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[1] [p5] The Court,
composed as above,
having heard the observations and conclusions of the Parties,
delivers the following judgment:
[2] The Government of the German Reich, by an Application instituting
proceedings filed with the Registry of the Court on February 8th, 1927, in
conformity with Article 40 of the Statute and Article 35 of the Rules of
Court, has submitted to the Permanent Court of International Justice a suit
concerning the reparation which, in the contention of the Government of the
Reich, is due by the Polish Government to the Oberschlesische
Stickstoffwerke A.-G. (hereinafter designated as the Oberschlesische) and
Bayerische Stickstoffwerke A.-G. (hereinafter designated as the Bayerische),
by reason of the attitude adopted by that Government towards those Companies
at the time when it took possession of the nitrate factory situated at
Chorzów, which attitude had been declared by the Court in Judgment No. 7
(May 25th, 1926) not to have been in conformity with the provisions of
Article 6 and the following articles of the Convention concerning Upper
Silesia concluded at Geneva on May 15th, 1922, between Germany and Poland
(hereinafter described as the Geneva Convention).
[3] It is submitted in the Application:
(1) that by reason of its attitude in respect of the Oberschlesische
Stickstoffwerke and Bayerische Stickstoffwerke Companies, which attitude has
been declared by the Court not to have been in conformity with the
provisions of Article 6 and the following articles of the Geneva Convention,
the Polish Government is under an obligation to make good the consequent
injury sustained by the aforesaid Companies from July 3rd, 1922, until the
date of the judgment sought;
(2) that the amount of the compensation to be paid by the Polish Government
is 59.400.000 Reichsmarks for the injury caused to the Oberschlesische
Stickstoffwerke Company and 16.775.200 Reichsmarks for the injury to the
Bayerische Stickstoffwerke Company;
(3) in regard to the method of payment:
(a) that the Polish Government should pay within one month from the date of
judgment, the compensation due to the Oberschlesische Stickstoffwerke
Company for the taking [p6] possession of the working capital (raw material,
finished and half-manufactured products, stores, etc.) and the compensation
due to the Bayerische Stickstoffwerke Company for the period of exploitation
from July 3rd, 1922, to the date of judgment;
(b) that the Polish Government should pay the sums remaining unpaid by April
15th, 1928, at latest;
(c) that, from the date of judgment, interest at 6% per annum should be paid
by the Polish Government;
(d) that, the payments mentioned under (a)-(c) should be made without
deduction to the account of the two Companies with the Deutsche Bank at
Berlin;
(e) that, until June 30th, 1931, no nitrated lime and no nitrate of ammonia
should be exported to Germany, to the United States of America, to France or
to Italy.
[4] In the Case filed with the Court on March 2nd, 1927, in accordance with
Article 35 of the Rules, the Applicant amended his conclusions as follows:
(1) that by reason of its attitude in respect of the Oberschlesische
Stickstoffwerke and Bayerische Stickstoffwerke Companies, which attitude has
been declared by the Court not to have been in conformity with the
provisions of Article 6 and the following articles of the Geneva Convention,
the Polish Government is under an obligation to make good the consequent
injury sustained by the aforesaid Companies from July 3rd, 1922, until the
date of the judgment sought;
(2) that the amount of the compensation to be paid by the Polish Government
is 75.920.000 Reichsmarks, plus the present value of the working capital
(raw materials, finished and half-manufactured products, stores, etc.) taken
over on July 3rd, 1922, for the injury caused to the Oberschlesische
Stickstoffwerke Company and 20.179.000 Reichsmarks for the injury caused to
the Bayerische Stickstoffwerke Company;
(3) that until June 30th, T93i, no nitrated lime and no nitrate of ammonia
should be exported to Germany, to the United States of America, to France or
to Italy;
(4) in regard to the method of payment:
(a) that the Polish Government should pay, within one month from the date of
judgment, the compensation due to the Oberschlesische Stickstoffwerke
Company for the taking [p7] possession of the working capital and the
compensation due to the Bayerische Stickstoffwerke Company for the period of
exploitation from July 3rd, 1922, to the date of judgment;
(b) that the Polish Government should pay the remaining sums by April 15th,
1928, at latest;
in the alternative, that, in so far as the payment may be effected in
instalments, the Polish Government shall deliver, within one month from the
date of judgment, bills of exchange for the amounts of the instalments,
including interest, payable on the respective dates on which they fall due
to the Oberschlesische Stickstoffwerke Company and to the Bayerische
Stickstoffwerke Company;
(c) that from the date of judgment, interest at 6 % per annum should be paid
by the Polish Government;
(d) that the Polish Government is not entitled to set off, against the above
mentioned claim for indemnity of the German Government, its claim in respect
of social insurances in Upper Silesia; that it may not make use of any other
set-off against the above-mentioned claim for indemnity; and that the
payments mentioned under (a)-(c) should be made without any deduction to the
account of the two Companies with the Deutsche Bank at Berlin.
[5] The Application instituting proceedings was, in accordance with Article
40 of the Statute, communicated to the Polish Government on February 8th,
1927; whereupon that Government, after having received on March 3rd, 1927,
the German Case in the suit, on April 14th, 1927, filed with the Registry of
the Court in conformity with Articles 34 and 38 of the Rules, a Preliminary
Objection, accompanied by a Preliminary Counter-Case in the suit concerning
the factory at Chorzów (indemnities).
[6] The Preliminary Objection denying the Court's jurisdiction to hear the
suit brought before it, submitted that the Court should, "without entering
into the merits, declare that it had, no jurisdiction".
[7] In accordance with Article 38 of the Rules, the German Government was
invited to present, before June 1st, 1927, a written statement setting out
its observations and conclusions in regard to the objection to the
jurisdiction.
[8] On April 25th, however, the German Government transmitted to the Polish
Government a memorandum in which the former Government – arguing that, even
if the Court declined jurisdiction [p8] on the basis of Article 23 of the
Geneva Convention, it would have jurisdiction under Article 1 of the Germano-Polish
Arbitration Treaty initialled at Locarno on October 16th, 1925-suggested
that the five following questions concerning the case of the factory at
Chorzów should be referred by mutual consent and by means of a special
agreement to the Court:
(1) Up to what amount is the Polish Government bound to make compensation
for the injury caused by its attitude to the Oberschlesische and Bayerische
Companies?
(2) Is the German Government justified in claiming, over and above the
pecuniary compensation, that the exportation of nitrate of lime, nitrate of
ammonia, etc., to Germany, the United States of America, France and Italy,
should cease?
(3) What are the appropriate methods of payment for the settlement of the
indemnity fixed in accordance with (1)?
(4) At what rate should the sums in question bear interest until paid in
full?
(5) Can the Polish Government set off against these sums claims in respect
of social insurances in Upper Silesia, or any other claim; must the sums to
be paid by the Polish Government under (1), (3) and (4), be paid in ready
money and without deduction?
[9] The text of this memorandum was transmitted on April 29th by the German
Minister at The Hague to the Registrar of the Court.
[10] The Polish Government replied to it by a memorandum dated May 14th, of
which the text was communicated to the Registrar of the Court both by the
German Minister (note of June 1st, 1927) and by the Polish Minister at The
Hague (note of June 2nd, 1927). In this memorandum, the Polish Government,
observing amongst. other things, that it was unable to share the opinion of
the German Government as to the relevance of the Germano-Polish Treaty of
arbitration in regard to the present case, declined the proposal made on
behalf of the German Government.
[11] The German Government, therefore, filed on June 1st a reply to the
Preliminary Objection of the Polish Government.
[12] Since, under Article 38 of the Rules, the further proceedings had to be
oral, the Court, in the course of public sittings held on June 22nd, 24th
and 25th, 1927, heard the statements, replies and rejoinder presented by
Messrs. Sobolewski and Politis, Agent and [p9] Counsel respectively for the
Polish Government, and Kaufmann, Agent for the German Government.
The Facts
[13] The facts relevant to the present case are set out as follows in
Judgment No. 6 given by the Court on August 25th, 1925:
[14] On March 5th, 1915, a contract was concluded between the Chancellor of
the German Empire, on behalf of the Reich, and the Bayerische
Stickstoffwerke A.-G. of Trostberg, Upper Bavaria, by which contract this
Company undertook "to establish for the Reich and to begin forthwith the
construction of", amongst other things, a nitrate factory at Chorzów in
Upper Silesia. The necessary lands were to be acquired on behalf of the
Reich and entered in its name in the land register. The machinery and
equipment were to be in accordance with the patents and licences of the
Company and the experience gained by it, and the Company undertook to manage
the factory until March 31st, 1941, making use of all patents, licences,
experience gained, innovations and improvements, as also of all supply and
delivery contracts of which it had the benefit. For this purpose a special
section of the Company was to be formed, which was, to a certain extent, to
be subject to the supervision of the Reich which had the right to a share of
the surplus resulting from the working of the factory during each financial
year. The Reich had the right, commencing on March 31st, 1926, to terminate
the contract for the management of the factory by the Company on March 31st
of any year upon giving fifteen month's notice. The contract could be
terminated as early as March 31st, 1921, always on condition of fifteen
month's notice being given, if the Reich's share of the surplus did not
reach a fixed level.
