nations, or to the Permanent Court of International Justice. To specify the contingency it covers, Article 37 uses the verb "provides" in the present tense, whereas it uses the future in going on to stipulate that the matter "shall" be referred to the International Court of Justice. The last part of this sentence refers to the (future) time in which the jurisdictional rules created by the legal operation for which Article 37 makes provision are to have effect ; while on the contrary the condition necessary for this operation to take place is indicated in the first part of the sentence by a reference to the present time. It must be concluded from this that the treaties and conventions referred to in Article 37 cannot be other than treaties and conventions in force at the time of the entry into force of the Statute.

A similar observation might be made with regard to Article 36, paragraph 5, which deals with the contingency of declarations made under Article 36 of the Statute of the Permanent Court "which are still in force" (pour une durée qui n'est pas encore expirée, in the French text), while on the contrary the future tense is used ("shall be deemed") to indicate the legal effect conferred by Article 36, paragraph 5, on the declarations concerned. The reference to a given point in time in
[p91] order to indicate the duration of the declaration is further strengthened, in Article 36, paragraph 5, by the use of the word "still".

It may be noted on the other hand that in Article 37 of the present Statute, the term "in force" has a different effect from that of Article 37 of the Statute of the Permanent Court; this is so even with regard to the treaties and conventions also covered by this latter provision, namely treaties and conventions which provide for reference to a tribunal to have been instituted by the League of Nations. Unlike Article 37 of the Statute of the Permanent Court, Article 37 of the Statute of the present Court uses the term "in force" in relation to a particular point in time, namely the entry into force of the Statute. The difference is due to the difference in the functions of two provisions: Article 37 of the Statute of the Permanent Court simply interpreted existing jurisdictional rules, whereas Article 37 of the present Statute in itself creates new jurisdictional rules, even where it refers back to treaties providing for reference of a matter to a tribunal to have been instituted by the League of Nations.

7. I have said that Article 37 of the present Statute refers to treaties or conventions in force at the time of the entry into force of the Statute, at the point in time when the legal operation for which Article 37 makes provision takes place. It must be made clear that if regard is had only to the terms of Article 37, the entry into force of the Statute is to be taken to mean either its initial entry into force or, in respect of a particular State, its entry into force for that State as a result of the admission of that State to the United Nations. This is of course so on the basis of the wording of Article 37 alone, which makes no distinction between original Members and Members admitted later. It is another matter to ascertain whether, among the admissions which have actually taken place, there have been some which, in the light of the conditions required by Article 37, have given rise to the legal effect for which that Article makes provision.

Now the basic condition laid down by Article 37 is that the treaty or convention providing for reference to the Permanent Court shall be a treaty or convention in force. I have already said that the treaty or convention must be in force at the time of entry into force of the Statute. It must be added, however, that it is not enough for the treaty or convention to be in force in respect of any of its provisions indiscriminately. On the contrary, it is necessary for the treaty or convention to be in force specifically in respect of its clause conferring jurisdiction on the Permanent Court. Should that clause have lapsed, the treaty containing it, though possibly still in force so far as its other provisions are concerned, is no longer a treaty in force providing for reference to the Permanent Court of International Justice. It follows that the contingency covered by Article 37 fails to materialize, because of the very terms of that Article.[p92]

In my opinion, there can be no doubt that the dissolution of the Permanent Court entailed the lapse of all the clauses, more generally speaking of all the jurisdictional rules, conferring jurisdiction upon that Court, since by this very fact those rules became devoid of object. Hence the consequence that the legal operation for which Article 37 makes provision became impossible as from 18 April 1946, the date of the dissolution of the Permanent Court. Since it is a historical fact that before that date there were no admissions to the United Nations, it is permissible to conclude that the legal operation provided for by Article 37 occurred once only, namely when the Statute first entered into force, and consequently solely in respect of the original Members of the United Nations. But this is no more than a statement of fact, not a restriction to be considered as inherent in the functioning of Article 37.

8. If the conditions laid down in Article 37 are present, and more particularly if, at the time of the entry into force of the Statute, a treaty or convention providing for reference to the Permanent Court was in force, the operation for which Article 37 makes provision was effected by the creation of a corresponding jurisdictional rule relating to the International Court of Justice. By the effect of Article 37 itself, the creation of that rule was accompanied by the simultaneous extinction of the rule relating to the Permanent Court. This has no influence on the condition laid down in Article 37 by the use of the term "in force", that requirement being a condition for the operation of Article 37, not a condition for the subsistence of the rule created by that Article.

The jurisdictional rules created by the legal operation provided for by Article 37 are rules the content and conditions of application of which (except as regards the indication of the organ on which jurisdiction is conferred) are determined by the reference back to the treaties relating to the Permanent Court. That reference also applies to the treaty clauses governing the duration of the jurisdictional rule relating to the Permanent Court. Obviously if the expiry of the time-limit governing the jurisdictional rule relating to the Permanent Court occurred before the entry into force of the present Statute, this prevented the operation for which Article 37 makes provision taking place, because no treaty was then in force under the terms of the Article. If, on the contrary, the time-limit expires after the entry into force of the Statute, and consequently after Article 37 has already operated to create a jurisdictional rule relating to the International Court, that rale expires at the same time as the time-limit in question expires. But this has nothing to do with the fact that Article 37 explicitly refers to treaties or conventions "in force", because, as has been said, that term relates solely to the time when the operation contemplated in the Article is carried out. On the contrary, it is merely a consequence of that Article's reference back to the treaty concerning the jurisdiction of the [p93] Permanent Court for the purpose of determining the content and provisions of application of the jurisdictional rules concerning the present Court which Article 37 seeks to create.

If Article 37 is compared with Article 36, paragraph 5, it is seen that, unlike Article 37, this latter provision explicitly specifies the consequence of the expiry of the period laid down for a declaration relating to the Permanent Court as regards the extinction of the jurisdictional rule concerning the present Court created by the means provided for in Article 36, paragraph 5. That consequence is specified by the words "for the period which they still have to run and in accordance with their terms", whereas the words "and which are still in force", used in the first part of the provision, refer to the fact of the declaration being in force at the time of the entry into force of the Statute and consequently at the time of the operation of Article 36, paragraph 5 (this reference corresponds to the explicit reference to a treaty in force in Article 37).
There is no need to add that after the accomplishment of the legal operation provided for in Article 37 by the creation of a jurisdictional rule relating to the present Court, the validity of that rule was in no way affected by the subsequent dissolution of the Permanent Court. This is so for the very simple reason that this was an event not foreseen by the treaty to which Article 37 refers.

9. My observations concerning the extinction of the jurisdictional provision concerning the Permanent Court, brought about by the very effect of the operation of Article 37, prevents me from subscribing to a statement frequently made by the Spanish Government. According to that Government, for the jurisdiction of the International Court to be able to be asserted on the basis of Article 37 of the Statute, an additional requirement would have to be fulfilled, namely that the clause providing for the jurisdiction of the Permanent Court should be in force at the time of the filing of the Application with the International Court.

This condition would however be quite incapable of fulfilment. This is because, as has been said, in every case where Article 37 has operated, that same Article, by stipulating the transfer of jurisdiction from the Permanent to the International Court, caused, by the very fact of the transfer, the extinction of the clause relating to the jurisdiction of the Permanent Court; hence this extinction occurred independently from the dissolution of the Permanent Court and well before that event.

In reality, for the International Court to be able to exercise jurisdiction on the basis of Article 37 of the Statute, it is necessary that there should be in force at the time of the filing of the Application not the jurisdictional provision relating to the Permanent Court but rather the jurisdictional provision relating to the International Court created by [p94] means of the legal operation provided for in Article 37, and whose status as a provision in force remained completely unaffected by the extinction of the provision relating to the Permanent Court pursuant to that Court's dissolution.

For the same reasons I am unable to subscribe to a phrase in the reasoning of the Advisory Opinion of 11 July 1950 concerning the International Status of South West Africa, in which the Court states that Article 7 of the Mandate "is still in force" (I.C.J. Reports 1950, p. 138). If my conception of the operation of Article 37 of the Statute is correct, in order to support the conclusion reached by the Court in the operative provisions of the Opinion, to the effect that the reference to the Permanent Court of International Justice is to be replaced by a reference to the International Court of Justice, it would have been sufficient to find that Article 7 of the Mandate was in force at the time of the entry into force of the Statute. At that time Article 7 of the Mandate as such was extinguished by the very operation of Article 37 of the Statute, precisely because it was replaced by a new corresponding provision relating to the jurisdiction of the International Court of Justice.

10. The Statute of the Court, including Article 37, did not come into force for Spain until 14 December 1955, as a result of the admission of that State to the United Nations. On that date, Article 37 had no possibility of application, because at that date there was no treaty or convention providing for reference to the Permanent Court which could be considered, as such, as being in force within the meaning of Article 37.

In particular, Article 17 (4) of the Hispano-Belgian Treaty of 19 July 1927 had lapsed on 18 April 1946, as a result of the dissolution of the Permanent Court. That provision did not decide that the parties were subject to some generic or abstract jurisdiction, quite inconceivable as such. On the contrary, it provided for the jurisdiction of a particular organ, specifically named. That organ was the Permanent Court of International Justice. The dissolution of that Court necessarily entailed the lapse of the treaty clause relating to the jurisdiction of that Court, which thereby became devoid of object.
11. This result cannot in my view be set aside by arguing, as does the Belgian Government, the inseparability of the provisions of the 1927 Treaty. It is difficult to find any reason why this alleged inseparability should have the effect of keeping Article 17 (4) in force, rather than the contrary effect of entailing the lapse of the entire treaty.

In my opinion there can be no doubt that Article 17 (4) lapsed, for lack of object, as a result of the dissolution of the Permanent Court. This is the only conclusion which is relevant for the purpose of the operation of Article 37 of the Statute. The fate of the other provisions [p95] of the 1927 Treaty is of no interest. But if it is desired also to consider the question of the preservation in force of the other provisions of that Treaty, what consequence must be drawn, for the solution of that problem, from the assertion that the Treaty constitutes an inseparable whole? If it is considered, as does the Belgian Government, that "resort to adjudication is an essential part of the economy of the treaty" that "the various methods of settlement were carefully combined, so that to remove those which concern the Court amounts to dismantling the whole system" and that Article 17 (4) "was an essential condition for the consent of the parties to the treaty as a whole" the inevitable result, assuming the impossibility, thus affirmed, of separability of the provisions of the Hispano-Belgian Treaty, would simply be that the entire treaty has lapsed.

12. Against the lapse of Article 17 (4) of the 1927 Treaty, the Belgian Government also argued that the sole consequence of the dissolution of the Permanent Court was the temporary impossibility of performance of that provision, which is said to have been suspended in its effects without ceasing to be in force. In this connection the Belgian Government relied on the concept of the suspension of international obligations. It observed that impossibility of performance of an obligation entails the extinction of the obligation only if the impossibility is permanent; in the case of temporary impossibility, on the other hand, the obligation is not extinguished, but is merely suspended.

However it is not correct in my view to apply to Article 17 (4) of the 1927 Treaty the various concepts used by Belgium, namely performance of the obligation, impossibility of performance, and extinction or suspension of the obligation as a consequence of permanent or temporary impossibility of performance. This is because strictly speaking that provision of the 1927 Treaty did not create a true obligation for the contracting States, that of adopting a certain course of conduct, which might subsequently have become impossible with the consequences considered to attach to such impossibility, namely impossibility of performance of the obligation (extinction or suspension of the obligation depending on the permanent or temporary nature of the impos-sibility).

Article 17 (4) of the 1927 Treaty created for each of the contracting States not an obligation, but rather a situation of subjection to particular legal powers, they also being created by the same provision. Those powers consist on the one hand of the power of jurisdiction conferred on a certain organ, the Permanent Court, and on the other hand the power for the other contracting State to seise that Court. Since these are legal powers conferred either on a particular organ or on a State with reference to a particular organ, the disappearance of that organ, the Permanent Court, necessarily entailed the extinction of those powers [p96] and, at the same time, the extinction of the corresponding situation of subjection to those powers. Those powers were extinguished and not simply suspended, because the organ provided for, namely the Permanent Court, was definitively abolished and not merely suspended in its operation for a certain period.

13. If regard is had to the true significance of Article 17 (4) of the1927 Treaty, it becomes clear that it is not correct, as Belgium has done, to assimilate the question of the preservation in force or lapse of that provision to the question of the effects of the disappearance of an international agency on the treaties conferring certain functions on that agency.

If a treaty creates obligations for the contracting States and at the same time provides for the intervention of a certain organ in connection with the performance of those obligations, the obligations may well continue to exist despite the disappearance of the organ which is not necessarily bound to entail more than the extinction of the powers of the organ and of the subjection of the States to it. But this has nothing to do with the question of the preservation in force or lapse of Article 17 (4) of the 1927 Treaty or even less with the operation of Article 37 of the Statute. That Article requires the existence, at the time of its entry into force, of the jurisdiction of the Permanent Court. But that jurisdiction, created by Article 17 of the 1927 Treaty, had ceased to exist when the Statute came into force for Spain on 14 December 1955.

14. Nor is it possible, as is sought by the Belgian Government, to find any analogy between the case of the disappearance of the organ on which jurisdiction is conferred by a treaty and the case of a treaty conferring jurisdiction on an organ yet to be established, as in the case of the clauses in the Treaty of Versailles which refer to a tribunal to be instituted by the League of Nations.

In this latter case there were provisions in connection with which no problem of lapse arose at all; these were provisions which looked to the future institution of a particular organ and which therefore made their own attribution of jurisdiction dependent on that event. Those provisions can readily be held to have been in force before the organ instituted by the League of Nations, to which they referred, was in a position to operate. But this has nothing to do with the term "in force" in Article 37 of the Statute of the Permanent Court, which relates to a point in time which is that of the proceedings and not to the point in time of the entry into force of the Statute, as is the case, on the contrary, in respect of the identical term in Article 37 of the present Statute.

15. I have said that the effect of Article 37 of the Statute is to create new rules concerning the jurisdiction of the present Court, those [p97] rules having come into existence at the time of the operation of Article 37. This effect of Article 37 is, however, subject to the condition that there is a treaty or convention "in force" concerning the jurisdiction of the Permanent Court, and that condition must be present at the time of the entry into force of the Statute. But Article 17 (4) of the Hispano-Belgian Treaty had lapsed before the Statute came into force for Spain, which leads to the conclusion that the condition laid down in Article 37 has not been fulfilled.

The question may well arise, however (and this appears to be a question raised by the Spanish Government in terms which are neither uniform nor completely clear), whether Article 17 (4) of the 1927 Treaty was not revived by Article 37 of the Statute. This would of course be a revival having no other effect than the fulfilment of the condition laid down by Article 37 for its own operation.
This observation forbids an affirmative reply to the question. If Article 37 requires, as a necessary condition for its own operation, that the clauses providing for reference to the Permanent Court should be in force at the time of the entry into force of the Statute, it would be quite absurd to conceive of Article 37 completely destroying this requirement by providing that the clauses relating to the jurisdiction of the Permanent Court, which lapsed as a result of the dissolution of that Court, are revived merely for the sake of the operation of Article 37.

Moreover, this would be contrary to the very concept of the transfer of the jurisdiction of the Permanent Court to the International Court of Justice. That transfer was intended to ensure continuity between two jurisdictions—a jurisdiction which actually existed at the time when the transfer took place, and a new jurisdiction, intended to replace it. But that continuity would have in no way been achieved if the jurisdiction of the Permanent Court had lapsed before the entry into force of the Statute and consequently before the jurisdiction of the present Court came into existence. The assumed revival of the first jurisdiction would be a pure fiction and quite incapable of ensuring such continuity.


II. On Preliminary Objections in general

1. In referring to preliminary objections, Article 62 of the Rules of Court attaches to these objections the effect of suspending the "proceedings on the merits" and, at the same time, of initiating a phase in the proceedings in which the only task the Court has to perform is to give its decision on the objection in question. The Court may, however, refrain from discharging this task in this phase and may decide to join the objection to the merits.

The term "preliminary" in the expression "preliminary objection" may be understood in two senses.[p98]

On the one hand, this term is used to denote the effect produced by an objection that is presented as a preliminary objection, this effect being precisely the initiation of a phase in the proceedings which also might be called preliminary.

It is in this sense that Article 62 speaks of preliminary objections when it says, in paragraph 1, that "a preliminary objection must be filed" within a certain time-limit. Indeed, far from prescribing the means by which certain objections must be presented, Article 62 merely provides a party with a faculty which it is free not to exercise, In other words, an objection which might be filed in the way specified in Article 62 can be presented also in the pleadings mentioned in Article 41. It is only if the party chooses the course made available by Article 62 that it must file the objection within the time-limit fixed in paragraph 1 of that Article, complying also with the other stipulations specified in paragraph 2.

It follows that, when Article 62 (1) refers to an objection that is described as "preliminary", it indicates, by that term, not so much a certain possible character of the objections raised by the parties, as a certain means by which the objections may be presented.

2. It is quite certain, however, that the means provided in Article 62 can be utilized, not for all objections or all pleas advanced by the parties, but only for objections possessing a certain character. It is quite certain that a party cannot, merely by presenting an objection or a plea according to the procedure indicated in Article 62, compel the Court to give a prior decision on a certain question, regardless of any relationship between that question and the other questions that have to be decided in the case.

Thus an objection may be presented by the means indicated in Article 62 only if it possesses a certain character; and that character relates to the actual content of the objection and consists pre-cisely in a certain relationship that must exist between the question that is raised by the objection and the other questions that have to be decided. The necessity for such a character is only impliedly prescribed by Article 62. The character of the objection may very well be indicated by the same term "preliminary" which Article 62 employs with a different object, namely to denote the means by which the objection may be presented. This is the other sense in which the word "preliminary" in the term "preliminary objection" may be understood.

A question can constitute the subject of a preliminary objection within the meaning of Article 62 of the Rules of Court only if a decision on that question is logically necessary before proceeding with the consideration of the other questions. There must be, between the different questions, an order that is imposed by a logical necessity and not merely one inspired by considerations of expediency or economy.[p99]

If a certain order is not imposed by any logical necessity, it is for the Court to determine the order that may most suitably be followed. In this connection, the Court may be guided by various criteria and these, as I have said, might even be criteria of economy. Thus the Court might find it desirable to start by considering a question of law that is so presented that it is easy to settle, before entering upon the consideration of a complicated question of fact, if it appears that a possible decision of the question of law might obviate the necessity for considering the question of fact.

The Court's freedom to determine the order to be followed, when the order between the different questions is not imposed by any logical necessity, cannot be removed or restricted by the attitude of the parties, still less by the attitude of one of the parties. It would be inconceiv-able that, by making use of the means provided by Article 62 or of any other means, one of the parties should be able to compel the Court to give a prior decision on a certain question, when such prior decision is not called for by any logical necessity.

3. It is quite obvious that the question whether a decision on the merits is or is not possible must necessarily be settled before the merits are considered. There can therefore be no doubt that procedural objections (on the ground of lack of jurisdiction or on any other grounds) aimed at preventing consideration of the merits can be presented as preliminary objections under Article 62 of the Rules of Court. What has to be determined is whether this possibility exists solely for the objections I have just mentioned or whether the same possibility can be admitted in respect of certain questions relating to the merits.

The answer to the question I have just raised must be in the negative. This follows from the fact that there is no necessary logical order between the various questions all relating to the merits in a case. This is tantamount to saying that there are no questions relating to the merits the prior decision of which is called for by logical necessity. It follows that there are no questions relating to the merits that can be presented as preliminary questions under Article 62 of the Rules of Court.

The conclusion I have reached is confirmed by the actual terms of Article 62. This Article stipulates, in paragraph 3, that, upon receipt by the Registrar of a preliminary objection filed by a party, the proceedings "on the merits" shall be suspended. In paragraph 5, the same Article gives the Court the faculty of joining the preliminary objection "to the merits". There emerges from the provisions of Article 62 which I have just recalled a clear distinction between consideration of the preliminary objection and consideration of the merits. This precludes any idea of it being possible to raise a question relating to the merits by means of a preliminary objection under Article 62. It is indeed obvious that, if proceedings on the merits are suspended, it is not possible, during such suspension, to decide any question which [p100] relates to those merits. It is equally obvious that it would not be correct to say that a particular objection may be joined to the merits in the case of an objection which itself concerns the merits.

