10 February 2005

 

General List No. 123

 
     

international Court of Justice

     
 

Certain Property

 
     

Liechtenstein

 

v. 

Germany

     
     
 

Judgment

 
     
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BEFORE:

President: Shi;
Vice-President: Ranjeva;
Judges: Guillaume, Koroma, Vereshchetin, Higgins, Parra-Aranguren, Kooijmans, Rezek, Al-Khasawneh, Buergenthal, Elaraby, Owada, Tomka;
Judges ad hoc: Fleischhauer, Sir Franklin Berman

   
PermaLink: http://www.worldcourts.com/icj/eng/decisions/2005.02.10_certain_property.htm
   
Citation: Certain Property (Liech. v. F.R.G.), 2005 I.C.J. 6 (Feb. 10)
   
Represented By: Liechtenstein: H.E. Mr. Alexander Goepfert, Freshfields Bruckhaus Deringer, Düsseldorf, Special Commissioner of the Principality of Liechtenstein,
as Agent;
H.E. Mr. Roland Marxer, Ambassador, Director of the Office for Foreign Affairs of the Principality of Liechtenstein, as Advocate;
Mr. Dieter Blumenwitz, Professor of Public International Law, Universities of Würzburg and Munich;
Mr. Thomas Bruha, Professor of Public Law, University of Hamburg;
Mr. James Crawford, S.C., Whewell Professor of International Law, University of Cambridge, member of the English and Australian Bars, Member of the Institute of International Law;
Mr. Gerhard Hafner, Professor of Public International Law, University of Vienna, Associate Member of the Institute of International Law;
Mr. Alain Pellet, Professor of International Law, University of Paris X-Nanterre, member and former Chairman of the International Law Commission, as Counsel and Advocates;
Mr. Malcolm Forster, Professor of International Law, University College, London, Freshfields Bruckhaus Deringer, London;
Ms Juliane Hilf, member of the Chamber of Lawyers of Germany, Freshfields Bruckhaus Deringer, Cologne;
Ms Lucy Reed, member of the State Bar of New York, Freshfields Bruckhaus Deringer, New York, as Advocates;
Mr. Daniel Müller, temporary Lecturer and Research Assistant, University of Paris X-Nanterre;
Mr. Stephan Wittich, Assistant Professor, University of Vienna,
as Advisers;
Ms Nadine Heider, Freshfields Bruckhaus Deringer, Cologne;
Ms Gabriele Klein, Freshfields Bruckhaus Deringer, Düsseldorf, as Assistants;
Mr. Thomas Dillmann, ECC Kohtes Klewes;
Mr. Thomas Pütz, ECC Kohtes Klewes, as Information Officers;

Germany: Mr. Thomas Läufer, Director General for Legal Affairs and Legal Adviser, Federal Foreign Office;
H.E. Mr. Edmund Duckwitz, Ambassador of the Federal Republic of Germany to the Kingdom of the Netherlands, as Agents;
Mr. Jochen Frowein, Director Emeritus of the Max Planck Institute for Comparative Public Law and International Law, Heidelberg, Professor of Public International Law, University of Heidelberg;
Mr. Christian Tomuschat, Professor of Public International Law, Humboldt University, Berlin;
Mr. Pierre-Marie Dupuy, Professor of Public International Law, University of Paris (Panthéon-Assas) and the European University Institute, Florence, as Counsel;
Mr. Daniel Erasmus Khan, Privatdozent, Visiting Professor, Bayreuth University;
Mr. Andreas Paulus, University of Munich;
Ms Karin Oellers-Frahm, Max Planck Institute for Comparative Public Law and International Law, Heidelberg;
Ms Susanne Wasum-Rainer, Head of the Public International Law Division, Federal Foreign Office;
Mr. Reinhard Hassenpflug, Federal Foreign Office;
Mr. Götz Reimann, Embassy of the Federal Republic of Germany in The Hague, as Advisers;
Ms Fiona Sneddon, as Assistant.

 
     
 
 
     
 

 
[p.6]

The Court,

composed as above,

after deliberation,

delivers the following Judgment:

1. On 1 June 2001, the Principality of Liechtenstein (hereinafter referred to as “Liechtenstein”) filed in the Registry of the Court an Application instituting proceedings against the Federal Republic of Germany (hereinafter referred to as “Germany”) relating to a dispute concerning

“decisions of Germany, in and after 1998, to treat certain property of Liechtenstein nationals as German assets having been ‘seized for the purposes of reparation or restitution, or as a result of the state of war’ - i.e., as a consequence of World War II -, without ensuring any compensation for the loss of that property to its owners, and to the detriment of Liechtenstein itself”.

In order to found the jurisdiction of the Court, the Application relied on Article 1 of the European Convention for the Peaceful Settlement of Disputes of 29 April 1957, which entered into force between Liechtenstein and Germany on 18 February 1980.

2. Pursuant to Article 40, paragraph 2, of the Statute, the Application was immediately communicated to the German Government by the Registrar; and, in accordance with paragraph 3 of that Article, all States entitled to appear before the Court were notified of the Application.

3. By an Order of 28 June 2001, the Court fixed 28 March 2002 as the time-limit for the filing of the Memorial of Liechtenstein and 27 December 2002 for the filing of the Counter-Memorial of Germany, the latter time-limit being fixed without prejudice to the possible application of Article 79, paragraph 1, of the Rules of Court, in their revised version applicable with effect from 1 February 2001. On 28 March 2002, within the time-limit thus prescribed, Liechtenstein filed in the Registry its Memorial.

4. Since the Court included upon the Bench no judge of the nationality of Liechtenstein, Liechtenstein exercised its right under Article 31, paragraph 2, of the Statute to choose a judge ad hoc to sit in the case. It first chose Mr. Ian Brownlie, who resigned on 25 April 2002, and subsequently Sir Franklin Berman.

5. By a Note Verbale of 29 April 2002, the Republic of Austria requested the Court to furnish it with a copy of the Memorial of Liechtenstein. Having ascertained the views of the Parties pursuant to Article 53, paragraph 1, of the Rules of Court, the Court decided that it was not appropriate to grant that request. The Registrar communicated that decision to Austria and to the Parties by letters dated 18 July 2002.

6. On 27 June 2002, within the time-limit prescribed in Article 79, paragraph 1, of the Rules of Court, Germany raised preliminary objections relating to the jurisdiction of the Court to entertain the case and to the admissibility of the Application submitted by Liechtenstein. The President of the Court, noting that, by virtue of Article 79, paragraph 5, of the Rules of Court, the proceedings on the merits were suspended, and having ascertained the views of the Parties at a meeting held with their Agents, by an Order dated 12 July 2002, fixed 15 November 2002 as the time-limit within which Liechtenstein might present a written statement of its observations and submissions on the prelimi-[p 11]nary objections raised by Germany. Liechtenstein filed such a statement within the time-limit so fixed, and the case thereupon became ready for hearing in respect of the preliminary objections.

7. By letters dated 13 March 2003, the Registrar informed the Parties that Judge Simma, of German nationality, had indicated to the Court that he would not be able to participate in the decision of the case in view of the provisions of Article 17, paragraph 2, of the Statute. In accordance with Article 31, paragraph 3, of the Statute and Article 37, paragraph 1, of the Rules of Court, Germany chose Mr. Carl-August Fleischhauer to sit as judge ad hoc in the case.

8. Pursuant to Article 53, paragraph 2, of its Rules, the Court, having ascertained the views of the Parties, decided that copies of the pleadings and documents annexed would be made accessible to the public on the opening of the oral proceedings.

9. Public hearings were held on 14, 16, 17 and 18 June 2004, during which the Court heard the oral arguments and replies of:

For Germany: Mr. Thomas Läufer,
Mr. Jochen Frowein,
Mr. Christian Tomuschat,
Mr. Pierre-Marie Dupuy.

For Liechtenstein: H.E. Mr. Alexander Goepfert,
H.E. Mr. M. Roland Marxer,
Mr. James Crawford,
Mr. Dieter Blumenwitz,
Mr. Thomas Bruha,
Mr. Gerhard Hafner,
Mr. Alain Pellet.


10. In its Application, the following requests were made by Liechtenstein:

“For these reasons, each of which is pleaded in the alternative, Liechtenstein, reserving the right to supplement or to amend this Application and subject to the presentation to the Court of the relevant evidence and legal argument, requests the Court to adjudge and declare that Germany has incurred international legal responsibility and is bound to make appropriate reparation to Liechtenstein for the damage and prejudice suffered. Liechtenstein further requests that the nature and amount of such reparation should, in the absence of agreement between the parties, be assessed and determined by the Court, if necessary, in a separate phase of the proceedings.”

11. In the written proceedings, the following submissions were presented by the Parties:

On behalf of the Government of Liechtenstein,

in the Memorial:

“1. For the reasons set out above, and reserving the right to amend these submissions in the light of further evidence and argument, the Principality of Liechtenstein requests the Court to adjudge and declare that:

(a) by its conduct with respect to Liechtenstein and the Liechtenstein property, Germany has failed to respect the sovereignty and neutral-[p 12]ity of Liechtenstein and the legal rights of Liechtenstein and its nationals with respect to the property;

(b) by its failure to make compensation for losses suffered by Liechtenstein and its nationals, Germany is in breach of the rules of international law;

(c) consequently Germany has incurred international legal responsibility and is bound to provide appropriate assurances and guarantees of non-repetition, and to make appropriate reparation to Liechtenstein for the damage and prejudice suffered.

2. Liechtenstein further requests that the amount of compensation should, in the absence of agreement between the parties, be assessed and determined by the Court in a separate phase of the proceedings.”

On behalf of the Government of Germany,

in the Preliminary Objections:

“On the basis of the preceding Submissions, Germany summarizes its Preliminary Objections as follows:

(1) The case is outside the jurisdiction of the Court since

(a) there exists no dispute as between Liechtenstein and Germany in the sense required by the Statute of the Court and Article 27 of the European Convention for the Peaceful Settlement of Disputes of 29 April 1957;

(b) all the relevant facts occurred before the entry into force of the European Convention as between the Parties;

(c) the occurrences on which Liechtenstein bases its claims fall within the domestic jurisdiction of Germany.

(2) Liechtenstein’s Application is furthermore inadmissible since

(a) Liechtenstein’s claims have not been sufficiently substantiated;


(b) adjudication of Liechtenstein’s claims would require the Court to pass judgment on rights and obligations of the successor States of former Czechoslovakia, in particular the Czech Republic, in their absence and without their consent;

(c) the alleged Liechtenstein victims of the measures of confiscation carried out by Czechoslovakia have failed to exhaust the available local remedies.

For the reasons advanced, Germany requests the Court to adjudge and declare that:

-it lacks jurisdiction over the claims brought against Germany by the Principality of Liechtenstein, referred to it by the Application of Liechtenstein of 30 May 2001,

and/or that

- the claims brought against Germany by the Principality of Liechtenstein are inadmissible to the extent specified in the present Preliminary Objections.”

On behalf of the Government of Liechtenstein,

in the Written Statement of its observations and submissions on the preliminary objections raised by Germany: [p 13]

“For all these reasons, and reserving the right of the Principality of Liechtenstein to supplement them in view of any further German arguments, it is respectfully submitted:

(a) that the Court has jurisdiction over the claims presented in the Application of the Principality of Liechtenstein, and that they are admissible;

and correspondingly

(b) that the Preliminary Objections of Germany be rejected in their entirety.”

12. At the oral proceedings, the following submissions were presented by the Parties:

On behalf of the Government of Germany,

at the hearing of 17 June 2004:

“Germany requests the Court to adjudge and declare that:

-it lacks jurisdiction over the claims brought against Germany by the Principality of Liechtenstein, referred to it by the Application of Liechtenstein of 30 May 2001,

and that


- the claims brought against Germany by the Principality of Liechtenstein are inadmissible to the extent specified in its Preliminary Objections.”

On behalf of the Government of Liechtenstein,

at the hearing of 18 June 2004:

“For the reasons set out in its Written Observations and during the oral proceedings, the Principality of Liechtenstein respectfully requests the Court:

(a) to adjudge and declare that the Court has jurisdiction over the claims presented in its Application and that they are admissible;

and accordingly,

(b) to reject the Preliminary Objections of Germany in their entirety.”

***

13. During the Second World War Czechoslovakia was an allied country and a belligerent in the war against Germany. In 1945, it adopted a series of decrees (the “Beneš Decrees”), among them Decree No. 12 of 21 June 1945, under which “agricultural property” of “all persons belonging to the German and Hungarian people, regardless of their nationality” was confiscated. Under the terms of this Decree, “agricultural property” included, inter alia, buildings, installations and movable property pertaining thereto. The properties confiscated under Decree No. 12 comprised some owned by Liechtenstein nationals, including Prince Franz Josef II of Liechtenstein. These measures were contested by [p 14] Prince Franz Josef II in his personal capacity before the Administrative Court in Bratislava. On 21 November 1951, it held that the confiscations of the property of the Prince of Liechtenstein were lawful under the law of Czechoslovakia.

14. Following earlier Allied enactments concerning a reparations régime in general and German external assets and other property seized in connection with the Second World War in particular, a special régime dealing with the latter subject was created by Chapter Six of the Convention on the Settlement of Matters Arising out of the War and the Occupation, signed by the United States of America, the United Kingdom, France and the Federal Republic of Germany, at Bonn on 26 May 1952 (as amended by Schedule IV to the Protocol on the Termination of the Occupation Regime in the Federal Republic of Germany, signed at Paris on 23 October 1954) (hereinafter referred to as the “Settlement Convention”). This Convention entered into force on 5 May 1955.

Article 3 of Chapter Six of the Settlement Convention read as follows:


“1. The Federal Republic shall in the future raise no objections against the measures which have been, or will be, carried out with regard to German external assets or other property, seized for the purpose of reparation or restitution, or as a result of the state of war, or on the basis of agreements concluded, or to be concluded, by the Three Powers with other Allied countries, neutral countries or former allies of Germany.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3. No claim or action shall be admissible against persons who shall have acquired or transferred title to property on the basis of the measures referred to in paragraph 1 and 2 of this Article, or against international organizations, foreign governments or persons who have acted upon instructions of such organizations or governments.”

Article 5 of Chapter Six of the Settlement Convention provided that:

“The Federal Republic shall ensure that the former owners of property seized pursuant to the measures referred to in Articles 2 and 3 of this Chapter shall be compensated.”

15. The régime of the Settlement Convention was intended to be temporary until the problem of reparation was finally settled “by the peace treaty between Germany and its former enemies or by earlier agreements concerning this matter” (Article 1 of Chapter Six). A final settlement was brought about through the conclusion in 1990 of the Treaty on the Final Settlement with respect to Germany (signed at Moscow on 12 September 1990 and entered into force on 15 March 1991). The parties to this Treaty were the four former Occupying Powers, the Federal Republic of Germany and the German Democratic Republic. On 27 and 28 Septem-[p 15]ber 1990, an Exchange of Notes was executed between the three Western Powers and the Government of the Federal Republic of Germany (the parties to the Settlement Convention) under which that Convention would terminate simultaneously with the entry into force of the Treaty. Whereas that Exchange of Notes terminated the Settlement Convention itself, including Article 5 of Chapter Six (relating to compensation by Germany), it provided that paragraphs 1 and 3 of Article 3, Chapter Six, “shall, however, remain in force”.

16. In 1991, a painting by the seventeenth century Dutch artist Pieter van Laer was lent by a museum in Brno (Czechoslovakia) to a museum in Cologne (Germany) for inclusion in an exhibition. This painting had been the property of the family of the Reigning Prince of Liechtenstein since the eighteenth century; it was confiscated in 1945 by Czechoslovakia under the Beneš Decrees. The Administrative Court of Bratislava in 1951 dismissed the appeal by Prince Franz Josef II of Liechtenstein against the measures of confiscation pursuant to which his property, including the Pieter van Laer painting, had been seized (see paragraph 13 above). In 1991, Prince Hans-Adam II of Liechtenstein filed a lawsuit in the German courts in his personal capacity to have the painting sequestered and returned to him as his property (hereinafter referred to as the “Pieter van Laer Painting case”). The claim was dismissed by the Cologne Regional Court on 10 October 1995, by the Cologne Court of Appeal on 9 July 1996, by the Federal Court of Justice on 25 September 1997, and by the Federal Constitutional Court on 28 January 1998, on the basis that, under Article 3, Chapter Six, of the Settlement Convention, no claim or action in connection with measures taken against German external assets in the aftermath of the Second World War was admissible in German courts.

17. In 1998 Prince Hans-Adam II of Liechtenstein instituted proceedings before the European Court of Human Rights against Germany, claiming that the above decisions of the German courts violated his rights under Articles 6, paragraph 1, and 14 of the Convention for the Protection of Human Rights and Fundamental Freedoms of the Council of Europe, as well as Article 1 of Protocol No. 1 to that Convention. That Court, on 12 July 2001, held that there had been no violation of the Articles invoked by the Applicant.

***

18. It is recalled that in the present proceedings, Liechtenstein based the Court’s jurisdiction on Article 1 of the European Convention for the Peaceful Settlement of Disputes which provides that:

“The High Contracting Parties shall submit to the judgement of the International Court of Justice all international legal disputes [p 16] which may arise between them including, in particular, those concerning:

(a) the interpretation of a treaty;

(b) any question of international law;

(c) the existence of any fact which, if established, would constitute a breach of an international obligation;

(d) the nature or extent of the reparation to be made for the breach of an international obligation.”

Article 27 (a) of the European Convention for the Peaceful Settlement of Disputes reads as follows:

“The provisions of this Convention shall not apply to:

(a) disputes relating to facts or situations prior to the entry into force of this Convention as between the parties to the dispute”.

19. Germany has raised six preliminary objections to the jurisdiction of the Court and to the admissibility of Liechtenstein’s Application. According to the first objection put forward by Germany, there exists no dispute between Liechtenstein and Germany within the meaning of the
Statute of the Court and Article 27 of the European Convention for the Peaceful Settlement of Disputes. In its second objection, Germany argues that all the relevant facts occurred before the entry into force of the European Convention for the Peaceful Settlement of Disputes as between the Parties. Germany contends in its third objection that the European Convention for the Peaceful Settlement of Disputes has no application because the acts on which Liechtenstein bases its claims fall within the domestic jurisdiction of Germany. In its fourth objection, Germany submits that Liechtenstein’s claims have not been sufficiently substantiated as required by Article 40, paragraph 1, of the Statute of the Court and Article 38, paragraph 2, of the Rules of Court. Germany argues in its fifth objection that adjudication of Liechtenstein’s claims would require the Court to pass judgment on rights and obligations of the successor States of the former Czechoslovakia, in particular the Czech Republic, in their absence and without their consent. Finally, according to Germany’s sixth objection, the alleged Liechtenstein victims of the measures of confiscation carried out by Czechoslovakia have failed to exhaust the available local remedies.

In its written observations and final submissions during the oral proceedings, Liechtenstein requested the Court to reject Germany’s preliminary objections in their entirety.