[15] On December 24th, 1919, a series of legal instruments were signed and
legalized at Berlin with a view to the formation of a new Company, the
Oberschlesische Stickstoffwerke A.-G., and the sale by the Reich to that
Company of the factory at Chorzów, that is to say, the whole of the land,
buildings and installations belonging thereto, with all accessories,
reserves, raw material, equipment and stocks. The management and working
were to remain in the hands of the Bayerische Stickstoffwerke Company,
which, for this purpose, was to utilize its patents, licences, experience
gained and contracts. These relations between the two Companies were
confirmed by means of letters dated December 24th and 28th, 1919, exchanged
between them. The Oberschlesische Stickstoffwerke Company was duly entered
on January 29th, 1920, at the Amtsgericht of Königshütte, in the Chorzów
land register, as owner of the landed property constituting the nitrate
factory of Chorzów. [p10]
[16] On July 1st, 1922, this Court, which had become Polish, gave a decision
to the effect that the registration in question was null and void and was to
be cancelled, the pre-existing position being restored, and that the
property rights of the lands in question were to be registered in the name
of the Polish Treasury. This decision, which cited Article 256 of the Treaty
of Versailles and the Polish law and decree of July 14th, 1920, and June
16th, 1922, was put into effect the same day.
[17] On July 3rd, 1922, M. Ignatz Moscicki, who was delegated with full
powers to take charge of the factory at Chorzów by a Polish ministerial
decree of June 24th, 1922, took possession of the factory and took over the
management in accordance with the terms of the decree. The German Government
contends and the Polish Government admits that the said delegate, in
undertaking the control of the working of the factory, at the same time took
possession of the movable property, patents, licences, etc.
[18] On November 10th, 1922, the Oberschlesische Stickstoffwerke Company
brought an action before the Germano-Polish Mixed Arbitral Tribunal at
Paris. It called upon that Court
"to allow the claim submitted by the Oberschlesische Stickstoffwerke
Aktiengesellschaft, and to order the Polish Government, the Respondent in
the suit, to restore the factory, to make any other reparation which the
Court may see fit to fix and to pay the costs of the action".
[19] In its reply to this application, the Polish Government asked the Court
to declare that it had no jurisdiction (in the alternative to non-suit the
Applicant).
[20] The suit was admitted to be ready for hearing on October 15th, 1923. It
is, however, still pending.
[21] Furthermore, the Oberschlesische Stickstoffwerke Company brought an
action before the Civil Court of Kattowitz. It asked that Court "to order
the Respondent to inform the Applicant as to the movable property found at
the Chorzów nitrate factories at 11 a.m. on the morning of July 3rd, 1922,
when the working of those factories was resumed by the Respondent; to state
what debts it had collected; to restore to the Applicant or to the
Bayerische Stickstoffwerke Company such movable property, or, should this be
impossible, the equivalent value, and also to repay to the Applicant or to
the Bayerische Stickstoffwerke Company the amount of the debts collected".
[22] This action is still before that Court, which, however, decided on
December 7th, 1923, that there was no pendency, as notice of the action had
not yet been served on the Procurature générale at Warsaw. [p11]
[23] In regard to this suit, the German Government stated in its
"Observations" filed on July 9th, 1925, that the application made to the
Court of Katovice was mainly intended to serve as a basis for claiming,
under Article 588 of the Geneva Convention, the reference of the suit to the
Upper Silesian Arbitral Tribunal, but that the Court rejected this claim.
[24] These suits were pending, when, on May 15th, 1925, Germany filed in the
Permanent Court of International Justice an Application praying the Court to
adjudge (1) that Articles 2 and 5 of the Polish law of July 14th, 1920,
constituted a measure of liquidation of the property, rights and interests
involved, (2) that this liquidation was not in conformity with Articles 92
and 297 of the Peace Treaty of Versailles, (3) that it was contrary to
Article 6 and subsequent articles of the German-Polish Convention concluded
at Geneva on May 15th, 1922 ; and finally to state (4) what the attitude of
Poland should have been under the Treaties mentioned.
[25] Article 297 of the Versailles Treaty relates to the liquidation by the
Allied and Associated Powers of property, rights and interests belonging at
the date of the coming into force of the Treaty to German nationals, or
companies controlled by them, within the territories, colonies, possessions
and protectorates of such Powers, including territories ceded to them by the
Treaty, and, while stipulating that the liquidation shall be carried out in
accordance with the laws of the Allied or Associated State concerned,
Article 297 lays down certain rules. which connect the subject with that of
reparations.
[26] Article 92 of the Treaty of Versailles, however, in accordance with
Article 297h of that Treaty, expressly provides that the property, rights
and interests of German nationals shall not be liquidated under Article 297
by the Polish Government, except on condition (1) that the proceeds of the
liquidation shall be paid direct to the owner, and (2) that if, on the
owner's application, the Mixed Arbitral Tribunal ... or an arbitrator
appointed by it, is satisfied that the conditions of the sale or measures
taken by the Polish Government outside its general legislation were unfairly
prejudicial to the price obtained, they shall have discretion to award to
the owner equitable compensation to be paid by the Polish Government. [p12]
[27] Poland, in answer to the German Application, asked the Court to hold
either (1) that it had no jurisdiction of the suit, or (2) that the
Application could not be entertained until the German-Polish Mixed Arbitral
Tribunal, at Paris, had given judgment.
[28] Without repeating provisions of the Statute relating to the
jurisdiction of the Court, it suffices to say that the Court's jurisdiction
was, in the present instance, invoked upon the stipulations of Article 23 of
the Geneva Convention. This article, consisting of two paragraphs, reads:
“1. Si des divergences d'opinion, résultant de l'interprétation et de
l'application des articles 6 ŕ 22, s'élevaient entre le Gouvernement
allemand et le Gouvernement polonais, elles seraient soumises ŕ la décision
de la Cour permanente de Justice internationale.
“2. Il n'est porté aucune atteinte ŕ la compétence du Tribunal arbitral
mixte germano-polonais résultant des dispositions du Traité de paix de
Versailles [FN1]."
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[FN1] This text, which is the sole and authoritative text of the article,
may be translated into English as follows:
"1. Should differences of opinion, resulting from the interpretation and the
application of Articles 6 to 22, arise between the German and the Polish
Governments, they should be submitted to the decision of the Permanent Court
of International Justice.
"2. The jurisdiction of the German-Polish Mixed Arbitral Tribunal under the
provisions of the Peace Treaty of Versailles is in no way impaired."
---------------------------------------------------------------------------------------------------------------------
[29] On the objection taken by Poland to the Court's jurisdiction, the
Court, in its Judgment No. 6, August 23th, 1925, held:
(1) That the Court's jurisdiction under Article 23 was not affected by the
fact that the rights claimed were contested on the strength of provisions of
other treaties as well as on those of Articles 6 to 22 of the Geneva
Convention.
(2) That the suits pending before the German-Polish Mixed Arbitral Tribunal
at Paris and the Civil Court at Katovice, did not prevent the Court from
exercising its jurisdiction under Article 23.
(3) That the plea to the jurisdiction should be dismissed.
Judgment on the merits was reserved.
[30] Before proceeding to the judgment later rendered by the Court on the
merits, it is essential briefly to summarize the provisions [p13] of
Articles 6 to 22 of the Geneva Convention so far as they are involved in the
pending case.
[31] Article 6 provides that Poland may expropriate in Upper Silesia major
industrial undertakings, conformably to the provisions of Articles 7 to 23
of the Convention; but that, with this exception, the property, rights and
interests of German nationals, or of companies controlled by them, cannot be
liquidated. By Article 7 this right of expropriation may be exercised, in
accordance with the provisions of Articles 92 and 297 of the Versailles
Treaty, during fifteen years from the date of the transfer of sovereignty,
"if, on the request of the Polish Government, this measure has been
recognized by the Mixed Commission as being indispensable to the maintenance
of the exploitation", the Mixed Commission thus referred to being an
international tribunal for the establishment of which provision is made by
Article 562 of the Convention. Article 8 deals with the subject of
expropriation after the fifteen-year period above mentioned. The
stipulations of Articles 9 to 11 it is unnecessary here to particularize.
Articles 12 to 16 relate to the expropriation of large rural estates.
Article 19, paragraph 1, assures to the Polish Government the right from
time to time to inquire into the real ownership of a major industry or a
large rural estate, and into the real control of a company appearing as
owner. If the Polish Government reaches the conclusion that the owner is
really a German national, or that the Company is really controlled by such
nationals, and if, after receiving notice, the interested Party contends
that the facts are not as stated, the latter, during a month after the date
of the notice, may appeal to the German-Polish Mixed Arbitral Tribunal which
may provisionally suspend the procedure for expropriation.
[32] After the delivery by the Court of Judgment No. 6, the German
Government amended the submissions made in its Application, so that, as the
submissions finally stood, the Court was asked to give judgment:
(1) That the application of the Polish law of July 14th, 1920, in Polish
Upper Silesia, decreed by the law of June 16th, 1922, constituted a measure
of liquidation within the meaning of Article 6 and the following articles of
the Geneva Convention, and that, [p14] as it did not conform to those
articles, any more than to Articles 92 and 297 of the Versailles Treaty, to
which the Convention expressly referred, such application was illegal.