4. Consequently, if a party presents as a preliminary objection an objection that concerns the merits, the Court cannot do otherwise than declare the objection inadmissible as a preliminary objection. This does not of course preclude the party in question from presenting the same objection, like all other objections concerning the merits, in any further proceedings.

An objection relating to the merits which is presented by a party as a preliminary objection must be declared to be inadmissible as a preliminary objection. It must not be joined to the merits under paragraph 5 of Article 62. A decision by the Court joining an objection to the merits presupposes the admissibility of the objection as a preliminary objection. The objection must be one that is intended to prevent consideration of the merits, but one on which the Court cannot give a decision without considering certain matters which are also connected with the merits. In the hypothesis I have stated the question is, on the contrary, one that directly concerns the merits.

The declaration of inadmissibility is obligatory for the Court and not discretionary like the joinder of a preliminary objection to the merits. Furthermore, the declaration of inadmissibility is something quite apart from any attitude which may be adopted by the party against which the objection is raised. The objection must be declared inadmissible even if that party does not object to the question which is raised by the objection presented as a preliminary objection being decided prior to the other questions which also relate to the merits, in a preliminary phase of the proceedings. It is not possible for one of the parties or the two parties in mutual agreement to limit the Court's freedom to determine the order to be followed in the examination of the different questions relating to the merits, by compelling the Court to give a prior decision on one of those questions.

5. Consideration must, however, be given to an argument that mightbe advanced to set aside the conclusion I have reached.
It might be argued that it is quite possible for the Court to be seised for the purpose of deciding, not a dispute in its entirety, but solely a question a decision on which is necessary for the settlement of the dispute. Proceedings of this kind can be instituted either by mutual consent of the parties, that is to say, by a special agreement, or by a unilateral application, as is shown by Article 36 of the Statute, according to which acceptance of the compulsory jurisdiction of the Court may relate to no more than questions of law or of fact. From the possibility of proceedings before the Court confined to the subject of a specific question of law or of fact, it might be inferred that, at any rate if there is an explicit or tacit agreement between the parties to this effect, it is also possible to utilize a special phase in the proceedings for [p101] the determination of some particular question, that phase in the proceedings being precisely the one provided for by Article 62 of the Rules of Court.

But such a conclusion would not be correct. Indeed, it is one thing to confine the subject of proceedings to a particular question; in other words, it is one thing to confine to one question the task which is entrusted to the Court and which the Court discharges fully by deciding that question. It would be another thing to detach a particular question from the whole body of questions all requiring decision by the Court for the purpose of the decision which the Court is required to give on the dispute, so that there might be devoted to this question a preliminary phase of the proceedings which, as such, would be followed by a subsequent phase in which the other questions would be considered and the dispute decided by the Court. In this latter case, unlike the former, there would be a restriction, not of the task entrusted to the Court, but rather of the freedom which the Court must enjoy in determining the order to be followed in the examination of the different questions concerning the merits which will all have to be decided by the Court. No such restriction is, in my view, permissible.

III. On Discontinuance (First Preliminary Objection)

1. Articles 68 and 69 of the Rules of Court are concerned with facts that differ in character but they ascribe to those facts identical legal consequences. These legal consequences always take the form of the extinction or termination of the proceedings, that is to say, they put an end to the proceedings.

Article 68 deals first with settlement, that is to say, the contingency in which "the parties conclude an agreement as to the settlement of the dispute".

Settlement produces, on the basis of general international law, the effect that the dispute is resolved in a certain way (this effect does not always consist of extinction of the right at issue, as is stated by Belgium). The particular rule of Article 68 of the Rules of Court, taking account of the effect produced by a settlement on the basis of general international law and of the fact that the specific purpose of the proceedings, that is to say, the resolution of the dispute, is achieved by another means, namely by means of settlement, ascribes to that settlement, where the parties inform the Court thereof in writing, the consequence of putting an end to the proceedings. Article 68 provides that, in the situation just described, the Court, or the President if the Court is not sitting, makes an order officially recording the conclusion of the settlement and directing the removal of the case from the list.
It must be observed that it is not true, as stated by Belgium, that a settlement is a bar to new proceedings. Settlement, if the conditions [p102] specified in Article 68 of the Rules of Court are fulfilled, and on the basis of that Article, does indeed produce the consequence of putting an end to the proceedings in the course of which it is concluded. But it does not affect any right of action conferred on the parties or any jurisdiction the Court may possess. The dispute which is resolved by the settlement may well arise again. In that event, each of the parties may exercise any action to which it is entitled, by means of an application which would have to be considered fully admissible; and the Court if it possesses jurisdiction may exercise it by giving a decision on the merits. It is clear, however, that, in giving such a decision, the Court must take account of the settlement concluded between the parties.

2. The effect of putting an end to the proceedings is ascribed by Article 68 and Article 69 not only to a settlement notified by the parties to the Court but also to a declaration of intention made specifically for the purpose of producing such an effect, namely a declaration of intention known as "discontinuance". Article 68 deals with the discontinuance effected by the parties by mutual agreement. Article 69 deals with the discontinuance effected by the applicant in the course of proceedings instituted by means of an application.

Discontinuance has, in any case, the effect of putting an end to the proceedings. This is evident from the actual terms in which the content of the notice of discontinuance is indicated in Articles 68 and 69. Article 68 deals with cases in which the parties, by mutual agreement, inform the Court "that they are not going on with the proceedings". Article 69 deals with cases in which "the applicant informs the Court in writing that it is not going on with the proceedings". This means that, after the discontinuance, the proceedings (in French the two terms instance and procedure can only have the same meaning) cannot be pursued. Thus, Article 69, paragraph 2, referring to the case in which, because of the objection of the respondent, acquiescence in the discontinuance is not presumed, states that "the proceedings shall continue". Both in the case dealt with in Article 68 and in that dealt with in Article 69 (provided that, in the latter case, acquiescence in the discontinuance is presumed, in accordance with paragraph 2), the order recording the discontinuance of the proceedings directs the removal of the case from the list.
The reasons for which either the parties by mutual agreement under Article 68, or the applicant alone under Article 69, may decide to give notice of discontinuance, can be of the most varied character. And these reasons need not be stated in the notice of discontinuance. Discontinuance may be due, inter alia, to the possibility or the probability of a settlement. But it may be due also to a settlement that has already been concluded between the parties; and this may be so both in the circumstances to which Article 68 refers and also in the circumstances to which Article 69 refers. If the parties have concluded a [p103] settlement, they may, instead of notifying the Court of it in accordance with Article 68, use the other means offered by the same Article. They may also inform the Court in writing that they are not going on with the proceedings, and they may do this even without stating the reason for such discontinuance, that is to say, without mentioning the settlement arrived at between the parties. It may also be that, once the settlement has been concluded, the applicant alone may give notice of discontinuance in accordance with the terms of Article 69 (provided, of course, in the hypothesis of paragraph 2 of that Article, that the respondent does not oppose the discontinuance).

3. The discontinuance referred to both in Article 69, as in the present case, and also in Article 68 of the Rules of Court (and similarly, on the basis of the last-named Article, a settlement notified by the parties to the Court, naturally leaving aside the effects produced by a settlement on the basis of general international law) therefore produces no other legal consequences than that of extinguishing the effects of the application filed with the Court, that is to say, other than that of putting an end to the proceedings in the course of which the discontinuance was effected.
Thus, discontinuance as such does not affect, in the first place, the actual existence of the dispute between the parties. Notwithstanding the discontinuance (whether effected by the parties by mutual agreement or by the applicant alone, accompanied, if such be the case, by the non-opposition of the respondent) the parties may maintain their respective attitudes in relation to the conflict of interests at issue. In that case, the dispute which had been submitted to the Court con-tinues to subsist even after the discontinuance.

Furthermore, the discontinuance, as such, does not affect either any right of action possessed by the party and the jurisdiction of the Court, or the substantive right on which the claim was based. It follows that, in the case of a discontinuance pure and simple, the dispute can be submitted to the Court by means of a new application and that the Court must deliver judgment upon it on the same legal basis that existed before the discontinuance.

4. Once the discontinuance has been perfected, it produces its effects in a final manner. In view of the fact that, as has been said, the effect of the discontinuance is merely to put an end to the proceedings, this means that, after the discontinuance, the proceedings in the course of which the discontinuance was effected are finally terminated. For the reasons already given, however, this does not preclude the possibility of new proceedings in respect of the same dispute.

In the discussions which led up to the discontinuance by Belgium, the term "final" was very frequently employed to indicate the character which, according to the Spanish nationals concerned and the Spanish Government itself, the discontinuance or withdrawal of the claim had
P[104] to possess. For instance, the "basic memorandum" drawn up by M. March says that "the final withdrawal of the claim is a prior condition for entering into negotiations". However, the adjective by which the discontinuance is qualified does not in any way change the nature of the discontinuance. This adjective does not in any way of itself indicate, as Spain claims in its arguments, that the discontinuance was bound to produce effects which are not the effects pertaining to discontinuance as such, or that it was bound to produce other effects in addition to those effects.

The "final" character which, according to the Spanish nationals concerned and the Spanish Government, the discontinuance had to possess, can be understood in two different ways.

In the first place, the term "final" has been used in regard to the perfected character of the discontinuance. Since the contingency envisaged was that of paragraph 2 of Article 69, it was intended to indicate in this way a discontinuance capable of a presumption of acquiescence under paragraph 2 in the absence of any objection by the respondent within the prescribed time-limit. It is in this sense that the term "final" is understood by Spain itself in paragraphs 39, 54, 55, 56, 60, 119 and 125 of its first Preliminary Objection. This interpretation of the "final" character of the discontinuance is in line, on the Belgian side, with the passage in the Application (paragraph (5)) in which it is stated that "the Spanish group had intimated that it did not wish to negotiate so long as the case before the International Court of Justice was proceeding". It is in the same sense that the Belgian Government understands the final character of the discontinuance when, in paragraph 25 of its Observations, it refers to its proposal of March 1961 "that the discontinuance should become effective through acceptance by the Spanish Government only after an agreement had been arrived at between the private parties".

But the term "final" is also applied to the Belgian discontinuance in another sense, namely to indicate that the Spanish nationals concerned and the Spanish Government required true discontinuance and that true discontinuance was effected by Belgium; true discontinuance as opposed to a different concept, namely mere suspension of the proceedings.

Suspension of the proceedings is not explicitly contemplated in the Rules of Court although it is admitted by certain systems of municipal law. It consists of a pause in the course of proceedings which nevertheless remain open, a pause during which no step in the proceedings may be taken. Once the suspension has come to an end, the proceedings resume their course without there being any need for the institution of new proceedings.

Now, as is stated in paragraph (5) of the Application, the Belgian Government had in fact said that it was "prepared to ask the Court for a suspension of the proceedings". This proposal, and also the other proposal concerning an extension of the time-limit fixed for the filing [p105] of the Belgian reply to the Spanish Preliminary Objections, was considered to be insufficient by M. March. This led the Belgian Government, as is stated in the same paragraph of the Application, to effect a real discontinuance, that is to say, a discontinuance which, precisely in order to distinguish it from a mere suspension was, on many occasions, described as "final". It is in this sense that the term "definitive" is employed in paragraphs 70 and 71 of the first Preliminary Objection of the Spanish Government, whereas the paragraphs immediately following use it in an entirely different sense. Similarly, the "final withdrawal of the claim" is the term used as opposed to a mere suspension of the proceedings, inter alia, in paragraphs 122 and 123 of the same Spanish Preliminary Objection.

5. If it is recognized (as, in my opinion, it must be recognized) that, on the basis of Articles 68 and 69 of the Rules of Court, the discontinuance produces no other effects than that of putting an end to the proceedings in the course of which the discontinuance is effected, it follows that it is quite possible, after the discontinuance and the ending of the proceedings resulting therefrom, to file a new application for the purpose of instituting new proceedings.

Such a possibility is in no way dependent on the need for any reservation whatsoever. The need for a reservation could be upheld only on the basis of the, in my view erroneous, concept that discontinuance, as such, produces in addition to the effect of putting an end to the proceedings, other effects and it is those other effects that the reservation would in fact be intended to obviate.
If discontinuance as such, that is to say, as the step referred to in Articles 68 and 69 of the Rules of Court, produces only the effect of putting an end to the proceedings, it is quite possible that a discontinuance—more particularly a discontinuance effected by the applicant in accordance with the terms of Article 69—could be accompanied by another act of will of the same party producing independent effects of its own on the basis of general international law or of other particular rules. It is, however, quite certain that the existence of such an act, in any particular case, would have to be proved by the party concerned. The existence of this act, contemporaneous with the discontinuance but distinct from it, could not be presumed. Nor could it be inferred from the absence of any reservation in the notice of discontinuance.

6. If it is recognized, in general, that discontinuance may be accompanied by other acts of the applicant party and that those acts may produce independent effects of their own, it may be convenient to refer here, again in a quite general way, to the different cases that may arise.

The first case is that of discontinuance pure and simple, not accompanied by any other expressions of intention and, consequently, producing the sole effect pertaining to discontinuance, namely that of putting an end to the proceedings.[p106]

A second case occurs when there is, on the part of the applicant, not only a discontinuance of the proceedings, but also the abandonment of its claim or of its protest as a constituent element of the dispute which had been submitted to the Court, with the consequence that the dispute is extinguished. It is possible that the abandonment of the claim or of the protest may not be accompanied by abandonment either of the right of action before the Court or of the substantive right on which the claim or the protest was based. In that case, if the dispute arises again or, more precisely, if a new dispute arises corresponding, to a greater or lesser degree, to the extinct dispute, the Court may well be seised for the settlement of such a dispute and, if so, that dispute will have to be decided on the basis of the substantive right which the applicant party had invoked before the discontinuance.

It is possible, on the other hand (and here we are confronted with a third case), that the discontinuance may be accompanied by the abandonment of the right of action before the Court. In this case, the right of action is extinguished and this results in the extinction also of the jurisdiction of the Court. In view of the fact that the abandonment of the right of action does not necessarily imply the abandonment of the substantive right, the latter right may very well be invoked subsequently, either quite apart from any legal proceedings, or in the course of proceedings instituted before some authority other than the Court, or even before the Court, by some means other than the exercise of the right of action which was abandoned (for means of a special agreement).

Lastly, there is a fourth possible case. This is the case in which the applicant party which discontinues the proceedings abandons also its substantive right or recognizes that such substantive right does not exist. Such abandonment or admission produces effects going to the actual merits of the dispute. The substantive right that is abandoned or is recognized to be non-existent can no longer be invoked either apart from legal proceedings or in the course of any possible proceedings, such proceedings being quite possible, even before the Court, seeing that the abandonment or admission in respect of the substantive right do not, of themselves, affect the right of action before the Court.

The distinction between the last two cases mentioned is clearer in international law than in municipal law. Having regard to the fact that, in international law, the right of action and the corresponding jurisdiction are not, as in municipal law, of a general character but, on the contrary, are derived from certain particular rules, it is easy to conceive of an abandonment of the right of action deriving from a given rule which would not in any way affect the substantive right. The abandonment which is contemplated in municipal law, on the contrary, is usually not an abandonment of the right of action as such, but rather of the substantive right. It is this abandonment, in fact, which constitutes the situation which has been opposed to a mere
[p107] abandonment of the proceedings. While this latter form of abandonment is described as a discontinuance of proceedings, the term discontinuance of the action is used to indicate something that does not exactly correspond to such a term, namely the abandonment, not of the procedural right of action, but rather of the substantive right. This is the terminology which is employed by both the Parties in the present case. It will suffice, in this connection, to recall that, in paragraph 294 of its Memorial, the Belgian Government states than in most countries on the European Continent "by discontinuance of the action is meant the abandonment by the plaintiff of his action, thus of his right". The same terminology, which reveals a certain confusion between the procedural right of action and the substantive right, is used in the Spanish arguments.

At all events, so far as concerns the terminology and in regard to the hypothesis which is usually contemplated in municipal law, it is necessary, for the purposes with which we are concerned, to determine which hypothesis is, according to the Spanish Government, the one that applies in this particular case as a result of the Belgian discontinuance.

7. In the Submissions in the Preliminary Objections the Spanish Government asked the Court to declare that it has no jurisdiction to admit or adjudicate upon the claim made in the new Belgian Application, "all jurisdiction on the part of the Court to decide questions relating to that claim, whether with regard to jurisdiction, admissibility or the merits, having come to an end" pursuant to the Belgian discontinuance. In the Submissions filed after the hearing on 8 May 1964 the Spanish Government asked, for the reason set out above and for the reasons given in support of the other Preliminary Objections, that the Belgian Application be declared definitively inadmissible.

If regard is had only to the way in which the Spanish Government's Submissions are formulated, the first Preliminary Objection might be understood in a purely procedural sense, namely that it was specifically and solely designed to deny the jurisdiction of the Court to decide the dispute. Since the Court's jurisdiction in the present case was founded by Belgium on the 1927 Treaty and Article 37 of the Statute, the first Preliminary Objection would according to this construction be understood in the sense that Spain thereby asserted that Belgium had abandoned any right of action before the Court which might derive from those provisions.

It must however be observed that the contention that Belgium abandoned its right of action as such is not developed or even clearly outlined in the Spanish arguments. It is moreover a contention which does not fit in with the formula of "definitive" inadmissibility used by Spain in its final Submissions. For the only possible subject of a declaration of inadmissibility would be the application instituting the [p108] proceedings in which the declaration of inadmissibility is made. But by asking that the Belgian Application be declared "definitively" inadmissible, Spain has on the contrary asked the Court for a judgment relating not specifically to the Application of 19 June 1962, but also relating to any other applications which, pursuant to the judgment asked for by Spain, would likewise have to be deemed to be "inadmissible". In substance Spain has asked for a judgment producing the effect of res judicata in the material sense, and such a judgment could, as such, only be a judgment on the merits.

8. In order to define the true scope of the first Preliminary Objection, it is necessary to construe the Spanish Submissions in the light of the arguments developed by Spain both in the written and in the oral proceedings.

It must be observed in the first place that in the circular sent to its diplomatic missions abroad on 13 April 1961, after the Order of the Court directing the removal of the case from the list, the Spanish Government, while it describes the Belgian discontinuance as a "discontinuance of the action", says that the Belgian Government was led "to discontinue the protection of certain private interests whose defence was not possible within the ambit of international law". The Spanish Government then comes to the conclusion that "Belgium's not going on with the proceedings therefore constitutes a definitive recognition that the position taken by Spain is well-founded". But the first Preliminary Objection refers to this circular in paragraph 62, stating that it demonstrates "as clearly as possible that the Spanish Government considered the international dispute between the two governments as having definitively come to an end".

But there are also other passages in the first Preliminary Objection which show the meaning which the Spanish Government attaches to the Belgian discontinuance. Although described as a "discontinuance of the action", that discontinuance is said to have as its subject, in reality, a substantive right, namely the right of diplomatic protection. For instance in paragraph 98 the Spanish Government refers to the definition given in the Dictionnaire de la terminologie du Droit international, according to which the term "discontinuance" can "be used to designate the renunciation of a claim or of a right". After this, the Spanish Government repeats precisely that the word can be "used in connection with the renunciation of a claim or of a right". Similarly, in paragraph 101 the term "discontinuance of the action" is used to denote "the intention of the parties concerning their rights as to the merits of the case". Again, in paragraph 102 it is said that "in most cases in which discontinuance occurs after agreement between the States the notice of discontinuance will reflect an agreement the purpose of which [p109] is to settle the dispute once and for all". It may be recalled finally that, in paragraph 103, with reference to the Belgian discontinuance in the Borchgrave case, mention is made of the Belgian Government's intention "of abandoning once and for all its right to appear before the Court". This is said to be precisely the consequence of the fact that the same Government had recognized "that the responsibility of the Spanish Government was not at all involved".

The real significance of the first Preliminary Objection can be seen also from the arguments presented in support of it at the hearing. A relationship was inferred between the Belgian discontinuance and the Preliminary Objections advanced by Spain against the first Application and, more particularly, the Preliminary Objection relating to lack of capacity, and it was asserted that the discontinuance implied the abandonment by Belgium of its arguments against the Spanish Preliminary Objections. Having regard to the fact that the question of capacity, as we shall see later (Part IV below) is concerned with a substantive right, namely the right of diplomatic protection, it is seen very clearly that, according to the contention advanced by Spain in its first Preliminary Objection, Belgium, when, through its discontinuance, it abandoned its arguments in this connection, disposed of the said substantive right. It is claimed that Belgium either abandoned that right or recognized its non-existence.