**[p 17]

20. The Court will now consider Germany’s first objection that there is no dispute between itself and Liechtenstein.

*

21. Germany argues that there is no dispute between the Parties. Germany in particular observes that even though the facts that are at the core of the dispute lie in Czechoslovakia’s seizure of certain Liechtenstein property under the Beneš Decrees of 1945, Liechtenstein bases its claims before the Court on an alleged “change of position” by Germany in the 1990s as to the need to apply the Settlement Convention to that property, whilst Germany contends that such a change has never occurred. Germany maintains that a distinction is to be made between the issue of the lawfulness of the Czechoslovak expropriations and that of the jurisdiction of the German courts regarding this matter. Germany contends that on neither issue has it changed its position either before or after 1995: as to the first, it has never accepted the validity of the relevant Czechoslovak measures against Liechtenstein property; as to the second, the German courts have always held that they are barred by the Settlement Convention from adjudicating on the lawfulness of confiscation measures, and for the purposes of the application of Article 3 of Chapter Six of the Settlement Convention, they have always relied on the assessment of the expropriating State.

Germany further claims that it is not German acts related to Czechoslovak confiscations but the lawfulness of the Czechoslovak measures as such and the resulting obligations of compensation on the part of the successor States to the former Czechoslovakia that are in question. Even if all the factual statements by Liechtenstein were correct, they would not justify a claim to compensation against Germany; “[i]ssues of compensation are to be decided between the State confiscating foreign property and the State victim of such measures”.

Germany therefore concludes that the only dispute which exists is one between Liechtenstein and the successor States of the former Czechoslovakia.

22. Liechtenstein maintains that its dispute with Germany concerns Germany’s position, whereby for the first time in 1995 it began to treat Liechtenstein assets as German external assets for purposes of the Settlement Convention, thus infringing Liechtenstein’s neutrality and sovereignty. Liechtenstein also asserts that on numerous occasions since 1995 it has made its legal position known to the German Government, and on each occasion has met with opposition. This opposition, and the opposition of views on the question of whether or not there has been a change of position by the German Government with regard to Liechtenstein property, itself clearly evidences a dispute.[p 18]

Liechtenstein recognizes the existence of another dispute, one between itself and the Czech Republic, but observes that this does not negate the existence of a separate dispute between itself and Germany, based on Germany’s unlawful conduct in relation to Liechtenstein.

23. Liechtenstein contends further that Germany itself acknowledged the existence of the dispute between them. Liechtenstein thus submits that Germany recognized the existence of the Liechtenstein claims and a divergence of legal opinions over these claims, both in the course of bilateral consultations held in July 1998 and June 1999, and in a letter from the German Minister for Foreign Affairs to his Liechtenstein counterpart dated 20 January 2000. This letter stated that “[i]t [was] known that the German Government [did] not share the legal opinion” of the Government of Liechtenstein and “[did] not see a possibility to make compensation payments to the Principality of Liechtenstein for losses of property suffered as a result of post-war expropriations in former Czechoslovakia” as those measures “[could not] be attributed to Germany on a constructive legal basis”.

For its part, Germany denies that it acknowledged the existence of a dispute by participating in diplomatic consultations at the request of Liechtenstein. It argues that a discussion of divergent legal opinions should not be considered as evidence of the existence of a dispute in the sense of the Court’s Statute “before it reaches a certain threshold”.

*

24. According to the consistent jurisprudence of the Court and the Permanent Court of International Justice, a dispute is a disagreement on a point of law or fact, a conflict of legal views or interests between parties (see Mavrommatis Palestine Concessions, Judgment No. 2, 1924, P.C.I.J., Series A, No. 2, p. 11; Northern Cameroons, Judgment, I.C.J. Reports 1963, p. 27; Applicability of the Obligation to Arbitrate under Section 21 of the United Nations Headquarters Agreement of 26 June 1947, Advisory Opinion, I.C.J. Reports 1988, p. 27, para. 35; East Timor, Judgment, I.C.J. Reports 1995, pp. 99-100, para. 22). Moreover, for the purposes of verifying the existence of a legal dispute it falls to the Court to determine whether “the claim of one party is positively opposed by the other” (South West Africa, Preliminary Objections, Judgment, I.C.J. Reports 1962, p. 328).

25. The Court recalls that Liechtenstein has characterized its dispute with Germany as involving the violation of its sovereignty and neutrality by the Respondent, which, for the first time in 1995, treated Liechtenstein property confiscated under the Beneš Decrees as German external assets for the purposes of the Settlement Convention, notwithstanding Liechtenstein’s status as a neutral State. Germany for its part denies altogether the existence of a dispute with Liechtenstein. It asserts instead that “the subject-matter of this case” is the confiscation by Czechoslovakia in 1945 [p 19] of Liechtenstein property without compensation; Germany considers further that, in the case of Liechtenstein, German courts simply applied their consistent case law to what were deemed German external assets under the Settlement Convention. The Court thus finds that in the present proceedings complaints of fact and law formulated by Liechtenstein against Germany are denied by the latter. In conformity with well-established jurisprudence (see paragraph 24 above), the Court concludes that “[b]y virtue of this denial, there is a legal dispute” between Liechtenstein and Germany (East Timor (Portugal v. Australia), I.C.J. Reports 1995, p. 100, para. 22; Application of the Convention on the Prevention and Punishment of the Crime of Genocide, Preliminary Objections, Judgment, I.C.J. Reports 1996, p. 615, para. 29). The Court further notes that Germany’s position taken in the course of bilateral consultations and in the letter by the Minister for Foreign Affairs of 20 January 2000 has evidentiary value in support of the proposition that Liechtenstein’s claims were positively opposed by Germany and that this was recognized by the latter.

26. It remains for the Court to identify the subject-matter of the dispute before it. Upon examination of the case file, the Court finds that the subject-matter of the dispute is whether, by applying Article 3, Chapter Six, of the Settlement Convention to Liechtenstein property that had been confiscated in Czechoslovakia under the Beneš Decrees in 1945, Germany was in breach of the international obligations it owed to Liechtenstein and, if so, what is Germany’s international responsibility.

27. Having established the existence of a dispute between Liechtenstein and Germany and identified its subject-matter, the Court concludes that the first preliminary objection of Germany must be dismissed.

**
28. The Court will now examine Germany’s second preliminary objection that Liechtenstein’s Application should be rejected on the grounds that the Court lacks jurisdiction ratione temporis to decide the present dispute.

*

29. Germany asserts that were the Court to find that there exists a dispute, it would nevertheless fall outside the jurisdiction of the Court by virtue of Article 27 (a) of the European Convention for the Peaceful Settlement of Disputes (see paragraph 18 above). In its view, such a dispute would relate to facts or situations prior to 18 February 1980, the date when the European Convention for the Peaceful Settlement of Disputes entered into force between Germany and Liechtenstein. In Germany’s view, the Application should therefore be rejected. [p 20]

30. Germany contends that the key issue for the purpose of applying Article 27 (a) is not the date when this dispute arose, but whether the dispute relates to facts or situations that arose before or after the critical date. Only if these facts or situations took place after the critical date, that is after 1980, would the Court have jurisdiction ratione temporis under Article 27 (a). But since, in Germany’s view, this dispute relates to facts and situations that predate 1980, the Court lacks the requisite jurisdiction.

31. Germany claims that the property of Prince Franz Joseph II of Liechtenstein, including the painting by Pieter van Laer, as well as property belonging to other Liechtenstein nationals, was seized in Czechoslovakia pursuant to the Beneš Decrees. The Settlement Convention required Germany to bar any action in its courts that sought to challenge the legality of such confiscations. In Germany’s view, the lawsuit brought by Prince Hans-Adam II of Liechtenstein to recover the Pieter van Laer painting was governed by the provisions of the Settlement Convention. The dismissal of the lawsuit by various German courts, beginning with the decision of the Cologne Regional Court in 1995, acting in compliance with the provisions of that Convention, was in conformity with earlier decisions of German courts. According to Germany, its courts have consistently held that they lacked jurisdiction to evaluate the lawfulness of such confiscations. The dispute which arose in the 1990s with regard to the Pieter van Laer painting was directly related to the Settlement Convention and the Beneš Decrees; it had its real source, according to Germany, in facts and situations existing prior to the 1980 critical date.

32. Liechtenstein contends that until the decisions of the German courts in the Pieter van Laer Painting case, it was understood between Germany and Liechtenstein that Liechtenstein property confiscated pursuant to the Beneš Decrees could not be deemed to have been covered by the Settlement Convention because of Liechtenstein’s neutrality. German courts would therefore not be barred by that Convention from passing on the lawfulness of these confiscations. In Liechtenstein’s view, the decisions of the German courts in the 1990s with regard to the painting made clear that Germany no longer adhered to that shared view, and thus amounted to a change of position. It mattered not, according to Liechtenstein, whether the decisions in that case marked a change as such in Germany’s position or whether Germany was now applying its earlier case law to a new situation.

33. Liechtenstein maintains, inter alia, that, in so far as there was a change of position by Germany, the decisions of the German courts in the Pieter van Laer Painting case and the “positions taken by the German Government, in the period after 1995” gave rise to the present dispute. In these decisions and positions, Germany made clear for the first [p 21] time that it regarded Liechtenstein property as coming within the scope of the reparations régime of the Settlement Convention (see paragraph 14 above). These were the facts with regard to which the dispute arose. Prior thereto there was no dispute between Liechtenstein and Germany. The facts that triggered the present dispute were therefore not the Settlement Convention or the Beneš Decrees, but Germany’s decision in 1995 to apply the Settlement Convention to Liechtenstein property.

34. The foregoing conclusion, Liechtenstein argues, accords with the legal test for temporal jurisdiction applied by the Permanent Court of International Justice and by this Court, which is relevant to the interpretation of Article 27 (a) of the European Convention for the Peaceful Settlement of Disputes in this case. In Liechtenstein’s view, the Phosphates in Morocco case makes clear that the limits of temporal jurisdiction are to be construed not by looking at the source of the obligation said to have been violated or at the surrounding factual situation, but by focusing on the fact with regard to which the dispute arose, that is, the “fait générateur” of the dispute. According to Liechtenstein, the Permanent Court of International Justice adopted that same approach in the Electricity Company of Sofia and Bulgaria case, where it “distinguish[ed] between the source of the rights relied on by the Claimant and the source of the dispute; what matters is the point at which the rights are denied”. Liechtenstein further contends that, as the Right of Passage case indicates, it is only when the “parties ‘adopt clearly-defined legal positions’ that the dispute arises, and it arises in relation to the triggering event, not the whole legal and factual matrix against the background of which the event is to be understood”.

35. Germany submits that, contrary to Liechtenstein’s allegations, there was “no change of position” by Germany because the judicial decisions in the 1990s did not depart from prior German case law on the subject. In Germany’s view, there are thus no facts or legal situations that took place subsequent to the entry into force between the parties of the European Convention for the Peaceful Settlement of Disputes to which Liechtenstein can point to establish the jurisdiction of the Court.

36. Germany also suggests that the distinction between the source of the rights claimed by one of the parties and the source of the dispute, referred to by the Permanent Court of International Justice in the Electricity Company of Sofia and Bulgaria case and by the International Court of Justice in the Right of Passage case, is of no relevance to the present case. This is so, Germany submits, because none of the legal and factual situations “which are the real cause of the alleged dispute” can be attributed to or involve acts or decisions taken after 1980; rather, they [p 22] relate entirely to the legal situation created in the aftermath of the Second World War and, in particular, to “the confiscation of Liechtenstein property by Czechoslovakia in 1945 and thereafter and possible legal consequences of these confiscations”.


37. A further difference, according to Germany, between the Electricity Company of Sofia and Bulgaria and the Right of Passage cases, on the one hand, and the present case, on the other, is that in those two cases, the legal situation existing between the parties had been fully recognized by both sides before the act or omission by one party gave rise to the dispute. In the present case, by contrast, there was prior to 1995 no similar recognition of the legal situation existing between the two States. On the contrary, Germany considers that the present case and the Phosphates in Morocco case fall into the same category. In the Phosphates case, “the Court could not look into the matter because the legal situation had been exactly the same since long before the jurisdictional clause applied and no separable facts or legal situations were at issue”. According to Germany, that is also the situation in the present case. Here the legal régime applied by “German courts in 1995 and later was a legal régime applicable for Germany since 1955” by virtue of the Settlement Convention.

38. Liechtenstein disagrees with Germany’s interpretation of the jurisprudence applicable to this case. It argues that the temporal limitation expressed in Article 27 (a) of the European Convention for the Peaceful Settlement of Disputes “refers to the generating fact . . . which triggers the dispute”. In its view, the dispute was triggered neither by the Settlement Convention nor by the Beneš Decrees because, prior to the 1990s, that Convention had never been applied to neutral assets and thus gave rise to no dispute with neutral Liechtenstein. In Liechtenstein’s view, Germany’s decisions in the years from 1995 onwards were the origin and are at the heart of the present dispute. They are the facts to which the dispute relates.

*

39. Germany’s second preliminary objection requires the Court to decide whether, applying the provisions of Article 27 (a) of the European Convention for the Peaceful Settlement of Disputes, the present dispute relates to facts or situations that arose before or after the 1980 critical date.

40. As recalled by the Parties (see paragraphs 34 and 36 to 38 above), this Court and the Permanent Court of International Justice have dealt with a comparable issue in a number of cases. Thus, in the Phosphates in Morocco case, the French declaration accepting the Permanent Court of [p 23] International Justice’s jurisdiction spoke of “disputes which may arise after the ratification of the present declaration with regard to situations or facts subsequent to this ratification” (P.C.I.J., Series A/B, No. 74, p. 22). While the parties in that case agreed that the dispute arose subsequent to the date of the French declaration, the issue that divided them concerned the date of the “situations or facts” with regard to which the dispute arose, that is, whether it was prior or subsequent to the declaration. The Court found that the subject of the dispute was the so-called “monopolization of the Moroccan phosphates” (ibid., p. 25) and the inconsistency of that monopoly régime with earlier French treaty obligations. This régime was established by legislation adopted before the critical date. It was that legislation, the Court ruled, with regard to which the dispute arose.


41. In the Electricity Company of Sofia and Bulgaria case, the wording of the Belgian limitation ratione temporis was identical to the relevant language of the French declaration in the Phosphates in Morocco case. Here, too, the parties agreed that the dispute arose after the critical date, but they disagreed as to whether the “facts or situations” with regard to which the dispute arose were prior or subsequent to that date. In the Electricity Company case, Bulgaria argued that the awards of the Belgo-Bulgarian Mixed Arbitral Tribunal, which predated the critical date, had to be treated as the “situations” that gave rise to the dispute. The Permanent Court of International Justice rejected this argument and held that, while these awards constituted the source of the rights claimed by Belgium, they were not the source of the dispute because the parties had been in agreement throughout regarding their binding character. The Court explained this conclusion as follows:

“A situation or fact in regard to which a dispute is said to have arisen must be the real cause of the dispute. In the present case it is the subsequent acts with which the Belgian Government reproaches the Bulgarian authorities with regard to a particular application of the formula - which in itself has never been disputed - which form the centre point of the argument and must be regarded as constituting the facts with regard to which the dispute arose.” (P.C.I.J., Series A/B, No. 77, p. 82.)

Since these facts all took place after the critical date, the Court rejected the Bulgarian preliminary objection to its jurisdiction.

42. In the Right of Passage case, this Court had to deal with India’s preliminary objection ratione temporis. The objection was based on its declaration accepting the Court’s jurisdiction “over all disputes arising after 5 February 1930, with regard to situations or facts subsequent to [p 24] the same date”. Here the Court first found that the dispute arose in 1954, when India interfered with Portugal’s alleged right of passage over Indian territory to certain Portuguese enclaves. The Court turned next to the question of the date of the situations or facts with regard to which the dispute arose. Relying on the holding of the Permanent Court of International Justice in the Electricity Company of Sofia and Bulgaria case, the Court emphasized that in determining the facts or situations with regard to which a dispute has arisen, only those facts or situations are relevant that can be considered as being the source of the dispute, that is, its real cause. It then made the following finding:

“Up to 1954 the situation of those territories may have given rise to a few minor incidents, but passage had been effected without any controversy as to the title under which it was effected. It was only in 1954 that such a controversy arose and the dispute relates both to the existence of a right of passage to go into the enclaved territories and to India’s failure to comply with obligations which, according to Portugal, were binding upon it in this connection. It was from all of this that the dispute referred to the Court arose; it is with regard to all of this that the dispute exists. This whole, whatever may have been the earlier origin of one of its parts, came into existence only after 5 February 1930.” (I.C.J. Reports 1960, p. 35.)

43. The text of Article 27 (a) of the European Convention for the Peaceful Settlement of Disputes (see paragraph 18 above) does not differ in substance from the temporal jurisdiction limitations dealt with in those cases. In particular, no consequence can be drawn from the use of
the expressions “with regard to” or “relating to” which have been employed indifferently in the various texts in question. The Court notes further that in the Phosphates in Morocco case, the Electricity Company in Sofia and Bulgaria case and the Right of Passage case, the Permanent Court of International Justice and this Court were called upon to interpret unilateral declarations accepting the Court’s jurisdiction under its Statute, whereas, in the present case, the Court has to interpret a multilateral Convention. Without pronouncing in any more general sense upon the extent to which such instruments are to be treated comparably, the Court finds no reason on this ground to interpret differently the phrase in issue. Nor have the Parties suggested otherwise.

Accordingly, the Court finds its previous jurisprudence on temporal limitations of relevance in the present case.

44. In interpreting the latter ratione temporis limitations, this Court and the Permanent Court of International Justice before it emphasized that [p 25]

“[t]he facts or situations to which regard must be had . . . are those with regard to which the dispute has arisen or, in other words, as was said by the Permanent Court in the case concerning the Electricity Company of Sofia and Bulgaria, only ‘those which must be considered as being the source of the dispute’, those which are its ‘real cause’” (Right of Passage over Indian Territory, Merits, Judgment, I.C.J. Reports 1960, p. 35).

45. Thus in the Phosphates in Morocco case, the facts with regard to which the dispute arose were found to be legislative measures that predated the critical date. The objection ratione temporis was accordingly upheld. In the Electricity Company of Sofia and Bulgaria and the Right of Passage cases, the disputes were found to have had their source in facts or situations subsequent to the critical date and thus the objections ratione temporis were rejected.

46. The Court considers that, in so far as it has to determine the facts or situations to which this dispute relates, the foregoing test of finding the source or real cause of the dispute is equally applicable to this case.

47. The Court will now consider whether the present dispute has its source or real cause in the facts or situations which occurred in the 1990s in Germany and, particularly, in the decisions by the German courts in the Pieter van Laer Painting case, or whether its source or real cause is the Beneš Decrees under which the painting was confiscated and the Settlement Convention which the German courts invoked as ground for declaring themselves without jurisdiction to hear that case.

48. The Court observes that it is not contested that the present dispute was triggered by the decisions of the German courts in the aforementioned case. This conclusion does not, however, dispose of the question the Court is called upon to decide, for under Article 27 (a) of the European Convention for the Peaceful Settlement of Disputes, the critical issue is not the date when the dispute arose, but the date of the facts or situations in relation to which the dispute arose.

49. In the Court’s view, the present dispute could only relate to the events that transpired in the 1990s if, as argued by Liechtenstein, in this period, Germany either departed from a previous common position that the Settlement Convention did not apply to Liechtenstein property, or if German courts, by applying their earlier case law under the Settlement Convention for the first time to Liechtenstein property, applied that Convention “to a new situation” after the critical date.

