INTERNATIONAL COURT OF JUSTICE

REPORTS OF JUDGMENTS,
ADVISORY OPINIONS AND ORDERS

AERIAL INCIDENT OF OCTOBER 7th, 1952

(UNITED STATES OF AMERICA wv. UNION
OF SOVIET SOCIALIST REPUBLICS)

ORDER OF MARCH 14th, 1956

1956

COUR INTERNATIONALE DE JUSTICE

RECUEIL DES ARRETS,
AVIS CONSULTATIFS ET ORDONNANCES

INCIDENT AERIEN DU 7 OCTOBRE 1952

(ÉTATS-UNIS D'AMÉRIQUE c. UNION DES
RÉPUBLIQUES SOCIALISTES SOVIÉTIQUES)

ORDONNANCE DU 14 MARS 1956
This Order should be cited as follows :

“Aerial incident of October 7th, 1952,
Order of March r4th, 1956: I.C. J. Reports 1956, p. 9.”

La présente ordonnance doit être citée comme suit :

« Incident aérien du 7 octobre 1952,
Ordonnance du 14 mars 1956: C. I. J. Recueil 1956, p. 9.»

Sales number 1 4 5
N° de vente:

INTERNATIONAL COURT OF JUSTICE

1956

March 14th »

General List: YEAR 1956
No. 28

March rath, 1956

AERIAL INCIDENT OF OCTOBER 7th, 1952

(UNITED STATES OF AMERICA v. UNION
OF SOVIET SOCIALIST REPUBLICS)

ORDER

Present : Vice-President Bapvawi, Acting President; President
Hackwortu ; Judges BASDEVANT, WINIARSKI, KLAESTAD,
Reap, Hsu Mo, ARMAND-UGoN, KOJEVNIKOV, Sir
Muhammad ZAFRULLA Kuan, Sir Hersch LAUTERPACHT,
MorRENO Quintana, CORDOVA ; Registrar LOPEZ OLIVAN.

The International Court of Justice,

composed as above,

after deliberation,

having regard to Articles 36 and 48 of the Statute of the Court ;

Makes the following Order :

Whereas on June 2nd, 1955, the Ambassador of the United
States of America to the Netherlands filed in the Registry an
Application dated May 26th, 1955, and signed by the Agent of
the Government of the United States of America instituting
proceedings before the Court against the Government of the
Union of Soviet Socialist Republics on account of ‘certain willful
acts committed by fighter aircraft of the Soviet Government against
a United States Air Force B-29 aircraft and its crew off Hokkaido,

Japan, on October 7th, 1952” ;
4
IO AERIAL INCIDENT OF OCT. 7th, 1952 (ORDER OF I4 III 56)

Whereas the Application was duly communicated by the Registry
on June 4th, 1955, to the Ambassador of the Union of Soviet
Socialist Republics to the Netherlands ;

Whereas the Application was also duly communicated by the
Registry to the Members of the United Nations, through the
Secretary-General of the United Nations, and to the other States
entitled to appear before the Court ;

Whereas the Application contains the following paragraphs :

“The United States Government, in filing this application with
the Court, submits to the Court’s jurisdiction for the purposes of
this case. The Soviet Government appears not to have filed any
declaration with the Court thus far, although it was invited to do
so by the United States Government in the note annexed hereto.
The Soviet Government is, however, qualified to submit to the
jurisdiction of the Court in this matter and may upon notification of
this application by the Registrar, in accordance with the Rules of
the Court, take the necessary steps to enable the Court’s jurisdiction
over both parties to the dispute to be confirmed.

The United States Government thus founds the jurisdiction of
this Court on the foregoing considerations and on Article 36 (1)
of the Statute.”

Whereas the note annexed to the Application, which was
addressed on September 25th, 1954, by the Government of the
United States of America to the Government of the Union of
Soviet Socialist Republics, ends with the following passage :

“Since it appears that the Soviet Government has thus far not
filed with that Court any declaration of acceptance of the compulsory
jurisdiction of the Court, the United States Government invites
the Soviet Government to file an appropriate declaration with the
Court, or to enter into a Special Agreement, by which the Court
may be empowered in accordance with its Statute and Rules to
determine the issues of fact and law which have been set forth
herein ; and the Soviet Government is requested to inform the
United States Government in its reply to the present note of its
intentions with respect to such a declaration or Special Agreement.”