Thus if account is taken of the way in which the first Preliminary Objection is presented and if the Spanish Submissions are understood in the light of the arguments developed both in the written proceedings and also in the course of the hearing, it becomes in my view very clear that by this objection Spain denies, as a consequence of the Belgian Government's discontinuance, that it is possible for that Government to exercise the right of diplomatic protection in any way whatsoever in respect of Barcelona Traction. Henceforward, from the Spanish Government's point of view, such a right could no longer be invoked by Belgium, not only before the Court but also in any proceedings that might be instituted before any other jurisdiction whatsoever, or even quite apart from any legal proceedings.

9. If this is the significance of the first Preliminary Objection, it is quite certain that this objection raises a problem that is concerned, not with the possibility or impossibility of a judgment on the merits, but, on the contrary, with the very way in which the merits of the case should be judged by the Court. But, for the reasons I have given in Part II above, such a question, as a question relating directly and exclusively to the merits, could not be considered by the Court at the present stage of the proceedings. Consequently the Court should in my view have declared the first Objection inadmissible as a preliminary objection.[p110]

On the Third Preliminary Objection


IV. On the Third Preliminary Objection

1. In the third Preliminary Objection, Spain denies that Belgium has the capacity to exercise diplomatic protection in favour of the Barcelona Traction Company, or in favour of the Belgian shareholders in that company in respect of the damage suffered by it.

In my opinion, diplomatic protection is nothing other than the exercise by a State of its right to claim from another State a certain treatment for its nationals (whether natural or juristic persons). When a State demands, through the diplomatic channel, that one of its nationals shall be treated by another State in the manner prescribed by the international rules on the subject, or when it claims compensation because that treatment has not been afforded, the first State is merely exercising the right conferred upon it by those international rules. These are substantive rules conferring a right which has the character of a substantive right. It is simply because of the means by which that right is usually exercised that it is known as the right of diplomatic protection. There is no reason to consider that a right of diplomatic protection exists independently of the substantive right established by the rules relating to the treatment of foreigners.

The Spanish Government appears to have adopted an entirely different concept, which considers diplomatic protection as an institution the purpose of which is to guarantee the international rules relating to the treatment of foreigners. The Spanish Government appears to make a distinction between the right of a State to demand a certain treatment for its nationals and, as a corollary of that right, the same State's faculty of intervention through the exercise of diplomatic protection.

In my opinion, this differentiation is neither necessary nor even conceivable. In any event it is quite certain that when a State acts not through the diplomatic channel but by use of the judicial method, the right it invokes as the basis of its claim is simply the substantive right conferred by the rules concerning the treatment of foreigners. No account at all could be taken in judicial proceedings of the other right, or other faculty sought to be conceived of (wrongly, in my opinion) as something apart from the said substantive right in order to provide an explanation for the basis of diplomatic intervention.

2. In proceedings instituted by an application based on a right deriving from a rule concerning the treatment of foreigners (which maybe called the right of diplomatic protection, subject to the above qualifications), the question of whether or not such a right exists is obviously one which directly concerns the merits of the case. Consequently, a judgment deciding this question is a judgment on the merits, producing the effect of res judicata in the material sense. Thus a judg-
[p111] ment finding that the right of diplomatic protection does not exist in a particular case is a judgment on the merits of the claim, not a judgment declaring that the substance of the claim cannot be considered or in other words a judgment declaring the claim inadmissible.

There are various reasons why in a particular case a right of diplomatic protection may be deemed to be non-existent. One possible reason is lack of capacity on the part of the State which relies on a would-be right of diplomatic protection. By capacity, in this instance, is meant nothing other than that the substantive right relied on in the proceedings pertains to one State rather than to another; it is thus substantive and not procedural capacity. Since the right of diplomatic protection, like any other right, can be conceived of only as a right possessed by a particular State as against another particular State, denial that the right of diplomatic protection in respect of a certain private person pertains to the State which advances it as the basis of the claim made by that State to the Court is equivalent to a finding that the claim is, for this reason, not well-founded. This is so irrespective of whether or not the respondent State has committed any breach of an obligation, such obligation possibly existing towards a State other than the applicant. We thus see that a judgment declaring that the applicant State lacks capacity to exercise the right of diplomatic protection to which it lays claim, is a judgment dismissing the claim on the merits and not one declaring it to be inadmissible.

3. What are the merits in the. present case? Belgium claims compensation from Spain for the alleged breach of an international obligation owed by Spain to Belgium. Spain refuses compensation, and denies that it has committed a breach of any obligation towards Belgium. Spain denies the existence of such breach on various grounds. One consists of a denial of the existence of the obligation alleged to have been violated: naturally, the existence of an obligation towards Belgium. Spain maintains that even were it possible to speak of an international obligation and of a breach of that obligation, the obligation in question would be owed by Spain to a State other than Belgium, and Belgium would thus have no claim in the matter.

Hence, the question of whether Belgium does or does not possess the capacity to bring the claim it has brought against Spain is nothing other than an aspect of the merits of the case. A judgment on this question would not be a judgment on the admissibility of the claim, it would on the contrary be a judgment on the merits. Thus a judgment by the Court deciding this question in the manner desired by Spain would not be a judgment declaring the claim inadmissible, but rather a judgment deciding the merits of the claim to the effect that Belgium's claim is without foundation. The effect of such a judgment would [p112] not be limited to the present proceedings, preventing the pursuance of those proceedings before the Court. As a judgment on the merits, it would produce the effect of res judicata in the material sense. The judgment would be binding upon the parties, and upon any tribunal (the Court itself or any other tribunal) which might be called upon to give a decision on the same subject between the same parties. As a result of such a judgment, it would not be open to Belgium to make any further claim upon Spain in respect of the measures taken by the latter with regard to Barcelona Traction.

4. It is not possible to follow the Spanish Government in its attempt to separate from the merits of the case the question of the Applicant State's capacity to intervene for the purpose of diplomatic protection(hearing of 7 May 1964) for the very simple reason, already indicated, that capacity in this instance is nothing other than the possession by the Applicant State of the substantive right relied on as the basis of its claim.

The Spanish Government itself explicitly recognizes that the determination of the existence or otherwise of an international obligation, the breach of which a State alleges, is a matter of the merits. Such an obligation could be declared existent or non-existent only as an obligation owed by a particular State to another particular State. Consequently if the question of whether or not the Respondent State has committed a breach of an international obligation owed to the Applicant State by taking a certain measure in respect of a private person is a matter of the merits, the establishment of whether the obligation which is alleged to have been breached by the Respondent State is owed to the Applicant State—namely whether the right (the right of diplomatic protection) corresponding to the obligation pertains to the Applicant State—is also a matter for the merits, being only one aspect of the same question.

The answer to this question depends on the resolution of a number of points. Not only is it necessary to determine the identity of the private person affected by the measure of which the Respondent State is accused, but it is also necessary to ascertain whether or not that person is linked to the Applicant State by a bond of nationality. These are all points relating to the very existence of an obligation on the part of the Respondent State towards the Applicant State, hence the existence of a breach of such obligation, and hence the international liability asserted by the Applicant State. All these points thus concern the merits of the case.

5. The question raised by Spain as its third Preliminary Objection is therefore by no means of a preliminary character, since the answer to it is inseparable from an actual decision on the merits of the case. This is why this question was not open to consideration by the Court at the present stage of the proceedings, which was confined to questions [p113] which really, and not simply because they are so qualified by a party, have the character of preliminary questions.

The bar on the Court's considering at the present stage of the proceedings the question of Belgium's capacity to exercise diplomatic protection was an absolute bar. There could be no question of a possible exercise of the discretionary power to join the objection to the merits, which presupposes the preliminary character of the objection. On the contrary, in the present case the question of capacity was a question directly and exclusively concerning the merits, not a preliminary question arising as linked to the merits in such a way as to justify the Court in joining it to the merits.

Nor were there any grounds for making a distinction, within the ambit of what has been called Preliminary Objection No. 3—as did the Belgian Government (hearing of 23 April 1964)—between questions ripe for decision and questions which were not. This distinction could apply only in respect of questions which all possessed the character of genuine preliminary questions; it would then be a matter of the greater or lesser degree of relationship between each question and the merits of the case. In this case the questions concerned were not separate questions, but rather different points all relating to the same question, namely the question of the capacity of the Belgian State. Now as I said before, that capacity derives from the substantive right; and the question of whether or not it exists is a question which is not merely connected with the merits, but rather which directly and exclusively concerns the merits.

I need hardly point out that the argument which appeared to exist between the parties, concerning the possibility of deciding at this stage certain points considered by both as ripe for decision, was one which could have no influence on the powers of the Court. Such an agreement not only did not oblige the Court, but did not even give it authority to consider the question of capacity at the present stage of the proceedings, either as a whole or in respect of certain of the points on which it arises.

6. The question of capacity could therefore definitely not be one arising for consideration at the present stage of the proceedings. Nor was the objection relating to it capable of being joined to the merits under Article 62 (5) of the Rules of Court. It ought on the contrary to have been declared inadmissible as a preliminary objection.

Whether the question of capacity should be considered before the other questions which also concern the merits, and the order in which the different points on which that question arises should be taken, are of course matters which may arise for consideration. It rests exclusively with the Court and not with the parties (either with the respondent party or with both parties acting in agreement) to decide such matters. The decision depends not upon logical reasons, but simply upon reasons [p114] of convenience and economy. It is only on the basis of a comprehensive view of all the questions concerning the merits, and consequently only in the phase of the proceedings in which such questions arise for decision, that the Court could embark upon an examination of such matters.

It suffices to observe in this connection that it is quite possible, in a particular case, for a question other than that of capacity (for example, the question of the actual content of the rule of law on which the claim relies) to appear to lend itself more readily to decision than the question of capacity. In such case, the Court may well think fit to begin by considering that question and, on the basis of the conclusion reached on that question, possibly to decide to reject the claim on the merits without dealing with the question of capacity at all.


V. On the Fourth Preliminary Objection

1. In the fourth Preliminary Objection Spain asserted that the remedies provided by Spanish municipal law had not been exhausted and submitted that the Court should for this reason declare the Belgian claim to be "definitively inadmissible".

The preliminary character of this objection and hence its admissibility as a preliminary objection depend on what is held to be the nature of the rule on which the objection is based. It must be observed in this connection that the Spanish Government did not base its fourth Preliminary Objection directly on Article 3 of the Hispano-Belgian Treaty of 1927. On the contrary, the Spanish Government relied on a rule of general international law, the local remedies rule which, according to the Spanish Government, is only confirmed by Article 3 of the 1927 Treaty.

However, the local remedies rule, as a rule of general international law, is in my view substantive and not procedural. It is indeed a rule which is supplementary to other rules which also themselves possess the character of substantive rules, namely the rules concerning the treatment of foreigners.

Those rules require from the States to which they are directed a particular final result in respect of the treatment of foreign nationals, leaving the State which is under the obligation free as regards the means to be used. Consequently, if an organ of the State which is under the obligation performs an act contrary to the desired result, the existence of an internationally unlawful act and of the international responsibility of the State cannot be asserted so long as the foreign national has a possibility of securing, through the means provided by the municipal legal system, the result required by the international rule.[p115]

2. It follows that if in international proceedings instituted, like the present proceedings, by a claim based on damage to a national of the applicant State by an organ of the respondent State, it is found that the remedies made available by the municipal law of the respondent State have not been exhausted, the conclusion which must be drawn from this finding is not the inadmissibility of the claim, but rather the dismissal of the claim on the merits. In the eventuality I have des-cribed what is in fact found is that the alleged violation of the substantive international right of the applicant State has not been accomplished.

The consequence of such a finding can only be a denial of the responsibility of the respondent State and hence dismissal of the claim on the merits. A judgment to this effect is thus a judgment on the merits and produces as such res judicata in the material sense. It is just such a judgment, although incorrectly and contradictorily worded in the form of definitive inadmissibility, that is asked for by Spain in its fourth Preliminary Objection. But it was not open to the Court to give such a judgment in the present phase of the proceedings.

It must be concluded that the fourth Preliminary Objection also ought to be, not joined to the merits, but rather declared inadmissible as a preliminary objection.

(Signed) Gaetano Morelli.[p116]

Dissenting Opinion of Judge Armand-Ugon

[ Translation ]

First Preliminary Objection

I much regret that I am unable to associate myself with the conclusions at which the Court has arrived in the present Judgment and I avail myself of the right to set out the reasons for my dissent.

The first Preliminary Objection relates to the discontinuance which occurred in the proceedings on the first Application. The Belgian Government asked for such discontinuance, invoking paragraph 2 of Article 69 of the Rules of Court. This discontinuance was agreed to by the Spanish Government at the express request of the Belgian Government, and the Court ordered that the case should be removed from its list.

The two Parties dispute the effect of the discontinuance. The Belgian Government contends that it was a mere discontinuance of the proceedings, while the Spanish Government maintains that the discontinuance put an end to the right to bring the case before the Court.

It is for the Court to construe this legal act. It is proper that this act should be interpreted by the organ from which it emanates.

The discontinuance in question is a judicial contract the subject of which must be determined with precision. It exists only in respect of the point which formed the subject of the agreement between the parties. Its scope must remain limited to what they intended. The proposal to discontinue was agreed to by the Respondent Party. An agreement between the Parties thus came into being. Paragraph 2 of Article 69 of the Rules of Court implies the reaching of an agreement and, in the act effected, there must be seen a judicial contract which, of course, is binding on the two Parties.

The question which this contract raises is that of determining its nature, its extent and its effects.

***

Article 30 of the Statute of the Court authorizes the Court to frame rules for carrying out its functions and, in particular, to lay down rules of procedure.

An international organ is given the power of creating rules of law, in full independence. If international law is based on the agreement of States, either express or tacit, in the case of Article 30 of the Statute a new creative source has arisen. The Permanent Court and the International Court, which were created by States, have the capacity to lay down mandatory rules of law in the same way as any national legislature.[p117]

It has been rightly held that the Rules of Court have the force of an international convention binding upon all States but that, by the will of the same States, these Rules can be modified or abrogated by the Court. In Article 31 of the Rules the Court provides that the parties may jointly ask it to make particular modifications or additions to Sections 1, 2 and 4 of heading II of the Rules. The heading Settlement and Discontinuance is to be found in Section 1 and Articles 68 and 69 could therefore have been modified or supplemented by agreement between the Parties to the present case, with the Court's consent. The Parties did not take advantage of this possibility.

To understand the scope and significance of Articles 68 and 69 of the Rules, it is indispensable to examine the sources of these two provisions.

Article 68 is a remodelling of Article 61 of the 1922 Rules. The origin of that Article 61 is to be found in the work of the Permanent Court between January and March 1922, when it was drawing up the first Rules of that Court.

The Permanent Court first examined a questionnaire on the points to be dealt with in the draft of the first Rules. One of the points in that questionnaire was the following: Can the parties remove a case from the Court, once they have submitted it? (P.C.I.J., Series D, No. 2, p. 291.) A first Article, numbered 44 (given in Annex 21 (b), at p. 304), gave, in its first and second paragraphs, an answer to that question. This text, which relates to numbers 63 and 64, was adopted (p. 154) and appeared finally in the first Rules as Article 61.

The discussion of the questionnaire (pp. 83 and 84) made it clear, according to Judge Anzilotti, that the Court's jurisdiction was based entirely on the will of the parties and that for that reason the wishes of the parties should in all circumstances prevail. Lord Finlay added that it was agreed that the parties should have the right to withdraw, by common consent, a suit which they had brought before the Court.

The original Article 61, now Article 68, covered two cases: that of an agreement between the parties as to the settlement of the dispute and that of an agreement between the parties not to go on with the proceedings, that is to say, to withdraw the case from the Court. In both events, it was laid down that the case should be removed from the list. For the authors of that original Article 61, if discontinuance was effected by common consent of the parties, the withdrawal of the case from the Court was concluded. This decision not to go on with the proceedings was equivalent to withdrawing the case from the Court.

At the time of the preparation of the Rules of 22 March 1936, there was given as footnote 2 on page 318 of P.C.I.J., Series D, No. 2 (Third Addendum), an extract from the report of a discussion regarding Article 61 of the first Rules. It is an extract from the minutes of 12 May 1933.

Baron Rolin-Jaequemyns is reported in these minutes as thinking [p118] that if "a government had noted the other government's declaration of withdrawal, the result of this was to constitute an agreement between the parties, so that Article 61 was applicable". The Registrar then recalled that Article 68 had been applied in two cases submitted by unilateral application, the Sino-Belgian and Chorzów cases.

The discussion ended with a statement by Sir Cecil Hurst to the effect that:
"if the parties were agreed to remove a case from the Court, the latter's jurisdiction ceased and there was not even anything to make an order upon, since the Court's jurisdiction was derived exclusively from the agreement between the parties".

In his view,

"withdrawal by the applicant did not suffice by itself to put an end to the jurisdiction of the Court; for that purpose it must be accompanied by the consent of the other party. He thought that Article 61 of the Rules, which only dealt with the case of an agreement between the parties, did not cover the present case."

The aim of the 1936 reform, in framing paragraph 2 of Article 69, was to introduce unilateral discontinuance and to supplement the concepts embodied in Article 61. Hitherto, said Jonkheer van Eysinga,

"the Court had only been agreed as to the possibility of the joint abandonment of proceedings by both parties. The Commission's intention was now by means of Article [69, paragraph 2] definitely to provide for unilateral discontinuance."

In Judge Fromageot's view the proposed text did not make provision for a possibility which had not previously existed. As a matter of fact it had existed, and the best proof of that was that there had been several instances of such possibilities. The point, according to him, seemed really to be one of drafting.

These antecedents make it possible to affirm that the sole aim of paragraph 2 of Article 69 was to embody a previously existing practice in a provision of the Rules.

Far from making provision for discontinuance of the proceedings, it adopted a discontinuance which, if accepted by the other party, creates an agreement to put an end to the proceedings. In such a case, paragraph 2 of Article 69 has the same legal content as the discontinuance by mutual agreement provided for in Article 68, formerly Article 61 of the old Rules, which, according to Sir Cecil Hurst, had the final result of bringing jurisdiction to an end.
[p119] Paragraph 2 of Article 69, moreover, did not introduce the right to re-submit the application; jurisdiction having come to an end, such a right was inconceivable. In order that such a right might be exercised, it would have had to be based on a provision of the Rules which they do not contain.

***

When the Court is seised of a dispute, such dispute may be terminated by a judgment, but there are other means for putting an end to suits before the Court. It is provided in Article 20, paragraph 2, of the Rules, under heading XVIII, that the nature of the result of a suit shall be stated and its immediate effect can only be its removal from the list. As soon as an order has been made removing a case from the list, this means that the case has a final result.
Discontinuance, as provided for in Articles 68 and 69 of the Rules FN1, opens another possibility for obtaining the removal of a case from the list. These two Articles come together under the heading Settlement and Discontinuance; these two situations are related to each other.
---------------------------------------------------------------------------------------------------------------------
FN1 Article 68

If at any time before judgment has been delivered, the parties conclude an agreement as to the settlement of the dispute and so inform the Court in writing, or by mutual agreement inform the Court in writing that they are not going on with the proceedings, the Court, or the President if the Court is not sitting, shall make an order officially recording the conclusion of the settlement or the discontinuance of the proceedings; in either case the order shall direct the removal of the case from the list.

Article 69

1. If in the course of proceedings instituted by means of an application, the applicant informs the Court in writing that it is not going on with the proceedings, and if, at the date on which this communication is received by the Registry, the respondent has not yet taken any step in the proceedings, the Court, or the President if the Court is not sitting, will make an order officially recording the discontinuance of the proceedings and directing the removal of the case from the list. A copy of this order shall be sent by the Registrar to the respondent.