50. With regard to the first alternative, the Court has no basis for concluding that prior to the decisions of the German courts in the Pieter van Laer Painting case, there existed a common understanding or agreement between Liechtenstein and Germany that the Settlement Con-[p 26] vention did not apply to the Liechtenstein property seized abroad as “German external assets” for the purpose of reparation or as a result of the war. The issue whether or not the Settlement Convention applied to Liechtenstein property had not previously arisen before German courts, nor had it been dealt with prior thereto in intergovernmental talks between Germany and Liechtenstein. Moreover, German courts have consistently held that the Settlement Convention deprived them of jurisdiction to address the legality of any confiscation of property treated as German property by the confiscating State (see Judgment of the German Federal Court of Justice (Bundesgerichtshof) of 11 April 1960, II ZR 64/58; see also Judgment of the German Federal Court of Justice (Bundesgerichtshof) of 13 December 1956 (AKU case), II ZR 86/54). In the Pieter van Laer Painting case, the German courts confined themselves to stating that the Settlement Convention was applicable in cases of confiscation under Decree No. 12, as with the other Beneš Decrees, and that, consequently, it was also applicable to the confiscation of the painting. Liechtenstein’s contention regarding the existence of a prior agreement or common understanding and an alleged “change of position” by Germany cannot therefore be upheld.

51. As to Liechtenstein’s contention that the dispute relates to the application, for the first time, of pre-1990 German jurisprudence to Liechtenstein property in the 1990s, the Court points out that German courts did not face any “new situation” when dealing for the first time with a case concerning the confiscation of Liechtenstein property as a result of the Second World War. The Court finds that this case, like previous ones on the confiscation of German external assets, was inextricably linked to the Settlement Convention. The Court further finds that the decisions of the German courts in the Pieter van Laer Painting case cannot be separated from the Settlement Convention and the Beneš Decrees, and that these decisions cannot consequently be considered as the source or real cause of the dispute between Liechtenstein and Germany.

52. The Court concludes that, although these proceedings were instituted by Liechtenstein as a result of decisions by German courts regarding a painting by Pieter van Laer, these events have their source in specific measures taken by Czechoslovakia in 1945, which led to the confiscation of property owned by some Liechtenstein nationals, including Prince Franz Jozef II of Liechtenstein, as well as in the special régime created by the Settlement Convention. The decisions of the German courts in the 1990s dismissing the claim filed by Prince Hans-Adam II of Liechtenstein for the return of the painting to him were taken on the basis of Article 3, Chapter Six, of the Settlement Convention. While these decisions triggered the dispute between Liechtenstein and Germany, the [p 27] source or real cause of the dispute is to be found in the Settlement Convention and the Beneš Decrees. In light of the provisions of Article 27 (a) of the European Convention for the Peaceful Settlement of Disputes, Germany’s second preliminary objection must therefore be upheld.

***

53. Having dismissed the first preliminary objection of Germany, but upheld its second, the Court finds that it is not required to consider Germany’s other objections and that it cannot rule on Liechtenstein’s claims on the merits.

***

54. For these reasons,

The Court,

(1) (a) by fifteen votes to one,

Rejects the preliminary objection that there is no dispute between Liechtenstein and Germany;

In favour: President Shi; Vice-President Ranjeva; Judges Guillaume, Koroma, Vereshchetin, Higgins, Parra-Aranguren, Kooijmans, Rezek, Al-Khasawneh, Buergenthal, Elaraby, Owada, Tomka; Judge ad hoc Sir Franklin Berman;

Against: Judge ad hoc Fleischhauer;

(b) by twelve votes to four,

Upholds the preliminary objection that Liechtenstein’s Application should be rejected on the grounds that the Court lacks jurisdiction ratione temporis to decide the dispute;

In favour: President Shi; Vice-President Ranjeva; Judges Guillaume, Koroma, Vereshchetin, Higgins, Parra-Aranguren, Rezek, Al-Khasawneh, Buergenthal, Tomka; Judge ad hoc Fleischhauer;

Against: Judges Kooijmans, Elaraby, Owada; Judge ad hoc Sir Franklin Berman;

(2) by twelve votes to four,

Finds that it has no jurisdiction to entertain the Application filed by Liechtenstein on 1 June 2001.

In favour: President Shi; Vice-President Ranjeva; Judges Guillaume, Koroma, Vereshchetin, Higgins, Parra-Aranguren, Rezek, Al-Khasawneh, Buergenthal, Tomka; Judge ad hoc Fleischhauer;

Against: Judges Kooijmans, Elaraby, Owada; Judge ad hoc Sir Franklin Berman. [p 28]

Done in English and in French, the English text being authoritative, at the Peace Palace, The Hague, this tenth day of February, two thousand and five, in three copies, one of which will be placed in the archives of the Court and the others transmitted to the Government of the Principality of Liechtenstein and the Government of the Federal Republic of Germany, respectively.

(Signed) Shi Jiuyong,
President.

(Signed) Philippe Couvreur,
Registrar.

Judges Kooijmans, Elaraby and Owada append dissenting opinions to the Judgment of the Court; Judge ad hoc Fleischhauer appends a declaration to the Judgment of the Court; Judge ad hoc Sir Franklin Berman appends a dissenting opinion to the Judgment of the Court.

(Initialled) J.Y.S.

(Initialled) Ph.C. [p 29]


DISSENTING OPINION OF JUDGE KOOIJMANS

Other preliminary objections without merit.

1. To my regret, I find myself unable to subscribe to the Court’s finding that Germany’s second preliminary objection must be upheld, and that it thus has no jurisdiction to entertain Liechtenstein’s Application. In the following pages, I will state the reasons for my disagreement with the Court’s conclusion. Since I am of the opinion that the Court has jurisdiction and that Liechtenstein’s Application is admissible, I will subsequently consider -- albeit briefly – the preliminary objections raised by Germany which have not been dealt with by the Court.

2. The present case epitomizes the need to distinguish sharply between preliminary issues and matters of substance. In their reasoning on the preliminary objections, both Parties to this rather peculiar case have used arguments which actually belong to the merits. That is perhaps unsurprising: the interpretation and application of the relevant provisions of the 1952 Settlement
Convention, which are at the centre of the dispute, are also of relevance for the consideration of preliminary questions, in particular, those involved in the second and fifth objections. That makes it all the more important not to confuse preliminary or mainly procedural matters and substantive issues.

In the following, I will try to confine myself strictly to what I consider to be the preliminary issues. Whatever my views on the validity of Liechtenstein’s claims may be, they are not relevant to the present stage of the proceedings. Since the case will not reach the merits phase, I will refrain from any comments in that respect.

A. The subject-matter of the dispute

3. I share the Court’s view that Germany’s first preliminary objection, according to which there is no dispute between the Parties to the case, [p 30] must be dismissed. Liechtenstein claims that Germany has breached obligations owed to it under international law; Germany emphatically denies this claim. As the Court states, Liechtenstein’s claim was positively opposed by Germany,
and there is credible and convincing evidence that, on various occasions, Germany recognized the existence of a dispute (Judgment, para. 25).

4. Germany has reproached Liechtenstein for artificially transforming its long-standing dispute with Czechoslovakia and its successor State(s) about the confiscation of Liechtenstein property under the Beneš Decrees -- the alleged unlawfulness of this confiscation is not a matter of dispute between Liechtenstein and Germany ¾ into a dispute with Germany. This contention makes it all the more necessary to determine the subject-matter of the dispute which has been brought before the Court. In the Right of Passage case, where the parties were as much in disagreement as to what the legal dispute before the Court was as in the present case, the Court stated, “[i]n order to form a judgment as to the Court’s jurisdiction it is necessary to consider what is the subject of the dispute” (Right of Passage over Indian Territory (Portugal v. India), I.C.J.Reports 1960, p. 33); and, as in the present case, the Court did so, before dealing with the
preliminary objection concerning a limitation ratione temporis.

5. In its Application, Liechtenstein describes the dispute as concerning

“decisions of Germany, in and after 1998, to treat certain property of Liechtenstein nationals as German assets having been ‘seized for the purposes of reparation or restitution, or as a result of the state of war [this wording reproduces that used in the 1952 Convention on the Settlement of Matters Arising out of the War and the Occupation, hereinafter, “Settlement Convention”] . . . without ensuring any compensation for the loss of that property to its owners, and to the detriment of Liechtenstein itself” (Application of the Principality of Liechtenstein, para. 1).

Whereas Germany contends that its courts had no choice but to apply Article 3, Chapter Six, of the Settlement Convention in the Pieter Van Laer Painting case (as described in paragraph 16 of the Judgment), Liechtenstein maintains that by so doing they violated Liechtenstein’s rights under general international law, thus engaging Germany’s international responsibility.

The subject-matter of the dispute is, therefore, not whether Germany was under a treaty obligation to apply the relevant provisions of the Settlement Convention to property confiscated during or after the Second World War by Allied States, but whether Germany could lawfully apply it to confiscated property belonging to nationals of a State which remained neutral during that war and which, moreover, is not a party to that Convention. [p 31]

6. Likewise, the relevant question is not whether the German courts were obliged or entitled under international law to apply a legality test to Czechoslovak expropriations of assets of Liechtenstein nationals. Counsel for Germany stated, “[l]eaving aside the issue of the Settlement
Convention, German courts would have applied rules of private international law and the international law of confiscations. They would have rejected any claim concerning movable property confiscated more than 50 years ago.” (CR 2004/24, p. 28, para. 75; see also Preliminary
Objections of the Federal Republic of Germany, pp. 56-59, paras. 91-95.) “Leaving aside the Settlement Convention” would, however, transform the dispute into a completely different one, which has not been submitted to the Court. The question the Court is asked to answer is whether
the German authorities could lawfully apply the Settlement Convention to neutral assets or – to put it differently -- whether neutral assets could be considered as “German external assets or other property, seized for the purpose of reparation or restitution, or as a result of the state of war” for the purposes of applying the Settlement Convention. From this point of view, the legality or illegality of the confiscation of Liechtenstein property under the Beneš Decrees is irrelevant, and the Court is not asked to consider that issue.

7. For these reasons, I agree with the Court’s identification of the subject-matter of the dispute in paragraph 26 of the Judgment.
B. The limitation ratione temporis

8. Once the subject of the dispute has been defined, it becomes possible to consider whether that dispute relates “to facts or situations prior to the entry into force” of the 1957 European Convention on Dispute Settlement and thus, by virtue of its Article 27 (a), is excluded from the jurisdiction of the Court, as Germany maintains in its second preliminary objection. The critical date in this respect is 18 February 1980, the date on which the European Convention entered into force as between the two States.

9. The Parties agree that the present controversy between them has arisen not earlier than 1995. According to Germany, however, it relates to facts or situations dating from 1945, the year when the Beneš Decrees were promulgated; or from 1955, the year of the entry into force of the Settlement Convention; or from the consistent application of the latter by the German courts – all of which predate the critical date. Liechtenstein, for its part, contends that the temporal limitation
of Article 27 (a) of the European Convention on Dispute Settlement must be interpreted as referring to facts or situations with regard to which the dispute arose: [p 32] “what is . . . the ‘definitive act which would, by itself, directly involve international responsibility’” (CR 2004/25, p. 25, para. 29). In this respect, Liechtenstein has referred to a common position of the Parties and a subsequent change of position by the German authorities which allegedly occurred in the years after 1990 (Application of the Principality of Liechtenstein, para. 9).

10. By so doing, Liechtenstein, in my view, has obscured the relevant issues. Both Germany and Liechtenstein may have considered or still consider the confiscation of Liechtenstein property under the Beneš Decrees as unlawful, but this is a matter which -- I repeat -- is not relevant to the
present dispute. At no time was there a common position, or even an explicit or implicit unilateral one on the part of Germany, on the question of whether seized or confiscated property of nationals of neutral States was covered by the 1952 Settlement Convention (see Memorial of the Principality of Liechtenstein, p. 62, paras. 3.15 and 3.16). Consequently, there was no position which, in the years after 1990, could have been changed by the German authorities. That issue simply had not presented itself.

11. The Court, therefore, correctly observes that it

“has no basis for concluding that prior to the decisions of the German courts in the Pieter van Laer Painting case, there existed a common understanding or agreement between Liechtenstein and Germany that the Settlement Conventiondid not apply to the Liechtenstein property seized abroad as ‘German external assets’ for the purposes of reparation as a result of the war” (Judgment, para. 50).

In the same paragraph, however, the Court, without much argument, states,

“[m]oreover, German courts have consistently held that the Settlement Convention deprived them of jurisdiction to address the legality of any confiscation of property treated as German property by the confiscating State”.

It is this sentence which fails to appreciate properly the true subject-matter of the dispute: the Court’s observation does not constitute evidence of already existing case law with regard to seized or confiscated neutral property, nor of an unaltered position of Germany in this regard.

12. Germany argues that it has consistently interpreted Article 3, Chapter Six, of the Settlement Convention as barring German courts from looking into the lawfulness of any measures against property considered German property by the confiscating State. In this respect, Germany refers, in particular, to the decision of the Federal Court of Justice of 11 April 1960 (Preliminary Objections of the Federal Republic of Germany, p. 18, paras. 20-21; Ann. 3, p. 46) as being pivotal since, in that decision, the Court stated that it is the intention of the authority of the foreign country to confiscate property as German property which is decisive for the application of this Article of the Settlement Convention. According to Germany, this case law has merely been confirmed by the court decisions in the Pieter van Laer Painting case (Preliminary Objections of the Federal Republic of Germany, p. 54, para. 87). The alleged change of position is, therefore, said to be a fabrication by Liechtenstein.

13. However, the pivotal issue is not that the German courts in the Pieter van Laer Painting case confirmed the previous case law, but that they applied it -- for the first time -- to neutral assets, and thus introduced a new element. In this respect, it is important to analyse the decision of the German Federal Court of 11 April 1960 since, of all the decisions cited, it is most analogous to the decisions in the Pieter van Laer Painting case. In 1960, the Court stated,

“[e]ven if the conditions of Article 3 paragraph 3 of Chapter Six Settlement Convention are not fulfilled, German courts lack jurisdiction in a case in which the Plaintiff is trying to raise an objection against measures mentioned in Article 3, paragraph 1 of Chapter Six Settlement Convention . . . For the application of this provision it is sufficient that the assets were seized as German assets.”(Preliminary Objections of the Federal Republic of Germany, Ann. 3, pp. 47-48.)

14. The underlying facts (as far as I have been able to ascertain them) make clear that this decision cannot support the argument that the present dispute before the Court relates to facts and situations prior to 1980. In the 1960 case, the plaintiff, a non-German national, claimed that the defendant did not have title to the assets at the time when they were seized under a United States Vesting Order based upon the Trading with the Enemy Act. The plaintiff claimed that these assets had belonged to her and, therefore, that the defendant could not raise a civil claim concerning them. The German Federal Court of Justice rejected the claim, invoking Article 3, Chapter Six, of the Settlement Convention: “whether the assets seized . . . were in fact German or foreign assets is to be decided exclusively by the State which has seized the assets” (ibid., p. 48).

15. However, in the 1960 case, the assets had been seized as assets belonging to a German national, and thus the application of the Settlement Convention was appropriate since the seizure itself came squarely within the definition of paragraph 1 of Article 3. In this respect, it was not relevant that in actual fact the assets probably had not belonged to the German defendant, who had perhaps mistakenly been considered to be the owner, but to a non-national of Germany. [p 34]

In this decision, therefore, the Federal Court did not apply the Settlement Convention to the confiscation or seizure of assets which at the time undoubtedly belonged to nationals of a neutral
State.

16. I respectfully disagree with the Court when it “points out that German courts did not face any ‘new situation’ when dealing for the first time with a case concerning the confiscation of Liechtenstein property as a result of the Second World War” and finds that “this case, like previous ones on the confiscation of German external assets, was inextricably linked to the Settlement Convention” (Judgment, para. 51).

17. In my view, this statement is beside the point, since it completely ignores the issue of whether the Settlement Convention can in any way be considered as intended, at the time of its conclusion, to be applicable to assets seized by the confiscating State as “German property for the purpose of reparation or restitution, or as a result of the state of war”, whereas in actual fact these assets belonged to -- and had belonged during the whole period of that state of war -- to nationals of a neutral State. An affirmative answer to that question -- which would in any case be part of the merits -- would seriously affect the rights of neutrals under international law, and such a decision had not been taken by German courts previously.

18. My conclusion, therefore, can only be that the court decisions in the Pieter van Laer Painting case applied the Settlement Convention to neutral assets for the very first time, and that this introduced the new element I referred to earlier ¾ or, to use the words of the Court, that the German courts faced a “new situation”.

19. For the present phase of the proceedings, it is also not relevant that Germany contends that the then Reigning Prince’s claim in the Pieter van Laer Painting case would have been rejected anyhow, even without the application of the Settlement Convention. Germany refers in this respect to a decision of the Federal Court of Justice of 1991, where the claim of the plaintiffs was rejected on the basis of, inter alia, international expropriation law (Preliminary Objections of the Federal Republic of Germany, pp. 56-57, paras. 91-92; Ann. 4, p. 62; in that case, the Settlement Convention was not applicable since it concerned expropriations carried out in the former Soviet Zone of Occupation (East Germany) and thus not German external assets).

20. As I stated previously, the question of whether Liechtenstein is entitled to compensation by Germany, and, if so, on what basis, is a matter for the merits and has no relation to the question of whether the facts or situations to which the dispute about the application of the Settlement Convention relates are prior to the critical date. [p 35]

21. It is undoubtedly true that, as the Court states, the decisions of the German courts in the Pieter van Laer Painting case cannot be separated from the Beneš Decrees and the Settlement Convention, which all predate the 1980 critical date, but I have serious doubts as to whether this justifies the conclusion that “these decisions cannot consequently be considered as the source or real cause of the dispute” (Judgment, para. 51). The Court, before coming to this conclusion, has
analysed its case law and that of its predecessor, the Permanent Court of International Justice, concerning similar temporal limitations in declarations made under Article 36, paragraph 2, of the Statute (Judgment, paras. 40-42). I consider this analysis useful, even if it has to be admitted that the various Court decisions are focused on the specific case at hand and, therefore, do not reflect a transparent general policy. I cannot, however, subscribe to the conclusion the Court draws from this analysis.

22. The Court evidently sees an analogy between the present case and the Phosphates in
Morocco case (Italy v. France). In that case, the Permanent Court of International Justice noted that “situations or facts subsequent to [the critical date in 1931] could serve to found the Court’s
compulsory jurisdiction only if it was with regard to them that the dispute arose” (P.C.I.J., Series
A/B, No. 74, 1938, p. 24). It then found that a number of dahirs (legislative acts), adopted in 1920 and which allegedly were unlawful, constituted the essential facts which really gave rise to the dispute. Such “facts”, by reason of their date, fell outside the Court’s jurisdiction (ibid., p. 26).

Italy further relied on an alleged denial of justice to its nationals which was said to have become definitive as a result of certain acts subsequent to the critical date. The Court, however, observed that that part of the claim could not be separated from a decision of the Department of Mines, based on the 1920 dahirs and taken in 1925; an examination of that complaint, therefore, could not be undertaken either without extending the Court’s jurisdiction to a fact which, by reason of its date, was not subject thereto (ibid., p. 29).

