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[p66] The Court,
composed as above - the President of the Court being a national of one of
the countries parties to the case, and the functions of President having
therefore, in accordance with Article 13 of: the Rules of Court, passed in
respect of this case to the Vice-President,
delivers the following judgment:
[1] By a Special Agreement, signed at Brussels on April 13th, 1934, the
Belgian Government and the Government of the United Kingdom agreed to submit
to the Court a dispute which had arisen between them with regard to a claim
made by the Government of the United Kingdom in respect of loss and damage
alleged to have been sustained by Mr. Oscar Chinn, a British subject, as the
result of certain measures taken and applied in the month of June 1931 and
subsequently thereto by the Belgian Government in connection with the
limited liability Company "Union nationale des Transports fluviaux"
(commonly known as "Unatra") in relation to fluvial transport on the
waterways of the Belgian Congo.
[2] Under its third Article, this Special Agreement, which came into force
on the date of signature, might "be notified to the Registrar of the Court
forthwith by either Party". It was actually notified on May 1st, 1934, on
which date the diplomatic representatives at The Hague of the two
Governments concerned forwarded to the Registrar certified copies of the
Special Agreement.
[3] Under Article 1 of the Special Agreement, the Court is called upon to
give judgment on the following questions:
"1. Having regard to all the circumstances of the case, were the
above-mentioned measures complained of by the Government of the United
Kingdom in conflict with the international obligations of the Belgian
Government towards the Government of the United Kingdom? [p67]
2. If the answer to question 1 above is in the affirmative, and if Mr. Oscar
Chinn has suffered damage on account of the non-observance by the Belgian
Government of the above-mentioned obligations, what is the reparation to be
paid by the Belgian Government to the Government of the United Kingdom?"
[4] Article 1, however, adds that the Court is requested, before fixing the
amount of any reparation that may be payable, to indicate the principles
upon which such reparation shall be calculated and to determine the
procedure whereby the said amount shall be ascertained, if within a
time-limit to be fixed by the Court the contracting Governments have not
reached an agreement on the sum to be paid.
[5] The subject of the dispute is thus indicated in accordance with Article
40 of the Statute of the Court.
[6] The communications provided for in Article 40 of the Statute and Article
36 of the Rules of Court were duly despatched on May 3rd and 4th, 1934.
Furthermore, on May 3rd, 1934, the Registrar, pursuant to Article 63 of the
Statute and Article 60 of the Rules, gave notice of the institution of these
proceedings to the States which, together with Belgium and the United
Kingdom of Great Britain and Northern Ireland, had signed the Convention of
September 10th, 1919, revising the General Act of Berlin, of February 26th,
1885, and the General Act and Declaration of Brussels, July 2nd, 1890; when
transmitting to the Court the text of the Special Agreement, the Government
of the United Kingdom had drawn its attention to the fact that the case
would raise questions as to the construction of certain articles of that
Convention.
[7] In Article 2 of the Special Agreement, the contracting Governments
agreed, in accordance with Article 39 of the Rules of Court, that the
written proceedings in the suit should comprise the successive presentation
of a Case, Counter-Case, and, if necessary, a Reply and a Rejoinder, the
Case to be filed by the Government of the United Kingdom, the Counter-Case
by the Belgian Government, and so on. In the same Article the two
Governments also agreed in proposing the duration of the lime-limits to be
fixed by the Court for the filing of the documents above mentioned.
[8] The time-limits were fixed in accordance with the Parties' proposal by
an Order made on May 2nd, 1934; after an extension granted at the request of
both Parties by an Order dated July 14th, 1934, the time-limit for the
filing of the Belgian Government's Rejoinder ultimately expired on September
24th, 1934. The documents of the written proceedings having been duly
presented within the periods fixed, the case became ready for hearing on
that date.
[9] The Government of the United Kingdom, in its Case, asks the Court to
adjudge and declare: [p68]
"(1) that the measures complained of by the Government of the United Kingdom
were in conflict (a) with the obligations of the Belgian Government towards
the Government of the United Kingdom under the Convention of Saint-Germain ;
and (b) with the obligations of the Belgian Government towards the
Government of the United Kingdom under general international law;
(2) that Mr. Oscar Chinn has suffered damage on account of the
non-observance by the Belgian Government of its international obligations
towards the Government of the United Kingdom, and that the Belgian
Government is accordingly liable to make reparation to the Government of the
United Kingdom".
[10] Other submissions are presented with regard to the manner in which the
reparation claimed should, if necessary, be calculated, with regard to the
ascertainment of the amount of reparation by an expert, if the Parties have
not reached an agreement within a specified time; and lastly, with regard to
the fixing by the Court, on receipt of the expert's report and after
considering" the observations of the Parties, of the sum to be paid by the
Belgian Government to the Government of the United Kingdom.
[11] These submissions are maintained unchanged in the written Reply of the
Government of the United Kingdom, which simply adds thereto a request for
the rejection of the submissions of the Belgian Government.
[12] As worded in the Counter-Case of the Belgian Government, these
submissions are as follows:
"May it please the Court,
To adjudge and declare:
that the measures for which the Belgian Government is blamed are in conflict
neither with its international obligations under the Convention of Saint-Germain-en-Laye,
nor with those ensuing from general international law ; that accordingly the
Belgian Government is not called upon to make any reparation;
alternatively, and should the Court not adopt the views of the Belgian
Government with regard to the character of the measures complained of:
that, insufficient proof having been produced to establish according to law
that the loss and damage complained of by Mr. Oscar Chinn are the outcome of
the measures for which the Belgian Government is blamed, no reparation is
due by the latter;
alternatively again :
that in any case the responsibility of the Belgian Government was only
partial and a secondary factor, the economic crisis and the decision taken
of his own account by Mr. Chinn to close down certain branches of his
business which were not affected by the tariff measures adopted by the
Belgian Colonial Administration being other and more important factors in
the losses which are alleged." [p69]
These submissions are not amended in the written Rejoinder of the Belgian
Government, but a request is added for the rejection of "all submissions to
the contrary".
[13] In the course of public sittings held from October 23rd to October
26th, 1934, the Court heard observations on the procedure to be followed,
oral statements and a reply and rejoinder, presented:
on behalf of the Government of the United Kingdom, by Mr. Beckett, Agent,
and by Mr. Fachiri, Barrister-at-law, Counsel for that Government;
on behalf of the Belgian Government, by M. de Ruelle, Agent, and by M.
Dumont, Director at the Belgian Ministry for the Colonies.
[14] The Agents informed the Court, in accordance with Article 46 of the
Rules of Court, that they were agreed that the Agent for the Government of
the United Kingdom should be called upon to speak first; accordingly, Mr.
Beckett opened the case.
[15] The submissions presented on either side in the written proceedings
were not amended in the course of the oral proceedings.
[16] At the beginning of the hearing, the Agent for the Government of the
United Kingdom observed that, at the conclusion of the written proceedings,
there was still a considerable divergence between the Parties in regard to
several matters of fact; he suggested that, in the first place, the Court
should decide in a judgment the questions of law in respect of which the two
Governments were in dispute; in its judgment the Court might direct an
enquiry to be held into the facts if the nature of the Court's judgment on
the questions of law was such as to render it necessary and if the Court did
not feel able upon the evidence already before it to hold that the effect of
the Belgian measures in question was to create a "de facto monopoly". The
Agent for the Belgian Government, for his part, pointed to the power
possessed by the Court under Article 50 of the Statute to order an enquiry
at any time and stated that, subject to certain reservations, he saw no
reason why the Court should not take note of the wish of the representatives
of the United Kingdom. As the proposal made by the latter did not raise a
preliminary issue, the Court reserved its decision.
[17] A certain number of documents in support of their contentions were
filed on behalf of each of the Parties as annexes to the documents of the
written proceedings. With the consent of the Belgian Agent, the Agent for
the United Kingdom submitted some additional documents in the course of the
hearings [FN1]. [p70]
---------------------------------------------------------------------------------------------------------------------
[FN1] See list in the Annex.
---------------------------------------------------------------------------------------------------------------------
[18] These are the circumstances in which the Court is now called upon to
give judgment in the case submitted to it by the Special Agreement of April
13th, 1934.
***
[19] According to the statements of the Parties, the dispute forming the
subject of these proceedings originated as follows:
[20] Before the war of 1914-1918 and also afterwards until 1925, transport
services on the Congo had been operated by, or under the auspices of, the
Belgian Government, though not in any way to the exclusion of private
enterprises. In 1921 it abandoned this business and transferred it to a
Company known as the "Sonatra" Company, which it formed and which was under
its management. In 1925, the Sonatra Company combined with a private Company
known as "Citas" and became the "Union nationale des Transports fluviaux"
known as "Unatra". According to the statutes of this Company, the State
owned more than 70,000 shares out of 120,000; it still at the present time
owns more than one-half of the shares (128,987 out of 243,000 shares).
[21] According to the terms of the "Cahier des charges" agreement, which was
made the subject of a Royal Decree dated March 12th, 1925, and to which the
statutes were appended, the Company is under an obligation to the Colony to
keep permanently in service a fleet capable of meeting the present needs and
future expansion of transport traffic and to establish regular services with
fixed time-tables on the Congo and on the Kasaï, as well as on the navigable
tributaries of those rivers. Transport rates are to be approved by the
Minister for the Colonies or by the Governor-General before being put into
force. The Colony has the right to insist on the maintenance of services
even though they show a deficit, but is bound to make up the receipts to an
amount equal to the running expenses. The Company can not grant exceptional
rates without the special permission of the Colony. The State, for its part,
is bound to entrust the Company with the transport by water of its officials
and goods. It also guarantees interest at 6 per cent, on the debentures of
the Company and the amortization of these debentures The debentures are free
of all taxes, whether state or colonial, over and above 2 per cent.
[22] On October 18th, 1928, the Company wrote to the Government, drawing its
attention to the adverse results shown for some time past by its business,
to the falling off in its receipts though expenses remained practically at
the same level, to its obligation to provide regular services regardless of
the cargoes obtainable, to the expenses arising from its obligation to [p71]
increase its fleet as provided in the cahier des charges, and, finally, to
the competition of trading companies, which, - according to the Company - ,
"pursuing a policy which seems to us to be economically unsound, prefer to
undertake their own transport by water and, furthermore, place their surplus
cargo space, when available, at the disposal of others at rates much lower
than those of our tariff". Pointing out that in this way a large proportion
of the transport traffic was being diverted into other hands and that,
restricted by the cahier des charges and by the obligation to maintain fixed
rates, it could not compete, the Company asked that its existing rates
should be regarded as maximum rates, so that it might enjoy the same freedom
as its competitors to grant special rates to regular and important
customers, and also be in a position to conclude with its customers fidelity
contracts enabling it to grant a rebate on the tariff charges to those
agreeing to entrust all their transport business to it.
[23] The Belgian Government acceded to the Company's request in a letter
dated October 24th, 1928, but at the same time pointed out that all shippers
of the same category must -be treated on the same footing, adding that the
slightest complaint might entail, if justified, the withdrawal of this
authorization.
[24] A series of contracts were actually concluded by the Company in 1929
and the following years. These contracts were of two kinds: fidelity
contracts properly so-called - most of which have, however, expired - and
contracts for the taking over or laying up of shipping.
[25] At the beginning of 1929, Mr.Chinn, a British subject, who had worked
in the Congo since 1927, came to Leopoldville and established there a river
transport and ship-building and repairing business. According to the
information furnished by the Agent for the Government of the United Kingdom
- which has not been gainsaid in this respect by the Belgian Government -
Mr. Chinn was, apart from Unatra, the only fluvial transporter in the
Belgian Congo who did not at the same time carry on business as a merchant
or as a producer. The Parties, however, disagree as to the volume of his
business and the amount of his profits.
[26] In the course of 1930 and 1931, the severe commercial depression which
prevailed throughout the whole world seriously affected trade in the Congo
colony. On May nth, 1931, the Chamber of Commerce of Leopoldville is stated
to have appealed to the Belgian Government to lend its assistance by
effecting a reduction of 50 % in the cost of all transport, by granting
export premiums for the benefit of traders and by establishing government
control of production. [p72]
[27] On June 20th, 1931, the Belgian Minister for the Colonies sent the
following communication to various transport concerns whose tariffs the
Government was in a position to control, informing them of the decision
which he had taken in order temporarily to relieve the critical state of
trade:
[Translation.]
"Gentlemen,
The collapse of the prices obtained for colonial produce in the European
markets necessitates an immediate reduction in the net price of the
following Congo products: timber, cocoa, coffee, rubber, cotton, palm-oil,
palm nuts, native rice, sesame, and other native produce with the exception
of copal.
After consideration of the question, I have come to the conclusion that this
reduction in the cost price must be effected, firstly, by a reduction of the
expenses of transportation and handling and, secondly, by a diminution of
the overhead charges of colonial producers.
Accordingly, I have decided that the rates at present in force for the
transport and handling of the above-mentioned products shall be reduced as
follows as from July 1st, 1931:
(a) Manucongo.
Reduction of 60 % in the rates at present in force for the carriage of raw
cotton of native origin; of 33 % in the rates for the carriage of palm-oil,
palm nuts, and empty oil-containers.
(b) Mayumbe Railway Régie.
Reduction in the rates for the carriage of palm-oil and of empty
oil-containers to 1 franc per ton for any distance.
Reduction of 75 % in the rates at present in force for the carriage of palm
nuts.
Reduction of 60 % in the rates at present in force for the carriage of
timber, coffee, cocoa, sesame and rubber.
(c) The "Compagnie du Chemin de fer du Congo".
Reduction of 60 % in the rates at present in force for the carriage of raw
cotton of native origin and of 33 % in the rates at present in force for the
carriage of palm-oil and empty oil-containers, and also for the haulage of
empty tanks.
(d) The "Union nationale des Transports fmviaux et Manutention Léo".
Reduction of the rates for the carriage of coffee, rubber, cocoa, cotton,
palm-oil, sesame, native rice and empty oil-containers to 1 franc per ton
for any distance.
Reduction of 75 % in the rates for the carriage of palm nuts for any
distance. [p73]
Reduction of the handling charges at present in force: by 60 % for cotton,
33 % for palm-oil and empty oil-containers and palm nuts.
(e) Congo Local Railways.
Reduction of 60 % in the rates at present in force for the carriage of raw
cotton of native origin.
(f) The "Societe des Messageries automobiles du Congo".Reduction of 60 % in
the rates at present in force for the carriage of raw cotton of native
origin.
The above reductions will come into force as from July 1st, 1931, for a
period of three months, renewable on expiry.
The Colonial Administration requests you to open a special account, showing
in particular any costs or losses arising out of the application of the
above-mentioned measures. After carefully checking and auditing the figures,
the Colonial Administration will reimburse you for any loss appearing in
this special account, subject however to the express condition that the
whole of your profits and losses, as shown in your annual statement of
accounts or in your quarterly balance-sheets, show a deficit; only overhead
expenses, normal amortization and interest charges may however appear on the
debit side of the said profit and loss account.
Furthermore, it is clearly understood that the charge which the Colony thus
agrees to bear shall be recoverable, whenever the economic position allows
of the transport tariffs being again raised.
I will be glad if you will inform me that you are in agreement with the
above conditions, and if you will send the necessary instructions to your
African office to enable the new regulations to come into force as from July
1st next. I have, etc.
(Signed) Paul Crokaert,
Minister.
Letter sent to:
Manucongo - Régie des Chemins de fer du Мауитbé - Comfagnie de Chemin de fer
du Congo - Union nationale des Transports fluviaux et Manutention Léo -
Chemins de fer vicinaux du Congo - Société des Messageries automobiles du
Congo."
[28] As will be seen, the decision, in so far as it applied to the transport
of the main products of the colony intended for export, affected downstream'
traffic; and in so far as the decision applied to the transport of empty
containers, it affected mainly upstream traffic. In both cases the charge,
reduced to one franc per ton, was, practically speaking, a purely nominal
one.
[29] In consequence of the reduction in rates, the Colony undertook to
refund to the companies referred to above any losses incurred by them,
provided that the profit and loss account [p74] of each concern as a whole
showed a deficit. On the other hand, it was understood that any such refunds
would be recoverable when the economic situation made it possible to raise
transport rates. Under the arrangement, the Belgian State paid to Unatra
2,072,000 fr. in 1931, 12,107,000 fr. in 1932 and 7,456,000 fr. in 1933.
[30] This measure, which was to take effect on July 1st, 1931, and to remain
in force for three months subject to renewal, gave rise to discontent in
certain circles in the colony.
[31] In a letter dated June 26th, 1931, the "Socié'té commerciale du Centre
africain", known as "Socca", asked the Minister for the Colonies to state
what conditions it must accept in order to obtain compensation for the
losses which, it averred, it was bound to suffer as a result of this
decision; Socca added that it did not imagine that the Government could have
"intended to create - in favour of one company - a preferential régime
amounting in fact to a monopoly".
[32] The Chamber of Commerce of Leopoldville also urged in a letter from its
President to the Governor-General of the colony dated June 27th, 1931, that,
"side by side with the assistance given to trade by the Colony through
Unatra, equivalent assistance should be provided for those who prefer to
entrust their transport business to other concerns or who transport their
own produce".
[33] In the following letter to Socca, dated July 28th, 1931, the Minister
for the Colonies expressed his regret that he could not comply with its
request:
[Translation.]
"Gentlemen,
I have the honour to acknowledge your letter of June 26th, 1931, regarding
the reductions granted in respect of the tariffs of Unatra, and in which you
ask that governmental aid should be extended to you under the same
conditions.
I would observe that the measure with regard to the reduction of transport
rates is a measure taken in the general interest and necessitated by the
prices prevailing in the European markets for produce of the Congo. These
reductions are temporary. They are only valid for periods of three months,
at the expiration of which they will be renewed if necessary.
The compensation to be accorded by the Colony to transport undertakings will
only be granted in so far as any expenses and losses are incurred resulting
from the application of this measure and subject to the express condition
that the profit and loss account of an undertaking as a whole shows a
deficit, it being understood that on the debit side of this account may only
be placed general expenses, normal amortization and interest charges.
The Government of the Colony moreover reserves the right, when a favourable
opportunity occurs, to recover by means of increases [p75] in the transport
rates any sums which may have had to be advanced as a result of these
reductions.
It follows that governmental assistance must be confined to transport
undertakings over whose rates the Government has a right of supervision. I
regret that, in these circumstances, I am unable to comply with your
request.
I have, etc."
[34] According to the Government of the United Kingdom, the effect of the
decision of June 20th, 1931, was to ruin Mr. Chinn by forcing him entirely
to suspend both his transport business and his ship-building and repairing
business. According to the Belgian Government, on the contrary, this was not
so and Mr. Chinn's last cargo was carried on May 13th, 1931, after which
date he carried no further cargo on the river, either upstream or
downstream. It is not disputed, moreover, that, on July 1st,1931, Mr.
Chinn's vessels were laid up.
[35] Whatever the facts may be in regard to this point, six concerns
interested in river transport, amongst them that of Mr. Chinn, decided to
have recourse to the courts. On March 18th, 1932, they brought an action
against the Colony before theCourt of First Instance at Leopoldville,
claiming on the basis of the Convention of Saint-Germain of September 10th,
1919, as approved by the Belgian law of July 5th, 1920, reparation of the
damage - provisionally estimated at about twelve million francs - alleged to
have been suffered by them as a result of the fact that the Colony "has
concluded with the Société nationale de Transports fluviaux, known as
Unatra, without admitting them to the benefit of similar treatment, an
arrangement under which that Company - in consideration of the refund of the
amounts involved - has made in its normal rates for the shipment of produce
progressive reductions down to a purely nominal figure, and has thus
established in favour of Unatra a virtual monopoly of the river transport
business in the most important direction".
[36] Their suit having been dismissed by a judgment given on September 21st,
1932, the claimants lodged an appeal with the Court of Appeal at
Leopoldville; the latter, in a judgment given on December 13th, 1932, upheld
the decision of the Court below.
[37] Meantime, as the acuteness of the depression did not diminish and as
the measure of June 20th, 1931, had only been instituted for three months,
the Belgian Government prolonged it for successive periods, after
attempting, without result, to revise in respect of certain products the
reduction which it had made in Unatra's rates.
[38] In October, 1932, after a visit paid to the Congo by the Minister for
the Colonies, a further decision was taken and [p76] was promulgated by the
Governor-General on October 3rd, 1932. This decision was as follows:
"NOTICE ТО THE PUBLIC.
The Minister for the Colonies has decided, as from August 1st, 1932, to
grant, as an advance, to all private transporters making application and
offering the requisite guarantees, the refund of losses suffered as a result
of transporting products the downstream rates for which have been reduced.
This loss will be calculated per ton kilometre on the basis of the loss
suffered by Unatra up to December 31st, 1932.
Private transporters must produce the manifest on unloading, and if
necessary they must send copies of the bills of lading to support the
manifest.
The guarantee must take the form of a guarantee by a bank or other solvent
institution or of a mortgage on immovable property."