2. If, at the time when the notice of discontinuance is received, the respondent has already taken some step in the proceedings, the Court, or the President if the Court is not sitting, shall fix a time-limit within which the respondent must state whether it opposes the discontinuance of the proceedings. If no objection is made to the discontinuance before the expiration of the time-limit, acquiescence will be presumed and the Court, or the President if the Court is not sitting, will make an order officially recording the discontinuance of the proceedings and directing the removal of the case from the list. If objection is made, the proceedings shall continue.
---------------------------------------------------------------------------------------------------------------------
Under Article 68, parties can agree as to the resolution of the dispute, either by means of a settlement or by not going on with the proceedings. In both cases, the will of the parties puts an end to the suit, and the Court places on record the agreement or the discontinuance and orders the case to be removed from the list on a mere communication from [p 120] the litigants. It is obvious that the parties cannot go back on what they have said concerning their agreement. In either event the case is finally and definitively removed from the Court's jurisdiction.

Paragraph 2 of Article 69 envisages a discontinuance which also requires the agreement of the parties, though that of the respondent party may be implied. In the present case, agreement was explicitly given at the request of the Applicant Party. Discontinuance thus became a fact. The Court placed the communications thus received from the two Governments on record and ordered that the case should be removed from the list, the suit having come to an end.

This provision does not specify whether it provides for a discontinuance of the action or for a discontinuance of the proceedings, this distinction being made in the municipal law of certain States. The Belgian Government bases its argument on a dogmatic notion of discontinuance which it derives, by analogy, from municipal law. It asserts that discontinuance presupposes the abandonment of the proceedings and that for it to comprehend abandonment of the action renunciation thereof is necessary. The vulnerability of this argument lies precisely in the fact that it is based upon analogy, in so far as it applies the principles of municipal procedural law to the procedure of the Court. The Rules have laid down the Court's own system for discontinuance and this is independent of the systems of municipal law, which can neither supplement nor interpret the system of the Rules. It is not in an argument by way of analogy that the concept which underlay the adoption of paragraph 2 of Article 69 must be sought. It is the rules and the procedure which are applicable in the International Court of Justice which apply in the present case and not the municipal law of certain States.

The Rules do not make any reference to these two kinds of discontinuance.

At the time of the 1936 revision of the Rules, the. Members of the Permanent Court did not, at any point in their discussions, consider the substance of the discontinuances for which provision is made in Articles 68 and 69. The Members of the Court knew quite well that the municipal law of some States and the rules of some Mixed Arbitral Tribunals allowed discontinuance of proceedings and also discontinuance of the action; but, on the occasion of the revision of the Rules, no allusion was made to this distinction. The Rules were devised to achieve only one purpose, namely to institute a means of putting an end to the proceedings. If the subject of the discontinuance was simply the proceedings, the party concerned was required to express this quite clearly, as the jurisdiction of the Court is consensual. If the texts concerning discontinuance filed by the parties contained no indication, there arose a problem of interpretation according to the rules of international law which the Permanent Court had laid down.

Paragraph 2 of Article 69 is a provision which partakes of the nature of a treaty and which allows parties to do only what it makes provision[p121] for. What the governments are entitled to do cannot be extended to situations for which this text makes no provision. Declarations of human rights authorize man to do everything which the law does not prohibit him from doing but, in public law, the powers of the organs created by such law can be exercised only within the limits assigned to them. They are only entitled to do what is provided for in the relevant texts or what is absolutely necessary in order to carry out what is provided for in those texts. Paragraph 2 does not make provision for the re-submission, by means of a new application, of a case which has been discontinued. Nor can any presumption in favour of such a right be drawn therefrom. Furthermore, there is no general principle of law in favour of the possibility of a new application which, in order to be permissible in municipal law, must generally be based upon actual texts.

There are no precedents in the Court in favour of the existence of such a right of re-submission. This is the first time that such a claim has come before the Court.

Such a right of re-submission finds no support in the Rules; nor can it be inferred either from the practice of the Court or from the practice of States in regard to arbitration. Municipal laws on this point are divergent. This right can result only from an explicit reservation contained in the discontinuance agreed to by the parties. Such a reservation is lacking in the present case.

***

The discontinuance to which the Court gave its official approval was expressly agreed to by the Parties. The private groups had negotiated an agreement which implied a prior discontinuance and that agreement was recognized by the Belgian Government. The object of the private agreement was the final and definitive withdrawal of the claim and its raison'd'etre was that the Sidro and Fecsa groups might begin negotiations in order to find a solution to their dispute.

The Spanish Government, when replying to the Belgian Government's request that it should agree to the proposed discontinuance, had to take account of the rules of procedure of the Court. Discontinuance under paragraph 2 of Article 69 is not in itself a discontinuance of the proceedings unless the party giving notice thereof wishes to give it this effect only. In such a case it must be clearly indicated. A consideration of a general nature supports this view: international jurisdiction must not be open to doubt and the relationship between States on this point must not be imprecise and lend itself to quibbling. Moreover, the Spanish Government understood that the discontinuance proposed by the Belgian Government contained something more than a mere discontinuance of proceedings.[p122]

***

The principle of the equality of the parties to a suit is indeed a principle laid down in Article 35, paragraph 2, of the Statute, in the provision of the Rules and in the case-law of the Court. The International Court of Justice, in its Advisory Opinion on Judgments of the Administrative Tribunal of the I.L.O. (I.C.J. Reports 1956) said (at p. 86): "The principle of equality of the parties follows from the requirements of good administration of justice." Discontinuance of the proceedings, in itself, obviously favours the applicant, allowing it to correct the mistakes contained in the first application when re-submitting a new one. This was recognized by the Belgian Government in its Observations. It had to take account of the criticism which the first Application had given rise to on the part of the Spanish Government. If the text which notifies the discontinuance does not clearly state that it is a discontinuance of the proceedings which is involved, the party which wishes to give it such an effect must make clear without ambiguities its intentions and the purport of its notice of discontinuance. It is in duty bound to do so. The respondent is thereby informed of the discontinuing party's intention so that it can consent to or refuse the discontinuance with a full knowledge of what is involved.

The Belgian Government maintains that, if the Spanish Government made a mistake in law by interpreting its notice of discontinuance as a final and definitive withdrawal of the claim and not as a discontinuance of the proceedings, it must bear the consequences thereof. It has not been shown that paragraph 2 of Article 69 of the Rules of Court provided for discontinuance of proceedings nor that that provision allows for the re-submission of a new application. In order to know whether there has been an error juris, it is first necessary to ascertain the law. This is precisely the question that is before the Court.
Though the practice of the Court authorizes modifications in the original Submissions, it does not permit of a change in the subject of the Application, which must remain the same throughout the proceedings.

In conclusion, according to paragraph 2 of Article 69 of the Rules of Court, any notice of discontinuance which is not accompanied by a reservation must be considered as a renunciation of the right to submit a new application. The right of re-submission does not follow from this provision; it must follow from the wording of the notice of discontinuance.

***

If it is for the Court to construe the legal contract of discontinuance which was arrived at, it must take into consideration the evidence presented by the two Governments which led to its adoption. The history of the conversations between the two private groups must be [p123] made clear. It is only thereafter that it will be possible to judge the value and the relevance of this evidence.

The notice of discontinuance cannot be situated in a void. It can be conceived of and understood only in the context of the conversations and discussions which gave rise to it. It is in the light of these facts and of the acts of those concerned that it must be read and interpreted. There is a sequence which links them with their culmination. The relationship which is established between them discloses the purpose of and the reason for the discontinuance. These various facts and acts, which form the context of the discontinuance, are bound together by a logical correlation. They explain one another. All these factors influenced the drafting of the notice of discontinuance, and it must be considered in relation to the circumstances in which it was filed and submitted for the decision of the other Party. These conversations started between Sidro and Fecsa, with Count de Motrico as an intermediary chosen by the two groups. They continued between Sidro and the Belgian Government and, finally, the text of the notice was communicated to the Spanish Government. The conversations which began in October 1960 ended in April 1961.

The documents exchanged during these conversations must be taken into consideration by the Court in order to ascertain the joint intention of the Parties, which must prevail over the literal meaning of the words. All legal acts are bound up with the real intention of those concerned. The two Governments have recognized the documents relating to these conversations as evidence and submitted them to careful examination in their written pleadings and oral arguments.

Before any step was taken in these conversations towards a friendly settlement between the two groups, M. March, of the Fecsa group, had drawn up a basic memorandum FN1. The first paragraph of this basic memorandum was drafted as follows: "From the moral standpoint, the final withdrawal of the claim is a prior condition for entering into negotiations." The Spanish text is as follows: "Desde un punto de vista moral la retirada definitiva de la demanda es condición previa para la apertura de la negociación." This memorandum was dated 20 October 1960 and was communicated by Count de Motrico to the Belgian group. It was at the request of that group that Count de Motrico got into touch with M. March.
Two days later, on 22 October, the representative of Sidro, the engineer M. Hernández, informed Count de Motrico of his disagreement [p124] with the condition of "the final withdrawal of the claim", if it were not accompanied by a final settlement between the two groups. M. Hernández considered that the "final withdrawal of the claim" involved "the discontinuance of the legal action" or the "withdrawal" of the legal action (Observations, Annex 6, Appendix 2, paras. 2 and 3).
---------------------------------------------------------------------------------------------------------------------
FN1
"1. From the moral standpoint, the final withdrawal of the claim is a prior condition for entering into negotiations.
2. Once this condition has been fulfilled, the other party undertakes to enter in all good faith into immediate negotiations to seek a solution determining compensation for the shareholders.
3. Complete discretion is indispensable for the development of these discussions. No publicity of any kind will be permitted until a final agreement, if such is possible, is reached."
---------------------------------------------------------------------------------------------------------------------


The chairman of Sidro, M. Frère, in his letter of 2 December 1960 to M. Hernández, stated that he could not take the risk of stopping proceedings. before an agreement was signed (Observations, Annex 6, Appendix 4).

M. Hernández wrote to Count de Motrico, in one of the drafts for an exchange of letters, dated 24 January 1961, that, as there was a "definite wish to arrive at a ... settlement of the dispute relating to Barcelona Traction", he accepted, on behalf of Sidro, among other principles, the "final withdrawal of the action brought by the Belgian Government against the Spanish Government before the Court at The Hague".

The Permanent Committee of Sidro had agreed—states M. Hernández in the same letter—to ask the Belgian Government "to put an end to the proceedings which are at present started in The Hague, if you [Count de Motrico] will be good enough to recognize that this letter faithfully represents what was agreed at our talks" (Observations, Annex 6, Appendix 5).

The Count de Motrico, being duly authorized by the Fecsa group, in a letter to M. Hernández dated 25 January 1961, manifested his agreement to the preceding draft letter (Observations, Annex 6, Appendix 5).

In a talk which the chairman of Sidro, M. Frère, had with the Belgian Minister for External Trade on 26 January 1961, he told him of the conversations with Fecsa. The Minister suggested that there should rather be "a suspension of the proceedings ... for a period of three months" (Observations, Annex 4, Appendix 6).

The Fecsa group and M. March having rejected such a suspension, the chairman of Sidro, at the instance of Count de Motrico, stated in his letter of 23 February 1961 that he was prepared to get the Belgian Government to agree to "a pure and simple withdrawal of the proceedings before the Court, so as to fulfil the condition regarded as a precondition for the negotiations proper" (Observations, Annex 6, Appendix 6). In answer to this letter Count de Motrico said that "it faithfully reflects what was dealt with in the various talks" (Observations, Annex 6, Appendix 6).

Two drafts for letters from M. Frère to Count de Motrico, dated 9 March 1961 (Preliminary Objections, Annex 71, documents 1 and 2) preceded the letter sent by M. Frère to Count de Motrico on the same day (document No. 3). The contents of the second paragraph of this last letter were as follows:

"I explained to the Minister that the prior withdrawal of the proceedings pending at The Hague was, in sum, a sine qua non [p125] condition for the negotiations on the bases defined in our exchange of letters of 23 and 24 February last to take place."

On 10 March 1961 M. Frère informed Count de Motrico by letter that the Belgian Government would take the responsibility of withdrawal after an exchange of letters between the Belgian Ambassador and the Minister for Foreign Affairs of Spain, which would be communicated to no-one, governing the procedure for the withdrawal of the proceedings and which would remain outside the knowledge "of the person whom I met in your company" (document annexed to the Count de Motrico's report dated 4 December 1963).

This proposal produced no results, being contrary to the first requirement in the basic memorandum, concerning the final withdrawal of the claim.

On 17 March 1961, Count de Motrico informed the Spanish Minister for Foreign Affairs of the state of the conversations with a view to discontinuance. In a letter dated the following day, Count de Motrico told the Minister that M. Frère had informed him that the Belgian Government had "decided to ask the International Court of Justice for the definitive withdrawal of its application submitted against our Government" and he added that "the Belgian Government will draft its notice of withdrawal in terms similar to those used in connection with a dispute between the United Kingdom and Bulgaria".

On 21 March, the Spanish Minister for Foreign Affairs telegraphed to Count de Motrico to inform him of his Government's position in respect of the announcement of the Belgian discontinuance. He stated that the case must be considered as closed and that the purpose of the discontinuance was to put an end definitively to the dispute between the two Governments.

There were two contacts, on 22 and 23 March, between the Spanish Minister and the Belgian Ambassador in Madrid. The Ambassador first tried to associate the Spanish Government with the discontinuance. On the Minister's refusal, he informed him of the text of the notice of discontinuance filed with the International Court, which was to fix a time-limit, asking him not to communicate his acceptance of the discontinuance before the expiry of the time-limit.

The following is the text of the notice of discontinuance:

"At the request of Belgian nationals the protection of whom was the reason for the filing of the application... [of] 15 September 1958, I am directed by my Government and I have the honour to request you to be good enough to inform the Court that, availing itself of the right conferred upon it by Article 69 of the Rules of Court, my Government is not going on with the proceedings instituted by that application."[p126]

Fecsa was opposed to beginning the private negotiations with Sidro for so long as the discontinuance had not been approved by the Court. The Spanish Government, at the request of the Belgian Government, agreed, in its letter to the Court of 5 April 1961, not to oppose the dis-continuance.

The International Court, in an Order dated 10 April 1961, placed the discontinuance on record and ordered the case to be removed from the list.
A circular from the Spanish Ministry of Foreign Affairs, dated 13 April 1961, informed its diplomatic missions abroad that the Belgian Government had "indicated its discontinuance of the action" instituted and that the case had "ended in tacit recognition of Spain's good name".

These are the essential facts and documents which led up to the discontinuance.

***
Let us now turn to an examination of the evidence in order to establish what conclusions are to be drawn.

It is not necessary to spend long over determining which of the two groups took the initiative for the conversations. Fecsa at least did not take the first step. In the first place, it laid down a prior condition for any negotiations, which it firmly maintained throughout all the phases of the conversations. It would not allow either the suspension of the proceedings or the extension of the time-limit for the filing of the Belgian Observations and Submissions. It opposed any suggestion contrary to the final withdrawal of the claim. It did not wish to be a party to negotiations until the discontinuance had been accepted by the two Governments and placed on record by the Court. These facts show the obvious interest which Sidro had in seeking to resolve the dispute.

***

The significance and meaning of the prior condition stipulated in the basic memorandum, which was accepted by the Belgian group, must be sought in the documents that preceded the discontinuance which was finally adopted.

What is the legal purport of the words "final withdrawal of the claim" (retirada definitiva de la demanda)? Right from the time when, two days later, the Belgian group learned about it from M. Hernández, the latter understood quite well that this withdrawal meant the "final withdrawal of the court action". Subsequently, he repeated this view when accepting on behalf of Sidro the principle of the "final withdrawal of the court action brought by the Belgian Government against the Spanish Government". In that same letter, he assimilated this withdrawal of the action to the phrase "put an end to the proceedings which are at present started in The Hague".[p127]

These utterances on the part of Sidro leave no room for doubt. It was a question of finally and definitively renouncing the seising of the Court of the Barcelona Traction case. It was indeed a renunciation of the bringing of the case before the Court. Such was the opinion of the Fecsa group too. There was thus from the outset no divergence as to the significance of the prior condition, no divergence as to the meaning of this phrase.

On 23 February 1961, the chairman of Sidro stated that he was prepared to get the Belgian Government to agree to the "pure and simple withdrawal of the proceedings before the Court so as to fulfil the condition regarded as a pre-condition for the negotiations proper". It was in accordance with that statement that the chairman of Sidro had his first interview with the Belgian Minister for External Trade. The Minister must have been informed of the demand made by the Spanish group and of the meaning of the prior condition, as the chairman of Sidro told Count de Motrico in his letter of 9 March, referring to the letters of the previous 23 and 24 February. But one of the bases of the letter of 23 February was the pure and simple withdrawal of the proceedings so as to fulfil the condition regarded as a pre-condition. The pure and simple withdrawal of proceedings signified to the Chairman, M. Frère, the withdrawal of the Application, so as to comply with the basic memorandum. The Belgians considered the "prior condition" to be excessive, as is shown by their efforts to attenuate it. The Belgian Minister tried to get other conditions substituted for it— suspension of the proceedings, extension of the time-limit for the presentation of the Observations, secret letters, requests for guarantees. It is obvious that, in their view, this prior condition was something other than a discontinuance of the proceedings.

This same view is confirmed by the letter of 18 March from Count de Motrico to his Minister.

The notice of discontinuance sent to the President of the Court read as follows:

"At the request of Belgian nationals the protection of whom was the reason for the filing of the Application ... I am directed by my Government ... to request you ... that, availing itself of the right conferred upon it by Article 69 ... [it] is not going on with the proceedings instituted by that Application."

This is the same formula for discontinuance as in the Borchgrave case which, however, was a final discontinuance and it had been used also in another case between the Belgian Government and the Spanish Government.

This discontinuance was filed at the request of Sidro, the only Belgian national taking part in the talks. No evidence was brought as to the intervention of any other Belgian nationals with their Government. The notice of discontinuance establishes a link between the wording [p128] of that document and the agreement negotiated between Sidro and the Fecsa group and accepted by the Minister for External Trade. Counsel for Belgium said: "In making its declaration of discontinuance on 23 March 1961 the Belgian Government was merely intending to meet the preliminary demand made by Juan March." The reason for the discontinuance was an agreement between the two groups that the suit should be brought to an end so that negotiations with Fecsa could be started. The same Counsel for Belgium stated that the Belgian Government accepted "the final withdrawal of the Application ... to permit of negotiations".

The two groups having arrived at an agreement on the basic memorandum, that is to say, on the final withdrawal of the claim, the Belgian group, in order to honour that agreement, asked its Government to take the necessary measures to that effect. That Government could not avail itself of Article 68 of the Rules, since no agreement had been reached between the Parties to the action; it therefore had to utilize the means available under Article 69, paragraph 2, which permits of a unilateral notice of discontinuance, which must nevertheless receive the express or implicit consent of the other Party. That is what it did. The Belgian Government notified the Court of a discontinuance based on the agreement between the two groups, and that agreement provided for the final withdrawal of the claim before the Court. The Belgian Government's notice of discontinuance endorsed the agreement reached by the two groups.

The Belgian Government must have been informed by the Chairman of Sidro of the meaning of the phrase in the prior condition "final withdrawal of the claim", just as he had informed Count de Motrico of it. Sidro consequently asked the Belgian Government for a final withdrawal of the Application filed with the Court. Sidro had made a promise to the Spanish group, creating an obligation finally to withdraw the claim of which the Court had been seised. The Belgian Gov-ernment took over that obligation by discontinuing, on behalf of Sidro, without any condition. The evidence adduced is therefore conclusive and decisive; not even the slightest doubt is possible as to the meaning and the scope of the discontinuance. The discontinuance is the expres-sion of the intentions underlying it and these override the words actually employed. This act, in the present case, bears the mark of decisive intentions and these must be conclusive in construing it.

***

It was maintained in oral argument on behalf of the Belgian Government that the first condition of the basic memorandum was satisfied when it filed its notice of discontinuance. The basic memorandum, however, required, for the opening of negotiations between the two groups, the final withdrawal of the claim, a requirement which presup-[p 129] posed, as must be inferred from its wording, that no new claim would be brought once the discontinuance had taken place. Final withdrawal of the claim, in accordance with the first point in the basic memorandum, meant a final withdrawal and not a mere withdrawal of the claim. The adjective final must be given its meaning. Words are of value only in so far as they express an idea and it must be supposed that when a particular notion is chosen something precise is intended.