(2) That the attitude of the Polish Government towards the Oberschlesische
and the Bayerische was not in conformity with the above-mentioned articles
of the Geneva Convention, and, should this be held to be so, that the Court
would state what attitude would have been in conformity with them.
[33] In reply, the Polish Government asked the Court
(1) To non-suit the Applicant as regarded submission No. 1.
(2) To find that it was not necessary to decide as to the conformity or
non-conformity of the attitude of the Polish Government with Article 6 and
the following articles of the Geneva Convention, since no measure of
liquidation had been taken by that Government.
[34] Issue being thus joined, the Court, at its tenth (extraordinary)
session, heard the case on the merits, and rendered judgment.
[35] In this Judgment – No.7 (May 25th, 1926) – the provisions of the Polish
law of July 14th, 1920, are analyzed and set forth in detail. The subject
matter of this law is the "transfer of the rights of the German Treasury and
of members of reigning German houses to the Treasury of the State of
Poland". Article 1 directs the Polish Courts automatically to substitute in
the land registers of the former Prussian provinces the name of the Polish
Treasury for that of "the Crown, the German Reich, the States of Germany,
the ex-Emperor of Germany or other members of reigning houses", entered
after November 11th, 1918, as owners or as possessors of real rights.
Article 2, paragraph 1, directs the Polish Courts, where such persons or
institutions had, after November 11th, 1918, alienated or charged the landed
property, or requested or consented to the cession, cancellation or
modification of real rights, to restore the registers to their condition on
that date. Article 5 authorizes the Polish Treasury to require the eviction
of persons who, as the result of a contract concluded with one of the
persons or institutions mentioned in Article 1 remained in occupation of the
property after the law came into force. [p15]
[36] The Court held:
(1) That Articles 2 and 5 were incompatible with the provisions of the
Geneva Convention, and that Poland had invoked no title of international law
which would permit Articles 2 and 5 of the law of July 14th to be regarded
as constituting the exercise of a right overcoming the obligations ensuing
from Head III of the Geneva Convention;
(2) That, in the transfer of the factory to the Oberschlesische, there was
no misuse by Germany of the right of alienation of property in the
plebiscite area; that the alienation was a genuine transaction effected in
good faith and was not designed to be detrimental to Poland's rights and
that the Oberschlesische's right of ownership must be regarded as
established, and could have been disputed only before a competent tribunal;
(3) That the property and operating rights claimed by the Bayerische were
also valid', and had been violated by Poland's action ;
(4) That expropriation without compensation was contrary to Head III of the
Geneva Convention; and that the application of the law of July 14th, 1920,
was contrary to Article 6 and subsequent articles of the Geneva Convention,
and that the Court had express and definite jurisdiction of the subject
matter by Article 23 of that Convention.
[37] In conclusion, the Court held:
(1) That the application of Articles 2 and 5 of the law of July 14th, 1920,
decreed by the law of June 16th, 1922, constituted, as to German nationals
or companies controlled by them, within Part I, Head III, of the Geneva
Convention, an infraction of Article 6 and the following articles of that
Convention;
(2) That the attitude of the Polish Government toward both Companies was not
in conformity with those articles, but that the Court was not called upon to
state what attitude would have been in conformity with them.
[38] It was on the basis of this decision of the Court that negotiations
were undertaken by the two Governments for an amicable settlement of the
claims of both Companies by the payment of pecuniary damages. [p16]
[39] Following upon the judgment of May 25th, 1926, the German Government,
on June 25th of the same year, sent to the Polish Government a note in which
it requested that Government "to take the steps necessary to establish a
situation conforming to the judgment both in fact and in law". These steps
should, in the view of the German Government, comprise three different
features:
(1) the re-entry in the land registers of the Court of K6nigshiitte of the
Oberschlesische as owners of the real estate constituting the Chorzów
factory;
(2) the restoration of the factory as an industrial enterprise to the
Bayerische;
(3) the payment to these two Companies of an indemnity, the amount of which
to be fixed by direct negotiations between the two Governments.
[40] The Polish Government replied to this note on September 9th, 1926, the
German Government having in the meantime asked the Polish Government whether
it did not intend to reply and whether it would prefer that the question
should be settled by the institution of new proceedings before the Court.
The Polish reply was to the effect that the Warsaw Government was disposed
"to settle by means of an agreement with the Berlin Government all questions
in dispute with regard to the Chorzów factory". But the Polish Government
stated in regard to the claim for the restoration of the factory that it was
unable to comply for reasons of fact and of law; it also made reservations
as regards the validity, in municipal law, of the entry of the
Oberschlesische in the land register. Finally, it suggested that it would be
better "having regard to the nature of the matter" that representatives of
the interested Companies should directly approach the management of the
factory and that the two Governments should only intervene if agreement
could not be reached in this manner. In a subsequent note, dated October
18th, the Polish Government, whilst, maintaining that the disputed questions
were questions of private law, agreed that delegates of the two Governments
should also take part in the negotiations.
[41] In these circumstances, the German Government proposed in a note dated
October 30th, that the negotiations should be begun at Berlin on November
15th. Believing that it could be said that differences of opinion still
existed between the two Governments "in regard to the legal principles
established by the Court's judg[17]ment" of May 25th, 1926, the German
Government reserved the right to appeal to the Court in regard to the
execution of that judgment, should these differences of opinion subsist
during the negotiations and make such appeal necessary.
[42] The Polish Government, whilst agreeing to enter into negotiations at
Berlin on November 22nd, maintained the standpoint taken in its previous
notes.
[43] The negotiations had been in progress since November 22nd, 1926, when,
on January 19th, 1977, the German Delegation sent to the Polish Delegation a
note setting out two alternative proposals for a compromise, which
proposals, leaving aside the question of restitution, solely related to the
amount of the indemnities and the method of payment: payment was to be
effected by the issue on the date of signature of the agreement, it
concluded, of bills of exchange payable at different dates; in the event of
the payments not being made within the times specified, the German
Government reserved the right once more to have recourse to the Court Should
one of the two proposals be accepted, the existing differences of opinion
would be regarded as disposed of. But if not, the German Government declared
itself ready to reopen negotiations, but the possibility of further
negotiations would not prevent the German Government from referring the
existing differences of opinion to the Court; in the judicial proceedings
that Government would not of course be bound by the proposals for a
compromise which it had made. To the note was attached a memorandum in
regard to the position of negotiations on January 14th, 1927; this
memorandum made it clear, amongst other things, that the reason why the
German Government had abandoned its original claim for the restitution of
the factory was that it had come to the conclusion that the Chorzów factory,
in its present condition, no longer corresponded to the factory as it was
before the taking over in 1922, and that the German Government reserved the
right, should the Polish reply to the German proposals be too long delayed,
to bring the matter before the Court so that it might be included in the
list for the Court's twelfth session, it being always possible to withdraw
the Application, should an agreement be reached within a relatively short
time. The reply of the Polish Government, dated February 1st, accepted more
or less completely the amounts suggested by the German Government for the
indemnities-the Polish Government proposing for the amounts to be paid
subsequently to the Bayeri[18]sche, bills of exchange issued by the Chorzów
factory-but it stated that the Polish Government was not willing to meet the
wishes of the German Government in regard to the issue of bills of exchange
for the Oberschlesische, particularly for the reason that, as it contended,
it possessed claims on the German Government for various amounts, one of
which, in respect of social insurances in Upper Silesia, had been fixed by
the League of Nations at 25 million Reichsmarks, and that, this being so, in
the view of the Polish Government, it was essential to set off the
respective claims against each other. It should be noted that, in its reply,
the Polish Government proposed the resumption of negotiations in regard,
amongst other things, to the "possible filing of an Application with the
Court", a point which, according to that Government, "had not yet been
discussed". Should the German Government not accept the Polish proposals,
the Polish Government would not consider itself bound by them.
[44] The German Government, by a note dated February 8th, 1927, then
informed the Polish Government that the points of view of the two
Governments seemed so different that it appeared impossible to avoid
recourse to an international tribunal, and that therefore the German
Minister at The Hague had received instructions to file an Application with
the Court. In its note, the German Government also drew attention to the
fact that, throughout the whole of the negotiations, the German Delegation
had emphasized that, failing an agreement, appeal to the Court would be
inevitable.
The Law
[45] As has already been indicated, the Applicant has, in his Case on the
merits, made submissions which constitute an amendment of the submissions
made in the Application.
[46] Since this amendment has been effected in the first document of the
written proceedings, in a suit brought by Application-i.e. at a time when,
in accordance with Article 38 of the Rules, the Respondent still retains a
completely free hand to file preliminary objections-no exception can be
taken to it. Moreover, the Respondent, in his preliminary plea, has referred
to the Applicant's submissions as formulated in the Case and not as
formulated in the Application. It is, therefore, the submissions as
formulated in the Case that the Court has now before it. [p19]
[47] The submissions formulated in the Application were based, is apart from
the above-mentioned provisions of the Statute and Rules of Court,
exclusively upon the jurisdictional clause contained in Article 23 of the
Geneva Convention. The basis of the amended submissions set out in the Case
remains unchanged.