Whereas in a letter dated August 26th, 1955, from the Chargé
d’affaires of the Union of Soviet Socialist Republics in the Nether-
lands to the Registry it was stated that :

“In its last note on this question, dated December 30th, 1954,
addressed to the Government of the United States of America, the
Government of the U.S.S.R. indicated that since the American
military aircraft violated the frontier of the U.S.S.R. and opened
fire without any reason upon Soviet fighter aircraft, responsibility
for the incident which occurred and for its consequences rests
entirely upon the American side ; in these circumstances the Soviet
Government cannot take into consideration the claim set forth in
II AERIAL INCIDENT OF OCT. 7th, 1952 (ORDER OF I4 I 56)

the note of the Government of the United States of America of
September 25th, 1954, and considers that the proposal that this case
should be referred for consideration to the International Court of
Justice is totally unfounded.

Having regard to the foregoing, the Soviet Government considers
that no question arises in this case which calls for a decision of the
International Court of Justice and it sees no reason why the question
should be dealt with by the International Court of Justice.”

Whereas a certified true copy of the above-mentioned letter was
communicated to the Agent of the Government of the United
States of America on August 20th, 1955;

Whereas the said letter of August 26th, 1955, does not constitute
on the part of the Government of the Union of Soviet Socialist
Republics either the appropriate declaration or consent to conclude
a Special Agreement ;

Whereas, in these circumstances, the Court finds that it has
not before it any acceptance by the Government of the Union
of Soviet Socialist Republics of the jurisdiction of the Court to
deal with the dispute which is the subject of the Application sub-
mitted to it by the Government of the United States of America
and that therefore it can take no further steps upon this Appli-
cation ;

THE COURT

orders that the case shall be removed from the list.

Done in English and French, the English text being authori-
tative, at the Peace Palace, The Hague, this fourteenth day of
March, one thousand nine hundred and fifty-six, in three copies,
one of which will be placed in the archives of the Court and the
others transmitted to the Government of the United States of
America and to the Government of the Union of Soviet Socialist
Republics, respectively.

(Signed) A. BADAWI,
Vice-President.
(Signed) J. LOPEZ OLIVAN,

Registrar.


47

             DISSENTING OPINION OF JUDGE OW ADA

   Characterization 0/ subjal-matter 0/ the dispute crucial la deciding on pre-
liminary objections - Treatment 0/ Liechlel1Slein property by Cemwny as the
real subject-mauer of the dispute - Applicability of the Seulement Convention
ta Liechtenstein properly - Scope oflimitation ratione temporis onjurisdiclion
under Arfide 27 (a) 0/ the European Convention for Ihe Peaceful Seulement of
Disputes - Meaning of "dispu/es relating [0 facts or situations prior ta Ihe
en/ry into force" of the Convention - Difference in formulation berween "dis-
putes relating ta facts or situations" and "disputes with regard ta factO' or situa-
tions" - Definition of "the facts or situalions giving rise ta Ihe dispute" -
Jurisprudence in Phosphates in Morocco, Electricity Company of Sofia and
Bulgaria and Right of Passage over Indian Territory cases - "Change of posi-
lion" by Germany as Ihe real source of the dispute - Objection based on Ihe
limitation ratione temporis ta be rejected - Ali other pre/iminary objections
raised by Germany ta be rejected - Jurisdiction of the Court ta entertain the
Application of Liechtenstein ta be upheld.

  To my regret, 1 cannot associate myself with the conclusion of the
Judgment that the Court has no jurisdiction ta entertaîn the present case,
especially as it relates ta the finding that the second preliminary objection
of Gcrmany to the Court's jurisdiction is to be uphcld. 1 wish to set out
hereunder my own views on sorne of the salient issues involved with a
view ta c1arifying the bases for my dissent.