To admit the Belgian interpretation would lead to holding that the Spanish group merely asked for a discontinuance of the proceedings. But such an interpretation is not seriously possible and would run counter to the recognized facts—non-suspension of the proceedings, non-extension of the time-limit for the presentation of Observations, non-agreement to secret letters. The withdrawal of the claim had to be final.

In order to establish the meaning of the phrase "final withdrawal of the claim", it must be emphasized further that such withdrawal had to serve a purpose of a moral nature. The Spanish Government and M. March had been abused in the Belgian Application and Memorial. M. March was opposed to any negotiations with Sidro so long as those documents were not finally withdrawn from the Court. The withdrawal was not to be limited solely to the proceedings then pending, but had to be final. This adjective has only one accepted meaning— the complete and total abandonment of the assertions contained in the documents. It was not a provisional abandonment that was asked for but the final withdrawal of the claim. The word final must be given its full emphasis. According to the undertaking entered into, these assertions could not be repeated again later. A mere suspension of the proceedings would have maintained them. The moral aspect could be safeguarded only by the final withdrawal of the case. A discontinuance of the proceedings would not have this effect.

The meaning of the judicial contract of discontinuance is further confirmed by the conduct of the two groups and of the Governments, and by the legal analysis of their conduct.

Their acts have not the same importance or the same significance. They are however a source which enables us to construe the discontinuance. They also imply abandonment of reference of the case to the Court.

Some of these acts were brought about by private parties seeking the holding of negotiations, whilst other acts emanate from the actual Parties to the case. They must be examined as a whole, in order to attribute a precise meaning to them and in order to ascertain the purpose and intention of the act performed.

"Cases are known in international practice where it was debated whether the facts alleged could be interpreted as a renunciation, but no cases are known in which the need for an explicit statement was affirmed. The intention to abandon a right may be inferred [p130] also from the attitude of the party concerned." (Anzilotti, Cours de droit international, Vol. I, p. 350.)

One salient fact emerges from this conduct. The Fecsa group made of the final withdrawal of the Application a sine qua non condition for any negotiations, as is recognized by the chairman of Sidro. This condition was reiterated on numerous occasions, each time there was a fresh attempt to get rid of it. The Fecsa group firmly maintained its position from October 1960 to March 1961. No final withdrawal of the claim : no negotiations. Such a requirement was known to Sidro and to the Minister for External Trade. The Belgian Government was thus informed of the nature of the discontinuance insistently demanded by the Spanish group.

***

The letter dated 10 March sent by M. Frère to Count de Motrico gives rise to a presumption in favour of the argument that the Belgian group were aware that M. March's demand referred to a final withdrawal of the claim brought before the Court. In that letter an attempt was made to give a conditional character to the withdrawal instead of the unconditional character insisted on in the basic memorandum. It was suggested in that letter that the Belgian Ambassador should have a talk with the Minister for Foreign Affairs in Madrid with a view to exchanging letters governing the procedure for the withdrawal of the proceedings. These letters would be communicated to no-one, not even to M. March. On the conclusion of the negotiations, they could be returned or destroyed. On this basis—but as an indispensable minimum—the Belgian Government would take the responsibility for the withdrawal.
This Belgian proposal, which was suggested, as M. Frère says, by the legal adviser to the Ministry of Foreign Affairs, was obviously intended to modify the requirement of the basic memorandum for the final withdrawal of the claim. Thus the finality sought by that memo-randum would be avoided. This shows that M. Frère was aware of the meaning of this requirement and of its legal effect. There is in this letter from M. Frère a recognition by the Belgian Government of the fact that the discontinuance asked for was not a mere discontinuance of the proceedings, for without such an interpretation, there could be no reasonable explanation for the letter, and it is difficult to see why the Belgian Government would have hesitated to commit itself if the discontinuance in question related only to the proceedings.

The proposal by the Minister for External Trade to replace this condition by a suspension of the proceedings for three months, thereby allowing the Parties concerned to negotiate during this time, was rejected in limine by the Fecsa group, which considered it incompatible with the basic memorandum. Other proposals by M. Frère, [p131] made with the knowledge of the Belgian authorities, met the same fate (withdrawal on agreement being reached by those concerned, an extension of the time-limit for the presentation of the Belgian Observations and Submissions, the procedure of an exchange of secret letters and guarantees). If the Belgian Government believed that the withdrawal asked for involved only a discontinuance of the proceedings which, in the last analysis, would be tantamount to a suspension, why did it submit proposal after proposal in order to avoid agreeing to the withdrawal asked for? What the Minister for External Trade, the chairman of Sidro, M. Hernández, Count de Motrico, and the Fecsa group knew was that the final withdrawal of the claim from the Court's list meant abandonment of the pursuit of the case before the Court. In the talks, there was accordingly a precise undertaking, with a well-defined subject and intention, and not a mere exchange of views. An agreement between the private groups was negotiated and accepted as it stood by the Belgian Government, which proposed it to the Spanish Government.

If the proposal for a suspension was declined on account of its insignificant procedural effect, it is inconceivable that a mere abandonment of the proceedings would have been preferred. A suspension would still have had the merit of preserving the Preliminary Objections should the proceedings be recommenced later, in the event of a breakdown in the negotiations. The refusal of a suspension does not fit in with the discontinuance of the proceedings as contended for by Belgium. Refusal to accept a suspension was also a refusal of a discontinuance of the proceedings. The basic memorandum required something more from the procedural point of view than a mere discontinuance of proceedings.

***

Sidro's interest in negotiating can be seen clearly throughout the talks. The letter of 23 February 1961 from M. Frère is one example of this. He was convinced—or at least he says he was—that a basis existed for a settlement favourable to the Barcelona Traction shareholders. The intermediary stated that negotiations could begin immediately after the withdrawal of the claim and that a solution might be found within a fortnight. It was, said M. Frère by reason of the fore-going that he was prepared to make a new effort to induce the Belgian Government purely and simply to withdraw the proceedings then pending. As soon as this withdrawal of the claim had taken place negotiations would open propitious to the Belgian interests, which would lead to concrete results. It was with a knowledge of this state of mind that the Belgian Government decided to agree to the discontinuance asked for by Sidro (Observations, Annex 6, Appendix 7, p. 108). The Belgian Government took the decision to withdraw the claim, as Sidro asked it to do, in order that the dispute might be settled by direct negotiations between the two groups of interests.[p132]

***

When agreeing to the discontinuance at the express request of the Belgian Government, the Spanish Government had before it the following facts : a letter from Count de Motrico informing it of the final withdrawal of the claim by the Belgian Government and announcing that this discontinuance would contain the same reservation as that made by the British Government in the case against Bulgaria. On that occasion the British Government reserved "all [its] rights in connection with the claim of the United Kingdom against Bulgaria". But the discontinuance proposed to the Spanish Government did not contain any reservation of this type. The Spanish Government, having regard to the wording of the discontinuance, could not doubt, when agreeing thereto, that it was a final discontinuance, without any reservation, and not a discontinuance of the proceedings.

M. Frère's legal adviser had informed Count de Motrico that the notice of discontinuance would contain the British reservation mentioned above. M. Frère, on behalf of Sidro, had taken the decision to accept the basic memorandum, which was known to the Belgian Government. The intermediary, being aware of this position, informed his Government of it at the time when the latter was about to receive communication of the notice of discontinuance. A party which allows its opponent to believe that it is taking up a particular legal position— in this instance the final withdrawal of the claim—cannot go back on its attitude and maintain that it wished for something else, namely a mere discontinuance of the proceedings. This is an application of the concept of good faith, whereby a party creates a right in favour of its opponent by following a certain course of conduct.

Moreover, for the Spanish Government, this discontinuance was effected on the basis of paragraph 2 of Article 69 of the Rules of Court, and not with reference to municipal procedural law. But paragraph 2 of Article 69 does not stipulate a discontinuance of proceedings or a right of reinstitution, and such right is not in accordance with the wording of the Belgian discontinuance, namely "is not going on with the proceedings instituted by that Application". It is impossible to draw from the use of this formula a presumption that the intention was not to put an end to the proceedings once and for all. If this formula had another intention, it was necessary to say so clearly. Good faith required it.

If, according to the argument of Counsel for the Belgian Government, the Spanish Government was informed by Count de Motrico of the conversations between the two private groups, the Spanish Minister for Foreign Affairs would have been aware that the discontinuance asked for by the Spanish group was a discontinuance of the legal action and not merely of the proceedings. In terms of this contention, it is obvious that the Spanish Minister could not have hesitated for a single moment to give his consent to the discontinuance for which the Belgian Ambassa-[p133] dor had asked him at the instance of his Government. Thus, the case would be at an end in respect of legal proceedings before the Court, in order to make way for a solution between the two groups, a position which the Spanish Government always supported right from the origin of the Barcelona Traction dispute. Any other attitude on the part of the Spanish Government would seem to be ruled out. It would never have agreed to a mere discontinuance of proceedings. The Belgian Government was abandoning judicial settlement in order to obtain a settlement through private negotiations.

One of the reasons why the Spanish Government could not accept such a discontinuance, and would not have accepted it, is an important consideration of a moral order which is expressed in paragraph 3 of its communication to the Court dated 7 July 1962:

"The Spanish Government would certainly have opposed the discontinuance if it had not had the certainty that this act entailed in itself the renunciation by the Belgian Government of accusations which are as defamatory as they are unjust against the judicial, administrative and governmental authorities of the Spanish State."

In short, the Spanish Government could not knowingly consent to a temporary discontinuance without damage to its moral position. This reason is in itself decisive. From the legal point of view, the Spanish Government, by accepting a temporary discontinuance, also risked compromising its constant position as to the absence of any Belgian jus standi in the matter. Finally, the Spanish Government was convinced that its position, judging by the pleadings, was extremely sound. Consequently, if it had not believed the discontinuance to be final, it would have had to examine with the closest attention the question whether it ought to go on with the proceedings at the stage which they had reached.

As to the material or moral prejudice actually suffered, Spain was again brought before the Court on the basis of the same grave accusations, which were automatically communicated to all Members of the United Nations. Secondly, the other party had the opportunity of revising, in the light of Spain's arguments, its entire case in respect of the Preliminary Objections and has, indeed, sought to modify its defence against one of the objections. Thirdly, Spain has had to bear the heavy administrative burden represented by a second submission of the case to the Court.

*

The first Objection must therefore be upheld.[p134]

Second Preliminary Objection

This Preliminary Objection is concerned with the jurisdiction of the Court.

The Application instituting proceedings states that the Treaty of 19 July 1927, which came into force on 23 May 1928, is binding on Spain and Belgium. Pursuant to Article 17 of that Treaty, these States may bring direct before the Permanent Court of International Justice, by means of an application, disputes with regard to which the parties are in conflict as to their respective rights. This Treaty being in force, according to Article 37 of the Statute of the International Court of Justice it is to this Court that the jurisdiction provided for in favour of the Permanent Court is transferred. As Belgium and Spain are parties to the Statute of the International Court it is claimed that this Court possesses jurisdiction to hear and decide the present dispute.

In its Submissions, the Spanish Government states that the bond of jurisdiction provided for in Article 17 applies to the submission of disputes, not to the International Court but only to the Permanent Court. The admission of Spain to the United Nations, in 1955, did not have the effect of substituting the compulsory jurisdiction of the International Court for that of the Permanent Court, for the Permanent Court was dissolved before Spain was admitted as a Member of the United Nations. This situation was not modified by Article 37 of the Statute, which binds only States that were Members of the United Nations prior to the dissolution of the Permanent Court. The Court is therefore without jurisdiction.

***

The Belgian Government maintains that the interpretation given in the Judgment of 26 May 1959 in the Aerial Incident case (I.C.J. Reports 1959, P. 127),although valid and correct in respect of Article 36, paragraph 5 FN1 ,is not applicable as an interpretation of Article 37 FN2. [p135]
---------------------------------------------------------------------------------------------------------------------
FN1 Article 36, para. 5:

"5. Declarations made under Article 36 of the Statute of the Permanent Court of International Justice and which are still in force shall be deemed, as between the parties to the present Statute, to be acceptances of the compulsory jurisdiction of the International Court of Justice for the period which they still have to run and in accordance with their terms."

FN2 Article 37:

"Whenever a treaty or convention in force provides for reference of a matter to a tribunal to have been instituted by the League of Nations, or to the Permanent Court of International Justice, the matter shall, as between the parties to the present Statute, be referred to the International Court of Justice."

---------------------------------------------------------------------------------------------------------------------


The interpretation given in this Judgment was followed in the Temple of Preah Vihear Judgment of 26 May 1961 (I.C.J. Reports 1961, p. 17).

In the Judgment in the Aerial Incident case, the Court made no mention of Article 37 in order not to prejudge the case on the first Application relating to Barcelona Traction which was then pending.

It must therefore be shown why that interpretation is not applicable with regard to Article 37. For this purpose, it must be shown that the question raised by Article 36, paragraph 5, is a different question from that raised by Article 37. In the absence of such proof, the decision in the Aerial Incident case would be applicable and the Belgian contention must be abandoned. It is only the legal differences between these two texts that concern us. Factual differences between the present case and that of the Aerial Incident are of less importance, for they have no bearing on the legal problem concerning the two texts.

The Belgian Government's central argument is to the effect that, from the legal standpoint, there is a difference between a declaration under Article 36, paragraph 5, and a declaration of acceptance of jurisdiction embodied in a treaty or convention (Article 37).

The legal nature of these two undertakings is identical and so is their content. Their purpose is to make the jurisdiction of the Court compulsory for the States (the same content) and they are also consensual undertakings (the same nature). They may or may not be subject to time-limits. The form of the undertaking is unilateral in one case and becomes subsequently, as in the other case, bilateral. It is therefore difficult to see how there can be any difference between these two undertakings, in respect of their form, their nature or their content. In both cases compulsory jurisdiction is brought into operation by means of a unilateral application.

It is true that the declarations were unilateral undertakings. But as those undertakings were addressed to other States, which had accepted the same obligation, they gave rise to agreements of a treaty character concerning jurisdiction which were legally equivalent to the jurisdictional clause embodied in a treaty or convention. The Court confirmed this view in the Right of Passage case:

"The contractual relation between the Parties and the compulsory jurisdiction of the Court resulting therefrom are established ‘ipso facto and without special agreement'."

These declarations could not be modified without the consent of the parties. Nor could they be withdrawn unless the right to do so had been explicitly reserved. They had the same force and the same legal content as a provision in a treaty. That is the point of view of the Belgian Government, as can be seen from the reservations it made when Paraguay denounced, unilaterally, its declaration of acceptance of the optional clause and when South Africa withdrew part of its declaration.[p136]

***

The ratio legis, the object, of these two provisions of the Statute is the same, namely the immediate transfer to the International Court of the jurisdictional obligations in respect of the Permanent Court—it being understood that these obligations must be "in force".

Article 36, paragraph 5, and Article 37 were both drawn up, discussed and adopted by Commission IV and the relevant committee at the same time, as dealing with the same legal question, namely that of the adaptation to the International Court of declarations relating to the jurisdiction of the Permanent Court.

After explaining, in paragraphs (a) and (b), the means by which the succession of the new Court to the jurisdiction of the Permanent Court was to be ensured, on the one hand, by Article 36, paragraph 4 (which later became paragraph 5), and, on the other hand, by Article 37, Committee IV/1 emphasized that—

"acceptances of the jurisdiction of the old Court over disputes arising between parties to the new Statute and other States, or between other States, should also be covered in some way".

After stating that it seems desirable "that negotiations should be initiated with a view to agreement that such acceptances will apply to the jurisdiction of the new Court", the above-mentioned report reaches the conclusion that this matter "cannot be dealt with in the Charter or the Statute", adding that it may later be possible for the General Assembly to facilitate such negotiations. The terms employed (jurisdiction of the Court, acceptances of jurisdiction) leave no room for doubt that they relate to the cases referred to in Article 37 and in paragraph 5 of Article 36.

These two texts therefore deal with the same question, namely that of the transfer of declarations and jurisdictional clauses from one Court to the other. It therefore follows that the interpretation of one of these texts must be valid also as the interpretation of the other. In the Nottebohm case the Court said: "The same issue is now before the Court: it must be resolved by applying the same principles" (I.C.J. Reports 1955, p. 22).

Of the jurisdictional clauses mentioned, one was incorporated in the Statute of the Permanent Court and the other in certain provisions of treaties or conventions. These legal undertakings have their own special purpose in the instrument in which they are embodied and they may be extinguished either through the expiry of a certain time-limit, or through some external cause. When the time-limit has expired, the obligation lapses, as it does also in the case in which an external cause affects the very subject-matter of the obligation. Where the obligation binds a State in regard to the Permanent Court (a declaration [p137] or a convention) the object of the obligation becomes impossible of achievement, definitively, if the organ, i.e., the Permanent Court, has disappeared. The obligation lapses and the lapsing occurs on the date of the dissolution of the Permanent Court, 18 April 1946, in respect both of declarations and of treaty clauses.

In order that the operation of the transfer from one Court to the other may be effected, immediately, validly, it is essential that the jurisdictional clauses should be in force in respect of the two States at the date on which the two States became parties to the Statute. In the present case, the obligation under the Spanish-Belgian Treaty was in force for Belgium when that country became a party to the Statute; but this obligation had lapsed when, in its turn, Spain became a party to the Statute in December 1955.

***

As already stated, Article 37, which is a transitional provision, had no other purpose than that of preventing the disappearance in the immediate future of the declarations accepting jurisdiction which were contained in certain treaties. This is also the purpose of Article 36, paragraph 5. The two provisions were concerned with declarations, whether bilateral or unilateral. The jurisdictional clauses incorporated in a treaty or convention were inevitably bound to lapse at the date of the dissolution of the Permanent Court. The preservation of these clauses could apply only to those that were in force and were included in a treaty signed by States that were parties to the Statute prior to the dissolution of the Permanent Court. Clauses not included in this category would lapse irremediably. That is what happened in the case of Article 17, paragraph 4, of the Treaty, on the dissolution of the Permanent Court. To enable Article 17 to survive after the dissolution of the Permanent Court, Spain would have had to be a party to the Statute before the dissolution of that Court.

The purpose of Article 37 was to maintain for the immediate future the jurisdiction that had been accepted, whilst transforming its object. Its purpose was not at all to resuscitate across the passage of time an obligation which had lapsed for want of substance and applicability, at the time of the dissolution of the Permanent Court. Consequently, it cannot be claimed that, between 18 April 1946 and 14 December 1955, owing to the effect of Article 37, Spain was bound to the compulsory jurisdiction of the Permanent Court, nor to that of the International Court, as Spain was not a party to the Statute at the time of the substitution effected in the jurisdictional clause. The obligation which had been extinguished could not be revived on the basis of Article 37.

There was no intention to cover all such jurisdiction, as might, in principle, have been desirable, but only jurisdiction that had not lapsed before the disappearance of the Permanent Court. The San Francisco Conference, as will be seen later, did not concern itself with the juris-[p138] dictional clauses in treaties of enemy or neutral States. The intention to maintain all jurisdiction agreed to in respect of the Permanent Court was not envisaged in Article 37.

To determine the effect of Article 37, it is necessary to consider the situation that would have been created if it had not been adopted. There can be no doubt that any provisions of treaties accepting the jurisdiction of the Permanent Court that were in force would have lapsed on the dissolution of that Court. Article 37 was intended to safeguard these provisions in treaties in force in the case of States parties to the Statute before that dissolution.

The purpose of Article 37 was, within certain limits, to obviate a hiatus, a lacuna, between the two Courts and continuity was obtained by giving validity in respect of the new Court to certain declarations concerning jurisdiction included in treaties and relating to the Permanent Court. This continuity could be ensured only as between those States that were parties to the Statute prior to the dissolution of the Permanent Court. Article 17 of the 1927 Treaty could not be used for this purpose, as Spain was not one of those States.

It is maintained that, although Article 36, paragraph 5, is transitional in character, Article 37 is not so. This interpretation is based on Article 37 of the Statute of the Permanent Court.