[39] After the Court of Appeal of Leopoldville had given judgment, the five
enterprises which had associated with Mr. Chinn in starting legal
proceedings against the Administration of the Colony do not appear to have
carried the matter further. Only the latter did not abandon his claim.
Before the delivery of the Court of Appeal's judgment, he had already
appealed to his Government for protection, and the latter had taken up his
claim.
[40] Negotiations ensued between the Government of the United Kingdom and
the Belgian Government with a view to a friendly settlement. These
negotiations proved fruitless and the two Governments then agreed to submit
the case to the Permanent Court of International Justice. The Special
Agreement of April 13th, 1934, by virtue of which the Court is called upon
to give judgment, was thereupon concluded.
***
[41] As the case has been brought before the Court by Special Agreement, it
is necessary to be clear as to the positions occupied by the respective
Parties, according to the terms of that instrument.
[42] Having regard to the order in which the documents of the written
proceedings were alternately filed, in conformity with the method proposed
in the Special Agreement, and having regard also to the order in which the
Agents were agreed that they should address the Court, and to their attitude
during the pleadings, it is evident that, in the opinion of the Parties in
the present suit, the British Government is, in fact, in the position of
plaintiff, and the Belgian Government in that of defendant. [p77]
[43] According to the terms of the Special Agreement, the first question on
which the Court has to decide is whether, "having regard to all the
circumstances of the case", certain measures taken and applied in the month
of June, 1931, and subsequently thereto by the Belgian Government, in
connection with the Unatra Company and in relation to fluvial transport on
the waterways of the Belgian Congo, are in conflict with the international
obligations of that Government towards the Government of the United Kingdom.
[44] It is first necessary to determine the nature of the measures of which
the Government of the United Kingdom complains, the "circumstances of the
case", that is to say the circumstances which are peculiar to the present
suit, and, lastly, the international obligations with which - in the
submission of the Government of the United Kingdom - these measures were in
conflict.
[45] 1- It is apparent from the history of the case that the measures taken
and applied in the month of June 1931, and subsequently thereto, in
connection with the Unatra Company and in relation to fluvial transport on
the waterways of the Belgian Congo, are primarily the decision of the
Minister of the Colonies, dated June 20th, 1931, and the refusal of the
Belgian Government, which ensued and which was maintained until October 3rd,
1932, to extend the benefit of these measures to fluvial transport
enterprises other than Unatra; the measures also include the payments made
by the Exchequer of the Colony to that Company. It is evident that the
fundamental issue in the present suit is the lawfulness or otherwise under
international law of the measures taken in 1931.
[46] The action of the Minister appears as a governmental act, applying to
several companies engaged in transport and in particular to Unatra; in the
case of the latter enterprise, this act constituted a kind of rider to the
Company's cahier des charges, and is to be accounted for by the right of
supervision which the Government retained over that Company; it was also a
governmental act, in virtue of the promises held out on behalf of the
Colonial Exchequer of reimbursement-possibly only temporary - of any losses
that might be incurred. Moreover, it is plain from the Special Agreement
itself that the Parties are agreed in regarding the measure as a
governmental act, and it is in that character that it has been impugned by
the Government of the United Kingdom.
[47] As regards its scope, the Belgian Government's action had in view - as
has been shown - a substantial reduction in the transport tariffs on certain
native products ; it is not a measure applying especially to the Unatra
Company, since it also affects certain land transport concerns under State
supervision. On the other hand, to compensate for the expenses and losses
which it [p78] imposes, it provides for a refund to each of the enterprises
concerned, subject however to the condition that the profit and loss account
of that particular enterprise, as a whole, reveals a deficit. These
reimbursements are, moreover, recoverable by the State, as soon as the
economic situation has improved sufficiently to allow the tariffs to be
raised again, they constitute a temporary loan, or advance, which has to be
refunded to the Colonial Exchequer. The measure itself is of a temporary
character ; it may, however, be prolonged.
[48] 2. - As regards the "circumstances of the case", which the Parties have
expressly asked the Court, in the Special Agreement, to take into account in
judging the demand of the Government of the United Kingdom, the information
given in the documents filed and in the oral pleadings shows them to be
briefly as follows.
[49] In the first place is to be noted the peculiar importance of fluvial
transport for the whole economic organization of the colony. The river
Congo, owing to the magnitude and extent of its waterways, constitutes the
chief highway of the Belgian colony. Penetrating, by means of its numerous
tributaries, to the remotest confines of the territory, it makes it possible
to exploit and turn to account the local sources of wealth of every part of
the colony, so that, from the point of view of the evacuation of products to
be exported, it constitutes an essential factor in the commercial activities
of the colony.
[50] A special aspect of the circumstances in which the measure of 1931 was
adopted is revealed when one considers the character of the Unatra Company.
Having succeeded in 1925 to the Sonatra Company, which was under the
direction of the State, the Unatra Company was in form a private company;
but it was charged, none the less - owing to the terms of its cahier des
charges and the supervision therein reserved to the State - with the conduct
of an organized public service, involving special obligations and
responsibilities, with a view, primarily, to satisfying the general
requirements of the colony.
[51] The fact that Unatra was responsible for these services was, it is
true, no bar to the enterprises of other concerns who were desirous of
engaging in fluvial transport on their own account, or for the account of
others. But these concerns, carrying on business freely, and having
pecuniary profit as their main and legitimate object, had no claim to any
guarantee of their profits from the State. They could only claim the freedom
and equality guaranteed by treaty on the Congo, as will presently be shown.
[52] Finally, the circumstance which, according to the Belgian Government,
was the determining cause of the measure which [p79] it took on June 20th,
1931, was the general economic depression and the necessity of assisting
trade, which was suffering grievously from the fall in prices of colonial
products, and of warding off the danger which threatened to involve the
whole colony in a common disaster.
[53] The Belgian Government was the sole judge of this critical situation
and of the remedies that it called for - subject of course to its duty of
respecting its international obligations.
[54] 3. - As regards the international obligations of the Belgian Government
towards the Government of the United Kingdom, these have been clearly
indicated by the Parties in their written. Memorials and in the course of
the pleadings. They are, in the first place, the obligations arising from
the international régime of the Congo Basin, under the Convention of
Saint-Germain-en-Laye of September 10th, 1919, and in the second place the
obligations resulting from the general principles of international law.
[55] According to Article 1 of the Convention of Saint-Germain:
"The signatory Powers undertake to maintain between their respective
nationals and those of States, Members of the League of Nations, which may
adhere to the present Convention a complete commercial equality in the
territories under their authority within the area defined by Article 1 of
the General Act of Berlin of February 26th, 1885, set out in the Annex
hereto, but subject to the reservation specified in the final paragraph of
that Article.
Annex.
Article 1 of the General Act of Berlin of February 26th, 1885.
The trade of all nations shall enjoy complete freedom:
1. In all the regions forming the basin of the Congo and its outlets
[according to the geographical boundaries].
2. In the maritime zone extending along the Atlantic Ocean [according to the
geographical boundaries].
3. In the zone stretching eastwards from the Congo Basin [according to the
geographical boundaries].
It is expressly recognized that in extending the principle of free trade to
this eastern zone, the Conference Powers only undertake engagements for
themselves, and that in the territories belonging to an independent
sovereign State this principle shall only be applicable in so far as it is
approved by such State. But the Powers agree to use their good offices with
the governments established on the African shore of the Indian Ocean for the
purpose of obtaining such approval, and in any case of securing the most
favourable conditions to the transit (traffic) of all nations."
[56] Furthermore, according to Article 5: [p80]
"Subject to the provisions of the present Chapter, the navigation of the
Niger, of its branches and outlets, and of all the rivers, and of their
branches and outlets, within the territories specified in Article 1, as well
as of the lakes situated within those territories, shall be entirely free
for merchant vessels and for the transport of goods and passengers.
Craft of every kind belonging to the nationals of the signatory Powers and
of States, Members of the League of Nations, which may adhere to the present
Convention, shall be treated in all respects on a footing of perfect
equality."
[57] The Convention of Saint-Germain was the successor - so far as the
Parties in the case are concerned and as regards the relations between them
- of the General Act of Berlin of February 26th, 1885, and of the Act and
Declaration of Brussels of July 2nd, 1890 - to which Acts it is linked up by
its Preamble; but it should be pointed out that, according to the terms of
Article 13 of the Convention signed by the two Governments concerned,
"Except in so far as the stipulations contained in Article 1 of the present
Convention are concerned, the General Act of Berlin of February 26th, 1885,
and the General Act of Brussels of July 2nd, 1890, with the accompanying
Declaration of equal date, shall be considered as abrogated, in so far as
they are binding between the Powers which are Parties to the present
Convention."
[58] No matter what interest may in other respects, attach to these Acts -
the Berlin Act and the Act and Declaration of Brussels - in the present case
the Convention of Saint-Germain of 1919, which both Parties have relied on
as the immediate source of their respective contractual rights and
obligations, must be regarded by the Court as the Act which it is asked to
apply; the validity of this Act has not so far, to the knowledge of the
Court, been challenged by any government.
[59] The Parties are not agreed as to whether paragraph 1 of Article 1 of
the Berlin Act - this Article is reproduced as an Annex to Article 1 of the
Convention of Saint-Germain - which proclaims "complete freedom" of trade
for. all nations, is, or is not, embodied in the last-named Article. In the
view of the Government of the United Kingdom, the clause in question
constitutes an integral part of that Article. The Court cannot however agree
with that opinion, which is inconsistent with the express terms of Article 1
of the Convention of Saint-Germain; for this Article only maintains in force
Article 1 of the Berlin Act, which is annexed thereto, in so far as concerns
the clauses fixing the limits of the territories to which the Convention
applies, and the last paragraph. But that question loses much of its
interest in the present case, when it is observed [p81] that paragraph i of
Article 5 of the Convention applies this principle of freedom of trade in
regard to the very question of fluvial navigation with which the Court is
now concerned. It is, indeed, hardly open to doubt that the fluvial
transport industry is a branch of commerce.
[60] It is true that the Convention of Saint-Germain, by Article 13 referred
to above, has abolished the regime of freedom of trade so far as concerns
the exemption from customs duties stipulated in Article IV of the Berlin
Act. But there is no evidence that it intended to depart, so far as concerns
commerce, from the general principle of freedom which was laid down at
Berlin in regard to the river system in question. On the contrary, the
signatory States of the Convention of Saint-Germain expressly referred to
that principle not only - as has already been shown - in Article 5 quoted
above, but also in the concluding paragraph of the Annex to Article 1 and in
Article 10.
[61] In regard to the general principles of international law, on which the
Government of the United Kingdom has alternatively relied, it is apparent
from the written Memorials and pleadings of the Parties that the Government
of the United Kingdom relies on the obligation incumbent upon all States to
respect the vested rights of foreigners in their territories, and that it is
this obligation which the Belgian Government is alleged to have infringed in
regard to Mr. Chinn.
***
[62] In considering, in accordance with the terms of the Special Agreement,
whether the impugned measures were or were not in conflict with the
international obligations of the Belgian Government, the Court, having
regard to the positions occupied by the respective Parties - as indicated
above - will examine the arguments advanced by the Government of the United
Kingdom against the compatibility of these measures with the obligations in
question.
[63] Relying on the international obligations incumbent upon the Belgian
Government, the Government of the United Kingdom impugns the measures taken
by the Belgian Minister of the Colonies on June 20th, 1931, in the following
respects.
[64] In the first place, it is alleged that the Belgian Government, by
'enjoining a reduction of tariffs on the Unatra Company in return for a
promise of -temporary pecuniary compensation, made it impossible for the
other fluvial transporters, including Mr. Chinn, to retain their customers,
and in consequence to carry on their business; in this way, it is argued, it
enabled the Unatra Company to exercise a de facto monopoly which - in the
view of the Government of the United Kingdom - is [p82] incompatible with
the Belgian Government's obligation to maintain commercial freedom and
equality, and also with the obligation arising out of Article 5 of the
Convention of Saint-Germain, which applies those principles to fluvial
navigation. The Belgian Government is alleged to have acted thus not only
with a view to assisting trade in the Colony, but also in order to
concentrate fluvial transport in the hands of Unatra.
[65] Alternatively, it is alleged that the Belgian Government, by creating
for the advantage of the Belgian Company Unatra a régime in the benefits of
which Mr. Chinn, a British subject, was not entitled to share, was
practising a discrimination, contrary to the equality of treatment
stipulated in the Convention of Saint-Germain.
[66] Lastly, in case the Court should not find that the measures taken in
1931 constituted a breach of the said Convention, the Government of the
United Kingdom submits that, by making it commercially impossible for Mr.
Chinn, a British subject, to carry on his business, these measures
constituted - it is alleged - a violation of vested rights, protected by the
general principles of international law.
[67] For its part, the Belgian Government submits the following
considerations:
[68] The measures which it adopted became necessary in order to safeguard
the interests of the community as a consequence of the position of colonial
products in the markets of the world; it never formed part of the intentions
of the Belgian Government to create a monopoly of any kind for Unatra in
order to drive embarrassing competitors out of business. The measures that
it took were lawful from the standpoint of international law, whether
conventional or customary.
[69] The Belgian Government further maintains that a distinction must be
drawn between the sphere of navigation and that of the management of
national shipping. Whereas, in the former sphere, the riparian State is
forbidden to encroach on freedom of navigation, its freedom of action in the
latter sphere is not subject to restriction.
[70] Lastly, in regard to the British Government's contention based on
general international law, the Belgian Government considers that no injury
has been caused to already existing vested rights; at the utmost, injury may
have been caused to private interests.
***
[71] (a) The main argument of the Government of the United Kingdom is the
alleged inconsistency between the measures [p83] taken by the Belgian
Government and the principles of equality and freedom of trade and freedom
of navigation.
[72] According to the conception universally accepted, the freedom of
navigation referred to by the Convention comprises freedom of movement for
vessels, freedom to enter ports, and to make use of plant and docks, to load
and unload goods and to transport goods and passengers.
[73] From this point of view, freedom of navigation implies, as far as the
business side of maritime or fluvial transport is concerned, freedom of
commerce also. But it does not follow that in all other respects freedom of
navigation entails and presupposes freedom of commerce.
[74] What the Government of the United Kingdom is concerned with in this
case is the principle of freedom of navigation regarded from the special
aspect of the commercial operations inherent in the conduct of the transport
business ; for that Government has never contended that the impugned
measures constituted an obstacle to the movement of vessels.
[75] For this reason the Court - whilst recognizing that freedom of
navigation and freedom of commerce are, in principle, separate conceptions -
considers that it is not necessary, for the purposes of the present case, to
examine them separately.
[76] The Government of the United Kingdom has relied, as regards freedom of
commerce, on the first sentence of the Annex to Article 1 of the Convention
of Saint-Germain. But, as has been shown above, this argument has not been
accepted by the Court, having regard to the wording of Article 1.
[77] The idea of freedom of trade has not, however, disappeared from the
Convention of Saint-Germain. Its first Article is devoted to the principle
of commercial equality, and the latter in itself presupposes in principle
freedom of trade. The last paragraph of Article 1 of the Act of Berlin,
which is maintained by the Convention of Saint-Germain, contains, as has
been recalled above, the following reservation: "It is expressly recognized
that in extending the principle of free trade to this eastern zone, the ....
Powers only undertake engagements for themselves", etc. Commercial freedom
is therefore expressly contemplated.
[78] Article 2 of the Convention concerns freedom of trade; it guarantees
free access for merchandise, in the same way as it does for vessels flying
the flag of any contracting Power, while reserving to the State concerned
complete liberty of action as to' the customs and navigation regulations and
tariffs to be applied in its territory.
[79] Finally, Article 10 refers to this principle in the following terms:
"The signatory Powers recognize the obligation to [p84] maintain in the
regions subject to their jurisdiction authority and police forces sufficient
to ensure protection of persons and of property and, if necessary, freedom
of trade and of transit."
[80] Whilst therefore it is certain that the Convention of Saint-Germain is
also based on the idea of commercial freedom, it is however to be observed
that this idea has not the same import in the Convention as in the Act of
Berlin. This Act really meant by free trade the régime of the open door. By
abolishing - as has already been stated - the prohibition to levy customs
duties found in Article IV of the Act, the Convention has abandoned this
regime; in this connection it should also be observed that Article V of the
Act, the second paragraph of which corresponds to Article 3 of the
Convention, contained a first paragraph which does not reappear in the
Convention and which prohibited the granting of a monopoly or privilege in
matters of trade.
[81] It cannot be supposed that the contracting Parties adopted new
provisions with the idea that they might lend themselves to a broad
interpretation going beyond what was expressly laid down.
[82] Freedom of trade, as established by the Convention, consists in the
right - in principle unrestricted - to engage in any commercial activity,
whether it be concerned with trading properly so-called, that is the
purchase and sale of goods, or whether it be concerned with industry, and in
particular the transport business; or, finally, whether it is carried on
inside the country or, by the exchange of imports and exports, with other
countries. Freedom of trade does not mean the abolition of commercial
competition ; it presupposes the existence of such competition. Every
undertaking freely carrying on its commercial activities may find itself
confronted with obstacles placed in its way by rival concerns which are
perhaps its superiors in capital or organization. It may also find itself in
competition with concerns in which States participate, and which have
occupied a special position ever since their formation, as is the case of
Unatra. Mr. Chinn, a British subject, when, in 1929, he entered the river
transport business, could not have been ignorant of the existence of the
competition which he would encounter on the part of Unatra, which had been
established since 1925, of the magnitude of the capital invested in that
Company, of the connection it had with the C61onial and Belgian Governments,
and of the predominant role reserved to the latter with regard to the fixing
and application of transport rates.
[83] The Government of the United Kingdom maintains that the reduction in
transport rates together with the Belgian [p85] Government's promise
temporarily to make good losses enabled Unatra to exercise a de facto
monopoly inconsistent with freedom of trade.
[84] The Court must therefore consider whether the alleged concentration of
transport business in the hands of Unatra, of which the Government of the
United Kingdom complains, and the fact that, because of this concentration,
it was commercially impossible for Mr. Chinn to carry on his business, are
inconsistent with the conception of freedom of trade propounded above.
[85] A concentration of business of this kind will only infringe freedom of
commerce if commerce is prohibited by the concession of a right precluding
the exercise of the same right by others; in other words, if a "monopoly" is
established which others are bound to respect.
[86] The Court sees nothing in the measure taken by the Belgian Government
indicative of such a prohibition. Moreover, the Government of the United
Kingdom does not contend that such a monopoly has been created; but it
maintains that the impugned measure had the effect of making it commercially
impossible for Mr. Chinn, amongst others, to carry on his business and thus
led to what is described as a "de facto monopoly". In what the Government of
the United Kingdom describes in this case as a "de facto monopoly", the
Court, however, sees only a natural consequence of the situation of the
services under State supervision as compared with private concerns. The
Court also sees therein, in some respects, a possible effect of commercial
competition; but it cannot be argued from this that the freedom of trade and
the freedom of navigation, provided for by the Convention of Saint-Germain,
imply an obligation incumbent on the Belgian Government to guarantee the
success of each individual concern. If the term "de facto monopoly" should
be understood, in so far as concerns trade, navigation or the transport
business, as covering all measures likely to render it difficult or
impossible for others to carry on their businesses at the same prices and
under the same commercial conditions, it would follow that all measures
affording to customers facilities, reductions "in prices, abatements or
other advantageous conditions which other concerns are unwilling or unable
to offer and which, after all, are calculated to promote commerce, would be
incompatible with freedom of trade. Such a contention would be inconsistent
with the very notion of trade; for there is nothing to prevent a merchant, a
ship-owner, a manufacturer or a carrier from operating. temporarily at a
loss if he believes that by so doing he will be able to keep his business
going. [p86]
[87] To sum up, having regard to the exceptional circumstances in which the
measures of June 20th, 1931, were adopted and to the nature of those
measures, that is to say, their temporary character and the fact that they
applied to companies entrusted by the State with the conduct of public
services, these measures cannot be condemned as having contravened the
undertaking given by the Belgian Government in the Convention of
Saint-Germain to respect freedom of trade in the Congo.
[88] Even supposing that Unatra took advantage of the temporary lowering of
its rates to endeavour to concentrate in its hands the business of its
competitors, it cannot be inferred, especially having regard to the
circumstances already mentioned, that this was the motive and aim of the
action of the Belgian Government.
[89] In these circumstances, it is unnecessary for the Court to consider
whether, as alleged by the Government of the United Kingdom, the Belgian
Government, in taking the measures which are said to have resulted in this
concentration of business, was to a certain extent actuated also by motives
other than the desire to assist trade during a period of depression.
Moreover, the circumstances in which the impugned measures were taken are
such as to preclude any idea that the Belgian Government intended by
indirect means to escape the obligations incumbent on it under the
Convention of Saint-Germain.
[90] On the other hand, the Court is unable to accept the general
proposition of the Belgian Government regarding its conception of "the
management of national shipping". However legitimate and unfettered
governmental action in connection with the management and subsidizing of
national shipping may be, it is clear that this does not authorize a State
to evade on this account its international obligations.