23. I interpret this latter part of the Judgment as implying that, if the decision of the Department of Mines had been taken after the critical date, the Court would not have considered the temporal limitation applicable to that part of the Italian claim, in spite of the fact that that decision had been based on the 1920 dahirs. While there are undoubtedly differences between an administrative act and a court decision, that situation is comparable to the present dispute, where the Settlement Convention, which came into force prior to the critical date, was applied for the first time to neutral assets after the critical date.

24. This reading would also bring the present dispute into line with that of the Electricity Company of Sofia and Bulgaria case (Belgium v. Bulgaria). In that case, the Permanent Court of
International Justice stated,

“[i]t is true that a dispute may presuppose the existence of some prior situation or fact, but it does not follow that the dispute arises in regard to that situation or fact. A situation or fact in regard to which a dispute is said to have arisen must be the real cause of the dispute.” (P.C.I.J. Series A/B, No. 77, 1939, p. 82.)

In the present case, the “real cause of the dispute” (“le fait générateur du différend”) is the application by the German authorities of the Settlement Convention to the assets of nationals of a State which was neutral during the Second World War.

25. For all the above-mentioned reasons, I cannot but conclude that Germany’s second preliminary objection cannot be upheld. In particular, I dissociate myself from the Court’s finding that “[w]hile these decisions triggered the dispute between Liechtenstein and Germany, the source or real cause of the dispute is to be found in the Settlement Convention and the Beneš Decrees” (Judgment, para. 52). That conclusion, in my view, ignores the “new situation” established by these Court decisions.

26. Of course, the Court could have concluded, as it did in the Right of Passage case, that it is not, at this stage, in a position to determine what the relevant facts or situations are, since that requires a further consideration of the 1952 Settlement Convention and its interpretation or application, which could “entail the risk of prejudging some of the issues closely connected with the merits” (I.C.J. Reports 1957, p. 152). If the Court’s finding had consequently been that the objection does not have an exclusively preliminary character, I certainly would not have cast a negative vote. Regrettably, the present decision of the Court leaves me no choice.

C. The other preliminary objections

27. I will now deal -- in a rather summary fashion -- with the remaining preliminary objections. I do so pour acquis de conscience and as a logical consequence of my disagreement with the Court’s decision on the second objection.

28. In its third objection, Germany claims that the dispute concerns questions which, under international law, are solely within the domestic jurisdiction of States, and that the Application is thus excluded from the Court’s jurisdiction by Article 27 (b) of the European Convention on Dispute Settlement, which provides that the Convention shall not apply to “disputes concerning questions which by international law are solely within the domestic jurisdiction of States”.

29. Both Parties have relied extensively in their arguments on rules and principles of international law. The Respondent itself has consistently invoked its obligations under international agreements and arrangements. The dispute can, therefore, only be resolved by having recourse to [p 37] international law, which takes the matter out of the ambit of domestic jurisdiction. As the Permanent Court of International Justice observed in its Advisory Opinion in the case concerning the Tunis and Morocco Nationality Decrees:

“once it appears that the legal grounds relied on are such as to justify the provisional conclusion that they are of judicial importance for the dispute submitted . . . the matter, ceasing to be one solely within the domestic jurisdiction of the State, enters the domain governed by international law” (1923, P.C.I.J., Series B, No. 4, p. 26;emphasis added).

The third objection thus fails.

30. Just as unfounded, in my view, is Germany’s fourth objection, namely, that Liechtenstein’s claims are not sufficiently substantiated. Germany appears to be perfectly aware of the object and scope of Liechtenstein’s claims, and this is shown by its arguments. In the second round of the oral hearings, counsel for Liechtenstein took great pains in elucidating what was to be understood by the claim, even if, in so doing, he went deep into the merits.

31. The final sentence of Article 38, paragraph 2, of the Rules of Court provides that the application shall “specify the precise nature of the claim, together with a succinct statement of the facts and grounds on which the claim is based”. This provision is based on a formula adopted by the Consultative Committee of Jurists in 1920:

“Des conclusions ne sont pas encore prises sous leur forme définitive dans la requête, celle-ci ne devant donner qu’une indication d’ordre general suffisante pour préciser le litige et permettre à l’instance de s’ouvrir.” (G. Guyomar, Commentaire du Règlement de la Cour internationale de Justice, 1983, p. 236.)

In my view, Liechtenstein’s Application, as elaborated in its Memorial, meets this requirement in a satisfactory way, even if its claims are not fully substantiated with regard to the legal position of each and every Liechtenstein national mentioned.

32. In its fifth preliminary objection, Germany submits that the Court, if it found that it has jurisdiction, should have refrained from exercising it, since Liechtenstein’s claim would have made it necessary for the Court to decide on the legality or illegality of acts of a third State which has not given its consent to the present proceedings (the Czech Republic as the successor state of Czechoslovakia).

In the present case, the Court should, therefore, apply its ruling in the Monetary Gold case, where it stated that the legal interests of a third State (Albania) would “not only be affected by a decision, but would form the very subject-matter of the decision” (Monetary Gold Removed from
Rome in 1943, Judgment, I.C.J. Reports 1954, p. 32), thus establishing the so-called “indispensable third party” principle. [p 38]

33. Liechtenstein denies that the alleged unlawfulness of the Beneš Decrees is “the very subject-matter of the dispute”. In its view, the subject-matter of the dispute is that Germany has brought Liechtenstein assets under the reparations régime of Article 3, Chapter Six, of the Settlement Convention. The only question Liechtenstein asks the Court to answer is to determine whether Germany was entitled to do so. That answer can be given without considering the question of whether the Beneš Decrees were in conformity with international law (CR 2004/25, pp. 54-55, para. 15).

34. As I stated previously, the claim as brought by Liechtenstein asks the Court to determine whether Germany acted wrongfully by treating Liechtenstein assets, for the first time in 1995, as German external assets for the purposes of the Settlement Convention, thereby infringing Liechtenstein’s neutrality and sovereignty. With respect to this claim, the Beneš Decrees are mere facts, the legality or illegality of which are not the subject-matter of the dispute. The Court could therefore, in my view, have given a declaratory judgment on Liechtenstein’s claim.

Of course, the Czech Republic could have asked permission to intervene in accordance with Article 62 of the Statute. But, as the Court has stated,

“the absence of such a request in no way precludes the Court from adjudicating upon the claims submitted to it, provided that the legal interests of a third State which may possibly be affected do not form the very subject-matter of the decision that is applied for” (Phosphate Lands in Nauru (Nauru v. Australia), I.C.J. Reports 1992, p. 261, para. 54).

35. Likewise, the other parties to the 1952 Settlement Convention and to the Exchange of Notes of 27 and 28 September 1990, which kept in force the provisions of the Convention relevant to the present case, could have intervened under Article 63 of the Statute if the case had come to the merits. That issue would, however, have provided no reason for upholding the fifth preliminary
objection.

36. However, Liechtenstein asked not only for a declaratory judgment but also for compensation. That part of the claim is rather complicated, and it cannot be excluded that, in dealing with this question, the lawfulness of the Beneš Decrees could not have been left unconsidered. That, however, is part of the merits. Nevertheless, it would have been prudent to observe, as was done in the Nauru case, that the Court’s ruling in the present stage of the proceedings “does not in any way prejudge the merits” (ibid., p. 262, para. 56), or to have joined the objection to the merits as not possessing an exclusively preliminary character.

37. Finally, Germany contends that Liechtenstein’s application is not admissible since the Liechtenstein nationals have not exhausted the available local remedies. [p 39]

38. Liechtenstein’s Application contains a “mixed” claim, combining claims in its own right and also in the exercise of diplomatic protection of some of its citizens. In so far as this claim refers to the infringement of its sovereignty and neutral status, there is no requirement of the exhaustion of local remedies since that part of the claim is brought by the Applicant in its own right (Avena and Other Mexican Nationals (Mexico v. United States of America), I.C.J. Reports 2004, p. 36, para. 40).

39. In so far as Liechtenstein’s claim is a claim in the exercise of diplomatic protection of its nationals, it can safely be maintained that the then Reigning Prince has exhausted all available local remedies, including an appeal to the European Court of Human Rights. Liechtenstein’s claim on his behalf is thus also admissible. With regard to the other Liechtenstein nationals, Liechtenstein submits that in their cases exhaustion of local remedies is not necessary, as these have already been shown to be futile in the case of the then Reigning Prince. That argument may sound persuasive, but it does not answer the underlying questions of why and on what ground the other Liechtenstein nationals could have been expected to seek redress from a German court. Unlike the Prince, whose former property -- the Van Laer painting -- was present on German territory, these other Liechtenstein nationals have no cause for action in the German courts, since their property never found itself within German national jurisdiction; and there is no decision against which they could have appealed.

40. That issue, however, is not an issue with regard to which the requirement of the exhaustion of local remedies is relevant. The question is simply whether Liechtenstein’s contention of a breach by Germany of its obligations vis-à-vis those other Liechtenstein nationals can pass legal scrutiny, but that is a matter for the merits, viz. whether Germany as a result of the decisions of its courts has breached an international obligation towards them.

41. Since Liechtenstein claims in its own right and also in the exercise of diplomatic protection on behalf of one of its citizens -- the then Reigning Prince -- who has exhausted all local remedies, Germany’s sixth preliminary objection has no merit.

42. In conclusion, I repeat my view that the Court has jurisdiction to entertain the case and that Liechtenstein’s Application is admissible.

(Signed) Pieter H. KOOIJMANS. [p 40]


DISSENTING OPINION OF JUDGE ELARABY

Preliminary objection to jurisdiction of Court ratione temporis -- Context and wording of limitation ratione temporis may have justified departure from “real cause” test adopted in prior cases -- Court’s conclusion that real cause of dispute was in facts or situations prior to critical date wrong on the facts --Court should have joined objection to its jurisdiction ratione temporis to merits -- Court’s disposal of case in limine, after it had recognized that there was a dispute between the Parties, not a positive contribution to settlement of international disputes.

1. The Court’s finding that it lacks jurisdiction ratione temporis and consequently that it has no jurisdiction to entertain Liechtenstein’s Application prompts me to append this dissenting opinion in order to clarify the reasons for which I cast a dissenting vote.

2. The Court based its conclusion that it has no jurisdiction ratione temporis on two premises:

(i) under Article 27 (a) of the European Convention for the Peaceful Settlement of Disputes,
the Court does not have jurisdiction over “disputes relating to facts or situations prior to
the entry into force of this Convention as between the parties to the dispute [i.e. 1980]”;

(ii) the case law of this Court and of its predecessor have established that the facts or situations that are relevant to a ratione temporis analysis are those that constitute the “source or real cause” of the dispute (Judgment, para. 46);

3. In applying the exclusion of jurisdiction ratione temporis, the Court rightly recognized that “the critical issue is not the date when the dispute arose, but the date of the facts or situations in relation to which the dispute arose” (ibid., para. 48; emphasis added). It went on to decide which facts or situations were the “source or real cause” of the dispute. It concluded that “it is not contested that the present dispute was triggered by the decisions of the German courts” (ibid.; emphasis added) in the Pieter van Laer Painting case, but that this “conclusion does not . . .
dispose of the question the Court is called upon to decide” (ibid.) because even though the German courts’ decisions came after the critical date, they were not the dispute’s “source or real cause”. The “source or real cause”, according to the Court, was instead the situation created by the Settlement Convention and the Beneš Decrees, both of which predated the critical date (ibid.,
para. 52). [p 41]

4. In applying the “real cause” test, the Court adopted an analysis originally applied in two cases that came before the Court’s predecessor, the Permanent Court of International Justice, and reapplied in the Right of Passage case before this Court in 1960. At this juncture, it is appropriate to point out that in each of the cases cited by the Court:

(a) the exclusion clause was inserted into an optional clause declaration, not a treaty; and

(b) the clauses at issue contained identical language that limited the jurisdiction of the Court to disputes which “aris[e] . . . with regard to situations or facts” occurring after the critical date, whereas in the instant case the temporal limitation in the European Convention conferred jurisdiction over disputes which “relat[e] to facts or situations” occurring after the critical date.

5. Clearly, the language in the European Convention in this case is broader than the language at issue in the previous cases. In my view, this fact may have required a different interpretation of the “real cause” test than that which was previously applied in prior cases, or indeed a different test. Moreover, it would appear that by acknowledging -- as it did several times in its Judgment (ibid., paras. 48 and 52) -- that the German courts’ decisions of the 1990s “triggered” the dispute, the Court also acknowledged that these decisions “relate” to facts or situations that occurred well after the critical date; but the Court saw no contradiction in this.

6. For the purposes of this dissenting opinion, however, I will assume that, notwithstanding the broader language in the exclusion ratione temporis in this case, the “real cause” test is the correct test and I will confine my remarks to an explanation of why I believe the Court reached the wrong conclusion in its application of this test to the specific circumstances of this case.

7. The basis of the Court’s finding that the real cause of the dispute is not the German courts’ decisions of the 1990s, but facts and situations that occurred before the 1980s, is that the German
court decisions “cannot be separated from the Settlement Convention and the Beneš Decrees” (Judgment, para. 51). This is because, according to the Court, the German courts’ decisions simply represented the latest in a long line of cases in which the German courts had consistently held that they lacked competence under the Settlement Convention to rule on the legality of property confiscated abroad (ibid., para. 50). This misses the central point, however, which is that the German courts had never before applied the Settlement Convention to property belonging to a neutral State, so there is no long line of cases to be taken into account. Moreover, the Settlement Convention is a treaty dealing only with “German external assets”. Liechtenstein is a third party and is not bound by its provisions. Whether the Beneš Decrees were based on citizenship or ethnicity (that is, [p 42] the wider concept of persons belonging to the German people regardless of nationality), is irrelevant in the case instituted by Liechtenstein against Germany because Germany, the Respondent, was in no sense connected to the promulgation of the Beneš Decrees. It did not issue or apply the Beneš Decrees to confiscate Liechtenstein property. Indeed, its relationship to the Decrees is identical to the Applicant’s: both sustained damage as a result of confiscations that took place under them. Thus, all the facts and situations that predate the critical date under the European Convention serve only as historical background to the dispute between the parties to this case.

8. Some of these facts would be relevant if the Respondent were Czechoslovakia and the purpose of the proceedings was to challenge some aspect of the lawfulness of the Beneš Decrees. But this is not the case here. Moreover, as I seek to clarify, the factual circumstances of this case are not identical to those underlying the three cases relied upon by the Court. One difference is fundamental: in each of the three previous cases, certain acts attributable to the Respondent and complained of by the Applicant took place both before the critical date and after the critical date, and the Court, in deciding the scope of its jurisdiction ratione temporis, had to decide which of these acts constituted the facts and situations that were the “source or real cause” of the dispute.

9. Thus, in Phosphates in Morocco, Italy complained that French legislation monopolizing the Moroccan phosphate industry to the detriment of an Italian company occurred before the critical date, whereas a final denial of the company’s rights by the French Ministry of Foreign Affairs occurred after it. In the Electricity Company of Sofia and Bulgaria case, Belgium complained that a Bulgarian municipality confiscated property of a Belgian company and that a mixed Belgo-Bulgarian tribunal established a formula for the price of coal to be sold by the company before the critical date, whereas the Bulgarian courts applied this formula in a way that caused the Belgian company to suffer a loss after it. And finally in Right of Passage over Indian Territory, Portugal complained that certain “minor incidents” between it and India regarding Portugal’s passage over Indian territory occurred before the critical date, whereas a full-scale obstruction of its right of passage occurred after it. Although the Court in each case weighed the facts or situations differently -- finding in only one of the cases that the facts or situations that constituted the “source or real cause” of the dispute occurred before the critical date -- the point is that in each of these cases there were acts attributable to the Respondent and complained of by the Applicant that occurred before the critical date. There are no such acts here. To neglect recognizing this fact and the [p 43] legal consequences that flow from it is to deviate from the prior jurisprudence of the Court.

10. It should, in my view, be manifestly clear that the German courts’ decisions purporting to include neutral Liechtenstein property under the umbrella of German external assets ¾ in the 1990s, a decade after the critical date ¾ should be considered the “real cause” of the dispute. Liechtenstein requested the Court to adjudge and declare that “Germany has failed to respect the
sovereignty and neutrality of Liechtenstein” (Memorial of the Principality of Liechtenstein, p. 187, para. 1 (a)) because it treated Liechtenstein property as German assets. Thus, its claim relates exclusively to the propriety under international law of the German courts’ decisions. The lawfulness of the confiscation of Liechtenstein property in Czechoslovakia represents a separate issue which could constitute a dispute between Liechtenstein and Czechoslovakia but not Liechtenstein and Germany. Here then, the German courts’ decisions have the same character and nature as the events that took place after the critical date in the Electricity Company and Right of Passage cases. In the latter case, the Court held that:

“It was only in 1954 that . . . a controversy arose and the dispute relates both to the existence of a right of passage to go into the enclaved territories and to India’s failure to comply with obligations which, according to Portugal, were binding upon it in this connection. It was from all of this that the dispute referred to the Court arose; it is with regard to all of this that the dispute exists. This whole, whatever may have been the earlier origin of one of its parts, came into existence only after [the critical date].” (I.C.J. Reports 1960, p. 35; emphasis added.)

11. It is difficult to grasp how in the instant case the “whole” could have materialized before 1980 since no pre-1980 conduct attributable to Germany was raised in the proceedings. Indeed the Court, by confirming that the “issue whether or not the Settlement Convention applied to Liechtenstein property had not previously arisen before German courts” (Judgment, para. 50) admitted as much. The Court has demonstrated that a “new situation”, namely the application of
earlier case law under the Settlement Convention for the “first time” to neutral and non-German property, existed, and it is this situation that for the first time caused a dispute between Liechtenstein and Germany. [p 44]

12. My line of reasoning is as follows: if we proceed from the established fact that the Respondent is not responsible for the Beneš Decrees, the question should be legitimately asked: did the Respondent undertake any post critical date act that potentially engaged its international responsibility?

13. An examination of the case file suggests that two such acts were adopted by Germany. The first is the Exchange of Notes which

“was executed between the three Western Powers and the Government of the Federal Republic of Germany (the parties to the Settlement Convention) under which that Convention would terminate simultaneously with the entry into force of the Treaty. Whereas that Exchange of Notes terminated the Settlement Convention itself, including Article 5 of Chapter Six (relating to compensation by Germany), it provided that paragraphs 1 and 3 of Article 3, Chapter Six, ‘shall, however, remain in force’” (Judgment, para. 15).

Thus, Germany retained the clause in Article 3, Chapter Six, of the Settlement Convention requiring Germany to “raise no objections” to measures taken against “German external assets”, but terminated the obligation to pay compensation provided for in Article 5 of Chapter Six of the
Settlement Convention, which stipulates that “[t]he Federal Republic shall ensure that the former
owners of property seized pursuant to the measures referred to in Articles 2 and 3 of this Chapter
shall be compensated”. The second act attributable to Germany is the decision of the German courts to apply the Settlement Convention to property belonging to nationals of a neutral country. Both these acts occurred well after the critical date.