[48] It is true that, in this document, the German Government has referred
to the Germano-Polish, Arbitration Treaty initialled at Locarno on October
16th, 1925. The only object, however, of this reference is, as shown by the
context, to establish that, in the contention of the German Government, a
certain claim which Poland may have against Germany cannot, without the
consent of the other Party, be set off extrajudicially against any
indemnities which may be awarded by the Court in the present case,
especially having regard to the procedure instituted by the above-mentioned
Treaty. This reference therefore cannot serve to modify the source from
which, according to the Application, the Court derives jurisdiction.
[49] The same reasoning applies a fortiori with regard to the statement made
in Court by the Agent for the German Government to the effect that even if
the arbitration clause contained in Article 23 of the Geneva Convention does
not apply in the present case, the Court would have jurisdiction under the
Arbitration Treaty of Locarno "if it were applicable in this case"; for this
statement which was, moreover, made at a very late stage, can hardly have
been intended to do more than affirm a more or less theoretical opinion in
regard to the interpretation of that Treaty.
[50] The Court, therefore, holds that the submissions set out above have
been laid before it solely under Article 23 of the Geneva Convention.
[51] Before proceeding to set out the reasons for which it must overrule the
preliminary objection taken by Poland to its jurisdiction to deal with these
submissions, the Court would observe that, for the purposes of this
statement of reasons, as also for the purposes of its future judgment on the
merits, it cannot take account of declarations, admissions or proposals
which the Parties may have made in the course of direct negotiations which
have taken place between them, declarations which, moreover, have been made
without prejudice in the event of the points under discussion forming the
subject of judicial proceedings. For the negotiations in question have not,
as acknowledged by the representatives before the Court of the Parties
themselves, led to an agreement between them. [p20]
***
[52] It is common ground that the Application of February 8th, 1927, and the
submissions of the German Case of March 2nd, 1927, relate to reparations
alleged to be due by the Polish Government for acts set out in the German
Application of May 15th, 1925, and which the Court, in Judgment No.7, has
declared not to be in conformity with Articles 6 to 22 of the Geneva
Convention. Poland denies that the jurisdiction, which the Court, by
Judgment No. 6, decided that it possessed in regard to the above-mentioned
Application of May 15th, 1925, also covers the new Application of February
8th, 1927, and the submissions in the Case of March 2nd, 1927.
[53] The position of the Polish Government is mainly based on the two
following contentions:
1. that Article 23, paragraph 1, of the Geneva Convention, which gives the
Court jurisdiction for "differences of opinion, resulting from the
interpretation and the application of Articles 6 to 22", which may arise
between the German Government and the Polish Government, does not
contemplate differences in regard to reparations claimed for violation of
those articles;
2. that the Geneva Convention has instituted special jurisdictions for
claims which private persons might assert in the event of the suppression or
diminution of their rights, and that the existence of these jurisdictions
would affect that of the Court even if Article 23, paragraph 1, of the
Geneva Convention could be construed as including differences of opinion in
regard to reparations amongst those relating to the application of Articles
6 to 22; therefore, the interested Parties should themselves have recourse
to the jurisdictions in question.
*
[54] In the first place, the meaning and scope of paragraph 1 of Article 23
must be considered, for it is upon this clause – and upon this clause only –
that the Court's jurisdiction in the present case rests.
[55] The Court, by Judgments Nos. 6 and 7, has recognized that differences
relating to the application of Articles 6 to 22 include not only those
relating to the question whether the application of a [p21] particular
clause has or has not been correct, but also those bearing upon the
applicability of these articles, that is to say, upon any act or omission
creating a situation contrary to the said articles. It is a principle of
international law that the breach of an engagement involves an obligation to
make reparation in an adequate form. Reparation therefore is the
indispensable complement of a failure to apply a convention and there is no
necessity for this to be stated in the convention itself. Differences
relating to reparations, which may be due by reason of failure to apply a
convention, are consequently differences relating to its application.
[56] Now, Poland maintains that the words "differences of opinion, resulting
from . . . the application" in Article 23 cannot have the meaning just
indicated, but that they must be construed as covering merely the question
whether, in a given case, the application of Articles 6 to 22 is or is not
correct, to the exclusion of any differences in regard to reparations.
[57] In this connection, the Polish Government, in support of its contention
that paragraph 1 of Article 23 of the Geneva Convention should be
restrictively construed, has traced the development of general treaties of
arbitration during the last fifty years, comprising (1) the so-called clause
compromissoire (arbitration clause) introduced into commercial and other
treaties during the last twenty-five years of the XIXth century and
subsequently, by which the contracting Parties agreed to submit to
arbitration any differences as to the interpretation or application of the
particular treaties; (2) general treaties for the compulsory arbitration of
certain specified categories of disputes, concluded since 1900, and (3)
treaties and clauses for the arbitration of pecuniary claims. It is needless
to say that paragraph 1 of Article 23 is an example of the first of these
three classes of agreements.
[58] Counsel for Poland admitted in Court, for the sake of the argument,
that the clause compromissoire was originally interpreted as including
claims for reparation; but he maintained that, because of later
developments, the clause must now be interpreted as excluding such claims.
The Court is unable to share this view. By the Convention for the Pacific
Settlement of International Disputes, concluded at The Hague in 1899,
although no exceptions [p22] were made in the provisions relative to
"arbitral justice" included in the first Chapter of Head IV of that
Convention, arbitration was not in any case made obligatory. An active
movement was then begun for the conclusion of treaties by which the
submission of differences would be made obligatory, treaties already
foreshadowed by Article 19 of the said Convention. The attainment of this
object, so far as concerns general questions of legal right and obligation,
was found to be feasible by including only certain classes of questions, and
subjecting even these to reservations. On the other hand, it had, ever since
the end of the XVIIIth century, been found to be possible to conclude
agreements for the submission of pecuniary claims to arbitration without
reserve. These facts appear to be logically fatal to the inference sought to
be drawn from them, for they clearly show that, in the opinion of
governments, the differences concerning which reserves were deemed to be
necessary were those relating to legal rights and obligations and not those
relating to pecuniary reparation. To say, therefore, that the clause
compromissoire, while confessedly providing for the submission of questions
of right and obligation, must now be restrictively interpreted as excluding
pecuniary reparation, would be contrary to the fundamental conceptions by
which the movement in favour of general arbitration has been characterized.
[59] Moreover, apart from the question whether expressions used in
conventions between other Powers and at different periods can be taken into
account in interpreting the intention of the signatories of the Geneva
Convention, the Court holds that, in view of the fundamental difference
between the nature of arbitration clauses (clauses compromissoire) and the
object of the classification of disputes in general arbitration agreements,
no conclusion can be drawn from the terminology of the one class of
provisions in respect of the other.
[60] The classification of international disputes which would be most in
point in the present case is undoubtedly the classification adopted in
Article 13 of the Covenant of the League of Nations, and reappearing in
Article 36 of the Court's Statute. For these instruments, which are very
close to the Geneva Convention in point of time, constitute collective
treaties of peculiar importance as they mark [p22] a step forward towards
the realization of compulsory arbitration. But the classification which they
contain would, in the Court’s opinion, lead to the conclusion that the
expression "differences of opinion resulting from the interpretation and
application" in Article 23 of the Geneva Convention, should be construed as
including questions relating to reparations. It is true that the Covenant
and the Statute mention separately, in the first place, "disputes as to the
interpretation of a treaty" and, in the fourth place, those relating to "the
nature or extent of the reparation" ; but they also mention, in the third
place, as a separate category, disputes relating to "the existence of any
fact which, if established, would constitute a breach of an international
obligation". Now it is established by Judgments Nos. 6 and 7 that the Court
has jurisdiction to decide whether a breach of Articles 6 to 22, has taken
place or not. The decision whether there has been a breach of an engagement
involves no doubt a more important jurisdiction than a decision as to the
nature or extent of reparation due for a breach of an international
engagement the existence of which is already established. If Article 23,
paragraph 1, covers the disputes mentioned in the first and third categories
by the two provisions above mentioned, it would be difficult to understand
why – failing an express provision to that effect – it should not cover the
less important disputes mentioned in the fourth category.
[61] Poland has, also drawn the Court's attention to the Convention which,
acting also in the name of the Free City of Danzig, she concluded with
Germany in 1921, - i.e. at a time not far removed from the conclusion of the
Geneva Convention – in regard to freedom of transit between Eastern Prussia
and the rest of Germany. Articles 11 and 12 of this Convention provide for
the establishment of an arbitral tribunal to which each High Contracting
Party may refer "disputes which may arise either in the interpretation or in
the application" of the Convention. Poland observes that Article 11, the
first paragraph of which establishes the jurisdiction just referred to,
contains a special paragraph to the effect that the tribunal will have
jurisdiction if necessary, to decide as to the reparation to be made by the
Party which may have been responsible for a breach of the provisions of the
Convention. Whatever may have been the reasons which led the Parties
expressly to mention jurisdiction in regard to reparations in addition to
that respecting interpretation and application, the fact that a convention
explicitly [p24] confirms the conception generally adopted in regard to
arbitration clauses, cannot be construed to mean that the same Parties, when
employing in another convention the wording ordinarily used in conventions
of this kind, have, by so doing, given evidence of an intention contrary to
that which is to be presumed when interpreting an arbitration clause in a
convention.