[91] (b) With regard to the alternative contention of the Government of the
United Kingdom, alleging discrimination inconsistent with the equality of
treatment provided for in the Convention of Saint-Germain, it should, in the
first place, be remembered that the principle of equal treatment is the
characteristic feature of the legal régime established in the Congo Basin.
The Convention of Saint-Germain applies this principle in most of its
articles, namely in Articles 1, 2, 3, 4, 5, 6, 7, 9 and 11. Moreover, this
equality of treatment is only guaranteed by the Convention to the nationals
of Powers which are parties to the Convention or of Powers adhering to it.
[92] Thus, Article 1 of the Convention provides that: "The signatory Powers
undertake to maintain between their respective nationals .... a complete
commercial equality", etc. Article 3 guarantees to nationals of the same
Powers the same treatment and the same rights as those enjoyed by nationals
of the Power [p87] exercising authority in the territory, and thus provides
for assimilation to nationals. The second paragraph of Article ii pro) vides
that the signatory Powers will protect and favour, without distinction of
nationality or of religion, religious, scientific or charitable
institutions.
[93] The form of discrimination which is forbidden is therefore
discrimination based upon nationality and involving differential treatment
by reason of their nationality as between persons belonging to different
national groups.
[94] It should be recalled in this connection that the treatment accorded to
Unatra was based on the special position of that Company, as a Company under
the supervision of the Belgian Government. The special advantages and
conditions resulting from the measures of June 20th, 1931, were bound up
with the position of Unatra as a Company under State supervision and not
with its character as a Belgian Company. These measures, as decreed, would
have been inapplicable to concerns not under government supervision, whether
of Belgian or foreign nationality. The inequality of treatment could only
have amounted to a discrimination forbidden by the Convention if it had
applied to concerns in the same position as Unatra, and this was not the
case.
[95] In these circumstances, the Court is unable to attach any legal
importance to the argument based by the Government of the United Kingdom on
the fact - which is not disputed by the Belgian Government - that Mr. Chinn
was the only private transporter who, like Unatra, confined his business to
the transport of goods belonging to others.
[96] On the other hand, the Government of the United Kingdom does not
maintain, and there is no justification for supposing, that, it was owing to
his status as a British national that Mr. Chinn was not given the benefit of
the arrangement accorded to the Belgian Company Unatra. In this respect, the
position of the British national Mr. Chinn was not, as such, either better
or worse than that of the other concerns not under State supervision; these
included, according to the evidence produced, Belgian concerns and a French
concern.
[97] The Court therefore is equally unable to accept the alternative plea as
to an alleged discrimination.
[98] (c) It remains to consider the last alternative plea of the Government
of the United Kingdom to the effect that the measure of June 20th, 1931, by
depriving indirectly Mr. Chinn of any prospect of carrying on his business
profitably, constituted a breach of the general principles of international
law, and in particular of respect for vested rights. [p88]
[99] The Court, though not failing to recognize the change that had come
over Mr. Chinn's financial position, a change which is said to have led him
to wind up his transport and ship-building businesses, is unable to see in
his original position - which was characterized by the possession of
customers and the possibility of making a profit - anything in the nature of
a genuine vested right. Favourable business conditions and goodwill are
transient circumstances, subject to inevitable changes ; the interests of
transport undertakings may well have suffered as a result of the general
trade depression and the measures taken to combat it.
[100] No enterprise - least of all a commercial or transport enterprise, the
success of which is dependent on the fluctuating level of prices and rates -
can escape from the chances and hazards resulting from general economic
conditions. Some industries may be able to make large profits during a
period of general prosperity, or else by taking advantage of a treaty of
commerce or of an alteration in customs duties ; but they are also exposed
to the danger of ruin or extinction if circumstances change. Where this is
the case, no vested rights are violated by the State.
[101] It is true that in 1932 the Belgian Government decided to grant
Belgian or foreign ship-owners, whose business was endangered, advances
similar to those allowed to the Unatra Company; the taking of this measure
cannot, however, be regarded in itself as an admission by the Belgian
Government of a legal obligation to indemnify the transporters for an
encroachment on their vested rights; it is rather to be ascribed to the
desire of every government to show consideration for different business
interests, and to offer them some compensation, when possible. The action of
the Government appears to have been rather in the nature of an act of grace.
***
[102] For the foregoing reasons, the Court holds that the answer to the
first question submitted to it by the Special Agreement must be in the
negative.
[103] Accordingly, the point concerning reparation for Mr. Chinn, which
forms the subject of the second question in the Special Agreement, does not
arise.
[104] In these circumstances, there is no occasion to order the enquiry
suggested at the beginning of the hearings by the Agent for the Government
of the United Kingdom. [p89]
[105] FOR THESE REASONS,
The Court,
by six votes to five,
decides:
that the measures taken and applied in the month of June 1931 and
subsequently thereto by the Belgian Government in connection with the
limited liability Company Union nationale des Transports fluviaux (commonly
known as Unatra) and in relation to fluvial transport on the waterways of
the Belgian Congo, are not, having regard to all the circumstances of the
case, in conflict with the international obligations of the Belgian
Government towards the Government of the United Kingdom.
[106] Done in French and English, the French text being authoritative, at
the Peace Palace, The Hague, this twelfth day of December, one thousand nine
hundred and thirty-four, in three copies, one of which shall be placed in
the archives of the Court, and the others forwarded to the Belgian
Government and to the Government of the United Kingdom respectively.
(Signed) J. G. Guerrero,
Officiating President.
(Signed) A. Hammarskjöld,
Registrar.
[107] M. De Bustamante, Judge, who sat as a member of the Court during the
extraordinary session devoted to the present case until December 10th, 1934,
and who took part in the deliberation and in the vote on the judgment, was
compelled to leave The Hague before it was delivered. He stated that he
concurred both in the operative part of the judgment and in the grounds on
which it was based.
[108] Sir Cecil Hurst, President of the Court, Mm. Altamira, Anzilotti and
Schücking, and Jonkheer Van Eysinga, Judges, [p90] declare that they are
unable to concur in the judgment given by the Court and, availing themselves
of the right conferred on them by Article 57 of the Statute, have appended
to the judgment the separate opinions which follow.
(Initialled) J. G. G.
(Initialled) A. H. [p91]
Dissenting Opinion by M. Altamira.
[Translation.]
[109] I regret that I cannot concur either in the decision reached in the
foregoing judgment or in the grounds on which that decision is based. My
main reasons for dissenting are two in number: first, I interpret
differently the relevant articles of the Convention of Saint-Germain and,
secondly, take a different conception of the question of law which confronts
the Court having regard to "all the circumstances of the case". In this
opinion I shall confine myself to explaining and justifying these two points
of difference.
[110] In point A, 1, of the Special Agreement submitting the "Oscar Chinn"
case to the Court, the latter is asked to say whether "the above-mentioned
measures complained of by the Government of the United Kingdom .... were
.... in conflict with the international obligations of the Belgian
Government towards the Government of the United Kingdom". The import of the
words "the above-mentioned measures" is clearly indicated in the preamble to
the Special Agreement. They were "certain measures taken and applied in the
month of June 1931 and subsequently thereto by the Belgian Government (which
is responsible for the Colonial Administration) in connection with the
limited liability Company "Union nationale des Transports fluviaux (commonly
known as Unatra), and in relation to fluvial transport on the waterways of
the Belgian Congo": Furthermore, the Court has received sufficient
enlightenment as to the precise nature of these measures in the course of
the written and oral proceedings in the case. It appears therefore that this
part of the text of point A, 1, requires no further explanation in order to
be properly understood.
[111] There might, however, be some doubt whether, by the definition of
these measures given in the preamble of the Special Agreement as quoted
above, they are restricted to measures directly affecting Unatra to the
exclusion of measures affecting any other company or person. An
interpretation as narrow as this would leave outside the scope of the
question submitted to the Court facts and documents such as, for instance,
those relating to the Company known as Socca, which, as I shall explain
later, are of great importance for a correct understanding of the present
question. It appears evident to me, however, that there can be no doubt of
this kind. Not only have the Parties discussed the measures taken by the
Belgian Government in regard to Socca and other commercial enterprises,
besides that of Mr. Chinn, as being essential to a full [p92] understanding
of the facts, but furthermore it is certain that the measures affecting
concerns other than Unatra followed directly upon and were closely linked to
the measures affecting the latter Company.
[112] The question of law involved in point A, i, of the Special Agreement
is to ascertain whether or not the Belgian Government's measures as defined
above are inconsistent with any or all of the international obligations of
the Belgian Government towards the Government of the United Kingdom. We
must, therefore, in the first place, see what these international
obligations are.
[113] In so far as treaty law is concerned, the source of these obligations
is the Convention of Saint-Germain of September 10th, 1919. Their source
might possibly also be traced to the general principles of international
law. Let us first of all consider the Convention.
[114] In Article 1 of the Convention, the fundamental words, in my view, are
those which describe the international engagement entered into as one to
maintain "a complete commercial equality". The signatories of the Convention
have therefore undertaken to "maintain" "a complete commercial equality" in
the territories indicated thereafter, which include the territory in which
the waterways of the Belgian Congo are situated. This equality clearly
covers all kinds of trade whether by land, river or otherwise. Accordingly,
what we have to examine and define in this case is the general conception of
commercial equality It undoubtedly covers the commercial activities of Mr.
Chinn's river transport business.
[115] The idea of equality expressed in Article 1 of the Convention is
certainly tantamount to a prohibition of any discrimination between the
respective nationals of signatory Powers and of States, Members of the
League of Nations, acceding to the Convention. It follows from the fact that
the Article says: "a complete equality", that the discrimination prohibited
by it embraces in principle any kind of discrimination which would involve a
transgression of this very widely conceived principle of equality. It is
however true that the word "complete" cannot have so absolute a meaning as
to render it impossible for the governments bound by the Convention to carry
out any act or measure of a commercial nature in their own territory and
within the sphere of their own sovereignty. A large proportion of such acts
and measures they are certainly free to carry out, even in relation to the
commercial activities of foreign nationals. Nevertheless, this freedom,
though very wide, cannot be exercised beyond the point where it would entail
infringement of the equality accorded to such nationals in their commercial
activities. This point would be reached as [p93] soon as the measure taken
by the Belgian Government affected fundamentally the commercial activities
which foreigners are entitled to engage in the Congo under the same basic
conditions as Belgian nationals. It is clear that this does not imply the
slightest encroachment on the sovereignty of Belgium, since it was in the
exercise of this sovereignty that the Belgian Government accepted the
obligations contained in the Convention of Saint-Germain. The Court has
expressly enunciated this principle in its Judgment No. 1 (p. 25), and has
referred to and confirmed it in Advisory Opinions Nos. 10 and 14.
[116] I think that a more precise definition of what is covered by the
equality mentioned in Article 1 is to be found in the other articles of the
Convention. At all events, this definition must be sought within the four
corners of the Convention and not elsewhere. The idea of equality in fact
dominates the whole of the Convention to such an extent that it constitutes
the common denominator of the articles following Article 1. We already begin
to find evidence of what I have just said in Article 2, which prescribes
"free access" for the merchandise of every signatory State to the interior
of the regions specified in Article 1, as well as access to all the coast
and to all maritime ports. And, in order to determine the precise import of
this "free access" in the intention of the Convention, the term is
immediately followed in the same Article by a clause to the effect that "no
differential treatment shall be imposed upon the said merchandise on
importation or exportation". The same prohibition is repeated in connection
with the access of vessels to the coast and ports ; this means that equality
is also prescribed in this respect, and thus concrete shape is given to one
aspect of the idea of "complete commercial equality" enunciated in Article
1, an idea which is different' from the mere "access" prescribed in the
previous sentence of Article 2. The last paragraph of the same Article
further confirms this general aim of the Convention, since, in reserving to
the States concerned "complete liberty of action as to the customs and
navigation regulations and tariffs to be applied in their territories", it
makes this liberty of action subject to the preceding provisions in the same
Article ("subject to these provisions").
[117] Article 3 of the Convention, like Article 2, adds something further to
the definition of what is meant by complete commercial equality : it lays
down that foreign nationals shall enjoy in the territories specified in
Article 1 "the same treatment and the same rights as the nationals of the
Power exercising authority in the territory". This applies as regards "the
protection of their persons and effects" "the acquisition and transmission
of their movable and real property", and "the exercise of their
professions"; here, again, we have [p94] different aspects of equality which
cover a wider legal sphere than that of commerce, but nevertheless include
the latter by the reference to the exercise of professions. The provision
concerning the "exercise of their professions" should be especially noted
here, since a part of the business carried on by Mr. Chinn in the Congo was
a profession which in the codes of all countries, as well as in common
parlance, is described as commercial, a point which moreover is well brought
out in the judgment.
[118] The same prohibition of differential treatment is to be found in
Article 4, though it does not relate to matters relevant to the present
case. On the other hand, Article 5, paragraph 1, prescribes a special right
which directly concerns the fluvial traffic in issue, the right of free
navigation "for merchant vessels and for the transport of goods and
passengers".
[119] The interpretation of the word "navigation" would seem to present no
difficulty, since it expresses a common conception and one understood by all
in the two senses which are well explained in the judgment. This conception
is fully confirmed, as regards the kind of navigation with which we are
concerned, by the phrase above quoted which specifies the economic
activities which the Convention meant the term "navigation" to cover, by
reference to the different functions served by navigation: commerce proper,
the transport of goods and that of passengers. But the difficulty begins
when we have to interpret the word "navigation" in conjunction with
"freedom", since the latter may apply equally well to the ship itself as to
the economic function which it serves and which is the chief reason why
freedom of movement is essential to it. Accordingly, whereas if one were to
consider "freedom" as applying only to the movement of ships in the
direction, in the regions and at the times demanded by the object in view,
any impediment of another character would be consistent with the rule laid
down in Article 5, if, on the other hand, one considers "freedom" from the
standpoint of the ultimate economic aim of navigation (trade, the transport
of goods or passengers), the term would also cover freedom from impediments
likely to render economically impossible the attainment of this aim. The
consequences of these two interpretations differ of course considerably,
and, in the present case, they would lead to entirely contrary conclusions.
The first would render the first paragraph of Article 5 applicable to the
present case only if Mr. Chinn's vessels had been actually prevented from
proceeding on their voyages; the second would make that paragraph applicable
even if there were no actual impediment to navigation, provided that some
other cause resulting from a measure taken by the Belgian [p95] Government
in regard to fluvial traffic on the Congo rendered the carrying on of the
transport enterprise in question economically or otherwise impossible. Upon
reflection, it does not appear to me that the second interpretation is
possible, because paragraph 1 of Article 5 does not cover the exercise of
the calling with which the economic purpose served by the vessels is
connected. An economic impediment may convert a favourable venture into a
ruinous one which it is impossible to proceed with, since the aim of
business life is to reap profits and not incur loss; but such an impediment
would not prevent the movement of ships for any other purpose served by
navigation. Economic or, in other words, professional aims have been dealt
with in Article 3, and there is nothing to indicate that they are again
contemplated here.
[120] On the other hand, paragraph 2 of Article 5 contains a phrase similar
to that occurring in Article 1: "a footing of perfect equality", a footing
on which "craft of every kind belonging to the nationals of the signatory
Powers" are to be treated "in all respects". This can only be regarded as
another concrete aspect of what is meant by commercial equality which, to be
"complete", must necessarily cover not only the persons of foreign nationals
and their commercial activities, but also their merchandise and vessels. As
regards the latter, it is clear that the Convention covers them in the
widest possible manner, since Article 5 contains the phrase already quoted:
"in all respects", which may well cover all respects in connection with and
necessary to, not merely actual navigation, but also the fulfilment of its
various possible and lawful objects. The phrase "in all respects", in fact,
will easily bear this interpretation, since access of vessels and
merchandise and customs regulations and tariffs have already been dealt with
in Article 2, since Article 6 deals with other charges, duties and
obligations, and paragraph 1 of Article 5 which we are now considering
covers the other movements of vessels, which leads naturally to the
supposition that the phrase "all respects" in the second paragraph of the
same Article may well possess an import much wider than the simple movement
of vessels.
[121] Article 6, as already stated, also concerns navigation; it exempts
shipping from dues and taxes with the exception of certain charges duly
specified in regard to which the Article repeats that they shall "not admit
of any differential treatment". Article 7 extends the provisions of Article
5 to the tributaries of the rivers and lakes specified in the latter, as
well as to roads, railways or lateral canals, and, in authorizing the
collection of certain tolls, it says that, "as regards the [p96] tariff of
these tolls, the nationals of the signatory Powers .... shall be treated on
a footing of perfect equality". Finally, Article 9, though it permits the
governments exercising authority to establish such systems "as may be
required" for the maintenance of public safety and order and other general
necessities, on certain rivers and their tributaries and on certain lakes,
stipulated that such regulations "shall not admit of any differential
treatment".
[122] After this analysis of the various articles relevant to the present
case, I can once more affirm that the idea dominating the Convention with
regard to the international obligations contracted therein is clearly the
idea of equality of treatment in every matter dealt with.
[123] Before turning to another point, we must now consider Article 10 of
the Convention, although it does not belong to the group of articles which
concern the matter before us. The fact that the words "freedom of trade" do
not occur in these articles may have been noticed; instead of them we find
"commercial equality" in Article 1, and "freedom of navigation" in Article
5. Only in Article 10, which is practically copied from Article 35, Chapter
IV, of the Act of Berlin, do we find a reference to "freedom of trade" in
conjunction with freedom of transit; but this reference serves rather to
emphasize that the Convention is governed by a conception some-what
different to that represented by the phrase "freedom of trade" in the sense
in which it was understood in 1885. The full text of this Article
demonstrates this sufficiently clearly:
"The signatory Powers recognize the obligation to maintain in the regions
subject to their jurisdiction an authority and police forces sufficient to
ensure protection of persons and of property and, if necessary, freedom of
trade and of transit."
[124] As regards the last paragraph of Article 1 of the Act of Berlin -
which is annexed to Article 1 of the Convention of Saint-Germain but for the
purpose indicated therein only - the phrase "free trade" also occurs in that
paragraph, but, in my opinion, the only purpose which it serves in the
Convention is to explain the scope of the obligations embodied therein in
relation to international life as a whole.
[125] As regards the source of any international obligations which might be
deduced from the general principles of international law, I have nothing to
say, being in agreement with the Court's judgment on this point.
[126] Having thus analysed the sources of law, we must now consider the
measures taken and applied in June 1931 and subsequently [p97] by the
Belgian Government, in order to see whether they are consistent with the
international obligations noted above.
[127] In examining these measures, I shall take account of the
"circumstances of the case" referred to in point A, 1, of the Special
Agreement, in so far as relevant to the question put therein. To my mind
there is no doubt that these "circumstances" include the facts for which the
Belgian Government is responsible (and accordingly the "measures" referred
to in Article 1 of the Special Agreement) as well as those in connection
with Mr. Chinn's activities in the river transport business. Since the
Special Agreement is an agreement between the two Governments who were
parties to the present dispute, the words "having regard to all the
circumstances of the case" can only be meant to cover both the opposing
standpoints, that is to say both that of the Belgian Government and that of
the Government of the United Kingdom, and likewise the circumstances in
connection with the person whose case the latter Government has taken up.
Accordingly, we must "have regard" on the one hand to "circumstances" in
connection with the Belgian Government's measures, their explanation and
justification, and, on the other hand, to "circumstances" in connection with
the effects of these measures as regards Mr. Chinn and the latter's reaction
to them.
[128] The first of the Belgian Government's measures contemplated by the
Special Agreement is the decision of June 20th, 1931. This decision was
taken by the Belgian Minister for the Colonies. Practically speaking, it
consists, on the one hand, of a reduction in the rates applying at that date
to the transport and handling of certain colonial products of the Congo, the
reason for the reduction being "the collapse of the prices obtainable for
colonial products in the European markets", and, on the other hand, a
promise to refund any losses occasioned by this reduction to certain
companies, which refunds would be recoverable by the Colony "when the
economic situation made it possible again to raise the rates above
mentioned".
[129] The decision states that the reductions in rates are to be applied in
so far as concerns Unatra "for all voyages". A differentiation between
upstream traffic and downstream traffic, as regards the application of the
new rates, is not expressly mentioned but seems to be implied in so far as
concerns colonial products properly so-called which, as a rule, will be
intended for export to Europe, thus involving transport downstream only.
These products being the most plentiful and important in the colony, must in
reason constitute a vast preponderance of the traffic, certainly of
downstream traffic. In reality, however, and for the purposes of this case,
this distinction between the two streams of traffic on the river is not very
important. [p98] It may be of importance in connection with the appraisement
of the economic effects (larger or smaller losses; greater or less degree of
the financial impossibility of carrying on transport business), since an
impediment affecting navigation traffic in one direction only (upstream or
downstream) will certainly be a factor exercising great influence on
shipping engaged in the transport of merchandise. For transporters are most
careful to secure cargoes for the voyage in both directions, since otherwise
the venture might be so financially unprofitable to them that they might be
impelled to lay up their vessels, as experience shows to be sometimes the
case. On the other hand, it in no way affects the commercial inequality
resulting from the decision of June 20th, 1931, which I shall demonstrate
later. Nor does the inconsistency of this measure with the international
obligations of the Belgian Government towards the Government of the United
Kingdom depend on what was the economic aim pursued by the former Government
in the decision of 1931, or on the question whether it had more than one
intention in taking that decision. In any case, the relation in which the
decision stands to certain articles of the Convention of Saint-Germain will
remain the same. That is why I see no use in discussing the British and
Belgian standpoints in regard to this question.