14. It is relevant to recall, in this context, that the European Court of Human Rights (“ECHR”) reached a conclusion similar to the one I am espousing when it analysed its jurisdiction ratione temporis in the case brought by the Prince of Liechtenstein. In that case, Germany made two separate claims, only one of which it duplicates here. In regard to the first claim -- that the Czech Decrees were unlawful -- the ECHR found that it did not have temporal jurisdictionFN1. But the Court drew an important distinction between this claim and the Prince’s second and entirely separate claim. The Court, with respect to this second claim, noted:

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FN1Prince Hans-Adam II of Liechtenstein v. Germany, European Court of Human Rights, Application No. 42527/98, Judgment, 12 July 2001 (Preliminary Objections of Germany, Vol. II, Ann. 1, pp. 27-28, paras. 84-85).
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“that the applicant’s complaint . . . does not concern the original confiscation of the painting which had been carried out by authori-[p 45]ties of former Czechoslovakia in 1946. In the present proceedings, the applicant complains that, as in the German court proceedings instituted in 1992 he could not obtain a decision on the merits of his claim for ownership of the painting, it was eventually returned to the Czech Republic. The Court’s competence to deal with this aspect of the application is therefore not excluded ratione temporis.”FN2

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FN2 Ibid., p. 27, para. 81.
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15. Thus, the European Court found that any claim regarding the Pieter van Laer court decisions -- Liechtenstein’s second claim before the European Court -- was “not excluded ratione temporis”FN3 because the relevant facts occurred in the 1990s, after the critical date. Liechtenstein raised only this second claim before this Court and in my view this Court should, like the ECHR, have found that it was not precluded from exercising jurisdiction over Liechtenstein’s claim.

--------------------------------------------------------------------------------------------------------------------
FN3 Ibid.; emphasis added. The ECHR was careful to point out that it did not consider Germany’s conduct to be a continuation of the former Czechoslovakia’s:
“The Court would add that in these circumstances there is no question of a continuing violation of the Convention which could be imputable to the Federal Republic of Germany and which could have effects as to the temporal limitations of the competence of the Court.” (Ibid., para. 85.)
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16. In sum, I am of the opinion that the temporal limitation in the European Convention was not a proper basis for a finding of no-jurisdiction. In the alternative, I believe that the various dimensions of the case could have been better clarified had the Court opted to explore the case further by joining the German second objection to the merits in conformity with Article 79, paragraph 9, of the Rules of Court instead of disposing of the case in limine.

17. I cannot conclude without expressing my concern regarding the final outcome. The Court has found that a legal dispute does exist between the Parties and made the finding that the real subject-matter of the dispute is:

“whether, by applying Article 3, Chapter Six, of the Settlement Convention to Liechtenstein property that had been confiscated in Czechoslovakia under the Beneš Decrees in 1945, Germany was in breach of the international obligations it owed to Liechtenstein and, if so, what is Germany’s international responsibility” (Judgment, para. 26).

Declining jurisdiction while a dispute persists does not represent a positive contribution to the settlement of international disputes, which is the central function of the Court.[p 46]

18. In the light of the foregoing, I voted for paragraph 1 (a) of the dispositif but was compelled to vote against paragraphs 1 (b) and 2 of the dispositif.

(Signed) Nabil ELARABY. [p 47]


DISSENTING OPINION OF JUDGE OWADA

To my regret, I cannot associate myself with the conclusion of the Judgment that the Court has no jurisdiction to entertain the present case, especially as it relates to the finding that the second preliminary objection of Germany to the Court’s jurisdiction is to be upheld. I wish to set out hereunder my own views on some of the salient issues involved with a view to clarifying the bases for my dissent.

I. The essential nature of the dispute

1. This case is unique in the sense that the Applicant and the Respondent are arguing their case at cross purposes. They base their respective arguments on different understanding of what the dispute between the Parties is about and what precisely the cause of action of the Applicant is.

2. Clearly it is this difference in approach to the case between the Parties in defining the essential nature of the dispute that forms a crucial element in this case at the present stage of the preliminary proceedings on objections raised by the Respondent. One critical question that the ourt has to decide on in the present preliminary proceedings therefore is the question of “what is the subject-matter of the dispute?” This question has its relevance to most, if not all, of the preliminary objections raised by Germany in the present proceedings; more specifically the Court is to define its position on this point in dealing with the first preliminary objection relating to the existence vel non of a dispute between the Parties and [p 48] the second preliminary objection relating to the limitation ratione temporis on the jurisdiction of the Court, on both of which the present Judgment has chosen to pronounce itself.

3. Liechtenstein in its Application to institute proceedings before the Court claims that:

“(a) by its conduct with respect to the Liechtenstein property [which had been confiscated in Czechoslovakia under the “Beneš Decrees” of 1945], in and since 1998, Germany failed to respect the rights of Liechtenstein with respect to that property;

(b) by its failure to make compensation for losses suffered by Liechtenstein and/or its nationals, Germany is in breach of the rules of international law.” (Application of Liechtenstein, para. 25.)

4. In support of this claim, the Applicant contends, inter alia, as follows:

“Under international law, having regard to Liechtenstein’s neutrality and the absence of whatsoever links between Liechtenstein and the conduct of the war by Germany, any Liechtenstein property that may have been affected by measures of an Allied power could not be considered as ‘seized for the purpose of reparation or restitution, or as a result of the state of war’” (Application of Liechtenstein, para. 9);

“Subsequent to the conclusion of the Settlement Convention [of 1952], it was accordingly understood, as between Germany and Liechtenstein, that the Liechtenstein property did not fall within the régime of the Convention” (ibid., para 10);

“In 1998 the position of the Federal Republic of Germany changed, as a result of the decision of the Federal Constitutional Court of 28 January 1998 [in a case concerning a painting which was among the Liechtenstein property seized in 1945 under the ‘Beneš Decrees’]” (ibid., para. 17);

“Liechtenstein . . . protested to Germany that the latter was treating as German assets which belonged to nationals of Liechtenstein . . . Germany rejected this protest and in subsequent consultations it became clear that Germany now adheres to the position that the Liechtenstein assets as a whole were ‘seized for the purpose of reparation or restitution, or as a result of the state of war’ within the meaning of the Convention” (ibid., para. 19).

5. Thus Liechtenstein submits that “[t]here is accordingly a legal dispute between Liechtenstein and Germany as to the obligations of the latter with respect to Liechtenstein property” and that “[i]t is this dispute which is the subject of the present Application” (ibid., para. 20). [p 49]

6. In support of its first preliminary objection that there is no legal dispute between Germany and Liechtenstein, the Respondent contends that the “change of position [as alleged by Liechtenstein], which supposedly led to a disagreement on a point of law, never occurred” and that “it is impossible to discern any disagreement on a point of law or fact between Germany and Liechtenstein” (CR 2004/24, p. 21, para. 42). Referring to the confiscation of certain Liechtenstein property by Czechoslovakia under the “Beneš Decrees”, the Respondent claims that

“[b]etween Liechtenstein and Germany there exists no dispute concerning the lawfulness of the Czechoslovak seizures. Rather, the dispute is one between Liechtenstein and the successor(s) of former Czechoslovakia.” (Preliminary Objections of Germany, Vol. I, Part III, Chap. I, Section I, D., p. 42, para. 60.)

It argues that “it is impossible to formulate the alleged dispute between Liechtenstein and Germany in a way which effectively distinguishes it from the real dispute between Liechtenstein and the Czech Republic” (CR 2004/24, p. 21, para. 43).
7. Liechtenstein on the contrary claims that “Germany address[es] a case that is not the case before [the Court]”. According to Liechtenstein, its case is that

“Germany bears international responsibility for infringing Liechtenstein’s neutrality and sovereignty by allowing Liechtenstein assets to be treated, for the first time in 1995, as German external assets for purposes of the Settlement ConventionFN1.”

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FN1 Convention on the Settlement of Matters arising out of the War and the Occupation, signed by the United States of America, the United Kingdom, France and the Federal Republic of Germany, at Bonn on 26 May 1952 (as amended by Schedule IV to the Protocol on the Termination of the Occupation Régime in the Federal Republic of Germany, signed at Paris on 23 October 1954) (hereinafter referred to as the “Settlement Convention”).
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It categorically states that “[t]his case is not about the legality of the Beneš Decrees”, and that “[it] is not about Liechtenstein’s dispute with Czechoslovakia . . . over property belonging to Liechtenstein and its nationals” (CR 2004/25, p. 12; emphasis in the original).

8. It is clear that here the Parties are presenting their respective different positions on the “subject-matter of the dispute” in the present case, not only by employing different formulations but also by addressing different substances. Needless to say, the question of what constitutes the dispute in a case before this Court in the final analysis has to be decided by the Court. Nevertheless, it stands to reason that since the case has been brought before the Court by Liechtenstein as Applicant against [p 50] Germany as Respondent, it is in the Submissions of the Applicant that the formulation of the claims on which the Court must adjudicate is to be sought (cf. Right of Passage over Indian Territory, Merits, Judgment, I.C.J. Reports 1960, p. 27).

9. More specifically, the Court in the case concerning Fisheries Jurisdiction (Spain v. Canada), in which the parties, while accepting that there existed a dispute between them, characterized the dispute differently, stated as follows:

“In order to identify its task in any proceedings instituted by one State against another, the Court must begin by examining the Application (see Interhandel, Preliminary Objections, Judgment, I.C.J. Reports 1959, p. 21; Right of Passage over Indian Territory, Merits, Judgment, I.C.J. Reports 1960, p. 27; Nuclear Tests (Australia v. France), Judgment, I.C.J. Reports 1974, p. 260, para. 24). However, it may happen that uncertainties or disagreements arise with regard to the real subject of the dispute with which the Court has been seised, or to the exact nature of the claims submitted to it. In such cases the Court cannot be restricted to a consideration of the terms of the Application alone nor, more generally, can it regard itself as bound by the claims of the Applicant.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
It is for the Court itself, while giving particular attention to the formulation of the dispute chosen by the Applicant, to determine on an objective basis the dispute dividing the parties, by examining the position of both parties” (Fisheries Jurisdiction (Spain v. Canada), Jurisdiction of the Court, Judgment, I.C.J. Reports 1998, p. 448, paras. 29 and 30; emphasis added).

10. When the divergent characterization of the subject-matter of the dispute given by the Applicant and the Respondent in the present case is closely examined in accordance with the principle enunciated by this jurisprudence of the Court, it seems clear that the subject-matter of the dispute in the present case is the question of international responsibility of Germany in its treatment of Liechtenstein property as “German external assets or other property, seized for the purpose of reparation or restitution, or as a result of the state of war” (hereinafter referred to as “German external assets or other property”) for purposes of the Settlement Convention. On this point, therefore, I concur with the Judgment in its conclusion that

“the subject-matter of the dispute is whether, by applying Article 3, Chapter Six, of the Settlement Convention to Liechtenstein property that had been confiscated in Czechoslovakia under the Beneš Decrees in 1945, Germany was in breach of the international obligations it owed to Liechtenstein and, if so, what is Germany’s international responsibility” (Judgment, para. 26).

11. Naturally the question of whether or not the allegation of Liechtenstein as quoted in paragraph 4 above, and especially the allegation that [p 51] there has been a change in this respect in the position of Germany, can be established is a question that obviously belongs to the merits of the case. In holding that there exists a situation in which “complaints of fact and law formulated by Liechtenstein against Germany are denied by the latter” and that “[b]y virtue of this denial, there is a legal dispute” (Judgment, para. 25) between the Parties, the Court is not prejudging the validity of such “complaints of fact and law formulated by Liechtenstein”. All that the Court should pronounce upon at this stage of the proceedings, where it is addressing strictly the preliminary objections raised by the Respondent only, is whether there does exist a legal dispute between the Parties on this point for the purposes of the jurisdiction of the Court.

II. The issue of “disputes relating to facts or situations”

12. Having come to its conclusion as stated above on the question of whether there exists a legal dispute between the Parties in the present case and what constitutes the subject-matter of this dispute, the Court has to adhere to this characterization of the subject-matter of the dispute in examining the question raised in the second preliminary objection of the Respondent, i.e., the question of whether the dispute thus formulated will fall within the jurisdiction of the Court, ratione temporis, under Article 27 (a) of the European Convention for the Peaceful Settlement of
Disputes of 29 April 1957.

13. Preliminary to proceeding to the examination of the facts of the case in this respect, however, the first issue to be analysed is the meaning of the provision in Article 27 (a) of the Convention which excludes “disputes relating to facts or situations prior to the entry into force of this Convention as between the parties to the dispute” (emphasis added) from the scope of jurisdiction conferred upon the Court under this Article.

14. In every case before the Court, the basis of jurisdiction of the Court is the legal instrument that confers jurisdiction on the Court, be it a unilateral declaration accepting the compulsory jurisdiction of the Court or a compromissory provision in a bilateral or multilateral treaty to refer a dispute under the treaty to the Court. Each case has to be assessed on its own by interpreting the legal instrument in question that serves as the basis for jurisdiction.

15. From this point of view the question could arise as to whether the language employed in Article 27 (a) of the European Convention for the Peaceful Settlement of Disputes should be interpreted differently from the more usual expression employed in some other cases that have come before this Court. By way of illustrations, in the Phosphates in Morocco case before the Permanent Court of International Justice, the legal instrument in question, the French declaration of 1930 accepting the compulsory jurisdiction of the Court, employed the expression “any disputes which may arise after the ratification of the present declaration with regard to situations or facts subsequent to this ratification” (Phosphates [p 52] in Morocco, Judgment, 1938, P.C.I.J., Series A/B, No. 74, p. 22; emphasis added). In the Electricity Company of Sofia and Bulgaria case, also before the Permanent Court, the legal instrument in question was the Belgian declaration of adherence to the optional clause of the Court’s Statute. That also used the formula “any disputes arising after the ratification of the present declaration with regard to situations or facts subsequent to this ratification” (Electricity Company of Sofia and Bulgaria, Judgment, 1939, P.C.I.J., Series A/B, No. 77, p. 82; emphasis added). In yet another case in which the same issue of the scope of limitation ratione temporis on jurisdiction of the Court came before the present Court, i.e., Right of Passage case, the legal instrument in question was also the Indian declaration of acceptance of the jurisdiction of the Permanent Court of International Justice of 28 February 1940. Here again the declaration used the same formula of limiting the scope of acceptance to “‘disputes arising after February 5th, 1930, with regard to situations or facts subsequent to the same date’” (Right of Passage over Indian Territory, Preliminary Objections, Judgment, I.C.J. Reports 1957, p. 151; emphasis added).

16. By contrast, the formula used in Article 27 (a) of the European Convention for the Peaceful Settlement of Disputes is different. Formulated as a compromissory clause in a multilateral instrument, Article 27 (a) of the Convention limits the scope of jurisdiction of the International Court of Justice ratione temporis as follows:

“The provisions of this Convention shall not apply to:

(a) disputes relating to facts or situations prior to the entry into force of this Convention as between the parties to the dispute” (emphasis added).

17. It therefore seems to be in order to engage in an examination of the legislative history of Article 27 (a) of the Convention within the Council of Europe where it was finally adopted, with a view to ascertaining whether this divergence from the more usual formulation employed in the other instruments was an intended one with the express purpose of producing a different legal effect on the part of the drafters of the instrument. At the drafting stage of the Convention, “Proposals of the Committee on Legal and Administrative Questions for a European Act for the Peaceful Settlement of Disputes”FN2 included the following provision relating to the limitation ratione temporis to be incorporated in the European Act (which grew into the European Convention for the Peaceful Settlement of Disputes of 1957):

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FN2 Contained in Appendix, Part B, to Recommendation 36 (1952) on the establishment of a European Court of Justice and of a European Act for the Peaceful Settlement of Disputes.
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“It shall be deemed not to apply to disputes arising out of facts which occurred prior to the accession to the Act of Members parties to such disputes . . .” (emphasis added).

However, when these proposals were submitted to a Committee of Experts who then produced a draft “Final Report of the Committee of Experts on the Peaceful Settlement of Disputes and the Creation of a European Court of Justice” of 18 May 1953FN3, some change in the wording of this part took place. Thus in the Final Report adopted of 22 May 1953, the then Article 1 (2) (which later became Article 27 (a) of the draft Convention) came to include the following formula in relation to the limitation ratione temporis on the jurisdiction of the Court:

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FN3 Council of Europe doc. EXP/RPD/JU (53); A.12.379; TL.794/WM/Unrevised.
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“This undertaking shall not apply to disputes relating to facts or situations prior to the entry into force of this Convention as between the parties to the dispute.” (Council of Europe doc. CM (53) 58; A.12.822; TL.794/WM; Appendix II, p. 20; emphasis added.)

There is nothing in the relevant records available that can shed light on the background for this
change. On the contrary, the “Comments on the Articles of the Preliminary Draft Convention”
contained in the Final Report states by way of a commentary on Article 1 (2) (i.e., present
Article 27 (a)) that:

“This paragraph sets a time-limit to the facts giving rise to a dispute which may be submitted to the Court. It lays down that the starting point shall be the date of the entry into force of the Convention.” (Council of Europe doc. CM (53) 58; A.12.822; TL.794/WM, p. 6; emphasis added.)

18. In the absence of any further documentary evidence to clarify this point, it would seem reasonable to presume that the final change in wording on this crucial part of the formulation in Article 27 (a) of the Convention from “disputes arising out of facts” to “disputes relating to facts or situations” did not signify any intentional modification on the scope of the limitation ratione temporis, both being treated indiscriminately as referring to “the facts giving rise to a dispute”.

19. Based on this analysis of the travaux préparatoires on the legislative history of the compromissory provisions of the Convention, it would [p 54] seem safe to conclude, as the Judgment seems to assume without going through a detailed analysis on this point, that the formulation of the limitation ratione temporis employed in the compromissory provisions of the European Convention for the Peaceful Settlement of Disputes should be interpreted as being no different from the comparable formulations employed in the other legal instruments which were the subject of scrutiny in the previous three judgments of the Court, which now form the case law on this issue.

III. The relevant “facts or situations” in relation to the dispute

20. Having thus disposed of the issue of a possible distinction in law between different formulations on the question of limitation ratione temporis employed in different legal instruments, the next question that the Court is to examine is what are such “facts or situations giving rise to the dispute” in the present case.

21. In determining the issue of which facts or situations are to be regarded as “facts or situations giving rise to the dispute” in the context of the present case, it is of cardinal importance that we base ourselves on the characterization of the subject-matter of the dispute in the present case as the Court has identified it. I have already stated in Part I of this opinion that the proper way of looking at the present case, especially taking account of the claims of the Applicant as presented
in its Application, is to define the subject-matter of the present dispute as consisting in the alleged change in the position of Germany in the 1990s, through a series of German court decisions, on the question of treatment of Liechtenstein property as “German external assets and other property” for the purposes of Article 3, paragraph 1, of Chapter Six of the Settlement Convention.

22. It is true that this allegation has not been fully elaborated by the Applicant at this stage of the proceedings, while the Respondent flatly denies that there has been any such change of position by Germany. In fact this question can only be determined definitively when the Court enters into a thorough examination of the facts of the case at the merits stage of the case. Nevertheless, on the basis of the relevant documents and the oral presentations both of the Applicant and of the Respondent submitted to the Court, it is difficult to deny that this Liechtenstein claim is something more than a sheer allegation which patently is not sustainable even on a prima facie basis of the facts made available to the Court. Germany claims that there has been no change of position in the jurisprudence of the German courts; and that its courts have consistently held that they are barredby the Settlement Convention from adjudicating on the lawfulness of any confiscation measures for the purposes named by the Settlement Convention (CR 2004/24, p. 15, para. 17). However, a glance at the jurisprudence of the German courts (cf. cases listed in Observations of Liechtenstein, Appendix I) seems to reveal that this [p 55] latter statement does not seem to be entirely accurate. It may be true that in those cases where the application of the Settlement Convention was involved, the German courts have consistently held that they lacked the competence to penetrate the legal veil of the provisions of Article 3, paragraph 1, of Chapter Six of the Settlement Convention and refrained from evaluating the lawfulness of the measures that had been applied to what were unquestionably “German external assets”. As the Respondent itself concedes (CR 2004/24, p. 13, para. 11), however, no concrete case had arisen, until the Pieter van Laer Painting case was brought before the court in Cologne in which the applicability itself of the Settlement Convention to Liechtenstein property as “German external assets or other property” was considered for the first time.