                 1. THE ESSENTIAL NATURE OF THE DISPUTE

   l. This case is unique in the sense that the Applicant and the Respon-
dent are arguing their case at cross purposes. They base their respective
arguments on ditTerent understanding of what the dispute between the
Parties is about and what precisely the cause of action of the Applicant IS.
   2. Clearly it is this difference in approach to the case between the
Parties in defining the essential nature of the dispute that forms a crucial
element in this case at the present stage of the preliminary proceedings on
objections raised by the Respondent. One critical question that the Court
has ta decide on in the present preliminary proceedings therefore is the
question of "what is the subject-matter of the dispute 7" This question has
its relevance to most, if not ail, of the preEminary objections raised by
Germany in the present proceedings; more specifically the Court is to
define its position on this point in dealing with the tirst preliminary objec-
tion relating to the existence vel non of a dispute between the Parties and

45

48                 CERTAIN PROPERTY (DISS. OP. OWADA)

the second preliminary objection relating to the limitation ralione tempo-
ris on the jurisdiction of the Court, on both of which the present Judg-
ment has chosen to pronounce itself.
   3. Liechtenstein in its Application to institute proceedings before the
Court daims that:
     "( a) by its conduct with respect to the Liechtenstein property [which
           had been conflscated in Czechoslovakia under the 'BeneS
           Decrees' of 1945], in and since 1998, Germany failed to respect
           the righ ts of Lîech tenstein wi th respect to tha t pro pert y ;

      (b) by its failure to make compensation for losses suffered by
          Liechtenstein and/or its nationals, Germany is in breach of the
          mies of international law." (Application of Liechtenstein,
          para. 25.)
  4. In support of this claim, the Applicant contends, inter alia, as fol-
lows:
        "Vnder internationallaw, having regard to Liechtenstein's neutral-
     ity and the absence of whatsoever links between Liechtenstein and the
     conduct of the war by Germany, any Liechtenstein property that may
     have been affected by measures of an Allied power could not be con-
     sidered as 'seized for the purpose of reparation or restitution, or as a
     result of the state of war'." (Ibid., para. 9.)
        "Subsequent to the conclusion of the Settlement Convention [of
     1952J, it was accordingly understood, as between Germany and
     Liechtenstein, that the Liechtenstein properly did not fall within the
     régime of the Con ven tian." (Jbid., para. 1O.)
        "In 1998 the position of the Federal Republic of Germany
     changed, as a resuh of the decision of the Federal Constitutional
     Co urt of 28 J anuary 1998 [i n a case concerning a painting whiçh was
     among the Liechtenstein property seized in 1945 under the 'Benes
     Decrees']." (Ibid., para. 17.)
        "Liechtenstein ... protested to Germany that the latter was treat-
     ing as German assets which belongcd to nationals of Liechtenstein ...
     Germany rejected this protest and in subsequent consultations it
     bccame clear that Gennany now adheres to the position that the
     Liechtenstein assets as a wholc were 'seized for the purpose of repa-
     ration or restitution, or as a result of the state of war' within the
     meaning of the Convention." (Ibid., para. 19.)

   5. Thus Liechtenstein submits that "[t]here is accordingly a legal
dispute between Liechtenstein and Germany as to the obligations of the
latter with respect to Liechtenstein property" and that "[i]t i5 this dis-
pute which is the subject of the present Application" (ibid., para. 20).

46

49                    CERTAIN PROPERTY (mss. OP. OWADA)

   6. Tn support of its first prelîmi nary objection that there is no legal dis-
pute between Germany and Liechtenstein, the Respondent contends that
the "change of position [as alleged by Liechtenstein], which supposedly
led to a disagreement on a point of law, never occurred" and that "it is
impossible to disccrn any disagreement on a point of law or fact between
Germany and Liechtenstein" (CR2004/24, p. 21, para. 42). Referring to
the confiscation of certain Liechtenstein property by Czechoslovakia
under the "Benes Decrees", the Respondent daims that