[130] The companies affected by the decision and enumerated therein were
four land transport concerns, one river transport concern (Unatra), and
another the nature of which is not specified. These six companies did not
constitute all the concerns at that time engaged in the transportation
business in the Congo; over and above the companies to which the decision of
June 20th, 1931, applied were other concerns, both Belgian and foreign,
which are grouped together under the heading of "private transporters". It
is difficult to understand the reasons which led to this exclusion, seeing
that the crisis was at that time a general phenomenon which affected every
branch of economic activity in the Congo, and that one of the enterprises
excluded (that of Mr. Chinn) was at that moment the only one besides Unatra
(a fact which is hot disputed) engaged in fluvial transportation proper -
the other enterprises being in reality producers who transported their own
produce. The only reason for this exclusion which would, appear at all
comprehensible, is that it was impossible for the Belgian Government to
compel companies, other than those mentioned in the decision, to reduce
their transport tariffs. But, even disregarding a point which is not without
importance, namely the actual wording of the decision, that calls on the
enterprises in question to "consent" to these reductions being imposed on
them (the Government's only right, so far as we know, in this respect was
that of [p99] approving Unatra's transport tariffs, but that did not include
the imposing of any freight rates, even upon that Company), it is clear that
there was nothing to prevent the Government from making a similar proposal
to the so-called "private" enterprises, and in case of their acceptance,
from offering them the above-mentioned repayment - as it actually did, as we
shall see later, in 1932. That shows that there was no fundamental
impossibility in this respect. It might even be added that the Belgian
Government ought to have taken this - step in 1931, seeing that, although
the depression was primarily affecting trade in products of the Congo, it
could, not fail, by an inevitable reaction, to affect the carriers of -
those products, that is to say, not only those referred to in the decision
of June 20th, 1931, but also those who were excluded from the benefits of
that decision, though they constituted an integral part of the economic life
of the Congo, in the same way as the others. There is nothing in the text of
the decision of June 20th which gives even an indication of such an
elementary consideration. It is interesting to observe that, a few years
before that date, namely in 1928, when the Belgian Government was
authorizing this very Unatra Company, which is the chief subject of the
decision, to introduce certain reductions which it had asked leave to make
in its transport tariffs in order to meet the competition of other carriers,
it added some reservations which revealed its solicitude for the rights of
other enterprises. Thus, the letter written by the Minister of the Colonies
on October 24th, 1928, contains the following passage:
[Translation.]
"I should see no objection to the tariffs that are submitted for my approval
being regarded as maximum rates; in these circumstances you would be able to
conclude special transport contracts; but I draw your attention to the need
of treating all the carriers of the same category on a footing of equality.
I do not wish to receive any justifiable complaints; the smallest such
complaint would lead me to contemplate the withdrawal of the approval which
I convey to you in the present despatch."
[131] In view of the different circumstances surrounding the decision of
June 20th, 1931, the legal description which best fits it is, in truth, that
it constituted a privilege. It does not, of course, acquire that character
simply because it affirms the necessity and the intention of reducing
tariffs, as was done, with the consequence, so far as the transport
enterprises were concerned, of costly sacrifices, attended by grave
financial consequences. We might even agree that it did not become a
privilege because, at the outset, it applied the tariff reductions to some
only of the transporters operating on the Congo. But it undoubtedly became a
privilege when it confined to one group only of' the transporters its offer
of enabling them to offset the losses which must necessarily [p100] follow
the lowering of tariffs, and when it failed to extend this favour to the.
other enterprises. And yet the "private transporters" were inevitably placed
by the Belgian Government's decision in a manifestly weaker position for
resisting the crisis which must immediately overtake the transport business
; in other words, they were faced with the certainty of loss without being
offered the hope of compensation. And the privilege thus conferred solely
upon one group of transporters is nothing else than an inequality of
treatment affecting a particular branch of commerce.
[132] It is true that this inequality would not, in principle, be regarded
as an injustice in the normal life of a State. It might arise, without
giving any ground for justified complaint on the part of enterprises not
admitted to participate in advantages such as those which were offered, in a
period of general commercial depression, by the decision of June 20th. But,
in the case of the Congo, where the special Statute created by the
Convention of Saint-Germain is in force, the question presents itself in a
very different light. Having regard to the international obligations which
that Convention imposes on the riparian States, and in particular upon the
Belgian State, in the matter of commerce, the above-mentioned decision
undoubtedly constitutes one of those cases of inequality that is prohibited
by the Convention. That inequality is not dispelled owing to the difference
that exists between the special position of Unatra in the economic life of
the Congo, and in its relations with the Belgian Government, and the
position of the other companies. Even if that difference were. as profound
as has been alleged, that would be no ground for concluding that Unatra's
affairs - however closely that Company may be controlled by the Belgian
Government - are outside the boundary of the international obligations
arising from the Convention of Saint-Germain. It appears to me that, from
the point of view of that Convention, Unatra can only be regarded in the
light of its commercial character and of its Belgian nationality, and not in
its capacity as a controlled or an uncontrolled Company - a point which is
immaterial for the legal issue in the present case. The same reasoning
should apply, in good logic and in good law, to the theory that the decision
of June 20th, 1931, may be considered as a kind of novatio of the contract
between Unatra and the Belgian Government. No modification of that kind
could go so far as to override the obligations undertaken in the Convention.
[133] Also, owing to the fact that, as already mentioned, one of the
enterprises excluded by the decision was that of Mr. Chinn, a British
subject, and, still more, owing to the circumstance that Mr. Chinn was,
apart from Unatra, as has been pointed out, [p101] the only carrier, in the
strict sense of the term, the conflict which results with the rules of the
Convention of Saint-Germain is a "conflict with the international
obligations of the Belgian Government towards the Government of the United
Kingdom", in regard, in particular, to Articles 1, 3 and 5 of that
Convention.
[134] The following objection may be made against this conclusion. Even if
one admits, as a consequence of the foregoing arguments, that the decision
of June 20th, 1931, produced a commercial inequality of treatment, did that
inequality fulfil the condition, said to be required by the Convention, of
being based on the ground of nationality ? Or does the fact that the group
of enterprises excluded by the decision (the "private transporters")
comprised both Belgian and foreign nationals show that the above-mentioned
condition was not fulfilled, and that, consequently, there was no inequality
of treatment in the sense of the Convention ?
[135] I do not think so. First, because the idea of nationality appears to
me to mean something quite different in the Convention of Saint-Germain from
what it means in the treaties in which the ground of nationality is the
characteristic feature, namely, the treaties relating to Minorities properly
so-called. The standpoint of those treaties is indeed very different from
that which the Convention of Saint-Germain may have had - and, in my
opinion, really had. Moreover, there is nothing to show that a conception of
nationality such as might justify the objection we are now considering,
played any part in the negotiations which led to the framing of that
Convention. It would indeed be difficult to regard the presence of a certain
number of foreigners of different nationalities in the Congo as evidence of
the existence of minorities who would have need of rules for their
protection similiar to those provided for minorities in the treaties
referred to above.
[136] The signatory Powers of the Convention of Saint-Germain and the
signatories of the Berlin Act were not moved to give contractual form to the
freedom, equality, and guarantees, which are stipulated in those two
treaties, by any need of affording protection in the Congo to some minority
of nationality, language, or religion present therein, and attached to the
respective Powers by -political or other ties. Their aim-apart from matters
relating to the natives and from some words in Article 11 - was the economic
object of ensuring for the citizens of certain States in these African
territories freedom to engage in all economic activities, and protection for
their civil rights against the system of monopolies which had long
characterized the financial policy of the colonizing countries. Thus, when
the Convention refers to "nationals", it is [p102] because that word is best
suited to designate the link that unites the persons referred to therein to
the contracting States. But these persons are not considered in the
Convention with reference to their nationality, or with a view to
safeguarding anything inherent in their status as nationals, but with
reference to their commercial, shipping or other associations which, it must
be repeated, are the special concern of this Convention. It is in order to
safeguard them in the exercise of those avocations that the Treaty was
concluded, and it follows that it is the inequality of treatment to which
they might be subjected in that respect which is forbidden in the Treaty,
irrespective of the grounds on which it is based.
[137] In view of the above considerations, it appears to me impossible to
agree that acts of discrimination can only be regarded as infractions of the
international obligations arising out of the Convention of Saint-Germain if
the discrimination affects foreign nationals as compared to Belgian
nationals. To demonstrate the fallacy of this view, one needs only to
observe that, if that theory were adopted, the result would be to abolish
international obligations in a number of cases. It would suffice that, as a
result of an error or oversight, a measure which was discriminatory in
itself, happened to apply both to nationals and to foreigners, for the said
measure to be regarded as compatible with the international obligation of
equality of treatment. The earnest solicitude for "complete commercial
equality" - which is shown by the Convention of Saint-Germain could not be
reconciled with an interpretation which would presume an oversight on the
part of the signatory Powers, fraught with consequences inimical to their
essential purpose.
[138] One must also consider the fact (a very important "circumstance of the
case") that, in the present instance and because in 1931 there were no
fluvial transporters, properly so-called, other than Unatra and Mr. Chinn -
the inequality suffered by the latter really results from a difference of
treatment as between a Belgian national (Unatra) and a foreign national (Mr.
Chinn); for the other transporters on the Congo were not - as has been
already shown - working under the same conditions that characterized the
position of Unatra and Mr. Chinn. Accordingly, even if the hypothesis which
I am now considering were correct, it could not, in my view, cover the
present case.
[139] The conclusion that there was inequality of treatment is based solely
- as has been seen - on the decision of June 20th, 1931. The subsequent
facts are recited in the judgment. I will only select from among them the
fresh decision of July 28th, [p103] 1931, which most signally endows the
decision of June 20th with the character of a privilege, inconsistent with
the terms of the Convention.
[140] For, although the decision of June 20th, 1931, confined itself to
offering repayment of future losses to a particular group of companies,
there was nothing in the text of that decision which prevented a similar
favour from being conceded to the other companies, if they also reduced
their tariffs to the same scale as that laid down by the Belgian Government.
As a fact, this possibility at once occurred to some of the private
transporters; it was raised in particular by Socca in its letter of June
26th, 1931, to which I shall return. One finds other evidence of the same
fact in the letter dated June 27th, 1931, from the President of the
Leopoldville Chamber of Commerce, in the representations made by the
Association des intérêts coloniaux belges in August of the same year, and in
the recommendations made by the Council of the Colonial Government at
Leopoldville on July nth, 1931, and also at its meeting on October 14th.
Evidence to the same effect is to be found in recitals of the judgment of
the Court of first instance at Leopoldville (Sept. 21st, 1932), which show
that other private transporters, in addition to Socca, had perceived the
perfectly justifiable possibility of the advantages offered by the decision
of June 20th being further extended. The judgment in question says: "Whereas
.... the associated plaintiffs have brought an action against the Colonial
Government for damages on account of the prejudice they claim to have
suffered owing to the fact that the Colonial Government concluded an
arrangement with the Société nationale des Transports fluviaux known as
"Unatra" without admitting them to the benefits of similar treatment...."
[141] The Socca Company, as has already been said, had made formal
application to that effect to the Belgian Minister of the Colonies in a
letter dated July 26th. It is noteworthy that Socca does not ask, in that
letter, for any special favour, but that it assumes from the outset - as
something too self-evident to require proof - that the repayments promised
in the decision of June 20th are naturally applicable to companies other
than those enumerated in that decision. Accordingly, Socca confines itself
to asking for the necessary information as to the conditions with which it
must comply in order to qualify for the said repayments, that is to say, in
order to come under the régime of June 20th. Thus, paragraph 2 of Socca's
letter reads : "As our Company maintains a regular transport service,
carried on by several vessels, we should be glad if you would inform us as
to the conditions with which we must comply in order to be compensated by
the Government for the losses we are incurring, as a direct consequence of
your [p104] recent decision in regard to transport." Socca was right, in my
opinion, in believing that there could be no logical obstacle to its
participation in the new régime.
[142] The reply from the Minister of the Colonies to the letter of June 26th
is dated July 28th. It consists of five paragraphs. The first states clearly
the request made by Socca; the second gives a description of the decision of
June 20th, saying that "the measure in regard to the lowering of trans-port
tariffs was taken in the general interest and was made necessary by the
conditions in regard to prices of Congo products in the European markets".
This statement is of great importance for the present question, as it offers
a confirmation of the chief reason which is given for the necessity of the
decision of June 20th; but whereas one would expect this statement to be
followed by the natural conclusion ensuing from the general character thus
attributed to the measure taken in June, one finds on the contrary that, in
its last paragraph, the Minister's letter abandons the position taken up in
the second paragraph and refuses Socca's request for reasons of a totally
different kind. This fifth and last paragraph says: "It follows that the
Government's intervention must be confined to those transport enterprises
whose tariffs it has the right to control. I regret that I am not therefore
able to comply with the request you have submitted." To show even more
clearly the lack of continuity between the reasoning in this fifth paragraph
and that of the earlier paragraphs of the same letter, it should be
mentioned that the remainder of paragraph 2 and paragraphs 3 and 4 merely
give explanations regarding the text of the concluding paragraphs of the
decision of June, and point out that those paragraphs are only concerned
with fixing the character of the reimbursements promised, and the conditions
upon which they will be paid and, in due course, refunded, to the Colonial
Exchequer. They contain no argument which would enable the conclusion in
paragraph 5 to follow from what is stated in paragraph 2.
[143] Omitting all other possible comments - which would be superfluous at
this time - on this letter of July 28th, the fact which results from the
refusal it conveys is that it definitely confirms the differential treatment
which was already so clearly indicated by the decision of June 20th. The
reply of the Minister of the Colonies of July 28th, 1931, is therefore in
obvious conflict with the Convention of Saint-Germain and especially with
its Articles 1 and 3.
[144] On the other hand, I have not been led to the same conclusion, that
there was a conflict with the international [p105] obligations arising from
the Convention - in regard to the thesis based on the allegation that it
became absolutely impossible for the "private transporters" to continue
their business, as a consequence of the Minister's refusal of July 28th,
taken in conjunction with the decision of June 20th; and that Mr. Chinn not
being a merchant, was therefore not able to protect himself by trading from
the consequences of the injury done to his transport enterprise. Apart from
the uncertainty as to whether his business was in fact rendered impossible -
a point which is disputed by the Belgian Government, but which is not in my
view an essential issue - there is also the uncontested fact that Mr. Chinn
did abandon his business (on July 1st) a few days after the publication of
the decision of June 20th, and that he does not seem to have taken the same
steps as Socca to seek a natural solution of the situation created by the
decision of June 20th, before he had recourse to the courts in 1932. In
these circumstances, it would be rash to conclude that - in addition to the
inequality prohibited by the Convention of Saint-Germain - he suffered
prejudice on the ground that it was made impossible for him to continue his
business. I think that the prejudice would be found to consist - if it had
been possible now to make a thorough investigation - not in the fact
referred to above, but perhaps in the inevitable losses resulting from the
position of inequality in which the so-called "private" transporters were
placed by the decision of June 20th. But all those points are now immaterial
to the issue, and I think there is no need for me to dwell upon them.
[145] I have still a few words to say regarding certain facts subsequent to
July 28th, 1931.
[146] Fifteen months after that date, a "Public Notice", issued by the
Governor-General of the Congo in pursuance of a decision by the Minister of
the Colonies, modified the policy expressed in the decision of June 20th,
1931, and in the letter of July 28th of the same year, and declared that
"private transporters who ask for it will be granted, as an advance and
subject to the requisite guarantees, repayment of the losses suffered as a
result of the transport of produce downstream at the reduced tariffs. This
loss to be calculated .... on the basis of the loss sanctioned by Unatra on
December 31st, 1932"; that is to say, it would not be calculated upon the
basis of the losses suffered by the private transporters.
[147] I will not examine the substantial value of this new offer, having
regard to the conditions attached to it and to the terms of the fresh Notice
of November 5th, 1932, as these facts are irrelevant, from my point of view,
to the legal [p106] issue stated in A, 1, of the Special Agreement. I will
content myself with pointing out that this rectification of the policy which
the Belgian Government had declared in June 1931, and which it reaffirmed on
July 28th, confirms my reasoning. Moreover, the fresh decision of October
3rd, 1932, could not obliterate the effects of the former policy which had
been felt by the private transporters (including Mr. Chinn) during the past
fifteen months; or the fact that discriminatory treatment had continued
throughout that period, not to mention the disastrous consequences to
business which naturally ensued from it. That, in my opinion, suffices to
cause an affirmative answer to be given to point A, 1, of the Special
Agreement.
(Signed) Rafael Altamira. [p107]
Separate Opinion of M. Anzilotti.
[Translation.]
[148] I regret that I am unable to concur either in the decision reached in
the judgment rendered by the Court or in the grounds on which that decision
is based.
[149] In my opinion, this judgment fails to appreciate the true import of
the main plea of the Government of the United Kingdom and does not
satisfactorily deal with the question of law raised by that plea.
Furthermore, and in consequence of my attitude in regard to the point above
mentioned, I think that the Court, before deciding the case on the merits,
should have ordered the production of further evidence, as the Agent for the
Government of the United Kingdom requested it to do without any objection on
the part of the Agent for the Belgian Government.
[150] 1.- As I understand it, the main plea of the Government of the United
Kingdom may be summarized as follows:
[151] By compelling Unatra to reduce to one franc per ton its charge for the
carriage of the chief products of the Congo colony, and by giving an
undertaking to that Company temporarily to bear the losses resulting from
the reduction imposed, the Belgian Government was wittingly rendering it
commercially impossible for other transporters to carry on their businesses,
was concentrating the transport business in the hands of Unatra and was thus
creating in. favour of that Company what the Government of the United
Kingdom calls a de facto monopoly.
[152] These measures, regarded from this point of view, that is to say, in
so far as they were bound to bring about and did in fact bring about the
situation described, are alleged to be in conflict with the provisions of
the Convention signed at Saint-Germainen-Laye on September 10th, 1919,
concerning freedom of navigation and trade, and equality of treatment in
connection with these matters.
[153] The Government of the United Kingdom does not contend that the
measures adopted by the Belgian Government are in themselves and in all
circumstances inconsistent with that Convention. It disputes neither the
State's right to control shipping companies or itself to engage in the
transport business, nor its right to regulate transport changes or to grant
subsidies; its Agent has even made an express statement to the contrary.
[154] It contends, however, that in this particular case these measures were
bound to create and did in fact create a privileged position for Unatra, by
making it practically impossible for [p108] other concerns to engage in the
river transport business. It is on this ground, and this ground only, that
the Government of the United Kingdom alleges that the measures in question
are in conflict with the obligations resulting from the Convention of
Saint-Germain.
[155] 2. - The first question raised by this plea is whether the facts
advanced to support it have been established, that is to say, whether one
can regard it as adequately proved that the measures taken by the Belgian
Government were bound to result and did in fact result in concentrating the
river transport business in the hands of Unatra, by making it commercially
impossible for other transporters to engage in that business.
[156] I have no hesitation in answering this question in the negative.
[157] Of course, the Government of the United Kingdom has presented to the
Court a considerable quantity of information and statistics regarding the
transport of goods before and after the measure of June 20th, 1931, and
regarding the distribution of vessels amongst the various concerns; it would
appear from this evidence that, after the adoption of the measure in
question, Unatra did in fact attain a privileged position and did in fact
replace the other transporters.
[158] The Belgian Government, however, for its part, has produced an equally
large quantity of information and statistics, from which it would appear
that the river transport business was still carried on or even improved
after the decision of 1931. With the evidence at present available, it was
certainly impossible for the Court to say that the information and
statistics produced by the Government of the United Kingdom were correct and
that those produced by the Belgian Government were incorrect.
[159] Again, it is to be observed that, in order actually to establish the
contention of the Government of the United Kingdom, it will not suffice to
prove that private river transport concerns in the Congo ceased to operate
after the measures adopted in 1931; it must also be proved that these
measures and the cessation of business stand in the relation of cause and
effect. Since the decision of June 20th, 1931, only affects the carriage of
certain products of the colony between certain points on the river, this
necessitates the appraisement of a number of technical considerations which
only experts in fluvial navigation and in the economic conditions of the
Congo could adequately present to the Court.
[160] 3. - In these circumstances and at the very beginning of the oral
proceedings, the Agent for the Government of the [p109] United Kingdom made
the request to the Court to which I have referred at the outset of this
opinion.
[161] After remarking that serious discrepancies still existed between the
Parties in regard to important matters of fact, and after pointing out the
difficulty of producing complete proofs, when the facts to be established
had transpired in the territory of another State, the Agent for the
Government of the United Kingdom suggested that the Court should order an
enquiry, but only, of course, if it considered that the evidence already
produced was insufficient to establish that the effect of the Belgian
Government's measures had been to create a de facto monopoly, and that such
a monopoly, if proved to exist, would be inconsistent with Belgium's
international obligations.