23. The AKU FN4 case cited in this context by the Respondent as evidence of the German position quoted above (CR 2004/24, p. 15, para. 17) might appear to serve as a precedent for holding that “[Article 3, Chapter Six, of the Settlement Convention as amended by Schedule IV of the Paris Protocol of 23 October 1954] does not confer [upon German courts] a right to examine this question [of applicability of the Convention] in accordance with German law” (International Law Reports, Vol. 23 (1956), p. 23). However, it is preceded by one important condition by way of a proviso, which states as follows:

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FN4 See AKU case, Judgment of the German Federal Court of Justice (Bundesgerichtshof) of 13 December 1956 (II ZR 86/54); see also International Law Reports, Vol. 23 (1956), pp. 21-24; Neue Juristische Wochenschrift, Vol. 10, Issue 6 (1957), p. 217.
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“The sole condition . . . which must now be satisfied in order that the jurisdiction of the German Courts shall be excluded is that the claim is concerned with an asset seized for the purpose of reparation or one of the other purposes referred to in paragraph 1 [of Article 3].” (Ibid., p. 22.)

It would seem therefore that this decision, with this expressly stated proviso, could not be an authority on the point at issue here, i.e., that the German courts have consistently held that they were barred under the Settlement Convention from examining the applicability itself of the Settlement Convention to neutral assets.

24. To this extent at any rate, it thus seems undeniable that the position of the German courts in the Pieter van Laer Painting case, culminating in the decision of the court of the final instance in civil matters, i.e., the Bundesgerichtshof, followed by the decision of the Federal Constitutional Court of 14 January 1998 on a constitutional complaint which held that Liechtenstein property fell within the scope of the Settlement Convention, has had the effect of creating a new case law in applying the principle -- a principle that may well have been consolidated in relation to uncontestably “German external assets” that had been subject to war-[p 56]time or post-war reparation régime by allied or other powers -- to a new situation involving a neutral property of
Liechtenstein.

25. Whether this contention of Liechtenstein concerning the alleged change in the position of Germany in the 1990s can stand the test of scrutiny in terms of facts and law surrounding the situation involving the painting of Pieter van Laer is of course an entirely different matter. This is an issue which has to be scrupulously examined when the Court comes to the merits stage of the case. Suffice it to say at this preliminary stage on jurisdiction that there is at least sufficient basis for holding that the subject-matter of the dispute is real and not just artificially constructed. In fact, this alleged “change of position of Germany”, or more precisely, the treatment by Germany of Liechtenstein property as falling within the scope of Article 3 of Chapter Six of the Settlement Convention embodied in the decision of the highest German court in the 1990s, which can only be examined in detail at the merits stage of the case, is the key to definitively determining whether this situation amounted to the “facts or situations which have given rise to the dispute”, thus satisfying the conditions ratione temporis prescribed by the compromissory provisions of the European Convention for the Peaceful Settlement of Disputes.

IV. Jurisprudence of the Court on “facts or situations” giving rise to the dispute

26. As the existence of a dispute between Liechtenstein and Germany has been established in the Judgment itself, the next step for the Court is to ascertain whether this dispute falls within or outside the scope of the jurisdiction conferred upon the Court by the compromissory provisions of Article 27 (a) of the European Convention for the Peaceful Settlement of Disputes. On the basis of the interpretation given above on the formula “disputes relating to facts or situations” (Part II of this opinion), the question for the Court to address is whether this dispute is one “relating to facts or situations prior to the entry into force of [the] Convention as between the parties” as interpreted above.

27. In my view, an analysis of the past three cases before the Permanent Court of International Justice and the International Court of Justice, in which the issue of what are the “facts or situations giving rise to the dispute” was addressed by the Court and its predecessor, reveals that
there appear to be two lines of approach in the case law of the Permanent Court and this Court:

(1) the approach to look to those facts or situations which are the real source of the dispute, but not the source of the rights which underlie the dispute; and

(2) the approach to take the dispute as “the whole” of a chain of events [p 57] and looking to those facts or situations which crystallize the dispute by completing the cycle of its constituent elements.

The first approach places emphasis on the substantive problem of determining the real cause of the dispute, while the second approach looks to a formal aspect of the process of crystallization of the dispute by identifying the point in time at which a fact or a situation comes to constitute the critical factor which gives rise to a dispute in a concrete form.

28. These two lines of approach, however, represent different angles from which to look at the same situation, and therefore are not mutually exclusive. Indeed, it is the importance of a nexus of close and direct link between the dispute and the facts or situations which give rise to that dispute that is emphasized in both of the two approaches. This nexus of close and direct link connecting the dispute and the facts and situations which give rise to it is so essential that an authority on this subject was prompted to state that:

“It is believed . . . that in the long run there is little practical significance in this distinction [between the date on which the dispute arose and the date of the facts and situations which gave rise to it], at least in so far as concerns what occurs in the process of reaching the decision: a distinction between the date of a dispute, and the date of the facts and situations regarding which that dispute exists, may be one of form only.” (Shabtai Rosenne, The Time Factor and the Jurisprudence of the International Court of Justice, p. 40.)

29. It is thus incumbent upon me to analyse how the case law in each of the three precedents works out this nexus in a concrete context and see how the case law is to be applied to the facts of the present situation. In the Phosphates in Morocco case, Italy brought claims against France, alleging that by a series of decrees the French had denied certain rights of Italian nationals in the
Moroccan phosphates industry. The decrees preceded the critical date in the French optional clause declaration, but Italy argued that there was a continuing illegality, which had only been completed by certain acts subsequent to the date. After stating that “[s]ituations or facts subsequent to the ratification [of the optional clause declaration] could serve to found the Court’s compulsory jurisdiction only if it was with regard to them that the dispute arose” (emphasis added), the Permanent Court of International Justice made the point that

“it would be impossible to admit the existence of such a relationship between a dispute and subsequent factors which either presume the existence or are merely the confirmation or development of earlier situations or facts constituting the real causes of the dispute” (Phosphates in Morocco, Judgment, 1938, P.C.I.J., Series A/B, No. 74, p. 24; emphasis added). [p 58]

30. Relying on this dictum, Germany in the present case contends that the acts after 1980, including the decision of the German courts, were merely a confirmation or development of facts or situations that took place in the 1940s and the 1950s, i.e., the Beneš Decrees of 1945 and the
Settlement Convention of 1952.

31. It is a fact, however, that the Settlement Convention as such, with its reference to “German external assets”, created no dispute with neutral Liechtenstein. It is also a fact that the Settlement Convention had never before been applied to Liechtenstein assets by the German courts until the decision in the Pieter van Laer Painting case. Thus it was in the context of this new development of the 1990s which allegedly constituted a “new legal situation” and not just a “confirmation or development of earlier situations or facts” (Phosphates in Morocco, Judgment, 1938, P.C.I.J., Series A/B, No. 74, p. 24) that a concrete dispute arose between Germany and Liechtenstein.

32. In the Electricity Company of Sofia and Bulgaria case before the Permanent Court of International Justice, the Respondent, Bulgaria, relied on the so-called “double exclusion clause”
(or the “Belgian formula”) in the Belgian optional clause declaration. The Respondent argued that the situation underlying the dispute was created by the awards of the Belgo-Bulgarian Mixed
Arbitral Tribunal, and in particular by the formula established by the awards for the fixing of the price, both of which antedated the critical date of the declaration. The complaints made by the Applicant, Belgium, concerning the application of this formula by the Bulgarian authorities related to the working of that formula and made it the centre point of the dispute.

33. In rejecting the argument of the Respondent on this point, the Court recalled what it said in the Phosphates in Morocco case, and stated that

“[t]he only situations or facts which must be taken into account from the standpoint of compulsory jurisdiction accepted in the terms of the Belgian declaration are those which must be considered as being the source of the dispute” (Electricity Company of Sofia and Bulgaria, Judgment, 1939, P.C.I.J., Series A/B, No. 77, p. 82; emphasis added),

and concluded as follows:

“It is true that a dispute may presuppose the existence of some prior situation or fact, but it does not follow that the dispute arises in regard to that situation or fact. A situation or fact in regard to which a dispute is said to have arisen must be the real cause of the dispute.” (Ibid.; emphasis added.)

Thus the Court found that it was the subsequent acts with which the Belgian Government reproaches the Bulgarian authorities with regard to a [p 59] particular application of the formula – which in itself had never been disputed --i.e., the decision of the Bulgarian Administration of Mines of 1934 and the judgments of the Bulgarian courts of 1936 and 1937 ¾ which formed the centre point of the argument and must be regarded as constituting the facts with regard to which the dispute arose (cf. Electricity Company of Sofia and Bulgaria, Judgment, 1939, P.C.I.J., Series A/B, No. 77).

34. It seems clear that the present case has a close resemblance to the Electricity Company of Sofia and Bulgaria case in terms of how we define and apply the test of what constitutes le fait générateur in the context of the facts of the present situation. In the present case, the Beneš Decrees and the Settlement Convention are no doubt underlying factors of the dispute, and they relate to this dispute in the factual sense; it could thus be said that the dispute presupposes their existence. It does not follow, however, that the dispute therefore arose in regard to those situations or facts. It was not until the subsequent alleged position taken by Germany -- the German court decisions applying the Settlement Convention to Liechtenstein property -- that the
dispute came into being in the eyes of Liechtenstein as against Germany.

35. In the Right of Passage case before this Court, the Applicant, Portugal, in its Application indicated that the subject of the dispute was the conflict of views which arose between Portugal and India when, in 1954, India opposed the exercise of Portugal’s right of passage to certain Portuguese enclaves in the Indian territory. The Respondent, India, argued on the other hand that the Court was without jurisdiction under India’s own optional clause declaration with limitation ratione temporis, because the dispute was the continuation of a conflict of views on this alleged right of passage, going back as far as 1818. There were also questions of treaty interpretation and practice dating back to 1779. Against the background of these complex historical factors, the Court came out with the conclusion that the critical factor that gave rise to the dispute occurred in 1954, when India opposed the exercise of Portugal’s right of passage. After noting that the dispute submitted to the Court had a threefold subject -- i.e., (1) the disputed existence of a right of passage in favour of Portugal; (2) the alleged failure of India in 1954 to comply with its obligations concerning that right of passage; and (3) the redress of the illegal situation flowing from that failure -- the Court stated that “[t]he dispute before the Court, having this three-fold subject, could not arise until all its constituent elements had come into existence”, in particular, the obstacles which India was alleged to have placed in the way of exercise of passage by Portugal in 1954 (Right of Passage over Indian Territory, Merits, Judgment, I.C.J. Reports 1960, p. 34; emphasis added). On that basis the Court concluded that “[t]he dispute therefore as submitted to the Court could not have originated until 1954” (ibid., p. 34).

36. The conclusion that the Court arrived at as the real source of the [p 60] dispute in that case, applying the principle of looking for the origin of a dispute through the process of formation of the dispute as “the whole”, is the following:

“It was only in 1954 that such a controversy [as to the title under which passage was effected] arose and the dispute relates both to the existence of a right of passage . . . and to India’s failure to comply with obligations which, according to Portugal, were binding upon it in this connection. It was from all of this that the dispute referred to the Court arose; it is with regard to all of this that the dispute exists. This whole, whatever may have been the earlier origin of one of its parts, came into existence only after [the critical date as specified in the optional clause declaration as the limitation ratione temporis on jurisdiction]” (ibid., p. 35; emphasis added).


37. When the criterion enunciated by the Court in the Right of Passage case is applied to the present case, it seems clear that the decisive conclusive event that gave rise to the “difference in the legal positions” between Germany and Liechtenstein concerning the treatment of the Liechtenstein property, giving a concrete shape to the dispute as “the whole”, whatever may have been the earlier origin of the factors that affected the destiny of Liechtenstein property, was the alleged decision by the German courts which held that the Settlement Convention was applicable to the Liechtenstein property in question as “German external assets and other property” for the purposes of the Settlement Convention and that therefore the German courts were barred from passing a judgment on the legality of the measures referred to in Article 3 of Part Six of the Settlement Convention. While the validity of this allegation has to be tested in light of the facts of the case, the jurisprudence of the Right of Passage case definitely tilts towards a conclusion that it is this development which, if proved, constitutes le fait générateur du différend which arose.

38. The present Judgment, in addressing the issue of jurisdiction ratione temporis contained in the second preliminary objection of Germany, comes out with the conclusion that

“the Court has no basis for concluding that prior to the decisions of the German courts in the Pieter van Laer Painting case, there existed a common understanding or agreement between Liechtenstein and Germany that the Settlement Convention did not apply to the Liechtenstein property seized abroad as ‘German external assets’ for the purpose of reparation or as a result of the war” (Judgment, para. 50).

While the Applicant in its Application stated that “[s]ubsequent to the conclusion of the Settlement Convention, it was accordingly understood, as between Germany and Liechtenstein, that the Liechtenstein property did not fall within the régime of the Convention” (Application of Liechtenstein, p. 8, para. 10), it has not substantiated in the present proceed-[p 61]ings such common understanding between Liechtenstein and Germany. However, since the dispute at issue before the Court is whether Germany was in breach of its international obligations by its treatment of Liechtenstein property by applying the Settlement Convention to the property in question, this finding of the Court on the alleged change of position in itself does not seem to be decisive in determining whether the dispute has arisen with regard to this alleged new development. Of course whether such a “change of position”, in the sense that Germany departed from a previously held position concerning the applicability of the Settlement Convention, thus incurring an international responsibility of Germany, has indeed taken place or not is an issue that has to be closely examined as the central issue of the merits of the case in subsequent proceedings.

39. On this last point, however, the Judgment, ex cathedra and without giving much substantive reasoning, declares as follows:

“the Court points out that German courts did not face any ‘new situation’ when dealing for the first time with a case concerning the confiscation of Liechtenstein property as a result of the Second World War. The Court finds that this case, like previous ones on the confiscation of German external assets, was inextricably linked to the Settlement Convention. The Court further finds that the decisions of the German courts in the Pieter van Laer Painting case cannot be separated from the Settlement Convention and the Beneš Decrees, and that these decisions cannot consequently be considered as the source or real cause of the dispute between Liechtenstein and Germany” (Judgment, para. 51; emphasis added).

40. It is difficult to understand the logic of this conclusion, since the point at issue in the context of determining what constituted le fait générateur of this dispute is precisely the issue of whether a legal distinction can be made between the applicability of the Settlement Convention to what is undisputably to be regarded as “German external assets” (a thesis not contested by the Applicant) and the applicability of the Settlement Convention to neutral Liechtenstein property as “German external assets or other property” (a thesis fiercely contested by the Applicant, thus forming the fons et origo of the present dispute).

41. It is indisputable, as the Judgment states correctly, that the decisions of the German courts in the Pieter van Laer Painting case cannot be separated from the Settlement Convention and the Beneš Decrees. It does not follow, however, that “these decisions cannot consequently be considered as the source or real cause of the dispute between Liechtenstein and Germany” as the Judgment suggests (Judgment, para. 51; emphasis added). The fact that the Beneš Decrees and the Settlement Convention are even non-negligible factors that underlie, and thus constitute an [p 62] important background of, the colourful destiny of the Pieter van Laer painting is undeniable. In this sense it may be said that the decisions of the German courts on the Pieter van Laer Painting case cannot be separated from the Settlement Convention and, further, from the Beneš Decrees. However, this historical fact in itself cannot turn such “facts and situations” into les faits générateurs du différend (Phosphates in Morocco, Judgment, 1938, P.C.I.J., Series A/B, No. 74, p. 23), i.e., something which generates the dispute, constituting “the real source of the dispute”, unless it is shown that indeed these facts and situations, directly and without further intervening events, gave rise to the dispute. It seems evident that such was not the case with either the Beneš Decrees or the Settlement Convention

42. Based on the definition of the subject-matter of the dispute as identified earlier, and in light of the analysis offered above on the jurisprudence of the Court concerning the question of the limitation ratione temporis upon the Court’s jurisdiction, the conclusion seems inescapable that, at any rate as far as this preliminary stage of the case is concerned, where the task of the Court is to be strictly confined to the examination of the question of whether the Court has jurisdiction to hear the case on the merits, it is difficult to agree with the conclusion of the Court, when it declares that

“[w]hile these decisions [of the German courts in the Pieter van Laer Painting case] triggered the dispute between Liechtenstein and Germany, the source or real cause of the dispute is to be found in the Settlement Convention and the Beneš Decrees” (Judgment, para. 52).

43. For these reasons, I come to the conclusion that the second preliminary objection of Germany has either to be rejected together with the first preliminary objection of Germany which has been rejected by the Judgment, or to be joined to the merits for further investigation, in accordance with Article 73, paragraph 7, of the Rules of Court.

44. It might be added that as can be seen from what has been stated above, I am not entirely in disagreement with the Judgment of the Court, as far as its general legal analysis of the case law of the Court is concerned, on the issue of what constitutes “facts or situations giving rise to the dispute” as represented by the three cases referred to in the Judgment. What I question is the manner in which this jurisprudence is applied to the facts of the present case.

V. Other preliminary objections

45. It would follow from this conclusion of mine that the Court would have to proceed further to the examination of four other preliminary [p 63] objections of Germany relating to the jurisdiction of the Court and to the admissibility of the claims of the Applicant, in order to determine whether it should go to the merits stage of the case. The present Judgment, however, has arrived at the conclusion that “[h]aving dismissed the first preliminary objection of Germany, but upheld its second, the Court finds that it is not required to consider Germany’s other objections and that it cannot rule on Liechtenstein’s claims on the merits” (Judgment, para. 53). Given my position as stated above, nevertheless, it is incumbent upon me to examine each and all of the remaining objections of Germany, in order to determine whether the Court has the competence to proceed to hear the case on the merits. Thus in the following paragraphs I shall state my views on the other preliminary objections raised by the Respondent; but I shall do so only in a somewhat summary fashion. This is due to the obvious point that there is no practical significance in such an exercise, seeing that the Judgment by majority has effectively terminated the present case for all purposes.

The third preliminary objection relating to domestic jurisdiction

46. Germany contends that “the outcome of the German court proceedings would have been exactly the same even if the Settlement Convention did not exist”, since according to the applicable rules of private international law and confiscation law as applied and recognized in Germany, as in so many other countries in the world,

“[t]he painting found on German territory for the exhibition would have been returned to the owner according to Czech law, the museum, because Czechoslovakian law and now Czech law have governed the law of property for that painting for the last 50 years” (CR 2004/24, p. 33, para. 94). On this basis Germany argues that “the decisions of the German courts, as to their results, were not a matter of international law” and that “as far as Liechtenstein is concerned, the matter was solely within the domestic jurisdiction of Germany” (ibid., para. 95).