[62] It follows from the above that Article 23, paragraph 1, which
constitutes a typical arbitration clause (clause compromissoire),
contemplates all differences of opinion resulting from the interpretation
and application of a certain number of articles of a convention. In using
the expression "differences of opinion resulting from the interpretation and
application", the contracting Parties seem to have had in mind not so much
the subject of such differences as their source, and this would justify the
inclusion of differences relating to reparations amongst those concerning
the application, even if the notion of the application of a convention did
not cover reparations for possible violation.
[63] Having regard to the fact that Counsel for the Polish Government has
laid stress on the literal meaning of the word "application", the Court
thinks it well to remark that in judgment No. 5 -which has been cited before
it in this connection by the said Counsel – it observed not only that
"application" is a wider, more elastic and less rigid term than "execution",
but also that "execution .... is a form of application". It follows that
Judgment No. 5 cannot be cited to support a restrictive interpretation of
the term "application".
[64] For the interpretation of Article 23, account must be taken not only of
the historical development of arbitration treaties, as well as of the
terminology of such treaties, and of the grammatical and logical meaning of
the words used, but also and more especially of the function which, in the
intention of the contracting Parties, is to be attributed to this provision.
The Geneva Convention provides numerous means of redress to secure the
observation of its clauses and it does so in ways varying according to the
subjects dealt with under the different Heads, Parts or other subdivisions
of the Convention. Article 23 contains provisions of this kind in so far as
concerns Articles 6 to 22 which form the greater portion of Head III of the
First Part. [p25]
[65] The object of these methods of obtaining redress-and that of Article 23
in particular-seems to be to avert the possibility that, in consequence of
the existence of a persistent difference of opinion between the contracting
Parties as to the interpretation or application of the Convention, the
interests respect for which it is designed to ensure, may be compromised. An
interpretation which would confine the Court simply to recording that the
Convention had been incorrectly applied or that it had not been applied,
without being able to lay down the conditions for the re-establishment of
the treaty rights affected, would be contrary to what would, prima facie, be
the natural object of the clause; for a jurisdiction of this kind, instead
of settling a dispute once and for all, would leave open the possibility of
further disputes.
[66] This conclusion, which is deduced from the object of a clause like
Article 23, and, in general, of any arbitration clause, could only be
defeated, either by the employment of terms sufficiently clear to show a
contrary intention on the part of the contracting Parties, or by the tact
that the Convention had established a special jurisdiction for claims in
respect of reparation due for the violation of the provisions in question,
or had made some other arrangement regarding them.
[67] It follows from what has been said in regard to the meaning and scope
of the words "differences of opinion resulting from the interpretation and
application of Articles 6 to 22" that the terms of Article 23, first
paragraph, do not establish the existence of any such contrary intention. It
now remains to consider the scope of Article 23, paragraph 2, and Article 22
of the Geneva Convention.
*
[68] The Polish Government contends in the second place that there are other
tribunals before which the injured companies could assert their right to an
indemnity and that, in these circumstances, the German Government cannot, by
substituting itself for these companies, disturb the jurisdictional system
established by the Geneva Convention.
[69] The Court feels that it must consider this point, not only because
Counsel for Poland have cited the general principle with regard to recourse
to tribunals accessible to private persons, but also and more especially in
relation to the terms of Article 23, paragraph 2, of the Geneva Convention.
[p26]
[70] It must first of all be observed that any Jurisdiction which the Polish
Courts may have does not enter into account. For the act on the part of the
Polish Government, which the Court has held not to be in conformity with the
Geneva Convention, consisted in the application of Articles 2 and 5 of the
Polish law of July 14th, 1920, introduced into Polish Upper Silesia by the
law of June 16th, 1922, which application, in the opinion of the Court
(Judgment No. 7), is in itself a measure contrary to Article 6 and the
following articles of the Convention. The Court of Huta Krolewska (Königshütte)
effected this application by ordering the entry in the land register of the
Polish Treasury as owner of the factory in place of the Oberschlesische.
Accordingly, Poland has not argued that the Polish Courts have jurisdiction
in regard to reparation.
[71] The tribunals to be taken into account are therefore those contemplated
by the Geneva Convention itself, namely, the Upper Silesian Arbitral
Tribunal and the Germano-Polish Mixed Arbitral Tribunal. The Agent and
Counsel for the Polish Government spoke sometimes of the one and sometimes
of the other of these tribunals, without specifying which of them would be
competent in the particular case nor whether both of them would be so
competent.
[72] The question whether the jurisdiction of these tribunals might prevent
the exercise of the jurisdiction bestowed upon the Court by paragraph 1 of
Article 23 of the Geneva Convention was brought up before the Court during
the proceedings in regard to the jurisdiction in the suit submitted to the
Court by the German Government's Application of May 15th, 1925. The Polish
Government indeed submitted that that Application could not be entertained
until the Germano-Polish Mixed Arbitral Tribunal had delivered judgment in
the case concerning the same factory of Chorzów brought by the
Oberschlesische on November 10th, 1922, before that Tribunal. The Polish
Government also argued that, as it was a question of an alleged destruction
of vested rights, the Upper Silesian Tribunal might have jurisdiction under
Article 5 of the Convention.
[73] Some of the reasons for which the Court, in Judgment No. 6, overruled
this plea that the suit could not be entertained-for instance the argument
relating to the fact that the Parties are not the same-might to some extent
be applicable also in the present case. It should however be observed that
the position is not the same,[p27] more especially in view of the fact that
the German Application ,of May 15th, 1925, only asked the Court for a
declaratory judgment between States, which only the Court could give,
whereas the present Application seeks an indemnity which is not necessarily
different from that which the Companies on whose behalf it is ,claimed,
might obtain from another tribunal, assuming that there was one which was
competent. For this reason, the Court will not be content merely to refer to
Judgment No. 6 and will once more examine the question in relation to the
special conditions in which it presents itself on this occasion.
[74] Before undertaking this examination, the Court feels called upon to
call to mind the following: In Judgment No. 7 it held that, as the
expropriation allowed under Head III of the Geneva Convention, is a
derogation from the rules generally applied as regards the treatment of
foreigners and from the principle of respect for vested rights, and this
derogation is itself of a strictly exceptional character, -any other measure
affecting the property, rights and interests of German nationals
contemplated in Head III and not supported by some special authority having
precedence over the Convention, and which oversteps the limits of generally
accepted international law, is incompatible with the regime established by
the Convention. The seizure of the property, rights and interests belonging
to the Oberschlesische and Bayerische was precisely a measure of this kind.
It is in this sense that the measures taken by the Polish Government in
respect of the above-mentioned Companies are, in the Court's opinion,
contrary to Head III of the Geneva Convention, and this in spite of the fact
that they do not, properly speaking, fall within the expropriations or
liquidations regulated under that Head. The measures in question are
therefore of a special nature; and it is only in relation to those measures,
thus ,qualified, and to the regime established in Upper Silesia, that it
must be considered whether the dispossessed Companies could apply either to
the Upper Silesian Arbitral Tribunal or to the German Polish Mixed Arbitral
Tribunal for reparation of the injury sustained.
[75] The Polish Government argues that the Upper Silesian Tribunal has
jurisdiction on the basis of Article 3 of the Geneva Convention. This
article, which is the last of Head II of the Convention, is as follows:
[p28]
“La question de savoir si et dans queue mesure une indemnité pour la
suppression ou la diminution de droits acquis doit ętre payée par l'État,
sera directement tranchée par le Tribunal arbitral sur plainte de l'ayant
droit. [FN1]”
---------------------------------------------------------------------------------------------------------------------
[FN1] This text, which is the sole and authoritative text of the article,
may ¬be translated into English as follows:
"The question whether and to what extent an indemnity for the suppression or
diminution of vested rights must be paid by the State, will be directly
decided by the Arbitral Tribunal upon the complaint of the interested
Party."
---------------------------------------------------------------------------------------------------------------------
[76] In the Court's opinion, it is impossible to accept this proposition.
Whatever the scope and limits of the jurisdiction conferred on the Upper
Silesian Tribunal by this article may be in other respects, the fact remains
that this jurisdiction relates to the subject matter dealt with in Head II
of the Convention which concerns the protection of vested rights. Now the
Court, in Judgment No. 7, has decided that the dispossession of the
Oberschlesische and Bayerische was a violation of Head III and it has
decided thus even though it may be true that any violation of this Head,
which constitutes an exception to the general principle of respect for
vested rights, is at the same time necessarily a violation of Head II also.
It follows that the competent tribunals can only be those provided for by
Head Ill. This is also borne out by the fact that the Upper Silesian
Arbitral Tribunal, under Article 5, can only allow pecuniary indemnities;
now it is certain that Head Ill of the Convention is mainly designed to
preserve the status quo in Polish Upper Silesia and therefore that, whenever
possible, restitutio in pristinum is the natural redress of any violation
of, or failure to observe, the provisions therein contained.
[77] The jurisdiction of the Germano-Polish Mixed Arbitral Tribunal derived
from the Treaty of Peace of Versailles, is expressly reserved by Article 23,
paragraph 2.