[162] The Agent for the Belgian Government raised no objection: whilst
observing that the facts established - which however were quite other than
the facts to which the Agent for the Government of the United Kingdom
referred - sufficed in his view for the settlement of the dispute, he said
that he left the matter to the Court, which possessed all the requisite
powers under Article 50 of its Statute.
[163] This being the position and seeing that the case depended mainly on
the appraisement of the facts, as the Special Agreement expressly says in
the very terms of the question to be answered, the Court, in my opinion,
ought not to have hesitated. Being confronted with the alternative of
rejecting the main plea of the Government of the United Kingdom, for lack of
evidence, or of exercising the powers conferred on it by the Statute and
ordering the production of the necessary evidence, it should have taken the
latter course.
[164] To do so however would have hardly been possible without first of all
establishing that the evidence to be called for was material to the issue.
As the facts to be established related to the creation of a de facto
monopoly in favour of Unatra, it was necessary to prove that such a
monopoly, if its existence was established, would be inconsistent with the
obligations laid on Belgium by the Convention of Saint-Germain.
[165] It was from this aspect that the question of law raised by the main
plea of the Government of the United Kingdom should have been considered by
the Court at the very outset of its deliberation. I think that I may
formulate the problem as follows:
[166] Assuming to have been duly established the facts alleged by the
Government of the United Kingdom and tending to prove that the decision of
June 20th, 1931, and the application of that decision were bound to result
and did in fact result in concentrating the river transport business in the
hands [p110] of Unatra by making it commercially impossible for other
transporters to engage in that business, are these measures in conflict with
the international obligations incumbent on Belgium under the Convention of
Saint-Germain ?
[167] 4. - Before taking up this question, which is undoubtedly the most
important and the most delicate of the questions of law raised by the
present case, it will, not be out of place to define its essential features.
[168] In the first place, it is certain that Unatra's privileged position is
not the result of any legal prohibition applied to other river transport
concerns. The latter are in law free to navigate their vessels and to carry
passengers and cargo, just as before the decision of June 20th, 1931; what
prevents them doing so is simply a commercial obstacle, namely the
impossibility of obtaining customers unless they adopt Unatra's rates and,
as a result, face very considerable losses.
[169] On the other hand, Unatra's privileged position is not the result of
the natural operation of economic laws, and in particular of competition.
Unatra did not enter into competition with other transport concerns in the
way that any other transporter might have done: it was solely owing to the
financial assistance of the Government that it was able to lower its rates
to such an extent as to drive other transporters out of the market. Its
monopoly - if it is a monopoly - is the result of the decision of June 20th,
1931, that is to say of an act of the Government.
[170] There is no doubt that, if this decision had taken the form of a
prohibition to transport certain ' goods and to reserve their carriage to
Unatra, it would have been contrary to the Convention.
[171] Nor is there any doubt that, if the fact that it became impossible to
carry on the transport business had been the result of the natural operation
of economic laws, for instance a reduction in rates made by one of the river
transport concerns or by Unatra itself, without any intervention on the part
of the Government, that fact would have been of no importance as regards the
obligations arising out of the Convention.
[172] What is the law when it is in fact impossible, though a legal right
remains, for others to engage in the business in question, and this
impossibility is the necessary and direct consequence of an act of the
Government ?
[173] This, in my view, is the real question of law raised by the main plea
of the Government of the United Kingdom.
[174] 5. - In order to answer this question, I do not think it necessary to
ascertain how far the principle of freedom of trade which is so fully
stipulated for in Article 1 of the Act of [p111] Berlin of February 26th,
1885, has been accepted by the Convention of Saint-Germain. It will suffice
for my purposes to refer to Article 5 of that Convention, which is the real
sedes materia.
[175] The Article is worded as follows:
"Subject to the provisions of the present Chapter, the navigation of the
Niger, of its branches and outlets, and of all the rivers, and of their
branches and outlets, within the territories specified in Article 1, as well
as of the lakes situated within those territories, shall be entirely free
for merchant vessels and for the transport of goods and passengers.
Craft of every kind belonging to the nationals of the signatory Powers and
of States, Members of the League of Nations, which may adhere to the present
Convention shall be treated in all respects on a footing of perfect
equality."
[176] It is clear, to begin with, that this Article lays down that
navigation is to be free, both as regards movements of shipping, or
navigation in the strict sense of the word, and as regards the carriage of.
passengers and cargo. It is, indeed, in that sense that freedom of fluvial
navigation has always been understood in international treaties concerned
with the question.
[177] It follows that an encroachment on the freedom to carry goods is a
contravention of this Article, for the same reason and in the same way that
an encroachment on the freedom of movement of shipping would contravene it.
It is therefore quite possible, from this standpoint, for the Belgian
Government's measures to be in conflict with Article 5, although they only
affect the carriage of goods and in no way restrict the passage of vessels.
[178] The most delicate point of the problem is, however, the question
whether the provisions of Article 5 merely require the signatory Powers to
refrain from any measure restricting either the free movement of shipping,
or the freedom to carry passengers and cargo - provided of course that such
measure is not legally justified by some other article relating to
navigation in the Convention - or whether the Article goes further and
requires the signatory Powers to refrain from any measure which, though not
interfering with the free movement of shipping or cargoes, is of such a
nature as to render this freedom economically valueless.'
[179] The question amounts to this: what is it that Article 5 sets out to
protect? The Article is, indeed, drawn in such wide and general terms that
any injury done to that which it seeks to protect is undoubtedly covered by
its terms; there is nothing in the text to justify a belief that it is only
aimed at legal prohibitions of navigating or of carrying cargoes. [p112]
[180] In my view, it is beyond doubt that, in the Convention of
Saint-Germain - as in all the other conventions relating to this subject, to
which the present Convention is merely a sequel-navigation is regarded, and
is protected, as a branch of economic activity, as a business. The purpose
of Article 5 is to open the commercial exploitation of the waterways of the
Congo Basin to everybody, so that everyone may reap the financial profits to
be derived from it.
[181] The freedom of navigation which Article 5 seeks to protect is not an
abstract and academic freedom, but a tangible and effective freedom: the
freedom to engage in a business in order to reap its profits. The purpose of
this Article would be entirely stultified if the State were entitled to make
it impossible for the shipping business to earn any profits, so long as
every one was left free to engage in it: the idea of freedom of navigation
which underlies Article 5 is something altogether different.
[182] It would, of course, be absurd to maintain that the State was bound to
make it possible for the shipping business to be carried on by guaranteeing
custom and profits to those who engage in it; freedom of navigation can only
signify freedom to engage in the shipping business, without hindrance, and
subject to the risks to which that business is liable.
[183] But the position is quite different if the State itself takes measures
which* render it impossible to obtain custom or to earn profits: in that
case it is restricting that very freedom which it was bound to respect;
measures of that kind are just as repugnant to Article 5 of the Convention
of Saint-Germain as would be a law prohibiting navigation or the carriage of
passengers and cargo. I find it impossible to believe that this Article
prohibits the Belgian Government from reserving to the Unatra Company by
legal enactment the carriage of goods referred to in the decision of June
20th, 1931, and yet left that Government free to adopt measures as a
consequence of which no one else but Unatra could carry such goods without
the certainty of incurring heavy losses.
[184] 6. - If, assuming the facts alleged, by the Government of the United
Kingdom to have been duly established, the measures adopted by the Belgian
Government were contrary to the Convention of Saint-Germain, the
circumstance that these measures were taken to meet the dangers of the
economic depression cannot be admitted to consideration. It is clear that
international law would be merely an empty phrase if it sufficed for a State
to invoke the public interest in order to evade the fulfilment of its
engagements.
[185] I hasten to add, to prevent any misunderstanding, that it is quite
possible, on the other hand, when one comes to examine [p113] the facts,
that the economic depression was an important or even a decisive factor,
accounting for the Belgian Government's measures in a manner calculated to
refute the allegations of the Government of the United Kingdom. That
is-however, a question of fact. And it is for that reason that the Court,
unless it rejected the submissions of the last-named Government for lack of
proof, could not adopt that course except as the result of an enquiry which
would elucidate all the questions of fact, both those relied on by the
Belgian Government - including therefore, and primarily, the economic
depression - and those relied on by the Government of the United Kingdom,
which relate to the creation of a monopoly in favour of Unatra by the
measures referred to.
[186] Again, the position of Unatra, as a Company which has been under
governmental control from the time of its foundation in 1925, and which is
responsible for certain public services, has no bearing on the issue: that
position in no way precluded competition by other enterprises. It is true
that it was owing to the control which the Belgian Government exercised over
Unatra - as over the other transport enterprises covered by the decision of
June 20th, 1931 - that that Government was able to take the impugned
measures; but it is equally true that the Belgian Government should have
abstained from taking those measures if they had been inconsistent with its
international obligations. The situation occupied by the State-controlled
companies, on the one hand, and by the uncontrolled companies, on the other
hand, is therefore entirely immaterial to the issue which the Court had to
decide.
[187] 7. - The situation would have been entirely different if the Belgian
Government had been acting under the law of necessity, since necessity may
excuse the non-observance of international obligations.
[188] The question whether the Belgian Government was acting, as the saying
is, under the law of necessity is an issue of fact which would have had to
be raised, if need be, and proved by the Belgian Government. I do not
believe that that Government meant to raise the plea of necessity, if the
Court had found that the measures were unlawful; it merely represented that
the measures were taken for grave reasons of public interest in order to
save the colony from the disastrous consequences of the collapse in prices.
[189] It may be observed, moreover, that there are certain undisputed facts
which appear inconsistent with a plea of necessity.
[190] To begin with, there is the fact that, when the Belgian Government
took the decision of June 20th, 1931, it chose, from among several possible
measures - and, it may be added, in a manner contrary to the views of the
Leopoldville Chamber of [p114] Commerce - that which it regarded as the most
appropriate in the circumstances. No one can, or does, dispute that it
rested with the Belgian Government to say what were the measures best
adapted to overcome the crisis.: provided always that the measures selected
were not inconsistent with its international obligations, for the
Government's freedom of choice was indisputably limited by the duty of
observing those obligations. On the other hand, the existence of that
freedom is incompatible with the plea of necessity which, by definition,
implies the impossibility of proceeding by any other method than the one
contrary to law.
[191] Another undisputed fact which seems irreconcilable with the plea of
necessity is the offer made by the Government to transporters other than
Unatra on October 3rd, 1932. Whatever its practical value, that offer showed
that it was possible to concede advantages to all enterprises, similar to
those granted to Unatra, and hence to avoid creating that de facto monopoly
which, in the submission of the Government of the United Kingdom, was the
necessary consequence of the decision of June 20th, 1931.
[192] 8. - For the foregoing reasons, I have reached the conclusion that the
facts alleged by the Government of the United Kingdom are not sufficiently
established ; but that if they were proved, that is to say, if it were
established that the decision of June 20th, 1931, and the application of
that decision, were bound to result and did in fact result in concentrating
all fluvial transport business in the hands of Unatra by rendering it
commercially impossible for other transporters to engage in that business,
those measures would be in conflict with Belgium's international obligations
under the Convention of Saint-Germain towards the United Kingdom.
[193] Seeing then that further evidence was material to the issue, it was
the duty of the Court, in my opinion, having regard to the terms of the
Special Agreement and to the attitude of the Parties, to suspend its
decision on the merits and to proceed, under Articles 48 and 50 of the
Statute, to order the necessary enquiries, to establish the truth
impartially in regard to the disputed facts, and to obtain the requisite
technical information to enable it correctly to appraise them.
[194] It is only with the result of these enquiries before it that the Court
could fulfil the mission confided to it by the Special Agreement which was
to deliver judgment "having regard to all the circumstances of the case".
(Signed) D. Anzilotti. [p115]
Dissenting Opinion of Sir Cecil Hurst.
[195] Being unable to concur in the answer which the judgment gives to the
first question put to the Court in this case, I feel it necessary to avail
myself of my right under the Statute of the Court and to indicate my
standpoint in regard to the dispute.
[196] It is a case where the decision must so largely depend on a correct
appreciation of the facts and circumstances that I shall frequently find it
necessary to state my view of the facts.
[197] The dispute submitted to the Court has arisen with regard to the
consequences which certain measures taken by the Belgian Government in
connection with Unatra had upon the enterprises carried on by a British
subject, Oscar Chinn, in the Belgian Congo.
[198] Unatra is a Congolese Company: therefore the treatment which it
receives at the hands of the Belgian Government is no concern of the
Government of the United Kingdom, but the allegation is that Chinn's losses
were due to the measures taken with regard to Unatra.
[199] As it is not legally possible in this case that the Belgian Government
should be liable to make reparation to the Government of the United Kingdom
on behalf of Chinn if the measures taken involved no violation of the
international obligations of Belgium, the basis of the British case must be
that the measures taken by the Belgian Government were in themselves
unlawful, either by reason of the intention with which they were taken, or
by reason of the consequences which they were bound to entail and which
should have been foreseen by the Belgian Government. In this latter, the
element of intention would be immaterial.
[200] It is not easy to tell from the Memorial and the Reply and from the
oral arguments of Counsel for the United Kingdom which of the above
alternatives is adopted as the foundation of the British case. It is
therefore necessary to examine them both.
[201] The first alternative involves a demonstration either by direct proof
or by necessary deduction from proved or admitted facts that the Belgian
Government intended to achieve a situation inconsistent with its
international obligations, i.e. that in this particular case it intended to
drive out Chinn from the transport business on the Congo either by
concentrating the whole of the transport business in Unatra's hands or by
rendering it [p116] impossible for him to carry on. Nothing in the case
suggests that the contention put forward on behalf of the United Kingdom is
that the Belgian intention was to drive out Chinn alone. No evidence of any
such intention is produced, and the story of the facts as detailed in the
Memorial shows that up to the moment when the Government of the United
Kingdom took up Chinn's case, Chinn was associating himself with other
private transporters (mostly of Belgian nationality) who" were equally
aggrieved by the Belgian measures.
[202] The relative smallness of Chinn's business as compared with the
aggregate volume of river transport on the Congo makes it inherently
improbable that the Belgian Government would conceive measures directed
against him alone.
[203] It may therefore be assumed that, when it is alleged that the Belgian
measures rendered it impossible or commercially impossible for Chinn to
carry on business, reference is made to Chinn merely because he was the only
British subject involved, not because he was singled out for special
treatment, and that the contention is that the position was made impossible
not only for Chinn but for all private transporters.
[204] As between the two alternatives indicated above - illegality of the
Belgian measures because of their intention and illegality because of their
necessary consequence - it seems on the whole more probable that the case of
the United Kingdom is that they were illegal by reason of their
consequences.
[205] No attempt is made in the documents of the written proceedings to
adduce the evidence required to establish the illegality of the Belgian
measures on account of the intention with which they were taken, i.e. to
show that it was the intention of the Belgian Government in adopting the
measures of 1931 to concentrate the river transport in the hands of Unatra.
Intention is a question of fact - as to which proof is necessary - and the
burden of proof lies on the party making the allegation. It is true that
direct proof of intention is not usually forthcoming: the proof must in most
cases consist of deductions from admitted or established facts, but where
that is the case the intention must be clearly deducible from the facts.
Here such facts as are admitted or established are insufficient to render
any such intention clearly deducible. In his reply the Agent for the United
Kingdom, it is true, suggested that there [p117] was this second motive for
the particular action taken by the Belgian Government, viz. that it would
benefit Unatra and put an end to competition, but the statement is one which
must be read in the light of the rest of his speech.
[206] If the intention to establish a monopoly for Unatra was the essence of
the case put forward by the United Kingdom against the Belgian Government,
it is incredible that the Memorial should not treat a document such as that
referred to in the third footnote on page 10 of the Memorial as a "document
in support" which should under Rule 40 be annexed to the Memorial (i.e. in
full).
[207] The fair conclusion would seem to be that the case put forward on
behalf of the United Kingdom is not that the Belgian measures were
inconsistent with the international obligations of that Government because
they were intended to confer upon Unatra a monopoly, but because their
necessary consequence and one which must have been foreseen was to create
such a monopoly.
[208] If this conclusion is erroneous, and the case on behalf of the United
Kingdom is based upon the contention that the Belgian measures were
inconsistent with the international obligations of that Government because
they were intended to concentrate the whole of the river transport in
Unatra's hands, the case with regard to the alleged de facto monopoly fails
for want of proof of the intention on which it is founded.
[209] For these reasons I conclude that the contention of the United Kingdom
is that the Belgian measures were inconsistent with the international
obligations of that Government, because of the consequences which they
involved and which the Belgian Government should have foreseen that they
involved.
[210] The measures themselves have already been explained in the judgment of
the Court. To appreciate the effect of them, however, it is desirable to add
a few words as to the industry of the colony.
[211] The Belgian Congo is an area producing in great quantities commodities
which find their market in Europe. The exporter depends for the prosperity
of his business upon the price which the goods realize on the European
market. Out of this price has to be paid the cost of transport to Europe;
the higher the cost of transport, the smaller the net price realized by the
exporter. It stands to reason in these circumstances that the exporter in
the Congo will patronize the business which will transport his goods at the
lowest rate.
[212] If of two competing businesses one can say that he is now able to
transport goods at one franc per ton and the other that he cannot do so, and
must continue to charge the previous [p118] rates, it is obvious that the
former will get the business. The general conditions to which both are
subject will be identical; they will be subject to the same laws, the same
regulations, the same conditions or liability as regards insurance and
carriage, the same rights to the use of ports, wharves, pilots and
stevedores, the same dues, etc.: all will be identical, but the one will get
the cargoes to carry and the other will not.
[213] All this is so obvious that the Court is entitled to assume that the
Belgian Government must have realized what the consequences would be of the
sweeping reductions in Unatra's transport rates which they effected by the
decision of June 20th, 1931.
[214] It is true that most upstream and some downstream traffic was not
affected by the reductions, but if this traffic had been sufficient
wherewith to carry on a business, Unatra would not have incurred the losses
it did in 1931 and 1932.
[215] It follows therefore that the Belgian Government must have realized
that the effect of the June measure would be that Unatra, carrying at one
franc a ton, would get all the business and a private transporter, such as
Chinn, carrying at the old rates, would get none. Even if the Belgian
Government did not realize this at first, it was within a few days made
clear to them by the Socca Company at Antwerp and by the Chamber of Commerce
at Leopoldville.
[216] Before turning to the questions whether the Belgian measures were or
were not inconsistent with the international obligations of that Government,
it is necessary to examine these measures a little more clearly.
[217] The decision of June 20th, 1931, embodied two elements: the direction
that the tariffs were to be reduced, as therein stated, and the arrangement
for the repayment of the losses which each of the six companies concerned
suffered as a result of the reductions.
[218] The so-called de facto monopoly of transport on the river which Unatra
are said to have secured as the consequence of this measure would result
from the first element - the reduction of the tariffs. Exporters would
entrust their goods to Unatra for carriage, because they would by this means
get them carried most cheaply.
[219] If Chinn had been able to reduce his charges to the same extent, he
could have protected himself by carrying goods at the same rate as Unatra
and keeping his clientéle, but that he could not do. To carry goods at one
franc per ton would [p119] have been ruin to him, just as it would have been
to Unatra if the Belgian Government had not reimbursed their losses.
[220] The decision of June 20th, 1931, being addressed to the six companies
concerned, was silent on the subject of extending the same favourable
treatment to private transporters if they made corresponding reductions in
their charges. Judging by the terms of the letter of the Leopoldville
Chamber of Commerce of June 27th, 1931, commercial circles in the Congo must
have had a shrewd suspicion that the Government did not intend to accord the
same treatment to the private transporters, but the position was not
certain. This is shown by the letter referred to above which Socca (one of
the Belgian exporting firms which had organized its own transport fleet)
wrote to the Belgian Minister on June 26th, 1931, asking how they could
qualify for repayment of the losses they would suffer, as they could not
believe that the Belgian Government intended to create a preferential régime
for Unatra.
[221] It was not until July 28th, 1931, that the Belgian Government by
letters addressed to Socca (Series C, No. 75) and to the Chamber of Commerce
at Leopoldville (Memorial, par. 24; ibid.) refused to accord similar
treatment to private transporters.
[222] It follows that the concentration in the hands of Unatra of the whole
of the river transport trade resulted (if at all) from the reduction of
tariffs by the decision of June 20th, 1931. The injury to Chinn resulted (if
at all) from the failure to make any provision for repaying their losses to
private transporters who made similar reductions, and this omission only
became definitive as from July 28th, 1931.
[223] There are certain subsidiary questions of fact which it is desirable
to dispose of in order to keep the legal issues clear.