47. To this argument, Liechtenstein counter-argues that such an assertion is clearly a matter for the merits. It claims that in diplomatic consultation on the present dispute Germany at no time argued that this was a matter within its domestic jurisdiction, and further argues that

“[t]he issue [then] was not whether this was a matter for Germany alone, but whether neutral property seized as a result of a war could be treated by German courts as ‘German external assets’ which were ‘seized for the purpose of reparation or restitution’ as a result of the Second World War” (CR 2004/25,p. 35, para. 12). [p 64]

48. A careful examination of the arguments of the two Parties on this issue of domestic jurisdiction leads me to the following conclusions. First, the German argument that the German courts were simply applying a rule of private international law, accepted by the practice of States and the doctrine of international law, that the title to property is governed by lex loci sitae rei seems to be misdirected, inasmuch as the Liechtenstein cause of action in the present case is not based on the alleged violation of international law by the German courts in recognizing the validity of the Czechoslovak confiscation measures of 1945, but on their alleged violation in treating the neutral Liechtenstein property as “German external assets and other property” for the purposes of the Settlement Convention. On this basis, the dispute cannot be said to lie solely with the domestic jurisdiction of Germany. Also Germany, as the second line of defence on this objection has brought into its pleadings the argument that the Settlement Convention in effect disposed of the question and that Germany had no choice but to accept the terms of the Settlement Convention in the circumstances of the situation. Whatever the validity and the legal relevance of this argument, such a contention defeats the very legal basis of the third preliminary objection of Germany by bringing in the element of an international convention as relevant.

The fourth preliminary objection relating to Article 40 of the Statute

49. On the admissibility of the Liechtenstein claims before the Court, Germany raises as its fourth objection the point that the Application is tainted by such profound flaws that the minimal requirement set out in Article 40, paragraph 1, of the Statute and in more detail in Article 38, paragraph 2, of the Rules of Court cannot be deemed to have been met. More specifically, it claims that “the Applicant has failed sufficiently to substantiate its contention that Germany has incurred responsibility on account of an internationally wrongful act” (CR 2004/24, p. 35. para. 101).

50. Liechtenstein counters this argument by stressing that Germany reshaped the Liechtenstein case into one entirely different from the one actually before the Court. Liechtenstein’s point is that what is at issue in this case is “Germany’s treatment of Liechtenstein property as German external assets under the Settlement Convention . . . which is the cornerstone of the present dispute” (CR 2004/25, p. 38; emphasis added). Liechtenstein further argues that “Article 40 (1) of the Statute and Article 38 (2) of the Rules of Court do not require an exhaustive statement of facts and grounds on which the claim is based in the application, but only a ‘succinct’ one” (ibid., p. 37) and that the Applicant has done precisely that.

51. As has been stated earlier, some more substantiation may be needed for establishing this
point both in terms of facts surrounding the [p 65] Liechtenstein allegation, as well as in terms of law that can legally link the German courts’ judgments to an internationally wrongful act that is attributable to Germany. This does not lead us to the conclusion, however, that therefore the Liechtenstein Application does not satisfy the minimal conditions set out in Article 40, paragraph 1, of the Statute. The question of whether this claim of the Applicant, supported by the legal grounds offered by the Applicant, will meet the test of rigorous scrutiny by this Court is an entirely different matter. But this is a matter to be closely examined when the Court comes to the merits stage of the proceedings.

The fifth preliminary objection relating to the absence of the third party

52. In the fifth preliminary objection relating to the admissibility of the Liechtenstein claim, Germany raises the issue of the absence of a “necessary third party” and contends that the core of the Application of Liechtenstein is “the legality or illegality of the Beneš Decrees, that is to say decrees adopted by a State whose successor State is today visibly absent from these proceedings before [the] Court -- not because it could not be present, but because it did not wish to be” (CR 2004/24, p. 48, para. 130; emphasis in the original).

53. Relying as authority on the jurisprudence of this Court in the Monetary Gold Removed from Rome in 1943 case of 1954 (hereinafter referred to as the “Monetary Gold” case), Germany argues that in order to determine whether Liechtenstein is entitled to reparation on account of the damage it has suffered, it is necessary first to determine whether Czechoslovakia has committed an international wrong against it. To do that, according to Germany, it would be necessary to decide whether the Beneš Decrees were contrary to international law. On the basis of this so-called “necessary party” rule as established by the jurisprudence in the Monetary Gold case, Germany concludes that “the review of the lawfulness of the expropriations effected by Czechoslovakia constitutes a prerequisite for an examination of the unlawful acts attributed by Liechtenstein to Germany” (CR 2004/24, p. 52, para. 144). Under the circumstances of the present case, however, the Court cannot entertain Liechtenstein’s claims which would oblige the Court to rule on the rights and obligations of the Czech Republic in its absence and without its consent.

54. Liechtenstein accepts that there is no disagreement on the analysis of jurisprudence of the Court offered by Germany that “[i]f . . . the legal interests of a third State constitute the ‘very subject-matter’ of a dispute brought to the Court and this third State is absent from the proceedings, the Court cannot exercise jurisdiction on the matter” and that “[l]egal [p 66] interests of a third State do constitute the very subject-matter of a dispute if . . . the Court cannot decide on the claims before it without prior determination as to the rights or obligations of the third State” (CR 2004/25, p. 51, para. 5).

55. In applying this principle to the concrete situation of the present case, however, Liechtenstein argues a contrario that:

“it equally follows that the Court not only has the right, but also the duty, to adjudicate on the application where the rights of a third State do not constitute ‘the very subject-matter’ of the judgment sought, even if that State’s interests might be ‘affectedFN5’, or [if] it has an ‘interest of a legal nature’ which might ‘be affectedFN6’ or [if], as in the Nauru case, the Court’s decision might ‘have implications for the legal situation of the [third] States concernedFN7’” (CR 2004/25, p. 51).

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FN5 Monetary Gold Removed from Rome in 1943, Judgment, I.C.J. Reports 1954, p. 32.
FN6 East Timor (Portugal v. Australia), Judgment, I.C.J. Reports 1995, p. 104, para. 34.
FN7 Certain Phosphate Lands in Nauru (Nauru v. Australia), Preliminary Objections, I.C.J. Reports 1992, p. 261, para. 55.
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According to Liechtenstein, the present case falls in this category, where neither the illegality of the Beneš Decrees nor Czechoslovakia’s right to war reparation are in any sense the “very subject-matter” of the present proceedings. While Liechtenstein considers that it has been the victim of the Beneš Decrees of 1945, which resulted in the unjust confiscation of Liechtenstein assets wrongly equated with German property, it nevertheless claims that the dispute between Liechtenstein and the successor States of Czechoslovakia is completely separate from the one which is the subject of the present proceedings.

56. In light of the nature of the subject-matter of the dispute as characterized above (cf. Judgment, para. 26), i.e., the one consisting in the question of whether, by applying Article 3, Chapter Six, of the Settlement Convention to Liechtenstein property that has been confiscated in
Czechoslovakia under the Beneš Decrees in 1945, Germany was in breach of its obligations it owed to Liechtenstein, it would seem difficult to argue that the Application in question relates to a case in which the legal interests of a third State constitutes the “very subject-matter” of this dispute. If there should be any question on this point in view of the complex nature of the facts surrounding the case, this question could also be joined to the merits in accordance with Article 79, paragraph 7, of the Rules of Court.

The sixth preliminary objection relating to the exhaustion of local remedies

57. In the sixth and final objection relating to the admissibility of Liechtenstein claim, Germany raises the issue of non-exhaustion of local [p 67] remedies. Specifically, it contends that “the Liechtenstein nationals who had been victims of Czechoslovak confiscations had not exhausted all the local remedies with a view to recovering the property of which they had been dispossessed or to claiming compensation” (CR 2004/24, p. 57). Against this contention, Liechtenstein argues that “[i]n its Application [it] raises claims against Germany primarily on its own account, as Germany’s conduct directly violated Liechtenstein’s own rights as a sovereign State and as a State which was neutral during the Second World War” (CR 2004/25, p. 43; emphasis added), and “additionally on account of its citizens” (ibid., p. 42).
58. Liechtenstein argues that the local remedies rule is restricted to cases of diplomatic protection, but is not applicable to cases where a State is directly injured in its State-to-State rights. This distinction, endorsed by the Court in the Interhandel and Elettronica Sicula S.p.A. (ELSI) cases, is accepted by Germany as a matter of general principle; at the same time Germany, denying its application to the present case, asserts that “it is impossible to find that there has been any infringement whatsoever of the sovereign rights of Liechtenstein as a State” (CR 2004/26, p. 24). As far as the Liechtenstein claim that it has suffered a direct injury as a State from Germany by its conduct is concerned, it is clear that the requirement of exhausting local remedies cannot be a procedural bar to this part of the claims presented by Liechtenstein.

59. As for injuries suffered by nationals of Liechtenstein, Germany argues that “the Liechtenstein nationals concerned did not defend their rights before the Czechoslovak courts when the confiscation strategy was implemented” (CR 2004/24, p. 59, para. 151). Germany claims that it is entitled to invoke this inaction of the Liechtenstein nationals concerned as a defence in the application of the rule of exhaustion of local remedies, “because the Czechoslovak measures were the decisive acts, depriving the owners of the enjoyment of their property” (CR 2004/24, p. 60, para. 152).

60. This is indeed a bizarre defence by the Respondent on the question of non-exhaustion of local remedies in relation to a claim whose cause of action lies, not in the illegal confiscation of assets of Liechtenstein nationals carried out by Czechoslovak authorities, but in the alleged illegal action by German authorities of treating these assets of neutral nationals as “German external assets and other property” for reparation purposes of Germany. Given this nature of the Liechtenstein claims, the principle of exhaustion of local remedies should be examined in relation to whatever local remedies available in Germany in relation to this point, and not in Czechoslovakia in relation to the confiscation measures.

61. In this respect, the final character in the German judicial system of the judgment of the Federal Constitutional Court of Germany in the [p 68] matter of the Pieter van Laer Painting case would seem to be conclusive. Given the nature of this pronouncement by the highest court in Germany, this decision should serve as the conclusive evidence to establish the point that the possibility for the Liechtenstein citizens concerned to exhaust local remedies for pursuing their cases in relation to their property before German courts is effectively foreclosed to them. Thus this case would seem to fall within the category to which the maxim “no need to exhaust local remedies where no remedies exist to exhaust” is applicable.

62. For all these reasons, I come to my final conclusion that the Court has jurisdiction to entertain the Application filed by the Principality of Liechtenstein on 1 June 2001. That is why I respectfully voted against the conclusions of the present Judgment, as contained in paragraphs (1) (b) and (2) of the dispositif.

(Signed) Hisashi OWADA. [p 69]


DECLARATION OF JUDGE AD HOC FLEISCHHAUER

I agree with the Court’s decision to uphold the second preliminary objection of Germany and with the Court’s reasoning that led to this decision, as expressed in paragraphs 28 to 52 of the Judgment. Having upheld Germany’s second preliminary objection, it follows logically that the Court is not required to consider Germany’s third, fourth, fifth and sixth preliminary objections “and that it cannot rule on Liechtenstein’s claims on the merits” (Judgment, para. 53).

I have, however, some remarks to make on the considerations which brought the Court to the conclusion that “there is a legal dispute” between Liechtenstein and Germany (Judgment, para. 25). Here I would like to state that the finding of the Court that there is a legal dispute between Liechtenstein and Germany does not of course imply that Liechtenstein’s position in this dispute is in any way better than Germany’s position. This does not follow from the text of the decision and was not a point to be decided at the present stage of the proceedings.

Moreover, I cannot follow the Court where it says that it

“further notes that Germany’s position taken in the course of bilateral consultations and in the letter by the Minister for Foreign Affairs of 20 January 2000 has evidentiary value in support of the proposition that Liechtenstein’s claims were positively opposed by Germany and that this was recognized by the latter” (ibid.).

I think that these words would reveal themselves as introducing too low a standard into the determination of the existence of a dispute and therefore have negative effects on the readiness of States to engage in attempts at peaceful settlements of disputes.

(Signed) Carl-August FLEISCHHAUER. [p 70]


DISSENTING OPINION OF JUDGE AD HOC BERMAN

1. While there is much in the Court’s decision, and in its reasoning, with which I agree, I find myself in substantial disagreement over certain [p 71] issues. That would not in itself be grounds for a dissenting opinion, since I do not take the view that it is virtually incumbent on a judge ad hoc to tell the waiting world where and how his conclusions differ from those of the majority on the Court. My views as to the duties and functions of a judge ad hoc are very much the same as those expressed by Judges ad hoc Lauterpacht and Franck respectively at the provisional measures (further request) phase of the case concerning the Application of the Convention on the Prevention and Punishment of the Crime of Genocide (I.C.J. Reports 1993, pp. 408-409), and the merits phase of the case concerning Sovereignty over Pulau Ligitan and Pulau Sipadan (I.C.J. Reports 2002,pp. 693-695).

2. Since, however (or therefore), I believe that the Court has gone seriously astray in deciding how this case should be handled at this preliminary objections phase, I must explain why.

3. In this case, the Federal Republic of Germany, the respondent State, has lodged with the Court no less than six preliminary objections to the Application brought against it by the Principality of Liechtenstein, as applicant State. Three of these objections are stated to go to the jurisdiction of the Court to hear Liechtenstein’s Application, and the second set of three are claimed to be reasons why the Court, assuming it holds itself to have jurisdiction, should nevertheless declare Liechtenstein’s claims inadmissible. No doubt this is not in itself a matter for judicial comment. Litigating States are free to argue their case before the Court as they think best; that is regarded as one of their sovereign attributes, in which the Court should not in normal circumstances interfere.

4. It remains true all the same that Liechtenstein’s claim against Germany, though undoubtedly an unusual one, a claim without obvious precedent, a claim which depends upon creative legal reasoning, is nonetheless in its essence a simple claim, without multifarious strands or complexities. Liechtenstein asserts that the present-day German State has, throughout its lifetime, owed certain duties to Liechtenstein, as a recognized neutral in the Second World War, that those duties have been breached by certain specified conduct in recent years, and that the breach gives rise accordingly to the consequences provided for in the law of State responsibility.
Even allowing for an understandable degree of forensic reinsurance, the interposition of a barricade of three jurisdictional plus three “admissibility” objections against so simple a claim creates the impression of indignation, not to say outrage, that the claim should have been brought in the first place. As indicated, however, this may not be fit matter for judicial comment ¾ except (in the context of the present opinion) to the extent that the phenomenon unites with certain features of the case to which I will return below. [p 72]

5. It is not necessary for me to say anything of my own about the first preliminary objection, the so-called absence of a dispute between the Parties. On it, I am in complete agreement with the Court. The objection has little merit. Germany had itself recognized, in a formal bilateral context, that there was a dispute between the two States which might have to be settled by judicial means.
Indeed, given this recognition (I would be disinclined to call it an admission, as it amounted to nothing more than a reflection of the objective facts), I would be prepared to go further than the Court, and to hold that Germany was precluded, by ordinary considerations of good faith, from now raising an objection of “no dispute”.

6. The issues on which I part company substantially from the Court relate rather to the second preliminary objection, that under which Germany claims that the dispute between the Parties falls outside Germany’s acceptance of the jurisdiction of the Court by virtue of the exception ratione temporis contained in Article 27 (a) of the European Convention for the Peaceful Settlement of Disputes. There is no need for me to repeat the opposing contentions of the Parties on this question, or the prior jurisprudence of the Court on questions of this kind; on both aspects, I have no quarrel with the summary given in the Court’s Judgment. I need only remark that, in my view, the prior jurisprudence of this Court and its predecessor, difficult as some aspects of it are to reconcile, at least establishes that, in interpreting clauses of this kind, the Court enjoys a certain latitude or discretion in determining what facts or situations should be regarded as what the Court now refers to as the “source or real cause” of a dispute before it ¾ if only because no one international dispute exactly resembles another in the way in which it comes into existence. The Court discusses (in paragraph 43 of the Judgment) the fact that the limitation ratione temporis relied upon in the present case is contained in an agreed treaty instrument on the peaceful settlement of disputes, not in a unilateral acceptance under the optional clause, and decides that nothing material turns on that fact. With that conclusion I have no great difficulty, at least in the particular circumstances of this case, though I would not exclude the possibility of a different answer being appropriate in other circumstances. In the present case, at all events, each Party, in its pleadings, has half-expressly, half-implicitly accepted the relevance of the three cases primarily in question (Phosphates in Morocco, Electricity Company of Sofia and Bulgaria, and Right of Passage), and the Court is entitled to treat that as an agreed understanding between these two Contracting States as to the extent of their treaty obligation towards one another, and give weight to it accordingly under normal Vienna Convention principles.

7. More to the purpose is however the fact that the Court, in reaching its conclusion (a somewhat discretionary conclusion, as I indicate above) that the essential facts or situations to which the present dispute “relates” are anterior to the critical date of 1980 under the European Convention, bases itself on the argument that the German courts, in their decision not [p 73] to hear the Pieter van Laer Painting case, were doing no more than continuing their consistent line of jurisprudence. I say, “bases itself on the argument”, but I could equally well have said “concludes”, because the point at issue, it will readily be apparent, is a critical element, perhaps even the crucial element, in the chain of reasoning that leads the Court, in paragraphs 50-52 of the Judgment, to uphold Germany’s second preliminary objection, and on that basis to dismiss Liechtenstein’s Application.

8. The argument in question is, of course, one that was vigorously advanced by Germany in both the written and the oral pleadings. My disappointment lies in the uncritical way in which the Court has adopted this argument as its own. The Court has failed, on the one hand, properly to distinguish the argument into its component parts, and compounded the lapse by then failing to subject these component parts ¾ crucial as they are to its chain of reasoning -- to adequate scrutiny.

9. As I see it, the argument that there was nothing new in the position taken by Germany in respect of the Pieter van Laer painting resolves itself logically into these three propositions: first, that there has been consistency in the jurisprudence of the German courts in respect of issues relating to the confiscation of German external property (at least since the entry into force of the Settlement Convention in 1955); second, that the tenor of these decisions has been compelled by the terms of the Settlement Convention (in other words, that the German courts have had no option but to decide as they did); and third, that it is simply these decisions of the German courts on their own that has served to generate the present dispute.