     "[b]etween Liechtenstein and Germany there exists no dispute con-
     cerning the lawfulness of the Czechoslovak seizures. Rather, the dis-
     pute is one between Liechtenstein and the successor(s) of former
     Czechoslovakia." (Preliminary Objections of Germany, Vol. l,
     Part III, Chap. r, Section I, D, p. 42, para. 60.)
ft argues that "it is impossible to formulate the alleged dispute between
Liechtenstein and Germany in a way which effectively distinguishes it
from the real dispute between Liechtenstein and the Czech Republic"
(CR2004/24, p. 21, para. 43).
   7. Liechtenstein on the contrary daims that "Germany address[es] a
case that is not the case before [the Court]". According lo Liechtenstein,
its case is that
     "Germany bears international responsibility for infringing Liechten-
     stein's neutrality and sovereignty by allowing Liechtenstein assets to
     be treated, for the first time in 1995, as German external assets for
     purposes of the Settlement Convention"l.

lt caregorically states that "[t]his case is no! about the legality of the
BeneS Decrees", and that "[it] is not about Liechtenstein's dispute wÎth
Czechoslovakia ... over property belonging ta Liechtenstein and its
nationals" (CR 2004125, p. 12; emphasis in the original).

   8. lt is clear that here the Parties are presenting their respective differ-
ent positions on the "subject-matter of the dispute" in the present case,
not only by employing different formulations but also by addressing dif-
fereut substances. Needless to say, the question of what constÎtutes the
dispute in a case before this Court in the final analysis has to be decided
by the Court. Nevertheless, it stands 10 reason that since the case has
been brought before the Court by Liechtenstein as Applicant against

   l Convention on Ihe Setllement of Matters arising out of the War and the Occupation,
signed by the United States of America, the United Kingdom, Franee and the Federal
Republic of Gennany at Bonn on 26 May 1952 (as amended by Schedule IV lO lhe Pro-
tocol on the Termination of the Occupation Régime in lhe Federal Republic of Germany,
signed at Paris on 23 October 1954) (hereinaftcr referred ta as the "Setllement Con ven-
tion").

47

50                  CERTAIN PROPERTY (mss. OP. OWADA)

Germany as Respondent, it is in the Submissions of the Applicant that
the formulation of the daims on which the Court must adjudicate is to be
sought (cf. Right of Passage over Indian Territ ory, Mer i ts, Judgment,
1. C J. Reports 1960, p. 27).
   9. More specifically, the Court in the case concerning Fisheries Juri.\"-
diction (Spain v. Canada), in which the parties, while accepting that
there existed a dispute between them, characterized the dispute differ-
ently, stated as follows:
        "ln order to iden/ify its task in any proceedings il1stituted by one
     SIGte agail1st wJOther, the Cauri must begin by examining the Appli-
     cation (see lnterhandel, Preliminary Objections, Ju dgm en t, 1. Cl.
     Reports 1959, p. 21; Righ! of Passage over Indian Terri/ory, Merits,
     Judgment, 1. Cl. Reports 1960,' p. 27; Nuc/ear Tests (A ustralia v.
     France), Judgmel1t, 1. Cl. Reports 1974, p. 260, para. 24). However,
     it may happcn that uncertainties or disagreements arise with regard
     to the real subject of the dispute with which the Court has been
     seised, or to the exact nature of the daims submitted to it. In such
     cases the Court cannot be restricted to a consideration of the terms
     of the Application alone nor, more generally, can it regard itself as
     bound by the daims of the Applicant.

        Tt is for the Court itself, white giving particular allen/ion to the
     formulation of the dispute chosen by the Applicant, to determine on
     an objective basis the dispute dividing the parties, by examining the
     position of both parties" (lurisdiction of the Court, Judgment, l. CJ.
     Reports 1998, p. 448, paras. 29 and 30; emphasis added).