[224] The first is that the arrangement introduced by the decision of June
20th, 1931, was temporary in character: it was open to review at the end of
three months. This circumstance cannot affect the question whether the
measures were inconsistent with Belgium's international obligations. The
duration of the arrangement would certainly affect the amount of the
reparation, if the measure were illegal, but if a State is subject to
engagement to do or not to do a certain thing, there cannot be read into it
a provision that for short periods there shall be liberty to violate the
engagement. [p120]
[225] The second is that the decision of June 20th provided that the sums
paid by the State to reimburse the losses suffered by the six Belgian
companies concerned should be repayable to the State when the economic
situation allowed. Clearly this is not a circumstance which could affect
Chinn or the Government of the United Kingdom.
[226] The third is that several of the Belgian companies at work in the
colony had previous to 1931 organized their own fleets so as to be able to
do their own transport work. It seems that when they could, their fleets
transported goods for other people as well. The Belgian measures of 1931
affected these companies in a way which differed slightly from the way in
which they affected Chinn or any other person who was not an exporter and
who devoted himself entirely to transport work.
[227] A company which had sunk capital in organizing its own fleet and had
collected a personnel to man and run that fleet would hesitate to abandon
its fleet merely because temporarily it could get its transport work done
for it more cheaply by Unatra under the decision of June 20th, 1931, than it
could do it for itself. It might feel that in the long run it would be more
advantageous to maintain its fleet and run it at a loss than to get its
merchandise carried gratuitously for a short time by another concern.
[228] If the companies which had organized their own fleets had been British
nationals, it would be necessary for the Court to enquire as to how the
Belgian measures affected each one of them, but being Belgian, the effect of
the measures upon them is not a matter with which the Court need deal.
[229] The difficulty which the position of these companies creates is that
both sides have endeavoured to establish their contentions before the Court
by the production of statistics as to the volume of merchandise which
private transporters carried on the river after the measures of 1931 came
into force. These statistics include the goods transported by companies
which for a time at least kept their fleets going. Neither side accepts the
statistics put forward by the other, and so great is the discrepancy between
them that the Agent for the United Kingdom asked for the appointment of an
"expertise" to investigate the questions to which these statistics related.
[230] The Court has declined to appoint such an expertise. [p121]
[231] In the view which I take of the case, such an appointment would have
been useless, as the results of the enquiry could not affect the ultimate
decision. What the United Kingdom has to show is that Chinn was injured by
measures which were inconsistent with Belgium's international obligations:
such proof would not be assisted by an enquiry as to the effect which the
measures had on the transport business of Belgian companies which tried to
keep their fleets going. It would only result in an enquiry as to how much
of its financial reserves each company was able and willing to devote to
keeping its fleet in being
[232] I return to the question whether the Belgian measures of 1931 were or
were not inconsistent with the international obligations of that country. It
is maintained by the Government of the United Kingdom that they were so;
that they constituted a violation of the Convention of Saint-Germain of
1919, which regulated relations between the United Kingdom and Belgium in
the Conventional Basin of the Congo, and that they ran counter also to
Belgium's obligations under general international law.
[233] The latter contention is a short one which can be disposed of rapidly.
[234] It is maintained on behalf of the United Kingdom that, as Chinn went
to the Congo relying on the position assured to him by treaty and set up a
business there, and as the Belgian measures destroyed his business and
rendered it impossible for him to carry on, his acquired rights were
interfered with to an extent and in a manner which is inconsistent with the
admitted principles of international law.
[235] This contention is not in my opinion well founded.
[236] Following the line of argument which Counsel for the United Kingdom
have put forward, it may be correct to say that Chinn possessed under treaty
a right to carry on in the Congo a ship-owning and ship-building business,
but this right cannot be put higher than that of a right to make contracts
for the transport of goods on the river, or for the repairing or building of
ships, with any person in the Congo who desired to make a contract with him.
Chinn possessed no right, either under the Treaty of Saint-Germain or under
general international law, which entitled him to find customers in the
Congo, i.e. people who were desirous of contracting with him. If the
individuals with whom Chinn would have liked to make contracts found that
they could get better terms elsewhere for the transport of their merchandise
or the repairing of their ships, they had just as much right to contract
with persons other than Chinn, as Chinn had [p122] to make contracts with
them. Consequently, the fact that these other individuals found it to their
advantage not to contract with Chinn, involved no violation by them of a
right belonging to him. Similarly, the decision of the Belgian Government
which rendered it more profitable for these persons to make contracts
elsewhere and not with Chinn interfered with no acquired right of his.
[237] If it could be shown on behalf of Chinn that some right which he had
already obtained to carry the goods of a particular merchant or to repair
the ships of some particular merchant had been infringed by the Belgian
Government, as, for instance, if he had had in existence a contract to carry
all the goods of such and such a person and the Belgian Government had
stepped in and prevented that person, no matter how much he wished to do so,
handing over his goods to Chinn to transport, it would be right to say that
an acquired right of Chinn had been interfered with, but the facts do not
show any such position. Chinn's right to fulfil existing contracts for the
transport of goods or the repair of ships, or to secure new contracts to
that effect if he could, was never interfered with.
[238] The more important argument advanced by the United Kingdom is that the
Belgian measures ran counter to the Convention of Saint-Germain. This Treaty
was concluded in 1919 as part of the peace settlement of that year. Its
purpose appears to have been to replace the Berlin and Brussels Acts by
something more suitable to the conditions of the moment, while maintaining
the general principles which those instruments embodied. By Article 13 the
earlier Acts are abrogated as between the Powers which are parties to the
new Convention. Both the United Kingdom and Belgium are parties to the
Convention and have in this case treated it as the operative instrument.
[239] In these circumstances I do not propose to express any opinion as to a
question which, it is true, was not raised by the Parties in this case, but
which must strike any one who studies the published procés-verbaux of the
Berlin Conference of 1885. That question is whether both Belgium and the
United Kingdom had not already pledged themselves by the terms of the Berlin
Act not to terminate or to modify, even as between themselves, the
provisions of that instrument except in agreement with all the other States
which were parties to it. Nor do I propose to express any opinion as to what
would be the [p123] effect of such a pledge, if it had been given, that is
to say, whether a new treaty made in violation of such a pledge would be
devoid of juridical effect, or whether it would merely be a wrongful act
entitling a State which was not a party to the Convention of Saint-Germain,
but was a party to the Berlin Act, to demand reparation.
[240] The stipulations of the Convention of Saint-Germain which the
Government of the United Kingdom alleges that the Belgian Government
violated by what it did in connection with Unatra are those which obliged it
to maintain in the Congo commercial freedom and commercial equality, and
also the provisions of Article 5 relating to liberty of navigation and
equality of treatment for craft.
[241] If I appreciate correctly the Belgian arguments, that Government does
not dispute its obligations to apply in the Congo the principles of liberty
and equality of commerce and of liberty of navigation ; its contention is
that the measures taken in 1931 infringed none of these principles nor any
of the stipulations of the Convention of Saint-Germain, because they fell
within the "domaine de la gestion de la flotte nationale" and that this
domain lies outside the scope of the Treaty provisions.
[242] On this latter point I agree with what is said in the judgment of the
Court. The Belgian arguments constitute an inadequate answer to the British
contentions, if these contentions are made out. In my view the more
difficult question is whether the June measure rendering transport by Unatra
practically gratuitous can be said, even if it did establish a monopoly in
fact for Unatra, to be inconsistent with "liberty of commerce" or "liberty
of navigation" or with "complete commercial equality".
[243] Liberty of commerce, freedom of commerce, liberty of trade and freedom
of trade are phrases which are used in the English texts of the Berlin Act
and the Convention of Saint-Germain almost indiscriminately. I can see no
practical difference between them.
[244] In the Convention of Saint-Germain there is no specific provision in
favour of freedom of trade. In this respect it differs from the Berlin Act,
Article 1 of which provides that in the Congo the trade of all nations shall
enjoy complete freedom. All that the Convention of Saint-Germain provides
for in Article 1 is "complete commercial equality", and yet there is a
provision in this same Article which looks as if it must have been intended
by the new Convention to keep alive the [p124] principle of freedom of trade
laid down in the first Article of the Berlin Act. This provision consists of
the words at the end of the Article, "but subject to the reservation
specified in the final paragraph of that Article". The final paragraph of
Article 1 of the Berlin Act is that, "in extending the principle of free
trade to the eastern zone, the Conference Powers only undertake engagement
for themselves", etc. If the authors of the Convention of Saint-Germain
deliberately kept alive that reservation in the Berlin Act as to freedom of
trade instead of making a corresponding reservation as to the application of
the principle of complete commercial equality to the eastern zone, it seems
difficult to escape the conclusion that they intended to maintain, after the
Convention of Saint-Germain came into force, this principle of liberty of
trade. It is equally difficult to believe that they intended the principle
to apply only in the eastern zone and not throughout the Conventional Basin.
I conclude, therefore, that this principle operates in the Belgian part of
the Congo, and that the Belgian Government is still under obligation to the
Government of the United Kingdom to see that the trade of all nations enjoys
complete freedom.
[245] The next question is whether a Government measure which enables one
transporter to carry goods on the Congo so cheaply that he will attract all
the business, violates the liberty of commerce to which other transporters
are entitled. What exactly is meant by maintaining liberty of commerce?
[246] The conclusion to which I am led is that this stipulation was intended
to prevent the imposition by a government of obstacles or prohibitions -
whatever their nature - to which a trader must perforce submit, and that it
is not contravened by measures which leave him free to carry on his trade if
he can. The important word in this connection is the word "liberty" or
"freedom".
[247] The Belgian measure of June 20th, 1931, reducing Unatra's transport
charges, left the other transporters free to carry on their business if they
so wished and if they could. The question whether they could depended on the
extent of their financial ressources - not upon any matter for which the
Government was responsible. The Government measure imposed no obstacle to
the carrying on of the business; at most it made it unprofitable. [p125]
[248] The argument advanced on behalf of the United Kingdom is that the
Belgian measures of 1931 made it commercially impossible for Chinn to carry
on his business ; when analyzed this only means that these measures
prevented him from earning any profit, because the cargoes available for
transport out of the carriage of which the profits would have been earned
all went to a competitor with whom he could not compete. They did not place
Chinn in such a position that he was not at liberty to carry on his business
if he so desired.
[249] Inability to make a profit is a circumstance which may equally well
arise from the superior activities of a commercial competitor. It certainly
cannot have been the intention of the Berlin Act to eliminate trade
competition in the Congo, but if the freedom of trade assured by the Berlin
Act could be interpreted as entailing an obligation on the Government not to
take a particular measure on the sole ground that it would prevent the
earning of a profit by a particular business carried on in the Congo, it
would have to be interpreted as obliging the territorial Government to
exclude trade competition.
[250] For these reasons the reduction of Unatra's tariff to one franc a ton,
even if it did result in that Company getting all the business, did not
infringe the liberty of commerce to which Chinn was entitled.
[251] The Belgian measures are also alleged to infringe the principle of
liberty of navigation.
[252] In this case there is no doubt as to the particular treaty stipulation
applicable: liberty of navigation is provided for in Article 5 of the Treaty
of Saint-Germain.
[253] The difficulty in accepting this argument arises from the fact that,
as in the case of liberty of commerce, what a stipulation in favour of
liberty of navigation seems to exclude is the imposition by the Government
of some direct obstacle in the way of the use of the ship or of the business
on which the ship was employed, something to which the ship-owner must
submit, whether he likes it or not, something which interferes with his
liberty. Nothing of the kind is to be found in the Belgian measures. Chinn
was as much at liberty to send his ships up and down the Congo after July,
1931, as he was before.
[254] A separate argument can be founded on the second paragraph of Article
5, which says that craft belonging to nationals of the signatory Powers
shall be treated in all respects on a footing [p126] of perfect equality;
but here again it is difficult to see how the Belgian measures infringed
this provision. Even after July 1st, when the reduced tariffs on Unatra came
into operation, there was nothing in the evidence submitted by the United
Kingdom to show that any difference was made between the treatment meted out
to the ships of the Unatra fleet and those of private transporters.
[255] The Memorial also maintains that the Belgian measures infringed the
"complete commercial equality" between the respective nationals of the
signatory Powers enjoined by Article 1 of the Treaty of Saint-Germain.
[256] This argument is used in paragraphs 40 and 44 to attack the Belgian
measures so far as they resulted in the de facto monopoly for Unatra and in
paragraph 45 as an alternative argument based on the discrimination involved
in "granting a subsidy to Unatra alone", i.e. in the refusal to undertake to
repay to Chinn as a private transporter the losses which were to be repaid
to Unatra if goods were carried at one franc a ton. With this second
contention I deal later on.
[257] As regard the first contention, that advanced in paragraphs 40 and 44,
the argument differs but little from that based on the right to liberty of
commerce. So long as the Government measures left all transporters
(including both Chinn and Unatra) free to carry on their business, the
reduction of tariffs imposed upon Unatra did not infringe the commercial
equality prescribed by the Treaty of Saint-Germain.
[258] The general conclusion is therefore that the reduction of Unatra's
transport rate by the Belgian decision of June 20th, 1931, was not
inconsistent with the liberty of commerce, the liberty of navigation or the
commercial equality which Belgium was obliged to maintain in the Congo, even
though the effect of the reduction was bound to be that exporters would give
their cargoes to Unatra and not to a private transporter like Chinn.
[259] That disposes of the argument founded on the so-called de facto
monopoly.
[260] There remains the alternative contention that the Belgian measures
amounted to discrimination in favour of Unatra and against Chinn, i.e. that
by refusing to extend to the private transporters, including Chinn, the
arrangement for the [p127] repayment of losses promised to Unatra in the
June 20th decision, the Belgian Government failed to maintain that complete
commercial equality between the nationals of the signatory Powers which they
were bound by Article 1 of the Convention of Saint-Germain to do.
[261] The June 20th, 1931, decision of the Belgian Colonial Minister said
nothing about the question of extending a similar arrangement to other
transporters. It was not until July 28th that the Government's refusal to do
so was published. The discrimination, therefore, if any, did not result from
the decision of June 20th, but from the action taken on July 28th. The
latter measure, however, is equally included in the reference to the Court.
[262] The question is whether the Government's refusal to extend the
arrangements for the repayment of losses to Chinn as a private transporter
was a violation of Article 1 of the Convention.
[263] It has not been disputed by the Belgian Counsel that one franc a ton
was not an economic transport rate. It is obvious that a rate which entailed
on Unatra in 1932 losses of over 12,000,000 francs was not a charge high
enough to enable a private transporter to make his business pay, even
allowing for the up and downstream business not touched by the decision.
[264] It is equally obvious that a private transporter who, like Chinn, was
not an exporter on his own account, would get no cargoes to transport unless
he carried them at the same rate as Unatra. Indeed it is admitted by the
Belgian Government that these sweeping reductions were only made in order to
save the industry of the colony, that is to say that it must have been
assumed either that exporters generally would patronize Unatra and so get
the benefit of Unatra's reduction, or that the private transporters would
make corresponding reductions - otherwise the industry of the colony would
not be saved.
[265] For the Government to oblige one transport concern by a direct order
to reduce its transport charges and to agree to reimburse the resulting
losses, and to oblige another transport concern indirectly to make similar
reductions in order to save its business and to refuse to reimburse the
resulting losses, cannot be said to amount to maintaining between the two a
complete commercial equality. [p128]
[266] That alone, however, is not sufficient to constitute a violation •of
the Convention of Saint-Germain. What Article 1 obliges the signatory Powers
to maintain is complete commercial equality "between their respective
nationals and those of States Members of the League....".
[267] Chinn's nationality was British, and Unatra's was Belgian. Is this
discrimination between an individual British subject and the group of
Belgian companies to whom the decision of June 20th was addressed,
sufficient to fulfil the requirements of Article 1 ? Or must the
discrimination be shown to be based on nationality?
[268] The judgment adopts the latter interpretation. I am not able to share
this view. In my opinion it is not necessary to show that the discrimination
was based on nationality, in the sense that the differentiation was made
because the persons possessed a particular nationality.
[269] Such a requirement would material reduce the scope of the application
of Article 1.
[270] The wording of the Article supports the larger interpretation. The
equality is to be maintained "between their respective nationals and those
of States...." (enire leurs ressortissants respeciifs et ceux des
États....). If any conclusion can be drawn from the use of the phrase
"respective nationals" instead of saying "undertake to maintain between
their nationals respectively and those of States....", it is that the
parties to the Treaty intended to ensure the position of their nationals
individually.
[271] The wording of other articles in the Treaty prohibiting
differentiation supports the view that what Article 1 is aimed at is the
protection of individual equality.
[272] Article 3 provides that nationals of the territorial Power and of
other Powers shall enjoy without distinction equal treatment and the same
rights as regards protection of persons and effects and as regards property
and professions. Clearly this is an Article which guarantees individual
equality: so does Article 2 which excludes differentiation as regards
merchandise and vessels. When Article 2, paragraph 2, and Article 5,
paragraph 2, are read together, one sees that the equality of treatment
guaranteed to craft by Article 5 must be individual equality. This is a
conclusion of some interest, because the wording of this paragraph of
Article 5 is much the same as that of Article 1.
[273] An additional argument is to be found in the fact that the liberty of
commerce stipulated in the Berlin Act must have ensured individual liberty.
Complete commercial equality under the Berlin Act followed from the liberty
of commerce so promised, and therefore must have been individual liberty.
The words [p129] in the fourth paragraph of the Preamble of the Treaty of
Saint-Germain as to the application of the principles of the Berlin Act
render it unlikely that the Powers intended by Article i to admit a sweeping
change in the basis of the commercial equality which their nationals had
enjoyed under the Berlin Act.
[274] Another reason is to be found in the fact that, as between Belgium and
some of the European Powers, it is the Berlin Act which still governs
matters in the Congo. The nationals of these Powers enjoy complete
commercial equality in the Congo thereunder. It seems improbable that the
Powers who became parties to the later Treaty can have intended that their
nationals should enjoy a régime of commercial liberty and equality less
favourable than that enjoyed by those who remained bound by the Berlin Act.
[275] A still further reason is to be found in the fact that, if Article 1
excludes only commercial differentiation based on nationality, it must be
taken to admit commercial differentiation based on race, colour, or
religion.
[276] These reasons justify the view that what Article 1 of the Convention
of Saint-Germain ensures is an individual commercial equality.
[277] As above said, the refusal to extend the repayment of losses to
private transporters was inconsistent with such individual commercial
equality. Therefore, so far as the Belgian measure embodied in the decision
of July 28th, 1931, applied to Chinn, it was inconsistent with the
international obligations of Belgium to the United Kingdom.
[278] To this extent the answer to the first question put to the Court
should in my view be in the affirmative.
[279] In the above statement of my views, no reference has been made to
Chinn's ship-building yard.
[280] The shipyard part of the case of the United Kingdom fails in my
opinion for the reason that the damage is too remote. Assuming that the
Belgian Government acted in contravention of Article 1 of the Convention of
Saint-Germain in that they failed to accord equal treatment to Chinn in the
matter of repaying the losses entailed upon him by his being obliged to
transport cargoes at one franc a ton in order to save his business, that
Government would not be liable to make reparation for such breach of treaty
beyond the loss which could reasonably be [p130] foreseen as the direct or
necessary consequence of the violation of the Convention. The injury to
Chinn's ship-building business falls outside the scope of this principle.
(Signed) С J. B. Hurst. [p131]
Separate Opinion of Jonkheer Van Eysinga.
[Translation.]
[281] The undersigned is unable to concur in the judgment of the Court and
submits the following observations.
*
[282] Article 1 of the Special Agreement of April 13th, 1934, requests the
Permanent Court of International Justice to give judgment, in the first
place, on the following question:
"Having regard to all the circumstances of the case, were the
above-mentioned measures complained of by the Government of the United
Kingdom in conflict with the international obligations of the Belgian
Government towards the Government of the United Kingdom?"
[283] The Special Agreement does not state what is the source of the
international obligations of the Belgian Government towards the Government
of the United Kingdom, with which the impugned Belgian measures are alleged
to conflict. But it is shown by the written and oral proceedings that the
two Governments are agreed that, apart from unwritten customary
international law (with which the present dissenting opinion does not deal),
the only source in question is the Convention signed at Saint-Germain on
September 10th, 1919, by the United States of America, Belgium, the British
Empire, France, Italy, Japan and Portugal. The instruments of ratification
of that Convention by those States were deposited in the archives of the
French Government, that of the United States quite recently on October 29th,
1934.
[284] The first question that arises is whether the signatory States of the
Convention of Saint-Germain were really entitled to consider the General Act
of Berlin of February 26th, 1885 (except for the stipulations of its first
Article, which are embodied in Article 1 of the Convention of
Saint-Germain), and the Declaration of Brussels of July 2nd, 1890, as
abolished inter se, and to replace these instruments inter se by the
articles of the Convention of Saint-Germain (Art. 13).
[285] In regard to this question, the following points should be noted.