10. In my considered view, each one of those three propositions is open to serious question. As to the first issue (consistency of jurisprudence), the argument advanced by Germany before the Court has been more a matter of assertion than of demonstration. Germany says that its courts have consistently held, since well before the critical date, that they lacked the competence to hear claims in respect of property confiscated under the Beneš Decrees and similar foreign measures. Liechtenstein has contested this assertion, notably in Appendix I to the Liechtenstein Written Observations, which contains a schedule listing the key court cases heard in Germany in the period 1953-1991FN1. One could have wished, indeed one would have been entitled to expect, that Liechtenstein had been at greater pains to show the Court in detail what issues the German courts had actually been confronted with, and how exactly those issues had been dealt with. An attempt of my own to follow through the court decisions listed in Appendix I, including those which neither Party has [p 74] thought fit to translate into the Court’s official languages, suggests strongly that in fact it took some years before the German courts settled into the totally non possumus stance they now maintain, which in itself implies that there was nothing inevitable about it. There are clear indications in early decisions by the highest courts (e.g., the AKU case of 1956, extracts from which are contained in Annex 2 to the Respondent’s Preliminary Objections) that room was consciously being left open for the argument to be made in appropriate future cases that the Settlement Convention did not apply, or even that it should not be appliedFN2. In other cases dating from the same period, there are clear indications of the highest courts recognizing that they were perfectly entitled to distinguish between different items of property in order to determine whether the régime of the Settlement Convention (or, as the case may be, its predecessor, Allied High Commission Law No. 63) did or did not come into play (e.g., the decisions of three separate supreme courts of 1955, 1957 and 1958 listed as serials 2, 4 and 5 in the table in the Appendix referred to above). Even in the proceedings in the Pieter van Laer Painting case itself in the 1990s, there is repeated discussion in the lower courts about the preconditions that need to be met before the Settlement ConventionFN3 is applied (e.g., Landgericht Köln, Annex 28 to the Memorial, esp. pp. A 260 et seq. and A 264 et seq. and Oberlandesgericht Köln, Annex 29, ibid., esp. pp. A 303 et seq.). Even the rejection of the Reigning Prince’s appeal by the Federal Constitutional Court is on the basis that the lower courts had decided that the expropriation of his property was a measure effected against German external assets within the meaning of the Settlement Convention (Annex 32, ibid., p. A 356). And in the pleading by Germany before the European Court of Human Rights one encounters once again a discussion of the requirements, aims and purposes of Chapter Six that belies the bald proposition that the hands of the German courts were simply tied in advance (Annex 36, ibid., pp. A 423 et seq.).

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FN1 The Appendix also contains an account of the views expressed in the German scientific literature which (if the account given is an accurate one) reveals anything but a settled view among the leading commentators that the question of the application of the Settlement Convention to neutral property had been settled by the earlier court decisions; quite the contrary.
FN2 In a pair of judgments handed down in July 1957 (which were not cited to the Court by either Party) the Federal Supreme Court (Bundesgerichtshof) decided not to apply Article 3 of Chapter Six of the Convention to certain elements of confiscations carried out, respectively, by the Netherlands and under the Beneš Decrees, specifically as German property, notwithstanding that Article 3 was recognized as applying to German assets in Germany. In the second of these decisions, the court expressly based itself on its own assessment of the intentions of the Allied Occupying Powers, i.e., that their intention was not to cover the particular confiscation in question. Both decisions are readily accessible in the International Law Reports, Vol. 24, pp. 31 and 35 respectively.
FN3 Which had by then been made permanent by the arrangements reached in 1990 on a Final Settlement over Germany, of which more below.
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[p 75]
11. As to the second issue (the constraining force of the Settlement Convention), one appreciates of course that under the German Constitution, as under those of many other States, treaties duly concluded are self-executing and fall to be applied directly by the courts. This is, to all appearances, how the German courts have treated Chapter Six of the Settlement Convention, or at least how they have treated its Articles 2 and 3, since the obligation in Article 5 (to compensate the owners of confiscated property) seems not to have been regarded as self-executing, but to have depended on parliamentary legislation; and, as the Court heard in argument, the corresponding legislation excluded the payment of compensation to non-German owners. All that said, however, and granted the proposition that Articles 2 and 3 of Chapter Six of the Settlement Convention were intended to be self-executing, it remains hard for any sophisticated jurist to understand why a treaty provision requiring respect for “measures . . . carried out with regard to German external assets or other property, seized for the purpose of reparation or restitution” compels the conclusion that it applies equally to non-German propertyFN4; or (to put the proposition in its more developed form) why it requires the German courts to follow, without enquiry of any kind, the qualification placed on a confiscation by the confiscating State. Or, even if one accepts the proposition in that more developed form, why it requires the German courts to do what they do without any demonstration of the qualification placed on the property by the confiscating State, because any such demonstration (even if one had been available in the Pieter van Laer Painting case, which on the evidence it was not: cf. Annex 28 to the Memorial, pp. A 265 et seq.) would have been outside the competence of the German courts to receive.

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FN4 With the consequence that it cannot therefore have been lawfully seized for the purposes of reparation or restitution.
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12. The justification for what I have called above this totally non possumus stance is stated over and over again to be that this was the intention behind the Settlement Convention (or, as the German argument has it, of the Three Western Powers in imposing the Settlement Convention), namely to prevent any German court or authority from enquiring into any confiscation in any manner whatsoever. That brings me however to the first of the two Great Silences in the case, both of which I regard as highly significant for its proper disposal.

13. If it was the intention of the Three Powers to impose a universal preclusion, against all comers, of the kind described above, it can surely be a presumed intention only. No evidence was offered to this Court to show that that was indeed the actual intention behind Chapter Six of the Settlement Convention. But would it not be strange in the extreme to [p 76] suppose that the Three Powers could have intended to protect from all scrutiny confiscations that clearly went outside the scope of the reparations régime laid down by them jointly with their wartime Allies, especially confiscations carried out at the expense of neutral States, towards whom they themselves owed the legal obligations arising out of neutrality, and with whom they maintained friendly relations after the War? And, if one looks at the reported decisions of the German courts themselves, can one discern the slightest sign of a detailed enquiry having been made into what the actual intentions behind the Settlement Convention were? I, for my part, find no indication whatever of a prise de position being sought from, or given by, the German Government on that question in any of these domestic legal proceedings. Nor a fortiori has this Court been given even a hint that the German Government had sought (and received), at any point in time, confirmation from their Allies and co-Contracting Parties of the interpretation Germany was giving to their common treaty, and specifically not when the issue of neutral property arose four-square in respect of the Pieter van Laer painting. Nor, by the same token, is there any sign of any such evidence as to the intentions (common intentions) of the Contracting Parties to the Settlement Convention having been presented by the German authorities to their own courts at the time when the jurisprudence of the latter was taking shape.

14. In other words, this Court is now being asked to proceed on the basis of the proposition that the victorious Allies, in their eagerness to ensure that their former enemy should not be in a position to question measures taken by them against enemy property, were completely indifferent to any risk that this régime might be applied to the detriment of neutral (i.e., non-enemy) property; and that, a full ten years later, the three Western Allies, for their part, forced such a conclusion on a reluctant Germany (by then “Federal Republic of Germany”). The proposition is, to put it mildly, counter-intuitive, and yet it is offered up in a formal judicial context without the slightest element of positive proof to sustain it! Surely it must be the case that, if the question had been put (in either its negative or its positive form), say to the Three Powers during the negotiation of the Settlement Convention, the answer would have been obvious. Anything else would carry with it the supposition that the Three Powers consciously intended to breach their own obligations towards States whose neutrality they had recognized during the War.

15. In brief, no sooner does one proceed to probe beneath the surface of some of the propositions advanced in this case, than one encounters the uneasy feeling that what has been presented to the Court as the inevitable and inescapable consequences of a régime imposed on Germany in fact seems more than likely to have contained along the way some elements of conscious choice by organs of the German State. This is not -- of course -- to say that the choices
made were bad or ignoble ones, or that [p 77] there was any element of deliberate intention to damage the interests of third States. But that is not the issue. The issue, as it presents itself in this case, is what steps ought to have followed once it became clear that this was going to be the result of the positions that had been taken by Germany. And that, on all the evidence in the case, including that marshalled by the Court in support of the Respondent’s second preliminary objection, did not become clear until the 1990s, well after the critical date under the European Convention for the Peaceful Settlement of Disputes.

16. It is that which brings me to the last of my three issues ¾ and at the same time to the second of the Great Silences in this case.

17. The third issue I identify in paragraph 9 above goes to the question whether it is simply the decisions by the German courts over the years that were the real cause of the dispute which has been brought before this Court. Let us assume for a moment, for the purposes of argument, that (contrary to what I have shown above) the German courts did in fact have no other option open to them when the Pieter van Laer Painting case came before them. The question is: does the matter stop there? And the answer to that question appears plainly from the fact that the complaint by Liechtenstein is directed at the adoption of that position by the German Government in its international relations, and its interposition as a bar to any possibility of paying compensation to Liechtenstein or its citizens as a result (cf. paragraphs 19 and 20 of the Application instituting these proceedings). That is something which the Court, quite correctly in my view, recognizes by implication in paragraphs 25 and 26 of the Judgment. But, having recognized it, the Court fails to follow through. For, if what triggered this dispute was the realization that Germany, against all expectation, was going to take the position that its treaty obligations to the Three Allies precluded, absolutely and permanently, compensation for the confiscation of Liechtenstein property, then that was a state of affairs (I deliberately avoid the problematical phrase “fact or situation”) that -- so it seems to me -- falls exactly within the framework of the Right of Passage Judgment, and ought at the least to have warned the Court off what I regard as the facile conclusion that the present dispute “relates to” the Beneš Decrees, for the purposes of applying Article 27 (a) of the European Convention for the Peaceful Settlement of Disputes. It will be recalled that, in the Right of Passage case, the Court found that it was not in a position to pronounce on what were the “situations or facts” to which the dispute related until it had heard full argument on the substance, and accordingly joined the preliminary objection to the merits (Judgment, I.C.J. Reports 1957, p. 125). The Court’s reasoning for so doing (ibid., pp. 151-152) bears a strong resemblance to the circumstances of the present case.

18. I pause at this point to observe that the conclusions I draw in the preceding paragraph are ones that, in my view, impose themselves simply [p 78] on the contours of the case. They do not in any sense depend either on there having been a prior understanding between Liechtenstein and Germany (with regard to neutral property) or on a supposed “change of position” by Germany. Both of these propositions I regard as red herrings, and the fact that they were introduced by the Applicant itself into its argument does not make them any the less so. The Court is quite right to dispose of them -- on the facts. But the Court, once again, stops short there, without going on to look carefully enough at whether the logic of the Applicant’s case really does require it to establish one or both of these propositions. To be sure, the Court does admit, in paragraph 49 of the Judgment, that Liechtenstein might be able to establish its case ratione temporis by showing that (I quote in full) “German courts, by applying their earlier case law under the Settlement Convention for the first time to Liechtenstein property, applied that Convention ‘to a new situation’ after the critical date”. But I regret to say that the purport of that Delphic utterance remains closed to me.

19. To my mind it is perfectly clear that the main conclusion which Liechtenstein asks the Court to draw does not depend on either the “prior understanding” or the “change of position” as a precondition. Indeed, one might almost say that there was something of the perverse in insisting that, in order to show that the essential facts generating the dispute are dated after 1980, you must first establish their link to things dating before 1980. In my view it suffices entirely to show that Germany first took an explicit position over neutral assets in relation to the post-war confiscations after 1980, in order to bring the case squarely within the view taken by the Court in the Right of Passage case. To say, as the Court does in paragraph 51 of the Judgment, that the issue addressed by the German courts in the Pieter van Laer Painting case “cannot be separated from the Settlement Convention and the Beneš Decrees” is no doubt true ¾ so far as it goes ¾ but it is not the question that arises for the purpose of deciding whether the facts of the present case fit this Court’s prior jurisprudence.

20. What, then, of the second Great Silence? If the German answer to the Liechtenstein claim, i.e. that it was the powerless agent of an obligation imposed upon it by the Three Powers, is to be subjected to critical examination -- as in my opinion it manifestly must be -- it has first to be broken down into its two component parts. To do so requires some further creative interpretation
of my own, in the absence of any proper argument on either point by either Party before the Court. But I believe I do no more than tease out the inner logic when I say that this argument depends upon the following: (a) that Germany was entitled (i.e. legally entitled) to oppose its obligations (i.e. its claimed obligations) under the Settlement Convention to Liechtenstein, which was not a party to that treaty; (b) that there was no novus actus interveniens in the arrange-[p 79]ments in 1990 which brought about the Final Settlement with respect to Germany.

21. These constituent propositions have only to be stated in order to see how open to question both of them are.

22. Proposition (a) stands in obvious conflict with the pacta tertiis rules in Articles 34 and 35 of the Vienna Convention on the Law of Treaties, which certainly reflect the customary international law on the subject. Yet the German argument before the Court simply parrots that Germany had to follow its obligations (sc. towards the Three Powers) under the Settlement Convention, as if it was obvious (including, presumably, to all third States) that Germany would
oppose this Convention to non-parties, to the detriment of the latter, and without regard to the elementary proposition that a State cannot, by contracting with a second State, absolve itself of its obligations towards a third State (for the application of which rule in the treaties field, cf. Article 30 of the Vienna Convention). And if the contradiction is glaring enough as it stands, how much more glaring still must it be when what is sought to be imposed on the third State is not even what the treaty, on its natural meaning, seems to say!

23. It is however proposition (b) that raises the more profound questions -- at least in the context of the present Judgment. The relevant treaty provisions, Chapter Six of the Settlement Convention, were self-evidently the subject of conscious attention, if not in the Four-plus-Two negotiations themselves, then certainly when Germany and the Three Powers negotiated the Exchange of Notes of 27/28 September 1990, since they formed the explicit subject-matter of part of its paragraph 3. Of utmost significance is the fact that those parts of Article 3 of Chapter Six that preclude claims were prolonged, and in effect made permanent, whereas the obligation in Article 5 to pay compensation was extinguished; this notwithstanding the inescapable conclusion that the Allies, in negotiating the Settlement Convention at the time, must have regarded the obligation to pay compensation in Article 5 as the necessary counterpart to Article 3. No evidence has been offered to the Court -- by either Party -- as to how or why the Settlement Convention was dealt with in this particular way; presumably evidence of that kind was not accessible to the Applicant (other than the shreds in paragraphs 3.54 and 5.56 of the Memorial), but the evidence must most certainly be in the possession of the Respondent. Be that as it may, it is hard to imagine any possible reason why this carefully calibrated metamorphosis of Chapter Six can have been at the insistence of the Three Powers. If per contra there are grounds for the assumption that the perpetuation of the one obligation and the extinction of the other was procured by Germany, for its own benefit, then that must surely have a substantial effect on one’s view of the case. On the one hand, because the Allies had specifically intended the régime of the Settlement Convention to be a temporary expedient only, [p 80] pending a final regulation of the reparations question, as Article 1 of Chapter Six recites. On the other hand, because it can certainly not be asserted that Germany was in the powerless position it claims to have been in in 1952/1955, and thus to have had to accept through gritted teeth in 1990 whatever its Western partners chose to impose upon it. But, in the very specific context of the present Judgment, the events of 1990 may be more than “substantial” in their effects; they may be decisive. Why? Because they may suggest a wholly different analysis of what represents “the source or real cause” of this dispute, and one which, without any doubt, does not fall within Article 27 (a) of the European Convention for the Peaceful Settlement of Disputes, on which the Court has chosen to rest its decision.

24. At all events, much of what I say in the preceding paragraph remains, for the moment, at the level of inference or supposition, in the absence of proper evidence or argument about what did happen in 1990. That in turn suggests, yet again, that the Court was not in a position adequately to assess, on the material available to it at the present stage of the case, whether the second preliminary objection was, or was not, well founded. If so, the accepted way to deal with the situation would be to join the objection to the merits, as foreseen in paragraph 9 of Article 79 of the Rules.

25. Since I would not therefore have upheld the second preliminary objection as denying the Court in limine the jurisdiction to hear the case, it is incumbent on me to say something about the remaining four preliminary objections. This I can do very briefly. I do not propose to say anything about the third, fourth and sixth objections; they seem to me devoid of any substantial merit. The fifth objection, however, relating to the absence before the Court of an indispensable third party, is a serious one, and would have required the Court’s serious attention, as a matter going to the admissibility of the case, had the Court upheld its jurisdiction to hear it.

26. This is not the place for a lengthy excursus on a question which, in the event, does not figure in the Judgment of the Court at all. For my part, I am in the company of those who experience difficulty in following the Court’s reasoning in the case concerning Certain Phosphate Lands in Nauru. It is however enough to say that that case, taken together with the classic pronouncements of the Court in the Monetary Gold case, establishes that the test is whether the determination of the rights or obligations of the absent third State would be a “necessary precondition” to the Court disposing of the dispute before it. This is something on which the Parties in the present case appear to be in agreement. It goes without saying, though, that that test cannot be applied until it is established what the dispute is. The Court has now made its objective determination of the subject-matter of the dispute between the Parties (a determination with [p 81] which I respectfully agree), and, in the light of that determination, it seems to me clear that the settlement of that dispute does not in any sense require the Court first to pronounce on whether the Beneš Decrees as such, or particular confiscations undertaken pursuant to any of those Decrees, were or were not lawful (in the particular sense of infringing the rights of Liechtenstein under international law). To the extent that it might, however, be felt that the final answer to that question was not yet sufficiently clear at this stage of the argument in the case, that would of itself suggest that the objection was not one of an exclusively preliminary character, and ought therefore to be joined to the merits, as with the second preliminary objection (paragraph 23 above).

27. Having reached the above conclusions, I feel it necessary to add some final remarks.

28. The first of these is the fairly elementary observation, which harks back to the remark in paragraph 4 above, that the decision by the Court that it has no jurisdiction to hear this case does not of itself resolve the dispute between the two States. To the contrary, the Court has now found that Liechtenstein and Germany are in dispute with one another, that the dispute is a legal dispute, and has made its own objective determination of what the subject-matter of the dispute is. Some element of res judicata doubtless attaches to those findings. One may assume that the matter will not rest there. The leader of the German delegation to the bilateral consultations in June 1999 recognized that a solution needed to be found, whether by judicial decision or otherwise. To have had that unresolved dispute -- whatever its merits or demerits ¾ settled by decision of this Court, if necessary by some form of ad hoc understanding between the disputants not to contest jurisdiction, would have been an entirely civilized way to handle the matter, one in accordance with the honourable traditions of both States, and, needless to say, entirely within the spirit of the European Convention for the Peaceful Settlement of Disputes. But other methods, of an equally civilized character, remain open to them as well.

29. The second observation may be thought a little more pointed, so I preface it by saying with all emphasis that it is not offered in a critical spirit. One cannot read the papers in this case without the feeling that, faced with the undoubtedly difficult and highly sensitive issue of the Beneš Decrees, the German courts have taken refuge behind the Settlement Convention (and previously Allied High Commission Law No. 63), and that then the German Government has taken refuge behind the German courts. That position, understandable as it may be in relation to the confiscation of German property, is not a proper way of dealing with the question of neutral
property confiscated as if it were German. It is all too easy to portray Chapter Six of the Settlement Convention as if it were simply a heavy burden imposed upon an unwilling Germany. But the truth is that Chapter Six also served to protect the newly founded German State by absolving it of co-responsibility for the confiscations, and at the same time absolving its courts from the invidious task of having to [p 82] sit in judgment on a flood of complaints from its citizens about the treatment visited on their property abroad. Yet the counterpart to this protection for Germany – the necessary element for its completion ¾ must surely have been, quite intentionally, the obligation to compensate laid down in Article 5 of that same Chapter (with no apparent limitation, it may be remarked, to German citizens at all). To lay claim to the one while disclaiming the other is surely a position that requires re-examination. One can only hope that even now some such re-examination may be possible.

30. My last observation of all goes back to the remark at the beginning of this opinion that Liechtenstein’s claim in this case is a very unusual one, requiring, shall we say, a degree of legal creativity. That is however a question going to its merits. It is hard to resist the conclusion that the Respondent -- and, dare one say it, in due course the Court itself -- has allowed the difficulty it experiences in weighing the prospective legal merits of the claim to become transmuted into an
issue in limine. However imaginative the claim, it deserved a hearing, and the Court could with ample justification have achieved just that by joining the second and fifth preliminary objections to the merits.

(Signed) Franklin BERMAN.

 
     

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