[78] In order to understand this provision, it should be remembered that
Head Ill of the Geneva Convention has not abolished, although it limits in
several respects, the liquidation regime instituted by the Treaty of
Versailles, and that some provisions of that Treaty concerning that regime
have been expressly declared applicable in Polish Upper Silesia. Thus
Articles 7 and 8 of the Geneva Convention refer to Articles 92 and 297 of
the Treaty. [p29]
[79] These articles, amongst other things, allow private persons to appeal
to the Mixed Arbitral Tribunal. The right to do so is given to the
interested Party in the event of the conditions of sale or measures taken by
the liquidating government outside its ordinary legislation being unfairly
prejudicial to the price ; the Tribunal may then grant the interested Party
a reasonable indemnity which is to be paid by the liquidating government.
[80] As the Geneva Convention was intended to secure to German nationals in
Polish Upper Silesia treatment more favourable than that resulting from the
Treaty of Versailles, there could be no question of abolishing or
diminishing the guarantees given by the Treaty to persons liable to have
their property liquidated. Again, the jurisdiction bestowed upon the Court
by Article 23, paragraph 1, which has no equivalent under the liquidation
regime of the Treaty of Versailles, might have left some doubt as to whether
the means of obtaining redress open to interested Parties under the Treaty
of Versailles would remain open notwithstanding. Cases of the same kind as
those contemplated by the provisions of that Treaty concerning the regime of
liquidation are certainly possible, even in connection with the
expropriations or liquidations authorized by the Geneva Convention. It was
therefore natural expressly to reserve the right possessed by private
persons to appeal in such cases to the Mixed Arbitral Tribunal : this is
what paragraph 2 of Article 23 does.
[81] The Court has also not omitted to examine Article 22 of the Geneva
Convention, in so far as it bestows jurisdiction upon the Germano-Polish
Mixed Arbitral Tribunal. It is however clear that this article also
contemplates regular expropriations effected within the limits fixed by the
preceding articles. That this is the case is proved by, amongst other
things, the fact that the contingency contemplated in the article is that of
a claim for damages greater than the indemnity fixed; the case is therefore
one of expropriation, in the proper sense of the term, and the jurisdiction
given to the Mixed Arbitral Tribunal does not differ from that bestowed upon
it by Articles 92 and 297 of the Treaty of Versailles.
[82] This being so, there would seem to be no doubt that neither this
provision nor Article 23, paragraph 2, expressly contemplates acts of the
kind for which the German Government claims an indemnity on behalf of the
dispossessed Companies. As has already been stated, these acts constitute
special measures [p30] which fall outside the normal operation of Articles 6
to 22 of the Geneva Convention, whereas the jurisdiction reserved by Article
23, paragraph 2, assumes the application of those articles. In the present
case reparation is the outcome, not of the application of Articles 6 to 22,
but of acts contrary to the provisions of those articles.
[83] It has not escaped the Court that the Oberschlesische supported the
action brought by it before the Germano-Polish Mixed Arbitral Tribunal upon,
amongst other things, Article 305 of the Treaty of Versailles. This cannot,
however, affect the conclusion just arrived at by the Court, The aim of
Article 305 – to which, besides, neither the Agent nor Counsel for the
Polish Government have made any allusion – is to secure to interested
Parties the possibility of having recourse to the Mixed Arbitral Tribunal,
even if measures contrary to the terms of the Treaty of Versailles have been
embodied in a judgment. Whatever construction in other respects the Mixed
Arbitral Tribunals have placed or may place upon this article, with which
construction the Court wishes in no way to interfere, the Court, when it has
to define its jurisdiction in relation to that of another tribunal, cannot
allow its own competency to give way unless confronted with a clause which
it considers sufficiently clear to prevent the. possibility of a negative
conflict of jurisdiction involving the danger of a denial of justice. The
Court does not consider that, in regard to the applicability of Article 305
to the situation of the Oberschlesische, all possible doubt is eliminated ;
it would observe, however, that it is not called upon to decide this point.
Furthermore, it should be noted that the Polish Government, in regard to the
action brought by the Oberschlesische before the Germano-Polish Mixed
Arbitral Tribunal on November 10th, 1922, filed a plea to the jurisdiction
on the ground, amongst others, that Article 305 was not considered as
applicable in that case.
[84] There is, moreover, another reason which the Court feels called upon to
invoke in order to show that the jurisdiction of the Mixed Arbitral Tribunal
cannot be urged in this case in opposition to the jurisdiction conferred on
the Court by Article 23 of the Geneva Convention.
[85] A careful examination of the provisions of Head III of the Geneva
Convention brings out-as the Court has already had occasion to point out in
Judgment No. 7 – that one of the fundamental principles [p31] upon which
this Head is based, as regards procedure, is that no dispossession may be
effected without previous notice to the real or apparent owner, affording
him an opportunity of being heard before the competent tribunal. It is
certain – having regard to the promulgation by the Polish Government of the
laws of July 14th, 1920, and of June 16th, 1922, and to the application
given to those laws-that in this case such a procedure has not been adopted,
for the dispossession of the Companies concerned had, in the Polish
Government's contention, taken place outside the framework of the Geneva
Convention. Consequently, the Polish Government cannot in this particular
case require the interested Parties to look for redress of the injury
sustained by them to the tribunals which might have been open to them if the
Convention had been applied. For, thereafter, the utmost that the interested
Parties could obtain from these tribunals would be reparation for the wrong,
whereas, if that procedure had been followed out, the wrong would perhaps
never have occurred.
[86] From what has been said, it follows that once dispossession has taken
place without previous investigation of the right of ownership, the possible
undertaking of this investigation in order to justify such dispossession
after it has taken place, cannot undo the fact that a breach of the Geneva
Convention has already taken place, or affect the Court's jurisdiction.
[87] It is, moreover, a principle generally accepted in the jurisprudence of
international arbitration, as well as by municipal courts, that one Party
cannot avail himself of the fact that the other has not fulfilled some
obligation or has not had recourse to some means of redress, if the former
Party has, by some illegal act, prevented the latter from fulfilling the
obligation in question, or from having recourse to the tribunal which would
have been open, to him.
[88] If, against what has just been stated by the Court, it were contended
that the measures taken by the Polish Government in regard to the
Oberschlesische and Bayerische did not constitute expropriation within the
meaning of Head III of the Geneva Convention, the Court would be called upon
to repeat what it has already had occasion to say not only in Judgment No.
7, but also in the present Judgment, namely, that if expropriation in
consideration of an indemnity is prohibited by that Head, a fortiori is a
seizure, without compensation to the interested Parties, prohibited. [p32]
[89] It has been argued repeatedly in the course of the present proceedings
that in case of doubt the Court should decline jurisdiction. It is true that
the Court's Jurisdiction is always a limited one, existing only in so far as
States have accepted it; consequently, the Court will, in the event of an
objection - or when it has automatically to consider the question – only
affirm its jurisdiction provided that the force of the arguments militating
in favour of it is preponderant. The fact that weighty arguments can be
advanced to support the contention that it has no jurisdiction cannot of
itself create a doubt calculated to upset its jurisdiction. When considering
whether it has jurisdiction or not, the Court's aim is always to ascertain
whether an intention on the part of the Parties exists to confer
jurisdiction upon it. The question as to the existence of a doubt nullifying
its jurisdiction need not be considered when, as in the present case, this
intention can be demonstrated in a manner convincing to the Court.
****
[90] It follows from the foregoing considerations that the Court affirms its
jurisdiction and reserves the suit for judgment on the merits in so far as
the first of the submissions of the Case of March 2nd, 1927, is concerned,
that is to say, as regards the question whether, "by reason of its attitude
in respect of the Oberschlesische and Bayerische, which attitude has been
declared by the Court not to have been in conformity with the provisions of
Article 6 and the following articles of the Geneva Convention, the Polish
Government is under an obligation to make good the consequent injury
sustained by the aforesaid Companies from July 3rd, 1922, until the date of
the judgment sought".
[91] The other submissions (Nos. 2-4) of the Case relate to the amount of
the indemnities to be paid by Poland, a prohibition of export affecting
certain products and, finally, the method of payment. The Court's right to
deal with these points and to grant or refuse the German Government's claim,
follows from the fact of its jurisdiction to hear the claim for reparation.
[92] Whilst denying that the Court has jurisdiction to deal with claims
seeking reparation for a breach of Articles 6 to 22 of the Geneva
Convention, Poland, in her preliminary Counter-Gase, has in the alternative
submitted certain objections in regard, particularly, to [p33] the German
submission concerning a prohibition of export and to the other submission to
the effect that Poland should not be allowed to set off, against any amount
which may be due as reparation, a claim which she has against Germany under
the decision of the Council of the League of Nations of December 9th, 1924.
The Court is not called upon to give a decision on these points at this
stage of the proceedings; they belong to the merits of the suit.
[93] Consideration of the question of the forms of reparation which are
admissible in this case and of the methods of payment indicated would
presuppose that the Court had satisfied itself of the existence of an
obligation to make reparation and of the existence, nature and extent of the
injury resulting from an attitude contrary to Articles 6 to 22.