[286] The General Act of Berlin of February 26th, 1885, came into force as
between thirteen contracting Powers; it was drawn up at a time when several
of them were engaged in the colonization of Central Africa - which at that
period was still, in part, [p132] terra nullius - a situation that might
lead to unfortunate international complications. It was mainly with the
intention of regulating these colonizing efforts that Prince von Bismarck,
in close cooperation with the French Government, convened the Berlin
Conference. The result of the Conference was to invest the Central African
region, defined in Article 1 of the General Act, with an international
statute which greatly diminished the danger of international disputes. This
eminently pacific object was attained by instituting for Central Africa a
highly inter) nationalized régime, which diminished the importance of the
question whether a given part of the continent belonged to this or that
country. Thus, Chapter I of the General Act definitely lays down the
principle of the "open door": The freedom of trade which it establishes does
not only cover what commercial treaties of that period understood by that
term - namely the forbidding of import and export prohibitions - but also
forbids the imposition of any import or transit duties; moreover, it
provides an extremely liberal régime for all foreigners, no matter of what
nationality. As regards the exercise of fluvial navigation, the General Act
contains - in addition to Article 2 comprising general provisions - a
special act, constituting its fourth Chapter, concerning the navigation of
the Congo; this Navigation Act provides a more internationalized régime than
any others that exist; the signatory Powers considered that the provisions
of its 13th Article were so important that they recognized them as
henceforward a part of public international law. The Niger, though situated
outside the part of Central Africa defined in Article 1, was endowed with a
similar Navigation Act (Chapter V). The VIth Chapter of the General Act
attempts to bring order into the efforts at colonization by prescribing
rules for the occupation of territories lying outside the possessions of a
contracting Power, even where such territories are situated in parts of
Africa other than the Congo Basin. As regards Chapter II, it contains the
germ of the General Act of the Brussels Conference of 1890 concerning the
African slave trade, and recognizes the duty of protecting the natives in
the whole Congo Basin. Chapter III is in some respects the most interesting,
since it pushes the idea of internationalization as far as neutralization:
for it is provided that the highly internationalized and eminently pacific
régime of the Congo Basin may continue, even in time of war, whereas this is
imperatively enjoined in the Navigation Acts both of the Niger and the Congo
(Art. 25 and 33).
[287] It will be seen from this survey that the Berlin Act presents a case
in which a large number of States, which were territorially [p133] or
otherwise interested in a vast region, endowed it with a highly
internationalized statute, or rather a constitution established by treaty,
by means of which the interests of peace, those of "all nations" as well as
those of the natives, appeared to be most satisfactorily guaranteed. Similar
internationalized régimes have been established also in other parts of the
world.
[288] The General Act of Berlin contains no clause providing for its
denunciation; nor does it contain any provision authorizing the contracting
States to conclude private arrangements separately among themselves, even
supposing that such arrangements were not repugnant to the provisions of the
General Act - a provision which is often found in collective conventions,
for instance in Article 15 of the International Convention for the
Protection of Industrial Property, signed at Paris on May 3rd, 1883.
[289] On the other hand, the Powers assembled at Berlin considered that the
treaty régime of the Congo Basin would have to be revised from time to time.
In regard to that point, the report signed by Baron de Courcel, the French
Plenipotentiary, and Baron Lambermont, the Belgian Plenipotentiary, contains
the following observation (de Martens, N. R. G., 2nd Series, p. 401):
"The situation being as it is in the regions of the Congo, it seems
difficult and perhaps premature to make provision for everything and to
regulate everything in advance.
By making any amendment of the acts of the Conference dependent upon an
agreement between the Powers arrived at in the light of experience, due
regard will be paid to the requirements of the future and to the permanence
of your decisions."
[290] In this connection, the following provision (Art. 36) was inserted in
Chapter VII of the Act:
"The signatory Powers of the present General Act reserve to themselves to
introduce into it subsequently, and by common accord, such modifications and
improvements as experience may show to be expedient."
[291] The legislative significance of the Article therefore resides in the
fact that the States which together had established the international
statute of Central Africa had made provision, as an integral part of their
union, for periodical revision thereof. By doing this, the Article however
expressly provides at the same time that the Act of Berlin may only be
modified with the consent of all contracting Parties. This precludes any
modification by some only of the contracting Parties, and moreover such
modification would not be appropriate in the case of a convention bestowing
an international statute upon a vast area. The General Act of Berlin does
not create a [p134] number of contractual relations between a number of
States, relations which may be replaced as regards some of these States by
other contractual relations; it does not constitute a jus dispositivum, but
it provides the Congo Basin with a régime, a statute, a constitution. This
régime, which forms an indivisible whole, may be modified, but for this the
agreement of all contracting Powers is required. An inextricable legal
tangle would result if, for instance, it were held that the régime of
neutralization provided for in Article 11 of the General Act of Berlin might
be in force for some contracting Powers while it had ceased to operate for
certain others.
[292] It must not be forgotten that Article 36 of the Act of Berlin merely
repeats, superfluously, the "essential principle of international law"
formulated - not for the first time - by the Protocol of London of 1871. It
is by agreement, that is to say upon the consent of all Powers parties to
the General Act of Berlin, that that instrument may be modified. But this
would have been the case even if Article 36 had not existed.
[293] It is interesting to observe with what constitutional nicety the
General Act of Berlin was modified at the Brussels Slavery Conference
(1890). One State which was not a party to the General Act of Berlin was
present at this Conference, namely Persia. That country could take part in
the General Act upon the slave trade, but not in the revision of the General
Act of Berlin, to which it had not adhered. For this reason, the Declaration
of Brussels modifying the General Act of Berlin runs as follows:
"The Powers assembled in Conference at Brussels, who have ratified the
General Act of Berlin of February 26th, 1885, or who have acceded thereto,
………………………………………………………..
Have agreed to make the following Declaration:
………………………………………………………..
The ratifications of the present Declaration shall be exchanged at the same
time as those of the General Act of this day."
[294] In 1919, some of the Powers parties to the General Act of Berlin,
including the two States which have submitted the present case to the Court,
acted in an entirely different manner. Without inviting the other
contracting Parties to take part in the Conference which they held, they
thought themselves entitled at that Conference to modify the General Act of
Berlin inter se. It seems clear that in proceeding thus they acted contrary
not only to an essential principle of international law, but also [p135] to
Article 36 of the General Act of Berlin, which expressly provides that
modifications may only be made in the General Act by agreement. This is a
legal situation of such importance that a tribunal should reckon with it ex
officio. The only convention which the Court could apply is the Act of
Berlin. If the Court had done so, it would have applied the Act of Berlin
alone. It should be observed here that the validity of the Convention of
Saint-Germain cannot, as the Court seems to hold, be dependent on the
question whether or not any government has disputed its validity; moreover,
the Court has not gone into this question. In applying the Act of Berlin,
the Court's task would have been singularly facilitated by the fact that,
with regard to the legal relations in issue in the Chinn case, Articles 3
and 5 of the Convention of Saint-Germain simply reaffirm Articles 5 and 13
of the Act of Berlin.
[295] In making the foregoing observations, the undersigned has not lost
sight of the fact that, up to a certain point, the parties to a case may
specify in the Special Agreement the rules of law which the Court to which
they have recourse is to apply. Article 38 of the Court's Statute provides
for this amongst other things when it says: "The Court shall apply
international conventions, whether general or particular, establishing rules
expressly recognized by the contesting States." Although the Special
Agreement in the present case is silent on the question what rules of law
the Court is to apply, and although consequently it does not constitute a
special convention specifying rules expressly accepted by Great Britain and
Belgium, the question might perhaps be raised whether, since the two Parties
clearly indicated both in the written and oral proceedings that they
considered themselves bound by the Convention of Saint-Germain, it would not
follow that this Convention constitutes for them an immediate source of
special treaty law applicable in this case.
[296] Even adopting this line of reasoning, it seems difficult to hold that
the two Parties could adduce the Convention of Saint-Germain.
[297] If, in a given case, no international law exists or if the law is
uncertain, it is comprehensible that the parties, in resorting to an
international tribunal, should at the same time determine the law to be
applied. The classic example of this is the Alabama case between the United
States of America and Great Britain; at the time, i.e. after the civil war,
the law of neutrality which, in the contention of the United States, had
been violated by Great Britain, was very uncertain. In a Special Agreement,
signed on May 8th, 1871, the two Parties therefore drew up the three famous
Washington rules which were to be applied by the tribunal of arbitration
provided for in the same [p136] Special Agreement. These are the rules which
subsequently were codified by the thirteenth Convention of the Second Peace
Conference in 1907 concerning the rights and duties of neutral Powers in
maritime war.
[298] The case before the Court presents an entirely different aspect. In
this case - apart from the arguments which the United Kingdom seeks to draw
from customary unwritten law, with which arguments the present opinion, as
already stated, does not deal - the international obligations of Belgium
which the Court has to determine are to be found in a collective treaty, the
Treaty of Berlin, modified in 1890 at Brussels, which Treaty can only be
modified by common accord. It seems clear that the two Parties have no right
to change this Treaty basis by means of statements made in the course of
legal proceedings. For it is impossible to admit that what a portion of the
group of States which were parties to the General Act of Berlin could not
lawfully do, namely modify that Act, two only of these States could do and
not even by means of a convention (the Special Agreement), but simply by
means of statements made in the written memorials and oral pleadings of an
action at law.
[299] The undersigned cannot refrain in this connection from expressing his
regret that the Court should frequently be called upon to give decisions in
regard to collective conventions concluded after the Great War, without
having at its disposal the records of the meetings at which these
conventions were elaborated, these records being kept secret. The resulting
lack of information has once more made itself felt in the present case.
*
[300] The British subject, Mr. Chinn, carried on with his own ships in the
Congo the business of transporting goods, and he also had a shipyard at
Leopoldville. At the time of the economic crisis which also made itself felt
in the Congo Basin, the Belgian Government, by a decision taken on June
20th, 1931, and several times extended, reduced to one franc per ton the
downstream transport tariff for nearly all products of the Union nationale
des Transports fluviaux (Unatra), a Company under the effective control of
the Government. The British Government contends that, as a result of this
drastic reduction which practically brought to zero Unatra's charge for the
transport of goods downstream, traffic became concentrated in the hands of
Unatra to such an extent that that Company found itself in possession of a
virtual monopoly which rendered it commercially impossible for Mr. Chinn to
carry on his business ; in addition to Unatra, a few concerns [p137] were
able to carry on, that is due to the fact that they transported their own
produce, whereas, apart from Unatra, Mr. Chinn's concern was the only one
which exclusively carried goods of others.
[301] The Government of the United Kingdom considers that it follows from
these facts that the measure taken by the Belgian Government is inconsistent
with the freedom of navigation and commercial equality to which Mr. Chinn
was entitled under the Convention of Saint-Germain. Alternatively, the
Government of the United Kingdom maintains that the Belgian Government has
by this measure, which confers a virtual monopoly upon the Belgian Company,
been guilty, contrary to the terms of the same Convention, of discrimination
to the detriment of the only concern which, like Unatra, exclusively carried
goods of others.
[302] The Belgian Government's answer is that, in taking the measure
drastically reducing transport rates in regard to Unatra, a Company under
its effective control, it was keeping strictly within the sphere of the
management of the national fluvial shipping industry, and contends that this
is something quite distinct from the sphere of the régime of navigation
within which the exercise of navigation falls. As regards the management of
the national fluvial shipping industry, the sovereignty of riparian States
remains intact and cannot be affected either by the freedom of navigation
prescribed by the Convention of Saint-Germain - which belongs to quite a
different sphere of action - or by the equality of treatment in commercial
or other matters laid down by the same Convention. The latter standpoint
emerges from the reply made by the Belgian Agent to the question put to him
at the beginning of the hearing on October 26th, 1934.
[303] The present dissenting opinion will deal in the first place with the
question of equality of treatment.
*
[304] At the first meeting (Nov. 15th, 1884) of the Conference of Berlin,
Sir Edward Malet, the British Plenipotentiary, after observing that in using
the term "free trade" in the Basin of the Congo, the intention was to
provide traders of all countries with a guarantee that no import duties or
transit dues would be levied and that the goods would only be subject to
reasonable taxes designed solely to cover administrative requirements, went
on to say :
[Translation.] "But I think that the Conference after mature reflection upon
the question will recognize the necessity of making more detailed provision
for the absolute equality of treatment of the [p138] subjects of all the
Powers, with regard to direct and indirect duties, and taxes, residence,
freedom to engage in trade and to travel, the use of roads and railways,
coasting traffic, and religious freedom." (De Martens, p. 205.)
[305] These words expressed the desire for absolute equality of treatment
for the subjects of all nations, whether nationals or foreigners, in the
Congo Basin. Moreover, this equality had already been provided for in the
second sentence of paragraph 5 of the draft declaration concerning free
trade, submitted to the Conference by the German Government and on which the
first part of the Act of Berlin was based; this sentence ran as follows:
"Foreigners shall enjoy the same treatment and rights as nationals without
any differentiation." (De Martens, p. 208.) The British Plenipotentiary
meant to suggest that the short sentence in the German draft should be
expanded and defined.
[306] That is indeed what was done by the Committee instructed to examine
the declaration on freedom of trade; the Chairman of that Committee was
Baron de Courcel, and the Rapporteur was Baron Lambermont. In regard to the
matter in question, the report speaks as follows: "Paragraph 2 of the same
Article [Article 5 of the General Act] relates to the rights of foreigners.
In order to develop trade, it does not suffice to open the ports or to lower
customs barriers. There can be no trade without traders. If one desires to
attract trade to distant and little-known countries, one must give the
traders guarantees for the things that most vitally interest them - their
persons, their goods, the acquisition of property, inheritances, the
exercise of professions. That is the aim of Article V. It does not only
protect traders; it covers all foreigners and the pioneers both of
civilization and of commerce. It has met with the unanimous approval of the
Committee." (De Martens, p. 254.)
[307] The result of this unanimous support was paragraph 2 of Article V of
the Berlin Act, which provides that:
"Foreigners, without distinction, shall enjoy protection of their persons
and property, as well as the right of acquiring and transferring movable and
immovable possessions; and national rights and treatment in the exercise of
their professions."
[308] It appears clear that the stipulation that "foreigners, without
distinction, shall enjoy .... national rights and treatment" and "the
absolute equality of treatment of the subjects of all the Powers" desired by
the British Plenipotentiary are one and the same thing. In fact, the General
Act of Berlin prescribes complete equality of individual treatment for all
persons in the Congo [p139] Basin, and any inequality of treatment is a
contravention of the Berlin Act.
[309] Did the authors of Article 3 of the Convention of Saint-Germain desire
to modify that situation ? Certainly they desired to limit the category of
persons who were to benefit by equality of treatment; whereas the General
Act of Berlin covers the nationals of any country whatever, Article 3 of the
Convention of Saint-Germain only applies to the nationals of certain States.
But there is nothing to show that, within this restricted group, individual
equality does not continue to be the law. This individual equality, which is
such a characteristic feature of the work accomplished at Berlin - the
result of which was to internationalize the legal régime of the Congo Basin
in so many respects - was not modified by the Convention of Saint-Germain.
That is shown by several articles of the latter instrument. Thus, for
example, while Article 1 maintains complete commercial equality between the
nationals of all the contracting States, it provides equality of treatment
as between all these individuals regarded as a group. The same observation
applies to paragraph 2 of Article 5, which provides that craft belonging to
the nationals of any of the contracting States shall be treated, in all
respects, on a footing of complete equality. Could it be otherwise, in the
case of Article 3, the history of which at Berlin - as has just been
recalled - shows so manifestly the intention of according absolute equality
of treatment to all persons engaged in professions in the Congo Basin?
[310] It results from the foregoing that the inequality of treatment created
by the Belgian Government's measure of June 20th, 1931, in favour of Unatra
and to the detriment of the only other enterprise in the Congo which
exclusively transported the goods of others, namely, Mr. Chinn's business,
is in conflict with the international obligations of the Belgian Government
towards the United Kingdom.
*
[311] As regards the relation between the Belgian Government's measure of
June 20th, 1931, and the freedom of fluvial navigation prescribed by Article
5 of the Convention of Saint-Germain, the Belgian Government contends, as
has been observed, that this measure, operating within the sphere of the
management of the national fluvial industry - a field in which the
sovereignty of the riparian State remains intact - could never be in
conflict with freedom of navigation, a thing which belongs to a totally
different sphere.
[312] The question arises whether this distinction between the two separate
spheres is not rather arbitrary; it certainly has no foundation in fluvial
international law, as it has evolved since [p140] the Congress of Vienna in
1815. It will be remembered that Articles 108 to 116 of the Final Act of
Vienna constitute the basis of the General Act of Berlin of 1885 (see the
Preamble to that Act, Nos. 4 and 5), and that the Belgian Government has
repeatedly alluded to those Articles of the Vienna Congress during the
present case.
[313] In 1814, when Talleyrand, for it was probably he, proposed the clause
which became Article V of the first Peace Treaties of Paris - those of May
30th, 1814 - an Article which thus inaugurated the general international
regulation of navigation on international rivers - he was regarding fluvial
navigation, not as "an object in itself", or as a "self-sufficing
principle", as the Belgian Government contends (pleadings of Oct. 24th,
afternoon), but as an element of international trade. It suffices to read
Article V of the Treaties of Peace of 1814, which is worded as follows:
"The navigation of the Rhine, from the point where it becomes navigable unto
the sea, and vice versa, shall be free, so that it can be interdicted to no
one: - and at the future Congress, attention shall be paid to the
establishment of the principles according to which the Duties to be raised
by the States bordering on the Rhine may be regulated, in the mode the most
impartial, and the most favourable to the commerce of all Nations.
The future Congress, with a view to facilitate the communication between
Nations, and continually to render them less strangers to each other, shall
likewise examine and determine in what manner the above provisions can be
extended to other Rivers which, in their navigable course, separate or
traverse different States."
[314] Indeed, from the very outset, freedom of fluvial navigation has
included both the nautical aspect, in the sense of freedom of movement and
the commercial aspect; it is seen from the text quoted above that Article V
of the Treaties of Peace of 1814 intends that the free navigation of the
Rhine and of other international rivers should be regulated by the Congress
that was to meet at Vienna in such a way that navigation duties-which would
primarily consist of duties on goods carried on the waterway, as laid down
at that time, by Article 99 of the Convention concerning the Rhine Tolls of
1804 - should be fixed in the manner most favourable to the trade of all
nations. It is clear, therefore, that from the very beginning, freedom of
fluvial navigation has been understood as an element of international trade,
and that it was never complete in itself in the sense of freedom of
movement. This close, one might almost say, indissoluble link between
navigation and trade appears again in Article 109 of the Final Act of
Vienna: "Navigation .... shall be entirely free and shall not in respect to
commerce [p141] be prohibited to anyone ; it being understood that the
regulations established with regard to the police of this navigation shall
be respected, as they will be framed alike for all, and as favourable as
possible to the commerce of all nations." And the three articles which
follow deal with navigation duties levied upon the goods. It is this freedom
of commercial navigation which the General Act of Berlin of 1885, as stated
in its Preamble, provided also for the Congo and its tributaries; and there
is nothing to show that the authors of Article 5 of the Convention of
Saint-Germain intended to alter that situation.
[315] What are now the obligations of the riparian States of an
international river with regard to freedom of navigation? The Belgian Agent
stated them very clearly at one moment during the proceedings, when he said
that: "Freedom of navigation implies the taking of all action - for instance
repairs and maintenance works - and abstention from any action - for
instance the creation of difficulties or obstacles - in so far as this is
necessary to render this freedom effective." (Belgian Rejoinder, para. 32.)
In the present case we are only concerned with the second aspect of these
obligations: the abstention from any action which might impede the effective
freedom of navigation.
[316] Some of the acts impeding the freedom of commercial navigation are
expressly named in Article 109, and the following articles, of the Final Act
of Vienna, and in the subsequent fluvial conventions. They are, in part,
acts which are perfectly lawful in themselves, but would become unlawful if
applied in such a way as to cause impediments to free navigation. Thus
Article 115 of the Final Act of Vienna lays down that: "Regulations shall be
established to prevent officers of the customs, in the exercise of their
functions, throwing obstacles in the way of navigation." And these
prohibited impediments to navigation are not solely acts calculated to
destroy a shipping business-which would mean that a State might lawfully do
anything to the detriment of such a business so long as it allowed it to
exist; for it is, on the contrary, the duty of the riparian States of an
international river to encourage and promote navigation. Thus, according to
Article 109, the regulations for the policing of navigation must be "as
favourable as possible" to the trade of all nations ; and according to
Article 111 the tariffs for navigation duties levied on cargoes must be
prepared in such a manner as "to encourage commerce by facilitating
navigation". In fact, it is not sufficient that the riparian States of an
international river should abstain from acts which impede the free movement
of shipping to such an extent that the shipping firm has to abandon its
fluvial transport business. The impediment comes under the prohibition at an
earlier [p142] stage, namely as soon as freedom of navigation ceases to be
effective. It is purely a question of fact whether, in a given case, the
effective freedom of navigation has, or has not, been annihilated ; it may
not always be easy to decide, but a Court must expect to find itself often
confronted with difficult questions of fact.