It may be noted, in the first place, that Article 37 of the Statute of the Permanent Court also had a transitional character. Indeed, once the Permanent Court was established, it became necessary to decide that that Court was the tribunal referred to in the Peace Treaties. The purpose of Article 37 of the Statute of the Permanent Court was not, as is contended, to extend the field of compulsory jurisdiction but to identify an international tribunal. Compulsory jurisdiction was not founded on that Article, but on the treaties by which it was established, and it could not be related explicitly to a court which had not yet been created. The treaties had established the compulsory jurisdiction of a tribunal which was to be instituted. Once its Statute had been drawn up, it became necessary to determine that that Court, and no other, was the tribunal to which the treaties referred. Article 37 of the Statute of the Permanent Court determined the organ on which the treaties in question had conferred compulsory jurisdiction.

In the second place, the conclusions to be drawn from Article 37 of the Statute of the Permanent Court are not applicable to Article 37 of the present Court, since they serve different purposes. The purpose of Article 37 of the International Court is to transfer a jurisdiction in order to prevent it from lapsing. When the present Article 37 was drawn up, those who drafted it did not have before them treaties establishing the compulsory jurisdiction of a Court which had not yet been created and which still remained to be established. For treaties prior to the institution of the Permanent Court, it had already been determined, by virtue of Article 37 of the Statute of the Permanent Court, that that Court was the organ on which jurisdiction had been [p139] conferred. In treaties such as that of 1927, on the contrary, jurisdiction was conferred on a jurisdictional organ that was specifically determined, namely the Permanent Court. What had to be done was, so far as was possible, to transfer this compulsory jurisdiction, created under a treaty, from the Permanent Court to the International Court. It was not, as in the case of the former Article 37, a matter of determining the organ on which jurisdiction had been conferred by agreements in which it was impossible to specify the organ. The case of the dissolution of an international tribunal cannot be assimilated to the case of a tribunal that has not yet been instituted. In the latter situation, it may be considered that there is a suspension of the undertaking to accept the jurisdiction of a court. In the other case, the existing jurisdiction is extinguished and it is absolutely impossible for the obligation to be fulfilled. A non-existent court can no longer have jurisdiction.

The two Articles of the Statute apply to analogous situations and it is impossible to form an opinion about Article 37 without taking account of the discussion in 1959 about Article 36, paragraph 5. It has been previously shown that, as between the system of these two Articles, there are no fundamental differences which would lead to devising different solutions for each case. Neither in the Judgment on the Aerial Incident case, nor in the Joint Opinion or in the Separate Opinions of individual Judges is it possible to find reasons of a convincing legal character in favour of the view that a distinction must be drawn between these two Articles.

The Court must be quite definite about the interpretation of its Statute. Either it is decided that there is a legal difference or else it is recognized that there is not such a difference.

The Belgian Government's contention is seen to be unconvincing on several points.

It is maintained that in the case of a declaration of acceptance of the jurisdiction of the Court a treaty position arises only when a specific dispute occurs. But this is also true from the standpoint of the 1927 Treaty which contains no more than an obligation to accept the jurisdiction of the Permanent Court at the time when a specific dispute arises. The difference alleged therefore does not exist. In both cases there is a firm obligation to accept jurisdiction and, in both cases, there is a firm obligation to accept jurisdiction only in respect of one and the same tribunal, namely the Permanent Court. There is no legal basis for the assertion—which is a mere begging of the question—that the obligation to accept jurisdiction subsists since the Treaty remains in force, but that it is merely the means for exercising that jurisdiction (the Permanent Court) which has disappeared. It is not sufficient merely to make such an assertion. It must be proved, for the 1927 Treaty did not provide for reference to "an international tribunal" but to the Permanent Court (Articles. 2, 4 and 17).

If an obligation arising from an acceptance by unilateral declaration came to an end because the Permanent Court disappeared and because [p140] it was bound up with the Statute of that Court, it did not survive after the disappearance of that Statute. An obligation arising from a clause which relates only to the Permanent Court disappears with that Court and with its Statute—in just the same way.

The 1927 Treaty must be construed according to the meaning it had in 1927, within the international context of 1927, and according to the intention of the parties in 1927. This Treaty bears the mark of its period. If there had been no Permanent Court, there would have been no reference whatsoever to an international tribunal. The Treaty would have been purely and simply a treaty of arbitration and conciliation. That is what it became on 18 April 1946. It is too easily forgotten that the 1927 Treaty was drawn up only five years after the institution of the first permanent international tribunal and that the treaties which referred to it could relate only to what existed and had only recently come into existence.

This analysis is reached through the application of two elementary rules of international law, namely that concerning the interpretation of clear texts and that concerning the "historical" interpretation of treaties according to the meaning they had at the time when they were concluded (case concerning Rights of Nationals of the United States of America in Morocco, I.C.J. Reports 1952, pp. 188-189).

It is contended that the provisions of the Charter and those of the Statute form a single mandatory whole for the States Members of the United Nations. This view is not absolutely correct. It is subject to derogations in relation to certain of those provisions which are not mandatory, as they do not apply to all the Members of the United Nations. This is the case with regard to paragraph 5 of Article 36 and Article 37 of the Statute.

The particular legal nature of these two provisions is clear from their actual wording. In the first place, they are concerned with situations that are quite special and specific, namely the jurisdictional clauses existing and in force relating to the Permanent Court. Further, these provisions apply only to certain specific States. Thus, Article 36, paragraph 5, is concerned only with States which had made declarations that are in force and Article 37 is concerned only with States whose treaties or conventions contain clauses that are still in force—in both cases at the time when they become parties to the Statute. This examination shows that these two provisions apply only to certain States, namely those which have accepted the jurisdiction of the Court, and not all States Members of the United Nations.

These two provisions are transitional and their application must very soon come to an end. Article 36, paragraph 5, as the Court has interpreted it, can no longer be applied. The same will in future be true of Article 37.
If the Statute had been set out with a more technical presentation, these two provisions would have been inserted at the end of it, under the heading "Transitional Provisions". This method was not adopted, [p141] no doubt in order to preserve the same numbering of the articles in the two Statutes. The transitional provisions mentioned were inserted where they would not entail changes in the numbering.

Furthermore, account must be taken of the effects of the dissolution of the Permanent Court on the 1927 Treaty and on its jurisdictional clause.

The subjection to a judicial settlement provided for in the 1927 Treaty relates specifically to the Permanent Court, stipulated by name and not in the form of a reference to a generic and undetermined international tribunal.

The Permanent Court was dissolved with final effect and the International Court of Justice is another and different Court, as is clear from the preparatory work concerning it.

This being so, the clear impossibility of submitting to the Permanent Court any disputes that may arise between the Parties after the final dissolution of that Court becomes apparent.

It is precisely because of the disappearance of the Permanent Court and the creation of a new Court that it was necessary to draft the conditions embodied in Article 37 of the present Statute for the purpose of transferring, so far as was possible, the jurisdiction conferred upon the Court that it had been decided to dissolve.

In the light of these considerations and taking account of the general principle that the jurisdiction of the Court is not to be presumed and that it is founded on the consent of States, an extensive interpretation of Article 37 would, as a consequence, entail an extensive interpretation also of the 1927 Treaty by means of which a jurisdictional obligation stated specifically in favour of the Permanent Court would be transferred to another Court, when such obligation no longer existed legally and Article 37 could no longer operate.

***

The Court's task related essentially to the interpretation of Article 37. For the transfer of jurisdiction from one Court to the other to take effect, this provision requires the fulfilment of two conditions:

(1) that the State party to the jurisdictional clause embodied in the treaty should be a party to the Statute, and
(2) that this clause should be in force.

These two conditions, which are clearly laid down in Article 37, must be fulfilled concurrently. Each of them must be fulfilled at the time when the other is fulfilled. If one of them is not fulfilled, Article 37 does not effect the transfer of jurisdiction. The two conditions prescribed by Article 37 must always be considered with reference [p142] to the same crucial date. It would be contrary to the principle of good faith if the applicability of Article 37 were to be judged, in respect of one condition, with reference to the date of the entry into force of the Charter and, in respect of the second condition, with reference to the date of the admission of the State in question to the United Nations. Such an interpretation would, moreover, be contrary to the text of Article 37.

But, when Spain was admitted as a Member of the United Nations, in December 1955, the jurisdictional clause of the 1927 Treaty was no longer in force, owing to the dissolution of the Permanent Court on 18 April 1946. At that date there was no treaty with a jurisdictional clause in force. The second condition was unfulfilled. Consequently, the situation covered by Article 37 does not exist in the case before the Court.

The acceptance of the jurisdiction of the Permanent Court stated in this clause was henceforth devoid of object since that Court no longer existed as a means for exercising it. The legal basis for that acceptance provided by Article 36, paragraph 1, of the Statute of the Permanent Court had ceased to exist as a result of the disappearance of that Statute. Thus, Article 17, paragraph 4, of the 1927 Treaty had lapsed and was no longer in force. The terms of that provision are as follows:

"If the special agreement has not been drawn up within three months from the date on which one of the Parties was requested to submit the matter for judicial settlement, either Party may, on the expiry of one month's notice, bring the question direct before the Permanent Court of International Justice by means of an application."

The dissolution of the Permanent Court destroyed the jurisdictional clause and the attribution of jurisdiction to the Court specified therein.

Spain gave its consent only in respect of that Court.

The Treaty continues to be in force in respect of the other means provided for the settlement of disputes (conciliation and arbitration), but in so far as the means of judicial settlement connected with the Permanent Court is concerned, it has entirely disappeared through the disappearance of that Court. All the provisions of the Treaty which referred to the Permanent Court, including Articles 1 and 2, had lapsed completely. The real importance of the Treaty resides in all the means of settlement for which it made provision and not exclusively in the means of judicial settlement (Permanent Court).

The admission of Spain to the United Nations resulted in that country being deemed to be a party to the Statute of the Court (Article 93, para.1, of the Charter). Spain thus became invested with a certain procedural capacity in respect of the Court; but this situation is not sufficient to establish the jurisdiction of the Court in respect of that State. It merely creates a preliminary situation for the establishment [p143] of that jurisdiction. The source of the jurisdiction of the Court lies in the declarations of the States (Article 36, paras.1 and 2) and, in exceptional cases, in Article 36, paragraph 5, and Article 37 of the Statute.

The admission of a State as a Member of the United Nations has the immediate consequence of making that State a party to the Statute of the Court. This admission does not signify any acceptance whatsoever of the jurisdiction of the Court. But such acceptance is attributed to Spain on the ground of its admission, through the application of Article 37. This interpretation, as is clear from the foregoing considerations, is quite indefensible.

The obligation to accept judicial settlement provided for in Article 2 of the 1927 Treaty in the case of certain disputes relates either "to an arbitral tribunal" or "to the Permanent Court of International Justice". Although this obligation is general in regard to an arbitral tribunal (it does not refer to the Permanent Court of Arbitration, for instance) it is particular in regard to the Permanent Court, which it mentions specifically. In the 1927 Treaty the Permanent Court is both the object and the means for fulfilling this obligation. There was an intention to accept this means of settlement, but only because it was indissolubly connected with the Permanent Court and not with any other court. Jurisdiction and the attribution of it are inseparable from the Permanent Court.

***

The Parties agree in the view that, according to Article 37, the provision concerning jurisdiction had to be in force at the time when Spain became a Member of the United Nations and, of course, also at the time of the filing of the Application instituting proceedings.

It is contended that the 1927 Treaty must be considered to be in force. This Treaty is renewable for periods of ten years, as from the time of its ratification, failing denunciation by one of the parties. That was the situation of Spain at the time when that country became a party to the Statute. This renewal every ten years must, however, be understood as a renewal of the provisions of the Treaty that are still in force. It is not possible to renew what has lapsed.

Although the 1927 Treaty remains in force in respect of some of its provisions, the conclusion is inevitable that Article 17, paragraph 4, so far as concerns that part of it which establishes the jurisdiction of the Permanent Court, had lost all legal force because of the dissolution of that Court on 18 April 1946. This provision was no longer in force in December 1955. The jurisdictional clause can be detached from the other articles of the Treaty. The "reference of a matter" mentioned in Article 37 is related to the provisions attributing jurisdiction to the Permanent Court. Those provisions are the specific object of the reference to the Court. There is no reference to other provisions of [p144] the Treaty. This is clear also from Article 35, paragraph 2, of the Statute which refers to "the special provisions contained in treaties in force", in a narrow sense.

With regard to Article 37, the report of Committee IV /1 of the San Francisco Conference says:

"(a) It is provided in Article 37 of the draft Statute that where treaties or conventions in force contain provisions for the reference of disputes to the old Court such provisions shall be deemed, as between the members of the Organization, to be applicable to the new Court" (Conference Documents, Vol. 13, P. 384).

The provisions referred to can thus only be jurisdictional clauses in force. It is the provision for the reference of a matter that must be in force, as is quite clear from the text of Article 37.

***
A treaty may lapse partially even before the expiry of the term for which it is concluded. This is true also in the case of certain legal instruments, laws and regulations, which may also have lapsed partially. In an international obligation, a distinction must be made between lapsing as the result of the expiry of the prescribed term and lapsing as the result of some other fact, also involving a lapse, such as the dissolution of the Permanent Court. That dissolution also constituted the time-limit for the validity of the jurisdictional provision in the Treaty. Article 17, paragraph 4, of the Treaty expired on 18 April 1946. That clause could not come into force again at the time when the Statute came into force in respect of Spain, in December 1955.

The separation of international obligations as between clauses that are valid and clauses that are not valid is admitted in the case-law of the Permanent Court. One example is furnished in that Court's consideration of the Special Agreement in the Free Zones case. In that case, the principle vitiatur et non vitiat was admitted. In point of fact, the Special Agreement was, in the case of some of its clauses, in contradiction with the Statute and the Court decided that the Special Agreement was valid but that the stipulations contrary to the Statute were null and void. The Court took no account of the second paragraph of Article 1 of the Special Agreement (P.C.I.J., Series C, No. 17-I, Vol. II, p. 492).

The Permanent Court refused to consider that the individual provisions of a treaty are inseparable and indissolubly connected. In the Free Zones case (P.C.I.J., Series A /B, No. 46, p. 140), that Court considered that Article 435 of the Treaty of Versailles was "a complete whole" separable from the rest of the Treaty. It took a similar view [p145] in the Advisory Opinions on the Competence of the I.L.O. (P.C.I.J., Series B, No. 2, pp. 23-24 and Series B, No. 13, p. 18), concerning the independence of Part XIII of the Treaty.

The idea of the integral character of a convention has its origin in a notion taken from private law. In the Opinion of the Court on Reservations, this notion of the absolute integrity of conventions was rejected as not having been transformed into a rule of international law (I.C.J. Reports 1951, pp. 24-25). The Opinion of the Court in the case concerning Reservations to the Convention on the Prevention and Punishment of the Crime of Genocide indicates certain limits to the notion of the inseparability of treaty provisions in respect of provisions which are not fundamental to the treaty as a whole. An article which has lapsed may quite properly be separated from other provisions of the treaty which continue to be in force where such provisions can apply quite apart from the provision that has lapsed.

***

International law can envisage various ways in which an international obligation may become impossible of performance. Such impossibility may be permanent. In the present case, the jurisdictional clauses of the 1927 Treaty disappeared permanently on the date of the dissolution of the Permanent Court. This fact inevitably put an end to the obligation to have recourse to that tribunal. This is an example of a case where it is permanently impossible to perform an international obligation—the latter having disappeared with the Permanent Court.
So far as general international law is concerned, Article 17,paragraph 4, of the 1927 Treaty is said, in short, to have been deleted from the Treaty until 1955—this being on the hypothesis that the Permanent Court did not finally and definitively disappear in April 1946, which distorts the relative position of the two Courts. Any reference to the continuity of the two Courts is merely a formula describing intentions as a matter of general policy and is not an assertion of legal succession.

The error in the Belgian contention in its presentation of the rules of international law concerning suspension is that it supposes that the basic problem has been resolved: the Permanent Court has disappeared; why should the obligation expressed in the Treaty, namely the obligation to have recourse to the Permanent Court, be only suspended? This contention presumes, asserts but does not prove, the original phenomenon: the suspension in this particular case, whereas suspension does not exist in the case of the permanent disappearance of the subject-matter.

For there to be suspension, it would indeed be necessary to prove that there were two categories of obligations in the 1927 Treaty and in the intentions of those who drew it up:

—a basic obligation, namely the obligation to have recourse to an international tribunal;[p146] —an obligation concerning the means, namely the choice, amongst possible international tribunals, of the Permanent Court.

This analysis has an artificial character. In 1927 the parties decided on only one thing, namely recourse to the Permanent Court. To say today that there is in this Treaty a division into two obligations one of which, namely the obligation to accept any international tribunal whatsoever, was suspended is nothing more than a theoretical and ex post facto view of the facts.

This would seem to justify the rejection of the Belgian argument, at all events so far as concerns the phenomenon of "suspension" over and above the effects proper to Article 37.

It should be noted that the positions taken up by the Belgian Government in regard to Article 17 of the 1927 Treaty are necessary to it in order that it may put forward the following contention as to the difference between Article 36, paragraph 5, and Article 37. Article 36, paragraph 5, concerns not only the tribunal on which jurisdiction is conferred, but also the obligation to accept jurisdiction on the basis of the pre-existing treaty, the Statute. Article 37, on the contrary, does nothing more than "effectively ensure the performance of the treaty obligations".

Here again it is therefore presumed that the Treaty remained in force so far as concerns a general obligation to accept jurisdiction in vague terms, without reference to any specific tribunal. If the existence of an obligation of this nature in the 1927 Treaty is not admitted, the Belgian argument collapses both in regard to the 1927 Treaty and in regard to Article 37 since it is all based on the ex post facto invention of a general jurisdictional obligation in the 1927 Treaty, which does not exist.

***

Article 37 of the Statute, which creates a very special regime, must be construed restrictively for two reasons:

(1) It constitutes an exception to the means whereby jurisdiction of the Court is accepted. It is a provision which constitutes a derogation from the ordinary law in this matter. Any exceptional rule of law must be construed restrictively. Normal consent to the jurisdiction of the Court can be given only through a treaty clause (Article 36, para. 1, of the Statute) or through a declaration (para. 2 of the same Article). Article 37 establishes jurisdiction by the substitution of a new jurisdictional clause for an old one. The jurisdiction of the Court is optional; this is a principle of the Statute. Article 37 introduces an exception to this rule by providing for a case of automatic and compulsory jurisdiction.

(2) Article 37 is a legal fiction, a solution that is empirical and more or less arbitrary. It transfers to the International Court an acceptance [p147] of the jurisdiction of the Permanent Court which is in force. This artificial method of stating the law requires a restrictive interpretation of the Article in question. The Permanent Court said that it did not "dispute the rule ... that every Special Agreement, like every clause conferring jurisdiction upon the Court, must be interpreted strictly" (P.C.I.J., Series A /B, No. 46, pp. 138-139). And this is all the more essential in the case of a system of acceptance of jurisdiction as exceptional as that of Article 37 of the Statute.


The intention of Article 37 was that the jurisdictional clause in force in treaties and conventions should be considered, as between parties to the Statute, as an acceptance of the compulsory jurisdiction of the International Court. If a State was a party to that Statute at the time of the dissolution of the Permanent Court, it gave explicit and voluntary consent to the transfer from the old Court to the new Court. If a State was not a party to the Statute at that time, as was the case for Spain, it is said, according to a certain interpretation, to have given an undeclared and non-voluntary consent to the new jurisdiction. This interpretation envisages two kinds of consent, according to whether the State in question was a party to the Statute before or after the dissolution of the Permanent Court. It is claimed that Article 37 would automatically establish the jurisdiction of the new Court in the case of States that became parties to the Statute after that dissolution.

Under such an interpretation, an undeclared consent, an automatic consent would be held to proceed from the Article in question—a consent given in a general way and beforehand. A consent thus given is not given in the way the Statute requires consent to be given by States if they accept the jurisdiction of the Court. Such an exceptional manifestation as this form of consent should have been clearly provided for in the text of Article 37. But that is not the case. As between two interpretations of Article 37, one following the principle of optional consent and the other accepting the idea of an alleged automatic consent, the choice must be in favour of the former interpretation. Any extensive interpretation is therefore inadmissible.