[94] As regards conclusion No. 4 (d) of the German Case, the question
whether Poland could, if the case arise, assert a claim to set off against
her debt to Germany any debt due to her by Germany remains therefore
entirely reserved.
[95] For These Reasons, the Court, having heard both Parties, by ten votes
to three,
1. dismisses the plea made by the Polish Government requesting the Court to
declare that it has no jurisdiction to deal with the suit brought by the
German Government on February 8th, 1927, and reserves this suit for judgment
on the merits;
2. instructs the President to fix the times for the deposit of the
Counter-Case, Reply and Rejoinder on the merits.
[96] Done in French and English, the French text being authoritative, at the
Peace Palace, The Hague, this twenty-sixth day of [p34] July, nineteen
hundred and twenty-seven, in three copies, one of which is to be placed in
the archives of the Court, and the others to be forwarded to the Agents of
the applicant and respondent Parties respectively.
(Signed) Max Huber,
President.
(Signed) Ĺ. Hammarskjöld,
Registrar.
[97] M. Ehrlich, Polish National judge, availing himself of the right
conferred on him by Article 57 of the Statute, has delivered the separate
opinion which follows hereafter.
(Initialled) M. H.
(Initialled) A. H. [p35]
Dissenting Opinion By M. Ehrlich
[98] I, regret to find myself in disagreement with certain aspects of the
judgment which has just been delivered.
I. [Jurisdiction Over Submission 1]
[99] While the Court has, in principle, jurisdiction to decide on submission
No. 1, I do not think that the Court can consider that submission in the
present case.
[100] It followed from Judgment No. 7, without the necessity of an explicit
statement, that the Polish Government was bound to make reparation for any
damage which may actually and unlawfully have been inflicted; is a result of
the attitude of the Polish Government declared by that judgment not to have
been in conformity with certain stipulations of the Geneva Convention. This
is a consequence of the principle that the violation of an international
obligation entails the duty of reparation, a principle so generally accepted
that in the classification of international disputes of a legal character,
embodied in Article 13 of the Covenant of the League of Nations, and in
Article 36 of the Statute of the Court (of which classification more will be
said presently), there is no special class of disputes as to the duty of
making reparation for a breach of an international obligation, as
distinguished from disputes concerning the existence of a fact which, if
established, would constitute a breach of an international obligation: this
latter class of disputes obviously includes the former. Both the applicant
and the respondent Governments appear to have understood Judgment No. 7 in
the sense just outlined, and, as the Case sets out they actually entered
into negotiations with a view to determining the reparation due to the two
Companies; the Polish Government even suggested that the negotiations be
carried on directly with the Companies concerned.
[101] Since the jurisdiction of the Court in the present case is based on
Article 23, paragraph 1, of the Geneva Convention which stipulates that:
[p36]
[Translation]
"Should divergences of opinion resulting from the interpretation and from
the application of Articles 6 to 22 arise between the German Government and
the Polish Government, they should be submitted to the decision of the
Permanent Court of International Justice.[FN1]"',
it follows that the Court has no jurisdiction where there is no divergence
of opinion. Now, the Case says:
[Translation]
"Thus there is no more a divergence of opinion between the two Governments
that the reparation should be made, in principle, by way of a pecuniary
indemnity.[FN2]"
---------------------------------------------------------------------------------------------------------------------
[FN1] "Si des divergences d'opinion, résultant de l’interprétation et de
l'application des articles 6 ŕ 22, s'élevaient entre le Gouvernement
allemand et le Gouvernement polonais, elles seraient soumises ŕ la décision
de la Cour permanente de Justice internationale."
[FN2] "Ainsi, il n'existe plus de divergence d'opinion entre les deux
Gouvernements que la réparation doit ętre faite, en principe, par la voie
d'une indemnisation pécuniaire."
---------------------------------------------------------------------------------------------------------------------
[102] The principle of reparation seems, therefore, admitted; for there is
not even a divergence of opinion as to the further question, what form
reparation should take.
[103] The jurisdiction of the Court in any given case cannot be taken to
rest on facts contrary to what is alleged by the Applicant. In the present
case, a lack of such a divergence in the matter of submission No. 1 appears
from the statements of the applicant Government.
[104] The conclusion to be drawn is not weakened by the fact that submission
No. 1 asks for the determination of the time limits of the damage; for these
are the logical time limits within which the damage must lie, whether or not
the Court has jurisdiction to estimate it. Nobody can be made responsible
for any damage before it has arisen, and a court in estimating damage will
consider those of its aspects which, at the time of estimating, it will be
in a position to appreciate.
II. [Jurisdiction Over Submissions 2-4]
[105] The judgment which has just been delivered holds that the jurisdiction
of the Court to entertain submissions Nos. 2-4 of the [p37] Case, follows
from the jurisdiction to decide upon the demand for reparation.
[106] Yet in international law jurisdiction to decide, in principle, that a
violation of an international engagement has taken place and that,
consequently, reparation is due, is distinct from jurisdiction to determine
the nature and extent of reparation in general and the amount of a pecuniary
indemnity in particular.
[107] I agree that the classification of international disputes (of a legal
character) which would be of most importance in the present case, is the
classification adopted in Article 13 of the Covenant of the League of
Nations, and reappearing in Article 36 of the Statute of the Court. Article
36 of the Statute provides that a State may accept the jurisdiction of the
Court:
... in all or any of the classes of legal disputes 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."
[108] It is quite possible that a State should accept the optional clause,
for instance, as to disputes belonging to class (c) only, or to classes (a)
and (c). The State in question would not thereby accept, and would not be
presumed to accept, the jurisdiction of the Court as to class (d). The
classes were understood to be distinct, and jurisdiction to decide disputes
belonging to one class cannot be assumed to imply jurisdiction to decide
disputes belonging to another class. In the present case, jurisdiction under
Article 23, paragraph 1, of the Geneva Convention, relates only to disputes
which would fall, as was submitted by the respondent Government, into
classes (a) and (c).
[109] Neither can jurisdiction to decide disputes belonging to one class be
deduced from jurisdiction to decide disputes belonging to another class, by
estimating the relative importance of both classes; for the estimate will
depend, like every question of the relative importance of things, on the
criterion adopted as basis of the comparison. And even if a comparison could
be made with [p38] the help of a universally accepted criterion, it could
still not be inferred that jurisdiction concerning the more important class
of disputes implies jurisdiction concerning a different, though less
important class. For the Parties might purposely have conferred on a
court-and most of all on this Court-the competence to settle the most
important disputes, without wishing to burden the Court with disputes of
less importance, particularly since, by deciding on the interpretation of a
treaty stipulation or on the correctness of its application, the Court could
probably point the way for the solution, or prevention, of a number of
disputes, while the question of reparation might have to be considered in
each individual case.
[110] It seems, indeed, to have been an established practice long before the
adoption of the Covenant of the League of Nations and of the Statute of the
Court, in cases in which an arbitral tribunal was to deal with the questions
of the amount of reparation or the mode of payment, as distinguished from or
in addition to a divergence of opinion as to the interpretation of a treaty
or as to a violation of a treaty or of a rule of general international law,
to specify such powers of the tribunal in the compromis.
III. [Jurisdiction To Assess Damages And Mode of Payment]
[111] While jurisdiction to assess the damages and to fix the mode of
payment does not, in international law, follow automatically from
jurisdiction to establish the fact that a treaty has not been applied,
although it should have been applied, it is necessary to consider whether
the Parties to the Geneva Convention did not intend to confer upon the Court
that jurisdiction.
[112] Two preliminary remarks must be made.
[113] First, the answer to the question just formulated turns, not on the
interpretation of any of Articles 6 to 22 of the Geneva Convention, but on
the interpretation of Article 23 itself ; for the question is, whether
Article 23, paragraph 1, should be read as conferring on the Court
jurisdiction to decide what reparation is due to individuals from the Polish
State (this is the correct term used in Article 3 of the Convention) if the
Polish Government fails to act in conformity with Articles 6 to 22. [p39]
[114] Secondly, the intention to confer upon the Court such a jurisdiction
must be ascertainable either from the wording of the compromise clause or at
least from the circumstances in which the clause was drawn up, and it must
be ascertainable in a way which demonstrates that the force of the arguments
militating in favour of the Court's jurisdiction is preponderant.
[115] No affirmative answer to the question of the Court's jurisdiction in
the matter of submissions 2-4 can be gleaned from Article 23. The words
"interpretation and application" do not, by themselves, imply such an
affirmative answer. They refer to processes, of which one, interpretation,
is that of determining the meaning of a rule, while the other, application,
is, in one sense, that of determining the consequences which the rule
attaches to the occurrence of a given fact; in another sense, application is
the action of bringing about the consequences which, according to a rule,
should follow a fact. Disputes concerning interpretation or application are,
therefore, disputes as to the meaning of a rule or as to whether the,
consequences which the rule attaches to a fact, should follow in a given
case. Now, Articles 6 to 22 of the Geneva Convention do not prescribe any
specific consequences which should follow if the Polish Government were to
disregard the rule laid down in Article 6. Therefore, although such a
disregard would be a violation of the. Convention, yet the determination of
the nature and the extent of the reparation would not be the settlement of a
dispute concerning the interpretation or application of Articles 6 to 22.