   10. When the di vergen t characteriza tian of the su bject -ma tter of the dis-
pute given by the Applicant and the Respondent in the present case Îs
closely examined in accordance with the principle enunciated by this juris-
prudence of the Court, il seems clear that the subject-matter of the dispute
in the present case Îs the que~tion of international responsibility of Ger-
many in its treatment of Liechtenstein property as "German external assets
or other property, seized for the purpose of reparation or restitution, or as
a result of the stare of war" (hereinafter referred to as "German external
assets or other properly") for purposes of the Settlement Convention. On
this point, therefore, 1 concur with the Jlldgment in its conclusion that
     "the subject-matter of the dispute is whether, by applying Article 3,
     Chapter Six, of the Settlement Convention to Liechtenstein pro pert y
     that had been confiscated in Czechoslovakia under the Benes Decrees
     in 1945, Germany was in breach of the international obligations it
     owed to Liechtenstein and, if so, what is Germany's international
     responsibility" (Judgment, para. 26).
   Il. Naturally the question of whether or not the allegation of Liech-
tenstein as quoted in paragraph 4 above, and especially the allegation that

48

51                  CERTAIN PROPERTY (DISS. OP. OWADA)

there has been a change in this respect in the position of Germany, can be
established is a question that obviously belongs ta the merits of the case.
In holding that there exists a situation in which "complaints of fact and
law formulated by Liechtenstein against Germany are denied by the
la tler" and tha t "[bJy virtue of this denial, there is a legal dispute" (J udg-
ment, para. 25) between the Parties, the Court is not prejudging the valid-
ity of such "complaints of fact and law formulated by Liechtenstein". Ali
that the Court should pronounce upon at this stage of the proceedings,
where il is addressing strictly the preliminary objections raised by the
Respondent only, is whether there does exist a legal dispute between the
Parties on this point for the purposes of the jurisdiction of the Court.

     11. THE ISSUE OF "DISPUTES RELA11NG TO FACTS OR SITUATIONS"

   12. Having come ta its conclusion as stated above on the question of
whether there exists a legal dispute between the Parties in the present case
and what constitutes the subject-matter of this dispute, the Court has ta
adhere ta this characterization of the subject-matter of the dispute in
examining the question raised in the second preliminary objection of the
Respondent, Le., the question of whether the dispute thus formulated
will fall within the jurisdiction of the Court, rarione lemporis, under
Article 27 (a) of the European Convention for the Peaceful SeUlement
of Disp utes of 29 April 1957.
   13. Preliminary to proceeding ta the examination of the facts of the
case in this respect, however, the first issue to be analysed is the meaning
of the provision in Article 27 (a) of the Convention which excludes "dis-
putes relating 10 Jacls or situations prior ta the entry into force of this
Convention as bctween the parties to the dispute" (emphasis added) from
the scope of jurisdictiotl conferred upon the Court under this Article.
   14. In every case before the Court, the basis of jurisdiction of the
Court is the 1egal instrument that confers jurisdictiotl on the Court, be it
a unilateral dcclaration accepting the compulsory jurisdiction of the
Court or a compromissory provision in a bilateral or multilateral treaty
ta refer a dispute under the treaty ta the Court. Each case has ta be
assessed on its own by interpreting the legal instrument in question that
serves as the basis for jurisdiction.
   15. From this point of view the question could arise as ta whether the
language employed in Article 27 (a) of the European Convention for the
Peaceful SeUlement of Disputes should he interpreted differently from
the more usual expression employed in sorne other cases that have come
before this Court. By way of illustrations, in the Phosphates in Morocco
case before the Permanent Court of International Justice, the legal instru-
ment in question, the French declaration of 1930 accepting the compul-
sory jurisdiction of the Court, employed the expression "any disputes
which may arise after the ratification of the present dedaration wilh
regard to situations or JaCls subsequent to this ratification" (Phosphates

49

52                  CERTAIN PROPERTY (DISS. OP. OWADA)

in Morocco, ludgment, 1938, P. C r.J., Series AIB, No. 74, p. 22; empha-
sis added). In the Electricity Company of Sofia and Bu/garia case, also
before the Permanent Court, the legal instrument in question was the BeI-
gian dedaration of adherence to the optional clause of the Court's Stat-
ute. That also used the formula "any disputes arising after the ratification
of the present declaration with regard to situations or faels subseq uent to
 this ratification" (Electricity Company of Sofia and Bu/garia, ludgmem,
1939, P.C!.J., Series AIB, No. 77, p. 82; emphasis added). In yet
another case in which the same issue of the scope of limitation rat/one
temporis on jurisdiction of the Court came before the present Court, i.e.,
 Righi of Passage case, the Iegal instrument in question was al80 the
 lndian declaration of acceptance of the jurisdiction of the Permanent
Court of international Justice of 28 February 1940. Here again the dec-
laration used the same formula of limiting the scope of acceptance ta
 '''disputes arising after February 5th, 1930, with regard to situations or
fac!s subsequent ta the same date'" (Righl of Passage over Indian Terri-
 tory, Preliminary Objections, Judgment, r.Cl. Reports 1957, p. 151;
emphasis added).