It would be surprising if Article 37 had established compulsory jurisdiction for a certain category of States when the San Francisco Conference had rejected the principle of compulsory jurisdiction for all States.
The jurisdiction of the Court is based on the explicit consent of States. Thus no doubt can arise as to the execution of any judgment it may deliver. No interpretation of texts concerning the acceptance of jurisdiction should be based on any ambiguous reasoning. It is an essential principle that jurisdiction must be established by clear manifestations of the will of States. To attempt to force the meaning of texts relating to the jurisdiction of the Court would be to risk consequences that might affect its authority and its prestige. The Judgment in the Aerial Incident case is a good demonstration of the fact that the Court must employ the discretionary power conferred by Article 36, [p148] paragraph 6, of its Statute with the greatest prudence. If there should be lack of jurisdiction, any action would be ultra vires. A change of jurisprudence on a question of jurisdiction must have a very solid basis. It is important that decisions should be consistent in order to maintain the authoritative character of the texts interpreted. The fact that the Court's list is somewhat slender cannot justify any extension of its jurisdiction.

***

The jurisdiction of the Court which is derived from Article 37 must be founded on the will of the parties and it exists only to the extent to which it has been accepted.

The transfer to the International Court of Justice of jurisdiction which a provision in a treaty provided for in favour of the Permanent Court of International Justice could not be made without the consent of the States parties to the treaty in question. It is a well-established principle of international law that only the parties to a treaty can modify its provisions.

By adopting Article 37 which provides for the transfer of jurisdiction from one Court to another, the San Francisco Conference could not substitute itself for the consent of States which were not present and did not take part in that Conference. As Spain did not take part in that Conference, Article 17, paragraph 4, cannot be made to apply to it. The States present at San Francisco were not able to modify a treaty signed by Spain without the consent of that country. Any modification decided upon by the States at the Conference, in respect of jurisdictional clauses embodied in the provisions of the 1927 Treaty, remained without effect so far as Spain was concerned in the absence of that State's acceptance of those modifications, and Spain has not signified its acceptance.

Furthermore, on the occasion of that Conference, Spain was not invited to take part in it. Spain was not persona grata (resolution 39 (1), of the General Assembly, of 12 December 1946). Spain, being excluded from the negotiations at San Francisco, had no part in them, and in the Statute which came into force on 24 October 1945 remained, so far as Spain was concerned, res inter alios acta. The Conference had excluded ex-enemy and neutral States from its meetings. It is obvious that the States assembled at that Conference did not concern themselves with the jurisdictional clauses contained in treaties of ex-enemy or neutral States for the purpose of imposing on them the obligation to agree that certain jurisdictional clauses should be applicable to the new Court in the possible event of their becoming Members of the United Nations. Such an interpretation is not reasonable. By making the international treaty which the Charter and the Statute constitute, the States at the Conference were not able to establish, by one of the provisions of those instruments, obligations incumbent on third States.[p149]
Provisions of this character are not to be presumed. Article 37 effects a substitution of one obligation for a previous one and such a substitution must not be presumed. For such a substitution to take place it is essential that the party concerned should formally and voluntarily express its intention to make the substitution. Spain, which was absent at the time when Article 37 was drawn up and accepted, had no opportunity to manifest such an intention.

The report of 22 May 1945 of sub-committee IV /1 /A on the question of continuity of the International Court, and on related problems, said, amongst other considerations, at the end of paragraph (d):

"In the case of enemy States, it would be possible as part of the conditions of peace to terminate their rights under the Statute; in the case of other States, this would not be possible unless they were to agree to it."

And the report added, in paragraph (e):

"From this conclusion it follows that, in the case of certain neutral States at any rate, the exclusion from participation in the Statute of the Court which is clearly laid down by Chapter VII, paragraph 5, of the draft Charter could probably not be accomplished without some breach of the accepted rules of international law" (U.N.C.I.O., Vol. 13, p. 525).

The relevant documents show that, at the San Francisco Conference, measures of exclusion from the Statute of the Court were contemplated in respect of enemy States and certain neutral States. That was the situation with regard to Spain. The sub-committee in question therefore did not concern itself with the maintenance of the jurisdictional clauses embodied in the declarations or treaties of those States.

When a State has for many years remained—as Spain did—a stranger to the Statute, this being moreover also by decision of the General Assembly (decision of 12 December 1946), it cannot be maintained that that State, by the fact of its request for admission to the United Nations, has recognized the jurisdiction of the International Court of Justice. Consent that is merely presumed is insufficient (I.C.J. Reports 1959, p. 142).

The States assembled at the San Francisco Conference, knowing their international obligations in the matter of the acceptance of the jurisdiction of the Permanent Court, whether through the optional clause or through a provision in a treaty, were, of course, able properly to assume the responsibility of transferring them to the new Court. Those States had the power to do this. That power could not be claimed in respect of States which might subsequently come to be admitted as Members of the United Nations on the basis of Article 4 of the Charter.[p150]

To admit such a power in relation to States not present would quite simply result in making them subject to a principle which the Conference firmly rejected, namely that the jurisdiction conferred on the new Court should be in all respects compulsory. The new Members of the United Nations would have had to accept such jurisdiction imposed on them by the States assembled at San Francisco, if they happened to be bound by treaties in force under which matters were to be referred to the jurisdiction of the Permanent Court. The decisions given by that Court and by the International Court have always maintained that-the Court possesses jurisdiction in respect of a State only if that State has given its voluntary and unequivocal consent.

***

The jurisdiction of the Court is based on the consent of States. The International Court has said, in the Monetary Gold case, that it must be careful not to "run counter to a well-established principle of international law embodied in the Court's Statute, namely that the Court can only exercise jurisdiction over a State with its consent".

According to a certain view, this consent must be understood to have been given by Spain when that country became a Member of the United Nations. The States assembled at San Francisco could not, in the absence of Spain, impose on that country an obligation involving the acceptance of a new jurisdiction, namely that of the International Court. They had no power to impose on Spain, as a supplementary condition for Membership of the United Nations, the acceptance of a specific jurisdiction of the International Court. To admit this would be contrary to the principle of the legal equality of States. The conditions for admission to membership of the United Nations did not stipulate that certain States would, in order to be admitted, have to accept obligations of a jurisdictional nature which other States were not required to accept.

On becoming a Member of the United Nations, Spain could not have been compelled to accept the jurisdiction of the International Court for certain cases. It is the distinctive feature of this jurisdiction that it is particular and voluntary and not general and compulsory. The jurisdiction of the Court must be established by a clear text which does not call for interpretation, so that it cannot come as a surprise. There is no compulsory jurisdiction of the Court. If any reasonable doubt can exist as to the interpretation of Article 37, its application also must be reasonable. A restrictive interpretation is absolutely essential.

It is contended that, when it became a Member of the United Nations, in December 1955, the Spanish Government ratified Article 37 of the Statute and thereby accepted the transfer of jurisdiction. Article 37 would thus be a clause concerned with accession or adhesion, an offer addressed to States other than those assembled at San Francisco. The [p151] International Court has replied to this view, in the Aerial Incident case. The same considerations are relevant with regard to Article 37.

At the time when Spain became a Member of the United Nations, its acceptance of the jurisdiction of the Permanent Court under Article 17, paragraph 4, of the 1927 Treaty had lapsed as from the date of the dissolution of that Court. Article 37 does not revive an obligation which no longer had any legal effect. This provision could not apply to Spain at the time of its admission to the United Nations. It follows therefore that Spain's acceptance of this provision does not constitute consent to the jurisdiction of the International Court of Justice (I.C.J. Reports 1959, p. 145). And any manifestations of acceptance attributed to Spain at a later date are unfounded.
It is contended that Article 37 is concerned solely with the validity of jurisdictional clauses in point of time, of the period which they still have to run within the context of the treaties of which they form part. So long as the term prescribed by the treaty has not expired, these jurisdictional clauses, it is said, remain in force, though not applicable because of the disappearance of the field of application to which they relate. There is said to be a suspension of these clauses for the acceptance of the jurisdiction of the Court until the time comes when the two States signatories of the treaty become parties to the Statute.

This view entails certain difficulties.

In the first place, it takes no account of the very strong argument in the judgment in the Aerial Incident case, when it admits that the jurisdictional clauses in question lapsed for want of the legal basis they found in the Statute of the Permanent Court, which had ceased to exist because of its disappearance. The extinction of such international obligations may be connected with the periods for which they were concluded, but there may be other causes that bring about their extinction before the expiry of those periods.

There is nothing in Article 37 to suggest that Article 17, paragraph 4, would continue to be able to be revived after the expiry of the Statute of the Permanent Court. To bring about this effect, Article 37 would have had to be worded differently. It would at least have been necessary for it to state that the provisions of treaties accepting the jurisdiction of the Permanent Court should be considered, as between the States which are parties to the present Statute or which may at any time become parties to the Statute, as involving acceptance of the compulsory jurisdiction of the International Court. Article 37 says nothing of the kind and has no effect upon Article 17, paragraph 4, which is included in a treaty of a State that had not yet become a party to the Statute.

***

Furthermore, this theory of the suspension of treaty clauses concerning the acceptance of the jurisdiction of the Court creates a delicate situation as regards both the duration of the suspension and its effects.[p152]

In order that the effects of this suspension may be brought to an end, an event that is extraneous to the will of the contracting parties must occur, namely the admission of a particular State to the United Nations. If the period prior to this admission is prolonged for an undue length of time, the above interpretation may lead to unreasonable results, which will have to be examined very carefully. When does such a suspension cease to be reasonable? The difficulty lies in the choice of units of measurement. What is the unit for what is reasonable? To what bases for comparison or judgment must resort be made? The frontier between what is reasonable and what is not reasonable must always remain arbitrary for the reason that between the one situation and the other there is no abrupt transition.

If the suspension begins to run from the date on which the Charter entered into force, Spain would have remained a stranger to the Statute for more than ten years. Could the suspended clause still have any effects after that period?
An interpretation in this sense has artificial aspects and gives ground for arbitrary conclusions and applications which may compromise principles hitherto accepted in the matter of consent to the jurisdiction of the Court. If some other interpretation of Article 37 does not entail the disadvantages just mentioned, it should be preferred.

***

Is it legally admissible that the jurisdictional clauses of treaties or conventions should, in respect of States that are not parties to the Statute, have potential validity by virtue of Article 37, either as from the entry into force of the Charter or as from the dissolution of the Permanent Court? There is nothing that could support this proposition, either in the text of that Article or in the preparatory work, or within the framework of an interpretation of this provision. To this concept of the potential validity of the clause there would be added the idea of its suspension pending the admission of a State to the United Nations, whilst it would be agreed that this suspension, if unduly prolonged, might cause the clause to lapse.

***

The view must be examined that Article 37 of the Statute could have the effect of reviving Article 17 of the 1927 Treaty. Can this Article, which had created an obligation to accept jurisdiction in respect only of the Permanent Court, "resume" its effect because of Article 37 of the Statute?

The whole problem centres round the text of this Article. Either it created a special kind of "suspension", not provided for by the general rules of international law, a "dormant" condition, a temporary "paralysis" of the means of jurisdiction, even in respect of States that are [p153] not yet parties to the Statute, with a "resuscitation" on their becoming parties to that Statute, or else Article 37 did not create that effect.

As this is a matter of the interpretation of the Statute, there is no obligation to take account of the arguments presented by the Parties. The Court must seek the solution by its own means.

Even if the view were admitted that Article 37 was intended to extend its effects to all parties to the Statute, whatever might be the date at which they became parties thereto, the legal problem is not solved thereby, for the question is whether the Statute could create in international law this new obligation relating to the "resuscitation" of provisions that had lapsed through the permanent disappearance of the subject of the obligation.

It is useless to say that this paralysis is the sole purpose of Article 37 and that it has no other purpose. Such an assertion implies that an obligation could be created in relation to third States, causing, before they had become parties to the Statute, a clause in a bilateral treaty to become "dormant". It is no negative proof that is required, but positive proof of the fact that the Statute could legally bring about such an effect.

It is true that every State which becomes a party to the Statute accepts it as it is. But in December 1955, when Spain became a party to the Statute, was there still in the 1927 Treaty an Article 17 which could be revived? Can Article 37 have "seized" the bilateral treaties of a third State, long before that State became a party to the Statute, for the purpose of "preserving" the jurisdictional clause?

This presupposes a new and complex operation which a priori is contrary to the voluntary character of the acceptance of the jurisdiction of the Court and which would have to be justified by some means other than a mere description of it. For it is no proof of the legal existence of an obligation merely to say that it is "dormant". This would, in fact, be laying down a principle contrary to the generally recognized principle of the voluntary acceptance of the jurisdiction of the International Court of Justice. Spain did not give its acceptance of the Statute until December 1955.

Hence follows the need to argue that Spain had itself recognized that the effect of Article 37 was indeed to revive Article 17 of the 1927 Treaty at the time when Spain became a party to the Statute. Whether Spain did or did not believe that Article 37 had a certain effect is quite immaterial. It is the Court alone which is called upon to determine its own jurisdiction according to the Statute, and not according to the view one of the Parties takes of the Statute.

The fundamental problem is in fact the following. How can Article 37 be given an effect of preserving the jurisdictional clauses of bilateral treaties between third States? That effect must necessarily date from the entry into force of the Statute, before the disappearance of the Permanent Court. And how can Article 37 then be given the effect of automatically transferring jurisdiction to the International [p154] Court of Justice on the day when the third State is admitted to the United Nations? The "preservation" must, of course, apply as from the time when the Statute came into force since it is claimed that Article 37 of the Statute applies to "all treaties" and therefore to treaties binding States which have not yet any obligation arising from membership of the United Nations and which might, by hypothesis, never have any such obligation if they did not become Members of the United Nations. Yet it is necessary that Article 37 should apply without any limitation of time for, if the "preservation" of the jurisdictional clause of a bilateral treaty has been brought about by the entry into force of the Statute, Article 37 will apply whatever be the date when the third State is admitted to the United Nations. If the preservation has occurred, it is "potentially" effective so long as the bilateral treaty is in force.

For it to be otherwise, it would have to be held that Article 37 does not "preserve" the jurisdictional clause of a bilateral treaty until the day when the third State is admitted. But, in that case, the problem already mentioned remains. A "paralysing" operation is one that is not known in general international law, according to which suspension means relief from the obligation. But it has not been proved that Article 37 determined such renewal after paralysis.

This consideration becomes still more conclusive in the examination of the alternative second objection. If a suspended obligation comes into force again only as from the day on which the obstacle ceases to exist, there is no jurisdiction during the period of suspension. Otherwise it is not a case of suspension but of a "dormant" condition or "paralysis", and these descriptions are in fact necessary to justify the fact that the suspension has had no effect. For if the period of suspension disappears retrospectively and if the jurisdiction of the International Court of Justice is admitted as if there had been no interruption in the application of the bilateral treaty, this is no longer a suspension of the obligation, by definition. Here again it must be held that this was the purpose of Article 37, but without any shadow of proof to establish it. Now, to prove that the suspension of an obligation has not "relieved" the parties of the obligation for the whole of the period of suspension, it is necessary to produce something more than a mere assertion.

Spain and Bulgaria signed a Treaty of Conciliation, Judicial Settlement and Arbitration on 26 June 1931, which was ratified in Sofia on 21 June 1935 (P.C.I.J., Series E, No. 13, p. 296). Under Article 17 each party may, subject to one month's notice, bring a dispute before the Permanent Court by means of an application. This Treaty is renewed every five years, unless denounced six months before the expiry of that period.

Is such a treaty still in force between these two States in regard to the jurisdiction of the International Court, even after the Judgment [p155] in the Aerial Incident case? Assuming that one of the passengers in the unfortunate aircraft brought down by the Bulgarian military forces was a Spaniard, would his Government have had the right to file an application in the exercise of protection of its national, on the basis of the above-mentioned Article 17?

If Article 37 confers jurisdiction on the International Court, it will also stipulate that Article 17 of the Spanish-Bulgarian Treaty is in force—a result that seems improbable and that would be contradictory.

The position would be the same in the case of other treaties, of the same kind as the 1927 Treaty, signed between Spain and Poland, Czechoslovakia and Hungary, to mention only a few of these treaties with countries that might not maintain diplomatic relations.

***

International practice with regard to the application of the treaties referred to in Article 37 of the Statute is only of relative value. The practice that would be of real interest in the case of the present objection would be practice subsequent to the interpretation given in the judgments in the cases concerning the Aerial Incident and the Temple of Preah Vihear in which the question was raised on two occasions.

The signatories to the protocols drawn up for the purpose of adapting clauses in treaties referring to the Permanent Court had no other object than to apply those jurisdictional clauses included in the treaties— expressly—to the International Court. But they did not raise the question whether Article 37 covered Members of the United Nations that were parties to the Statute before the dissolution of the Permanent Court and also new Members of the United Nations after that date. Those protocols referred to all of these States. Nevertheless, a doubt subsisted as to the field of application of this Article.

Here, the wisdom of the United Nations concurred with the wisdom of the International Court in its interpretation in the Aerial Incident case, in limiting the application of Article 37 to those States which were present at the San Francisco Conference. Thus, it was known what States were really going to be placed under the obligation, without going into situations the effects of which could not be foreseen in regard to treaties which conferred jurisdiction on the Permanent Court. If such a cautious attitude was adopted in regard to the declarations referred to in Article 36, paragraph 5, which were clearly limited and well known, a similar attitude should a fortiori be observed in regard to the jurisdictional clauses included in a large number of treaties between States parties to the Statute prior to the dissolution of the Permanent Court.

***

The interpretation upheld by the Applicant is not supported by the practice of various organs of the United Nations.[p156]

Two important instances cited by the parties may be mentioned, inter alia.

The General Act: The General Assembly's Resolution 268 A (III) of 28 April 1949 was intended to restore its original efficacy to the Geneva General Act of 26 September 1928. In paragraph (e) this resolution states that this Act, with the amendments introduced, would be open to accession by the Members of the United Nations and by the non-Member States which shall have become parties to the Statute of the International Court of Justice or to which the General Assembly of the United Nations shall have communicated a copy for this purpose. Such a provision was necessary as the efficacy of the General Act had been impaired by the fact that the organs of the League of Nations and the Permanent Court to which it refers had disappeared. This resolution states that the amendments made to the General Act will only apply as between States having acceded to that Act as thus amended. Paragraph (c) mentions the amendments to be made to Articles 17, 18,19, 20, 23, 28, 30, 33, 34, 36, 37 and 41, namely the words "Permanent Court of International Justice" shall be replaced by "International Court of Justice". This precedent shows, beyond all possible doubt, that the General Assembly did not think it could apply Article 37 of the Statute of the Court in the case of the provisions of the General Act relating to the Permanent Court. In order to transfer to the International Court the jurisdiction conferred on the Permanent Court, a new agreement was essential. This meant that Article 37 did not operate. The Belgian delegation's intervention in the United Nations in support of this resolution was not without its importance.

If Article 37 does not operate in the case of the General Act, as was admitted by the General Assembly's Resolution 268 A (III), how can it logically be maintained that Article 37 must operate in the case of the Spanish-Belgian Treaty of 1927? This Treaty is nothing other than a General Act on a small scale between two States. The General Act does, in fact, provide for the settlement of disputes between States by means of conciliation commissions, arbitration and judicial settlement before the Permanent Court, and the Spanish-Belgian Treaty of 1927 mentions the same means of settlement in regard to disputes between the two States. If, in order that the General Act may enter fully into force in respect of the International Court, it is essential that the States which signed and accepted it should make certain declarations to that effect, there is no reason why the same thing should not be true in the case of the two States that signed the Spanish-Belgian Treaty. If Article 37 does not bind the States that were signatories of the General Act to accept the jurisdiction of the International Court, how could that provision bind the Spanish Government to accept the jurisdiction of that Court?
The General Act adopted by the Assembly of the League of Nations on 26 September 1928 received the accession of Belgium on 18 May 1929 and of Spain on 16 September 1930. Thus the following situation [p157] arises. If Belgium invokes this General Act against Spain, it will only be able to do so when the latter State has signed the amendments made to that Act (General Assembly Resolution 268 A (III)). But, if Belgium invokes the 1927 Treaty, which is fundamentally identical with the General Act, it will, according to a certain interpretation of Article 37, be able to do so apart from any other condition. The same legal situation would thus be governed in two different ways according to whether it is the General Act or the Treaty that is invoked. It is difficult to agree with such an interpretation, which leads to contradictory results.