[116] The word "resulting from", used in Article 23, although different from
the words "concerning", "in the matter of", generally used in compromise
clauses in connection with the words "interpretation and application", does
not give to Article 23 a different meaning, which would prevent it from
remaining a typical compromise clause. For every divergence of opinion "in
the matter of" interpretation or application is, in a sense, a divergence of
opinion "resulting from" interpretation or application, since, until each
side has arrived at an opinion as a result of the process of interpretation
'or application of the treaty (application in the sense of determining the
consequences which the treaty attaches to the occurrence of a fact), there
can be no divergence of opinion in the matter of interpretation or
application. The word "resulting" connects [p40] the divergence of opinion
with its nearest cause, i.e. the process of interpretation or application.
[117] One might be tempted to maintain that since non-application, i.e.,
failure to bring about the consequences which a rule attaches to a fact, is
bad application, and since bad application is a kind of application (in the
second sense), therefore divergences of opinion, in the matter of reparation
to be made for such non-application are divergences of opinion resulting
from application. Yet non-application is not application. If the treaty
contains rules concerning such reparation, the determination of such
reparation is clearly application (in the first sense) of the treaty. But if
the treaty does not contain such rules, divergences of opinion in the matter
of reparation due for violations of the treaty are divergences of opinion in
the matter of general, as distinguished from conventional, international
law.
[118] Since, therefore, the words "interpretation and application" do not
necessarily relate to the determination of the nature and extent of
reparation for the violation of a treaty, it follows that to base such a
jurisdiction on Article 23 would require an extensive interpretation, where
as not to deduce such a jurisdiction from that article would imply the
natural and not a restrictive interpretation. In other words, a presumption
must be taken to exist, not for, but against deducing that jurisdiction from
Article 23. The presumption would, of course, be defeated if it could be
shown that at the time of the Geneva Convention, or shortly before that
time, the meaning of the compromise clause was generally understood to be
such as the clause has now been declared to have. But nothing has been
brought to the attention of the Court to prove conclusively that the clause
"interpretation and application" was considered in the practice of nations,
during the last quarter of the nineteenth or in the twentieth century, up to
the time of the Geneva Convention, to comprise jurisdiction in the matter of
the determination of the nature and extent of reparation for the violation
of the treaty in question. In particular, no such deduction can be made from
the Postal Convention, to which reference was made, but which establishes a
specific case of responsibility of the postal administrations. [p41]
[119] On the other hand, it is not easy to defeat the inference from the
Russian Explanatory Memorandum which accompanied the Russian project for an
arbitration convention in 1899 and which divides all possible international
conflicts into two groups, one of them comprising cases in which
[Translation]
"one State demands from another an indemnity of a material kind for damages
and losses caused to itself or to its nationals by the acts of the defendant
State or of its nationals, which it considers not to be in conformity with
the law”,[FN1]
while the other group comprises cases in which
[Translation]
"one State demands from the other that it exercise or do not exercise
certain specified attributes of the Sovereign Power, that it do or do not do
certain specified acts which do not relate to material interests". [FN2]
---------------------------------------------------------------------------------------------------------
[FN1] “Un Etat demande a un autre une indemnisation matérielle pour dommages
et pertes causes a lui-męme ou a ses ressortissants par des actes de l’Etat
défendeur ou de ses ressortissants qu’il juge n’ętre pas conformes au
droit.”
[FN2] “Un Etat demande a un autre d’exercer ou de ne pas exercer certaines
attributions déterminées du Pouvoir souverain, de faire ou de ne pas faire
certains actes détermines ne touchant pas a des intéręts d’ordre matériel.”
---------------------------------------------------------------------------------------------------------
[120] It is to the latter group that belong, among other disputes, the
disputes concerning the interpretation and application of treaties, some of
which were enumerated in the Russian project itself. While ultimately the
Conference of 1899 did not adopt the principle of obligatory arbitration,
even for the cases originally suggested by the Russian project, the
Committee proposals accepted, in principle, the Russian division, and in all
the history of the proceedings of the committees of the Conference, there
seems to be nothing to suggest that the division outlined in the Russian
explanatory note was not considered correct. It is difficult, therefore, to
admit that the group of disputes concerning interpretation and application
of treaties was supposed to include ipso facto disputes concerning the
amount of damages to be paid in case of the violation of such treaties.
[p42]
[121] In view, however, of the judgment now delivered, any treaty
henceforward concluded, containing a compromise clause similar to that of
Article 23 of the Geneva Convention, will have to be interpreted in the
light of this judgment.
IV. [Jurisdiction to Interpret an Article and a Consequence of a Fact]
[122] The question arises whether it is permissible to interpret Article 23,
paragraph 1, of the Geneva Convention as conferring upon the Court
jurisdiction to decide only (1) how an article should be interpreted and (2)
whether, in a given case, the consequences which should follow from a given
fact have followed, without giving the Court the further power of deciding
what reparation is due and in what way it should be made. The answer to this
question was given by the Court in Judgment No. 7, when it dealt with the
question of declaratory judgments. Moreover, while in the law of various
countries it is possible to observe the development of the institution of
declaratory judgments, in international relations a judgment of this Court,
establishing the fact that a violation of a treaty has occurred, has no less
power of settling a dispute than a subsequent judgment determining the
amount of damages to be paid.
V. [Exclusive Jurisdiction]
[123] Next it must be considered whether the general construction of Part I
of the Geneva Convention does not make it imperative to assume that the
Court, and no other tribunal, has jurisdiction in cases like the present.
The decision contained in Judgment No. 6 is of course binding, so far as the
question, which was then before the Court, is concerned. As to the question
which has now been raised, it seems that Heads I - III of Part I of the
Convention form one whole. Head Il lays down the general principle of
respect for acquired rights. Head III, while maintaining the principle,
permits of certain exceptions. It is possible, but it is not a priori
necessary to suppose that the general remedies under Head II, which lays
down the rule, should not be available in cases falling under Head III,
which, while admitting exceptions, confirms the same rule. [p43]
[124] Both interpretations being admissible, it seems that there is a
presumption in favour of that interpretation which (1) allows the individual
to apply to a tribunal for the protection of his rights, without making that
protection depend on a decision of the government, and (2) diminishes the
amount of litigation, and therefore of disputes, between States.
[125] Of course, from now on, the judgment now passed must be considered as
determining the question in a way which could only be changed by a new
agreement of both Parties.
VI. [Jurisdiction Inferred From Contemporanea Expositio]
[126] It remains to consider whether an intention of the Parties to the
Geneva Convention to confer the jurisdiction in question on the Court may
not be inferred from a contemporanea expositio, to be gathered, in the words
of Sir Robert Phillimore, from the acts of the Parties which preceded,
accompanied, and followed soon after the making of the treaty.
[127] On behalf of the respondent Government, attention was drawn to Article
II of a Convention concluded by Poland with Germany on April 21st, 1921,
i.e. about a year before the conclusion of the Geneva Convention. That
article provides that:
"Each High Contracting Party shall be entitled to refer any disputes which
may arise either as to the interpretation or the application of the present
Convention, to the decision of a permanent tribunal of arbitration ....
"The Tribunal shall decide all disputes on the basis of the provisions of
this Convention, and on the general principles of law, and of equity.
"It shall be competent to decide the amount, if any, of compensation to be
made to the injured Party by the Party found guilty of any infraction of the
provisions of this Convention."
[128] Since both Conventions were concluded by the same Parties within a
short space of time, the fact of the omission in the later Convention of a
clause which, in the earlier, supplemented the statement of the jurisdiction
conferred on the tribunal in question, [p44] seems to convey an indication
that the omission was intentional and that it was not desired to produce the
effects which the clause inserted in the earlier, but not in the later
Convention, was to produce.
[129] As to the attitude of the Parties after the conclusion of the Geneva
Convention, which is valuable as an indication of the views of the Parties
regarding the clause in question and as calculated to throw light on the
intention of the Parties at the time of the conclusion of the Convention, an
inference may be drawn from the fact that the action which was brought by
the German Government against the Polish Government in 1925 and which led to
judgments Nos. 6 and 7, was stated, on behalf of the German Government, in
the pleadings, not to demand restitution or indemnity and to have been
limited to a demand for a declaration, for this reason, among others, that
doubts might possibly arise whether the Jurisdiction under Article 23
relative to divergences of opinion "concerning" the interpretation and
application of certain stipulations would also comprise reparation on
account of an interpretation or application not in conformity with those
stipulations. It was added that while the German Government believed that in
principle such a jurisdiction should be considered as established, it did
not desire to burden its Application with this delicate problem.
[130] It would appear, therefore, that as late as 1925 the German Government
was not convinced of the undeniable correctness of the interpretation now
suggested. Nothing has been alleged before the Court in the present
proceedings to suggest that the Polish Government has admitted the
correctness of such an interpretation of Article 23. The inference from this
attitude of both Parties is that they had at the time of the conclusion of
the Geneva Convention no intention to give to Article 23 a meaning such as
is now suggested.
[131] I agree, however, that in the question of the jurisdiction of the
Court and of the tribunals of the Geneva Convention, the present judgment
will henceforth be binding,
(Signed) Ludwik Ehrlich.
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