[317] If all acts of a riparian State which result, in a given case, in
putting an end to effective freedom of navigation, are prohibited, why
should it be more lawful for a riparian government to take measures which
favour one of the two purely shipping enterprises operating on an
international river, to such a degree that the other enterprise, not only
suffers, but is driven out of business ? That is the action which the
British Government accuses Belgium of having taken, describing it, very
justly, as a virtual monopoly, and it seems clear that, if it were proved
that the freedom of commercial navigation to which Mr. Chinn is entitled has
ceased to be effective in consequence of the Belgian Government's measure of
June 20th, 1931, the reply to the first point in Article 1 of the Special
Agreement should also be in the affirmative, having regard to Article 13 of
the General Act of Berlin, which, as regards legal situations such as that
existing in the present case, is reaffirmed by Article 5 of the Convention
of Saint-Germain. While it is beyond doubt that a riparian government is
under no obligation to obtain customers for a foreign shipping enterprise,
it is also true that it is not entitled to deprive the foreign enterprise of
its customers by conferring a virtual monopoly on another fluvial transport
concern. "
[318] The foregoing observations suffice to show that the Belgian contention
to the effect that the measure of June 20th, 1931, could in no case be in
conflict with freedom of navigation is arbitrary. When paragraph 30 of the
Belgian Rejoinder declares that the two separate spheres of the management
of the national fluvial shipping industry and of the régime of navigation
have always been recognized as distinct in practice and jurisprudence, one
is constrained to ask if that statement is really in line with the facts.
[319] In any case, it is necessary to look again closely into this doctrine
of the two separate spheres.
[320] Are they, even according to the Belgian Agent's own explanations, as
distinct as he affirms? We learn from the pleadings on the afternoon of
October 24th, 1934, that fiscal laws may put obstacles in the way of
navigation, and therefore those laws belong to the sphere of navigation ("a
fiscal régime incompatible with the idea of freedom would also be contrary
to this freedom"). Again, we are told in these pleadings that fiscal laws
belong definitely to the other sphere, that of the management of the
national fluvial shipping industry. ("In [p143] this sphere of management,
there is a large number of measures which it" - i.e. the State - "may take.
Its fiscal legislation may be more or less burdensome.") It follows that the
important subject of fiscal legislation belongs to both of these spheres,
which Belgium seeks to separate from one another. This being so, the
separation seems to lose much of its distinctness, and the question again
arises: Why should a measure taken by a riparian government, as a
consequence of which measure a fluvial shipping business is annihilated, not
belong, also, to the regime of navigation ?
[321] But there is more. In order to construct a sphere of the management of
the national fluvial shipping industry, distinct from the sphere of
navigation, it was necessary to keep the latter sphere as small as possible.
The Belgian argument seeks to arrive at this result by relying on the
conception of navigation which it alleges that the Court laid down in its
Advisory Opinion on the jurisdiction of the European Danube Commission
between Galatz and Braila. But in doing so, the Belgian argument seems to
lose sight of the fact that the Opinion - which related, inter alia, to the
limits of the Commission's competence - turned chiefly on the question how
far navigation extends, and it held, in this respect, that navigation is
practised not only on the river itself, but also in ports. It was solely the
territorial aspect of navigation which it was desired to bring out in the
Opinion, and the other aspects could be neglected. The British Reply points
this out, quite correctly, in paragraph 45, and the Belgian Rejoinder seems
to admit it, by its opening sentence in paragraph 33. However, in his
pleadings, the Belgian Agent again recurred to the Advisory Opinion in the
Danube case.
[322] While the Belgian arguments seek to restrict the conception of
navigation by adducing this Advisory Opinion, which is not relevant, they
endeavour to restrict the conception of freedom of navigation by adducing
Article 109 of the Final Act of Vienna of 1815. According to paragraph 39 of
the Belgian Counter-Memorial, the above-mentioned Article has already
indicated "the scope of the freedom of navigation .... recognized on the
waterways to which the Act relates: it is the freedom which consists in
immunity from exclusion by a sovereign prohibition". However, in paragraph
32 of the Belgian Rejoinder, which has already been referred to, the sphere
of navigation is singularly enlarged. The above-mentioned statement in the
Counter-Memorial is relegated to the plane of "reflections offered by way of
illustration" and needing to be supplemented by stating that navigation
comprises "the taking of all action, for instance repairs and maintenance
works, and abstention from any action, for instance the creation of
difficulties or obstacles, in so far as this is [p144] necessary to render
this freedom effective". As has already been said, this supplementary
explanation is correct. However, when it is kept in mind that the Final Act
of Vienna does not speak of navigation in its purely nautical aspect, as an
"object in itself", but of navigation in its commercial aspect, the
supplementary explanation in the Belgian Rejoinder necessarily implies that
the régime of navigation comprises the act of the riparian government by
which the fluvial shipping industry of a private individual is extinguished,
as, in the British Government's submission, happened in the case of Mr.
Chinn.
[323] The judgment recognizes that "freedom of navigation and freedom of
commerce are, in principle, two different things". Nevertheless the judgment
holds that, in the present case, there is no need to consider freedom of
navigation and freedom of trade separately. The undersigned cannot agree
with this view, and sees no reason in the present case for departing from
the general rule which is recognized, quite correctly, in the judgment. If
the Belgian Government's argument is that freedom of fluvial navigation
merely signifies freedom of movement for ships, leaving the commercial
aspect out of account, the judgment, in the present case, adopts a
diametrically opposite standpoint, and interprets freedom of fluvial
navigation by the provisions relating to the liberty of commerce. The truth
lies mid-way between the two standpoints : freedom of navigation certainly
possesses a commercial aspect; but it is an independent notion, and is not
determined by the provisions relating to freedom of trade.
[324] If, in a given case, in order to appraise the commercial aspect of the
principle of freedom of fluvial navigation, reliance is placed on other
treaty clauses concerning freedom of trade, it must be admitted that, if
there exist no clauses of that nature - that is to say, if freedom of trade
is not provided for in a treaty stipulation - the commercial aspect of
freedom of fluvial navigation is reduced to nothing at all. Such a
consequence should alone be sufficient to counsel the greatest prudence in
this question.
[325] The contemplated hypothesis is moreover by no means a casus nоn
dabilis. It would be easy to mention international rivers whose navigation
act prescribes freedom of navigation without there being, either in the act
itself or in any other convention, any clause regarding freedom of trade. If
the reasoning of the judgment were correct, freedom of navigation would thus
be reduced to freedom of movement. The reasoning amounts to the
interpretation of an article concerning freedom of navigation - a conception
well known in international fluvial law - in the light of other factors
belonging to the domain of freedom of trade which may enter into account to
an extent [p145] varying from insignificance to decisive importance. The
principle of freedom of navigation on international rivers, which was laid
down at Vienna, reasserted at Berlin and not abandoned at Saint-Germain,
would thus become a very uncertain conception.
[326] An interpretation leading to such consequences cannot be sound.
[327] It would, in fact, be more correct to regard freedom of navigation on
international rivers as a principle having an existence of its own
independently of what may or may not be said regarding freedom of trade by
other treaty provisions binding the riparian States. The idea of the law of
international rivers, as developed in a large number of conventions, is
that, on certain waterways of importance for international trade, there
should be freedom of navigation from the commercial stand-point also ; one
characteristic feature of this freedom of navigation is precisely that it is
independent of what may be the law in other parts of the territory of States
through which the international river passes.
[328] This is also the case as regards the Congo. When the Conference of
Berlin elaborated an international statute for the Congo Basin, it dealt
with the matter from different aspects : freedom of trade, régime for native
races, neutralization, a navigation act for the Congo, its tributaries, etc.
As a result there has been some overlapping. Thus navigation on the Congo
and its tributaries is already mentioned in Article 2 of Chapter I of the
General Act. But the freedom of navigation prescribed in Article 13 retains
precisely the same independent value as it possesses in many other
conventions concerning navigation on international rivers. And there is
nothing to indicate that the same does not hold good as regards Articles 5
to 9 of the Convention of Saint-Germain.
[329] From the foregoing it follows that, if it were established that the
measure taken by the Belgian Government on June 20th, 1931, had the effect
of concentrating in the hands of Unatra the fluvial transport business by
rendering it commercially impossible for Mr. Chinn - the only ship-owner on
the river who, apart from Unatra, only carried goods belonging to others -
to engage therein, that measure would be inconsistent with the right of
entirely free navigation conferred on Mr. Chinn by Article 13 of the General
Act of Berlin, which is reaffirmed as regards legal situations such as that
existing in the present case by Article 5 of the Convention of
Saint-Germain. The measure would even constitute a characteristic case of
infringement of the freedom of fluvial navigation.
[330] Nevertheless, the allegations of the Government of the United Kingdom
- that it was commercially impossible for Mr. Chinn to carry on his
transport business and that this [p146] was a consequence of the measure
taken by the Belgian Government on June 20th, 1931 - have not been
established. The Government of the United. Kingdom has certainly submitted a
considerable number of figures and statistics concerning on the one hand the
quantities of goods carried on the Congo before and after the coming into
force of the measure of June 20th, 1931, on July 1st, 1931, and, on the
other hand, the distribution of shipping on the Congo amongst the various
transporters before and after July 1st, 1931, etc. These figures and
statistics tend to show that the measure taken by the Belgian Government
gave Unatra a virtual monopoly preventing Mr. Chinn from carrying on his
river transport business.
[331] On the other hand, the Belgian Government has not confined itself to
maintaining that the measure of June 20th, 1931, fell within the sphere of
the management of the national fluvial shipping industry and was not
therefore inconsistent with the conventional freedom of navigation, which
appertains to the quite distinct sphere of the régime of navigation; it has
also produced a considerable quantity of figures and statistics tending to
show that Mr. Chinn might well have carried on his river transport business
after the coming into force of the measure of June 20th, 1931, on July 1st,
1931.
[332] It is clear that the course of events subsequent to this measure
cannot be consistent with the assertions of both Parties which contradict
each other practically on every point.
[333] In these circumstances, the Agent for the United Kingdom, at the
hearing on October 23rd, 1934, suggested that the Court should exercise the
powers possessed by it, and order an enquiry into the facts. The Belgian
Agent, at the same hearing, observed that the Court could under its Statute
comply with the wish of the Agent for the United Kingdom, and he left the
matter to the Court.
[334] It is to be noted that Article 50 of the Statute does in fact confer
on the Court power at any time to entrust any individual, body, bureau,
commission or other organization that it may select with the task of
carrying out an enquiry or giving an expert opinion. In the present case, it
would seem that there were several reasons in favour of such an enquiry.
According to the terms of the first question in Article 1 of the Special
Agreement, the Court is asked to have "regard to all the circumstances of
the case". These words are very rightly inserted in a case which, like the
present, depends to such an extent upon an appraisement of the facts;
indeed, there has never been a case before the Court in which the facts have
been disputed to the same extent.
[335] Furthermore, the Court is not tied to any system of taking t evidence,
whether proceedings are begun by Special Agreement or by Application. Its
task is to cooperate in the objective [p147] ascertainment of the truth. Of
course, it behoves the parties to a Special Agreement as far as possible to
produce proof in support of their statements - if for no other reason than
because it is to their interest - and the Governments concerned have not
omitted to do this. But when one party has done its best to produce proof of
its assertions and admits that perhaps it has not succeeded, and suggests
that the Court should apply Article 50 of the Statute, the Court must have
very strong reasons for not adopting this course, more especially if, as in
the present case, the facts to be established all transpired outside the
territory of the Party adducing them. The Court cannot omit to use any means
which may enable it to ascertain the objective truth; as regards the
obtaining of evidence, the Statute provides that the Court shall take active
steps and not adopt a passive attitude.
*
[336] For the foregoing reasons, the undersigned cannot concur in the
judgment of the Court.
(Signed) V. Eysinga. [p148]
Separate Opinion of M. Schücking.
[Translation.]
[337] I do not concur in the opinion expressed by the Court in its judgment;
on the other hand, I find myself entirely in agreement with the dissenting
opinion of Jonkheer van Eysinga, and with the arguments employed therein.
The importance of one of those arguments is, however, so great that I am led
to add a few observations upon it.
[338] M. van Eysinga's dissenting opinion appears to me to show that the
Congo Act intended to prohibit a limited group of its authors from making
any changes in the Act ; if that is so, a tribunal cannot refrain from
considering what are the ensuing consequences as regards the validity of a
convention concluded in violation of that prohibition by some of the authors
of the Congo Act.
[339] The doctrine of international law in regard to questions of this kind
is not very highly developed. There is no clear and generally recognized
doctrine regarding "acts which are automatically null and void", and acts of
which the nullity is only relative, that is to say that they are valid in
relations between their signatories, but are open to be impugned by other
parties. The Court seems to have proceeded on the assumption that, even if
there was a prohibition which debarred a limited group of the signatories of
the Congo Act from modifying its terms - a question which the Court has not
gone into - the new Convention continues nevertheless to be legal and valid,
until such time as the Powers which were not invited to participate in it
take steps to assert, their rights.
[340] In my opinion, this view is not in conformity with the will of the
States which drew up the Congo Act. Once it is recognized that the intention
was to create a Statute of the Congo which should not be liable to be
altered by some only of its authors, the will of the Powers must be
interpreted as being that no convention can acquire valid existence that is
contracted in disregard of the rule forbidding a limited group of
signatories of the Act to modify its terms. The antecedents of the Berlin
Conference show that the intention was to set aside all treaties concluded
between certain Powers only in regard to their interests in the Congo Basin:
indeed, two States (the United Kingdom of Great Britain and Portugal) had to
discard a commercial treaty concluded prior to the Berlin Act (Feb. 26th,
1884), and that particular treaty was the real cause of the Berlin Act. It
is beyond doubt that the signatory States of the Congo Act desired to make
it absolutely impossible, in the future, [p149] for some of their number
only to amend the Congo Act, seeing that any modifications thus introduced
would have been a danger to their vested rights in that vast region.
Accordingly, in my view, the nullity contemplated by the Congo Act is an
absolute nullity, that is to say, a nullity ex tune, which the signatory
States may invoke at any moment, and the convention concluded in violation
of the prohibition is automatically null and void. The fact that, up to the
present time, those signatories of the Berlin Act who did not participate in
the Convention of Saint-Germain have not impugned the latter instrument,
cannot, therefore, in any way remedy the absolute illegality of its
conclusion. It remains null and void, because it transgresses the bounds
which the authors of the Berlin Act established for themselves when they
subscribed to that Act.
[341] I think that the case in which a convention has to be regarded as
automatically null and void is not an entirely isolated case in
international law. The Covenant of the League of Nations, as a whole, and
more particularly its Article 20, in which the Members undertake not to
enter into obligations or understandings inter se inconsistent with its
provisions, would possess little value unless treaties concluded in
violation of that undertaking were to be regarded as absolutely null and
void, that is to say, as being automatically void. And I can hardly believe
that the League of Nations would have already embarked on the codification
of international law if it were not possible, even today, to create a jus
cogens, the effect of which would be that, once States have agreed on
certain rules of law, and have also given an undertaking that these rules
may not be altered by some only of their number, any act adopted in
contravention of that undertaking would be automatically void. If that is
the situation, and if the Convention of Saint-Germain is not merely an act
which the signatory States of the Congo Act are entitled to impugn, but one
which is, in itself, invalid, then, as M. van Eysinga has already pointed
out, the Court ought not to apply the Convention. Our Court has been set up
by the Covenant as the custodian of international law. It is an essential
principle of any court, whether national or international, that the judges
may only recognize legal rules which they hold to be valid. There is nothing
to show that it was intended to disregard that legal principle when this
Court was instituted, or that it was to be obliged to found its decisions on
the ideas of the parties - which may be entirely wrong - as to the law to be
applied in a given case. The terms of Article 38 of the Statute - which
indicates, in the first place, as the source of law for the Court's
decisions "international conventions, whether general or particular,
establishing rules expressly recognized by the contesting States" - cannot
be intended to mean that [p150] the Court is bound to apply conventions
which it knows to be invalid. The Court would never, for instance, apply a
convention the terms of which were contrary to public morality. But, in my
view, a tribunal finds itself in the same position if a convention adduced
by the parties is in reality null and void, owing to a flaw in its origin.
The attitude of the tribunal should, in my opinion, be governed in such a
case by considerations of international public policy, even when
jurisdiction is conferred on the Court by virtue of a Special Agreement.
(Signed) W. Schücking. [p151]
Annex.
Documents Submitted to the Court.
I. - Documents Filed in the Course of the Written Proceedings.
A. - On behalf of the Belgian Government:
1. Extract from "Renseignements de l'Office colonial" published by the
Belgian Ministry for the Colonies. Year 1914, pp. 36-37: "The Rubber Markets
of Antwerp, 1913."
2. Cahier des charges Agreement, concluded on April 16th, 1925, between the
Colony of the Belgian Congo, the Union nationale des Transports fluviaux
(Unatra), and the Company known as the "Compagnie industrielle et de
Transports аи Stanley-Pool" (Citas).
3. Comparative table of prices obtained for colonial produce.
4. Table of reductions granted on September 1st, 1930.
5. Table showing the rate of the abatements granted as from July 1st, 1931
6. Correspondence from the Belgian Minister for the Colonies to the
President of the Permanent Committee for the coordination of transport
services in the Congo, indicating the intention to modify the rate of
reductions and abatements in accordance with requirements.
7. Note concerning fidelity contracts and contracts for the taking over of
fleets.
8. Form of fidelity contract.
9. Correspondence exchanged showing the origin of the fidelity contracts.
10. Table of tonnage transported up and down stream from 1929 to 1933.
11. Extract from the statutes of Unatra in 1925.
12. General summary of contracts concluded by Unatra.
13. Ordinance of the Governor-General. - River police. - Loading of ships
and other craft. (Bulletin administratif et commercial, 1920, p. 667.)
14. Summary of bordereaux and manifests, relating to incoming and outgoing
traffic, from 1930 to 1932, in connection with cargoes carried by Mr.
Chinn's vessels.
15. Note for the Chief Engineer of the Navigable Waterways Service
respecting Mr. Chinn's vessels.
B.- On behalf of the Government of the United Kingdom:
1. Graphs showing financial results of Mr. Chinn's business from July 1930
to the end of 1933.
2. Graphs showing:
(а) expenses in connection .with the Unatra fleet, 1927 to 1931;
(b) tonnage carried down stream by Unatra and by private transporters, 1929
to end of 1933.
3. Decision of June 20th, 1931.
4. Unatra charges before July 1931.
5. Form of fidelity contract and list of concerns with which fidelity
contracts were made by Unatra subsequently to July 1931.
6. Graph showing prices of produce and proportion represented by the
subsidy, from April 1931 to March 1934.
7. Correspondence with Socca and the Belgian Government regarding the offer
made in October 1932, and letter showing that Unatra allowed special
rebates. [p152]
8. Convention of Saint-Germain-en-Laye of September 10th, 1919 (Treaty
Series, 1919, No. 18) (in English and French).
9. Correspondence between the Belgian Minister for the Colonies, Socca,
Unatra and M. Crokaert:
(a) Letter from Socca to the Minister for the Colonies (June 3rd, 1932).
(b) From the same to the same (June 21st, 1932).
(c) Letter from the Minister for the Colonies to Socca (June 23rd, 1932).
(d) Letter from Socca to the Minister for the Colonies (July 2nd, 1932).
(e) Letter from Unatra to M. Crokaert (May 22nd, 1933).
(f) Letter from M. Crokaert to Socca (June 7th, 1933).
(g) Letter from the Ministry for the Colonies to M. Crokaert (June 26th,
1933).
(h) Letter from Unatra to M. Crokaert (July 13th, 1933).
10. Letter from the Agent of the United Kingdom to the Registrar (May 17th,
I934).
11. Letter from Socca to the Belgian Minister for the Colonies (June
26th,I930).
12. Letter from the Belgian Minister for the Colonies to Socca (July 28th,
1931).
13. Judgment of the Court of First Instance at Leopoldville (Sept. 21st,
1932).
14. Judgment of the Court of Appeal at Leopoldville (Dec. 13th, 1932).
15 Proclamations issued by the Governor-General of the Congo (Oct. 3rd and
Nov. 5th, 1932).
16 Letters exchanged between Unatra and Socca, etc.:
(a) Unatra to Socca (Nov. 6th, 1931).
(b) Socca to Unatra ( ,, 17th, ,, ).
(c) Unatra to Socca ( ,, 21st, ,, ).
(d) Socca to Unatra ( ,, 27th, ,, ).
(e) Unatra to Socca (Dec. 2nd, ,, ).
(f) Agreement between Unatra and Socca (Nov. 3rd, 1933).
II. - Documents Filed in the Course of the Oral Proceedings.
A. - On behalf of the Belgian Government :
Map of the Belgian Congo (means of communication).
B. - On behalf of the Government of the United Kingdom:
1. Letter sent on September 30th, 1931, to Mr. Oscar Chinn by the Inspector
of Navigation on the Belgian Congo.
2. Bulletin de la Chambre de commerce de Léopoldville, 9th year, No. 8.
3. The Echo de la Bourse, an industrial and financial paper, ed. of Sept.
21st, 1933.
III. - Documents Consulted by the Court.
1. General Act of the Conference of Berlin of February 26th, 1885 (Nouveau
Recueil général de Martens, 2nd Series, Vol. 10, pp. 414-427).
2. Maps of the Belgian Congo.
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