***

The Constitution of the I.L.O: The revision of the constitution of the I.L.O. was necessary, after the dissolution of the Permanent Court, in respect of all the provisions in it which referred to that Court. For the States which were parties to the Statute of the International Court of Justice before the said dissolution, the transfer provided for by Article 37 was sufficient but, for other States which were not Members of the United Nations or which became Members subsequently to that dissolution, amendments were necessary.

***

In regard to the Advisory Opinion of 1950 on the International Status of South-West Africa and in the South West Africa cases, it should be noted that the three States concerned in these cases, namely the Union of South Africa, Ethiopia and Liberia, were original Members of the United Nations. The situation was similar in the Ambatielos case, both States parties to which were Members of the United Nations before 18 April 1946. These precedents are therefore by no means conclusive. They are all in line with the interpretation given in the Judgments in the cases concerning the Aerial Incident and the Temple of Preah Vihear. This interpretation was upheld also, indirectly, in the Right of Passage case. At the time when Portugal filed its new declaration of acceptance of the jurisdiction of the Court, that country was bound by an earlier declaration to which Article 36, paragraph 5, of the Statute applied. The Court took account only of the later declaration.

In connection with the revision of many conventions conferring jurisdiction on the Permanent Court, new agreements or protocols were, in all cases, necessary to effect the transfer of that jurisdiction to the International Court. It was not considered that Article 37 settled the question. In these protocols the transfer was explicitly provided for with mention of the International Court, and this is an argument in favour of the Spanish contention.[p158]

***

The interpretation of Article 37 given by third States in their agreements loses much of its force, particularly if those agreements are prior to the interpretation which the International Court gave of paragraph 5 of Article 36 of the Statute, which raises the same question as Article 37. If reference is made to the Agreement of 9 April 1953 between Sweden and Finland, which modifies a convention of 29 January 1926, it will be seen that it makes valid Article 1 of the 1926 Treaty and that this validity does not depend on the entry of Finland into the United Nations. Indeed, when that State became a Member of the United Nations in 1955, it was by reason of that fact a party to the Statute of the International Court but, at that date, the 1926 Treaty, modified in April 1953, had been binding for two years. It was that Agreement which effected the transformation of the 1926 Treaty, and not the fact that Finland had become a party to the Statute. The fact that the procedure adopted was that of the Agreement, and not the application of Article 93, paragraph 2, of the Charter, gives rise to the supposition that Finland considered that Article 37 was not sufficient to render applicable the treaties in which acceptance of the jurisdiction of the Permanent Court was stipulated.

***

The Statute has provided two normal methods by which States may accept the jurisdiction of the International Court. The first method is by treaty or convention and the second by a unilateral declaration. These are the methods mentioned in Article 36, paragraphs 1 and 2.

According to a certain contention, Spain is said to have accepted the jurisdiction of the Court—implicitly—at the time when the Belgian Government proposed to the Spanish Government a special agreement as a preliminary step towards bringing the matter before the Court by means of an application. When the Spanish Government rejected this proposal, it said that Belgium had no jus standi entitling it to make such a proposal for the protection of a Canadian company and that local remedies had not been exhausted. From this it is argued that Spain had implicitly recognized the jurisdiction of the Court in connection with the special agreement that was proposed or submitted. Such is the contention advanced.

As a starting point, the basis adopted must be that the acceptance of the jurisdiction of the Court, whether by agreement or by declaration, must be "clear and unequivocal" as has been held in the decisions consistently given hitherto by the Permanent Court and by the International Court. The instruments by which such an acceptance of jurisdiction is given must be conclusive, decisive and such as to leave no room for doubt.[p159]

As soon as the Belgian proposal came before the Spanish Government, the latter stated quite clearly that it could not accept this proposal for the reasons already mentioned. It did this because the Spanish Government did not think it necessary at that stage to examine the question whether Spain was or was not bound towards Belgium, under any clause whatsoever, in regard to the submission of the case to the Court. The proposal made by Belgium was rejected outright because of the absence of a basic requirement, namely Belgium's right to introduce such a claim. Can it be deduced that Spain gave a "clear and unequivocal" manifestation of its acceptance of the jurisdiction of the Court? Can such acceptance be established by implication on the basis of implied reasoning? Moreover, what is the legal situation attributed—under this view—to Spain? Did Spain conclude a tacit agreement to come before the Court or is Spain held merely to have expressed willingness to accept the jurisdiction of the Court—also by way of implication? All these questions run counter to the contention advanced.

Hitherto it was a well-established principle that the jurisdiction of the Court must be accepted as required by the Statute, by explicit and clear manifestations of intention, and not by arguments founded on suppositions, on doubtful facts and on silences that have to be interpreted. For jurisdiction to be established, there must be a voluntary, indisputable and indubitable act on the part of the State to which such an intention is attributed.

One observation must be made on this contention which is dangerous because it would introduce a new notion of the acceptance of the jurisdiction of the Court by tacit acquiescence or by tacit agreement—a situation far from compatible with the principle of the Statute according to which acceptance of jurisdiction must be established by clear and unequivocal act and consent. The jurisdiction of the Court must not be founded on ambiguous considerations and arguments.

***

It is maintained that the present objection is incompatible with the earlier attitude of the Spanish Government. The conclusion is reached that certain paragraphs in the Spanish Note of 30 September 1957 contain a "clear and unequivocal" declaration of the recognition of the jurisdiction of the Court. That Note is concerned mainly with the proposal made in the Belgian Note of 8 July 1957 for a special agreement for the purpose of submitting the dispute to the International Court. The divergence in view, as between the two Governments, centred round the fact that the Belgian Government had not proved that it was entitled to grant its diplomatic protection to Barcelona Traction, a Canadian company, without furnishing evidence of the Belgian nationality of the shareholders of that company.

The question of the interpretation of Article 37 was not raised either in the Spanish Note or in the Belgian Note mentioned above.[p160]

The reference in the Spanish Note to the existence of a jurisdiction binding on both States relates to the Belgian silence in regard to the fundamental objection advanced by the Spanish Ministry of Foreign Affairs, in its Notes of 22 December 1951 and 5 January 1952. It is impossible to see how any explicit recognition can be deduced from the text of an incidental sentence. The reference to jurisdiction is connected with the question of the jus standi. It must be considered in its context. No jurisdictional obligation can be inferred from the statement. There is a definite and unequivocal manifestation of intention in the final summary of this Note given in paragraph 6, which says textually: "The above mentioned Treaty [of 1927] cannot be relied upon for the settlement of a dispute which, for the reasons indicated, cannot have arisen."

Moreover, this Note of 30 September does not, in the sentence that is cited, constitute a declaration of intention. It is clear from this correspondence that the Spanish Government never agreed to the intervention of the Court in the present case. This position alone is what is important. Belgium's lack of capacity was not the sole ground for lack of jurisdiction in the Court. From the point of view of the Spanish Government, this question of capacity was a preliminary one and the question of the Court's jurisdiction on the basis of Article 37 was neither discussed nor even touched upon.

If this Note Verbale is examined as a whole, the conclusion must inevitably be reached, in the light of the circumstances which gave rise to it, the proposals which it rejects and the reasons on which its attitude is based, that the Spanish Government did not in any way, either explicitly or implicitly, accept the jurisdiction of the Court.
***

It was only after the Belgian Application and Memorial that the question of preliminary objections really arose and Spain immediately put forward the preliminary objection relating to the jurisdiction of the Court. Before that, it was only the jus standi that was under discussion. The use, in the Spanish Note of 10 June 1957, of the words "an alleged dispute" shows clearly that Spain did not admit the existence of a dispute. The problem of whether or not any compulsory jurisdiction existed was not discussed in the Note. The fact that, in its Note of 30 September 1957, the Spanish Government stated that "the Treaty cannot be relied upon for the settlement of a dispute which, for the reasons indicated, cannot have arisen" implies that any discussion of preliminary objections in the event of Belgium deciding to bring the dispute before the Court becomes superfluous.

From the moment when Belgium actually brought the Barcelona Traction case before the Court, or when that possibility was seriously discussed between the Parties, Spain immediately took up position by[p161] denying that the Court possessed jurisdiction, thereby anticipating the future Preliminary Objection No. 2.

In the Anglo-Iranian Oil Co. case, the International Court gives rules for the grammatical interpretation of unilateral declarations. This Judgment says:

"But the Court cannot base itself on a purely grammatical interpretation of the text. It must seek the interpretation which is in harmony with a natural and reasonable way of reading the text, having due regard to the intention of the Government of Iran at the time when it accepted the compulsory jurisdiction of the Court" (I.C.J. Reports 1952, p. 104).

Account should not be taken, in isolation, of the literal meaning of words, without regard to the object and purpose they serve in the document in which they are employed, for it is from this that they derive a certain value and significance as the expression of the intention of the author. The jurisdiction of the Court must result from either an explicit declaration or from acts conclusively establishing it. In the present case there is no explicit declaration and there are no conclusive acts.

In the diplomatic correspondence, the Respondent has never displayed any wish to obtain a decision on the merits or to raise the question of jurisdiction. It seems evident that an acceptance of the jurisdiction of the Court cannot be inferred from such an attitude.



Alternative Preliminary Objection


In the event of the Court's finding that it possesses jurisdiction by virtue of Article 37 of its Statute and of its reviving Article 17, paragraph 4, of the 1927 Treaty together with the other provisions which are in harmony with that Article, the dispute to which the Belgian Government refers could not be submitted to the jurisdiction of the Court because it arose and relates to situations and facts prior to the date on which the Court's jurisdiction could have had effect in the relations between Belgium and Spain. Until the date at which it was revived, the jurisdictional clause was dormant and, in order to be brought again into force, consent thereto was required, this consent resulting from Spain's entry into the United Nations.

The date in question must be fixed as at 14 December 1955, that being the date on which Spain was admitted as a Member of the United Nations. As the dispute was prior to this crucial date, it could not be submitted to the Court.

The 1927 Treaty, in fact, in its Articles 1 and 2 and in the Final Protocol, is concerned with disputes that "may arise" between the two States. It cannot be said that the Spanish-Belgian Treaty indicates[p162] any clear intention to cover all disputes. The jurisdictional clause of Article 17 of the Treaty—paragraph 4, which Article 37 of the Statute revives—does not apply to any disputes whatsoever, but only to disputes which are subsequent to the date of 14 December 1955. For disputes prior to that date, there is no applicable jurisdictional clause. The present dispute arose much earlier than 14 December 1955, as is admitted by the Belgian Government in its diplomatic Note of 16 May 1957. It is clear therefore that Article 37 could not make the effect of the jurisdictional clause of Article 17 retrospectively applicable to disputes that arose prior to its coming into force. The Permanent Court said:

"Not only are the terms expressing the limitation ratione tem-poris clear, but the intention which inspired it seems equally clear: it was inserted with the object of depriving the acceptance of the compulsory jurisdiction of any retroactive effects" (P.C.I.J., Series A /B, No. 74, p. 24).

In the Mavrommatis case, the Permanent Court said:

"The Court is of opinion that, in cases of doubt, jurisdiction based on an international agreement embraces all disputes referred to it after its establishment. In the present case, this interpretation appears to be indicated by the terms of Article 26 itself where it is laid down that 'any dispute whatsoever ... which may arise' shall be submitted to the Court" (P.C.I.J., Series A, No. 2, p. 35).

Article 1 of the 1927 Treaty stipulates:

"The High Contracting Parties reciprocally undertake to settle by pacific means and in accordance with the methods provided for in the present Treaty all disputes or conflicts of any nature whatsoever which may arise between Belgium and Spain and which it may not have been possible to settle by the normal methods of diplomacy."
The Judgment of the Permanent Court cited above interpreted the phrase "any dispute whatsoever ... which may arise", which corresponds to the text of Article 1 of the Treaty quoted above "all disputes or conflicts of any nature whatsoever which may arise...", as referring to all disputes arising after the establishment of the jurisdiction, and this came into force when Spain became a party to the Statute of the Court. Earlier disputes are therefore excluded from this jurisdiction.
When Article 17, paragraph 4, came into force again, in 1955, the reservations ratione temporis of Articles 1 and 2 of the Treaty became applicable once more.[p163]

In its declarations of 25 September 1925 and 10 June 1948, the Belgian Government followed the usual practice of limiting its acceptance of the jurisdiction of the Court by a clause ratione temporis, in accordance with general international law. It is not conceivable that that Government intended to depart from or derogate from that practice when it signed the 1927 Treaty. The declarations in question admit of a clear presumption of Belgium's intention in this matter.

Certain provisions of the 1927 Treaty which had been dormant were brought into force, more particularly those provisions which mentioned the Permanent Court. It may be said that certain provisions of the Treaty were brought into force.

The only exception to non-retroactivity admitted by the Protocol is limited by two conditions, namely (a) that the dispute should relate to the interpretation of a previous treaty still in force, and (b) that the application challenged should have been initiated before the signature of the 1927 Treaty and should continue after its signature. These conditions are not relevant to the case now before the Court.

Article 37 does not establish any reservation ratione temporis. It merely brings into force the part relating to the compulsory jurisdiction established by the 1927 Treaty. It is in the provisions of that Treaty that the limitations ratione temporis on the jurisdiction of the Court must be sought. These are the limitations already mentioned.
***


On the Joinder of the Third and Fourth Preliminary Objection to the Merits


On joinder to the merits four points should be borne in mind:

(1) The basis of international jurisdiction is not, as in municipal law, the will of a law-maker, but the consent of the parties themselves.

(2) It is in the light of that fundamental observation that the effect of the raising of a preliminary objection by the respondent State must be judged. The respondent is thus exercising its right to have the Court ascertain as a preliminary matter whether the case for which the applicant has sought to bring it before the Court is or is not one of those for which it has agreed that the Court should give a decision where it is concerned. For that reason, when a preliminary objection is raised, the proceedings on the merits are stopped and can normally be resumed only when the question raised as a preliminary objection has been decided.


(3) It is always in the light of the basic observation made above [p164] under (1) that the question of the propriety of joining a preliminary objection to the merits must be examined. As Judge Anzilotti remarked (P.C.I.J., Series D, Third Addendum to No. 2, p. 647):

"The joinder of an objection to the merits, which compelled a State to appear before the Court, in spite of the fact that it claimed not to have accepted any obligation to do so, was in international proceedings an entirely different matter to the same step in proceedings at municipal law, in which the obligation to appear before a Court was not dependent on the will of the party concerned."

Thus, while it certainly cannot be said that the Court needs the consent of the respondent in order to be able to join a preliminary objection to the merits, it is none the less true that joinder to the merits may be decided upon only as an absolutely exceptional step. It runs manifestly counter to the respondent's right not to have the merits of a case discussed unless it has first of all been established that, in one way or another, its consent has been given to the Court's deciding the case.

Thus the Court can resort to the joining of a preliminary objection to the merits only:

(a) when the parties themselves request it, or

(b) when the question raised as a preliminary objection is so bound up with the question which constitutes the merits of the case that it is manifestly impossible to decide the one without deciding the other at the same time.

(4) As regards the validity of such a conclusion, there can be no difference whatever according to whether the question raised as a preliminary objection is a purely procedural question or a question which is in itself a question which touches upon substantive law. What is necessary is that it should be a question separate from that which constitutes the actual merits of the case. Many questions can be in themselves questions of substance without on that account touching on the merits of the case.

These four points should be borne particularly in mind when taking a decision on the possibility of joining to the merits a question raised by the respondent State as a preliminary objection. If joinder to the merits were decided upon in a case where the question could have been decided independently of the merits of the case, the Court would be going against the very purpose of the institution of preliminary objections. It would be compelling the respondent to address itself to the whole merits of a case in connection with which it might subsequently have to hold that, in the end, the respondent had not at all been bound to do so.[p165]

In the Barcelona Traction case, there is nothing to warrant the suggestion that the third and fourth objections should be joined to the merits. The idea advanced during the hearings to the effect that in the present situation the Court should first explore the circumstances of the case which might affect the Belgian State's jus standi, and take its decision in relation to those circumstances, would be likely to lead to an absurd situation. What is first necessary is to establish the rule governing the matter. Consideration should then be given to the question whether that rule ever contemplates the possibility, where prejudice has been caused to a company by a foreign State, of diplomatic protection being exercised by a State other than the national State of the company itself. If the Court comes to a negative conclusion, it should quite simply declare that the Belgian State has no capacity to exercise diplomatic protection in the Barcelona Traction case, whether it comes forward as the protector of the allegedly injured company or whether it seeks to act as the protector of the alleged Belgian shareholders of the company. The circumstances of the particular case cannot in any way modify this conclusion.

According to its terms of reference the Court must apply international law. It must apply a rule of international law in order to decide questions which are raised as preliminary objections, whether it be the question of the Belgian Government's lack of capacity or the question of failure to exhaust local remedies. The very idea of a decision for a particular case, such as seems to be suggested by the Belgian Government, is inadmissible. Is it possible to conceive of the Court's refraining from ascertaining the rule of international law which relates to questions under consideration and deciding those questions in themselves without troubling to determine beforehand what rules must be applied? Or, again, is it conceivable that after determining those rules it should not apply them to the particular case? This would not be deciding according to the circumstances of the particular case but inventing and applying to it a rule different from that laid down by international law and hence patently violating that rule.

It is moreover quite clear that the question of the Belgian Government's lack of capacity can be decided without going in any way into the merits of the case. The merits of the case consist of the question whether or not a Canadian company suffered a denial of justice in Spain. Whether the answer to that question is in the affirmative or in the negative cannot in any way affect the position to be taken on the question whether or not the Belgian Government has capacity to inter-vene in the case, either for the diplomatic protection of the company or for the diplomatic protection of the company's alleged Belgian shareholders. Nor can it affect the position on the question whether or not Sidro is a shareholder of Barcelona Traction.

The Belgian Government agreed, both at the time when it submitted its draft special agreement to the Spanish Government, and later when, after the Spanish Government's refusal, it notified it of the filing of [p166] its unilateral application, that the question of the Belgian Government's capacity to take action in the case could and should be decided prior to any consideration of the merits. It will be recalled that the Belgian Government had even explicitly excluded that question from among those on which a joinder to the merits might be contemplated. It is not open to it now to take a view different from the one which it took then. It cannot now claim that the question of the Belgian Government's capacity to take action cannot be disentangled from the merits of the case, seeing that it asserted the contrary itself at the time of the filing of the Application.
The two Governments are in agreement that the Court should decide the question whether the second Application is similar to the first (both are claimed to be concerned with protection of Barcelona Traction) and the question whether entry in the company's register is evidence of the status of shareholder. These points, in the view of both Governments, should not be joined to the merits.

The same applies to the question of the exhaustion of local remedies. Whether or not the adjudication in bankruptcy of Barcelona Traction and its consequences constituted a denial of justice towards the company cannot alter the fact that the company itself, and the company alone, was able and bound to make use in due time of the remedies which the Spanish legal system made available to it for the purpose of challenging the adjudication in bankruptcy. The company did not do so and has therefore lost the right to complain, at the international level, of a denial of justice which, if it had really existed, could have been cured at the municipal level and was not so cured solely because of its own negligence. There is nothing in this finding which could be modified by investigation of the question whether or not the alleged denial of justice existed, or whether or not the alleged Belgian shareholders in the company sustained damage to their own interests as a result of the prejudice sustained by the company. It is to the company and to its directors who failed to take appropriate steps to safeguard the rights and interests of the company that the shareholders should address their complaints, and not to the Spanish State which has never had anything to do with them.

It is impossible to see how the Court could derive from an examination of the merits any element that might be of use for the purpose of a decision on the preliminary objections concerning the Belgian Government's lack of capacity and the failure to exhaust local remedies, Might not the joinder of these objections to the merits, in a case where the questions with which they deal are manifestly separate from and independent of the question which constitutes the merits of the case, be regarded as a departure from the rules governing the procedure for the examination of preliminary objections and, over and above those rules, as a departure from the principles on which international jurisdiction itself is based?

(Signed) Armand-Ugon.
 

 
     

 

 

 

 

African Commission on Human and Peoples' Rights | Central American Court of Justice | Committee Against Torture
Committee on the Elimination of Discrimination against Women | Committee on the Elimination of Racial Discrimination
Economic Court of the Commonwealth of Independent States | International Commissions of Inquiry | International Court of Justice
International Prize Court | Permanent Court of International Justice

 

home | terms & conditions | copyright | about

 

Copyright © 1999-2011 WorldCourts. All rights reserved.