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

       "The provisions of this Convention shal1 not apply to:
     (a) disputes relating to facts or situations prior to the entry into
         force of this Convention as between the parties to the dispute."
         (Emphasis added.)

   17. Tt therefore seems to be in arder ta engage in an examination of
the legislative history of Article 27 (a) of the Convention within the
Council of Europe where it was finally adopted, with a view ta ascertain-
ing whether this divergence from the more u:mal formulation employed
in the other instruments was an intended one with the express purpose of
producing a different legal eITeet on the part of the drafters of the instru-
ment. At the drafting stage of the Convention, "Proposais of the Com-
mittee on Legal and Administrative Questions l'Of a European Act for the
Peaceful Seulement of Disputes"Z included the following provision relat-

  2 Contained in Appcl1dix, Part B, to Recommendalion 36 (1952) on the eSlablishment
of a European Court of Justice and of a European Act for the PeacefuJ Settlcmcnt of
Disputes.

50

                                                                                1
                                                                                1

53                        CERTAIN PROPERTY (DISS. OP. OWADA)

ing to the limitation ralione temporis ta be incorporated in the European
Act (which grew into the European Convention for the Peaceful Settle-
men t of Dispu tes of 1957):
             "It shaH be deemed not ta apply ta disputes arising out of faets
          which occurred prior ta the accession to the Act of Mem bers parties
          to such disputes ... " (Emphasis added.)

   However, when these proposais were submitted to a Committee of
Experts who thenproduced a draft "Final Report of the Committee of
Experts on the Peaceful Settlement of Disputes and the Creation of a
European Court of Justice" of 18 May 1953 3, sorne change in the word-
ing of this part took place. Thus in the Final Report adopted of 22 May
1953, the then Article 1 (2) (which later became Article 27 (a) of the
draft Convention) came to include the following formula in relation to
the limitation ratione temparis on the jurisdiction of the Court:
             "This undertaking shall not apply to disputes relaling 10 facts or
          situations prior to the entry into force of this Convention as between
          the parties ta the dispute." (Council of Europe doc. CM (53) 58;
          A.12.822; TL. 794!WM ; Appendix rI, p. 20; emphasis added.)

There is nothing in the relevant records available that can shed light on
the background for this change. On the contrary, the "Comments on the
Articles of the Preliminary Draft Convention" contained in the Final
Report states by way of a commentary on Article 1 (2) (i.e., present
Article 27 (a)) that:
        "This paragraph sets a time-Jimit to the facls giving rise to a dis-
     pute whîch may be submitted to the Court. It lays down that the
     starting point shall be the date of the entry into force of the Conven-
     tion." (Council of Europe doc. CM (53) 58; A.12.822; TL.794/WM,
     p. 6; emphasis added.)

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

   19. Based on this analysis of the travaux préparatoires on the legisla-
tîve history of the compromissory provisions of the Convention, it would

     J   Council of Europe doc. EXP/RPDIJU (53); A.12. 379; TL. 794fWM/U nrevised.

51

54                 CERTAIN PROPERTY (mss. OP. OWADA)

seem safe to conclude, as the Judgment seems to assume without going
through a detailed analysis on this point, that the formulation of the limi~
tation ralione temporis employed in the compromissory provisions of the
European Convention for the Peaceful Settlement of Disputes should be
interpreted as being no different from the comparable formulations
employed in the other legal instruments which were the subject of scru-
tiny in the previous three judgments of the Court, which now form the
case law on this issue.

 III. THE RELEVANT "FACTS OR SITUATIONS" IN RELATION TO THE DISPUTE

   20. Having thus disposed of the issue of a possible distinction in law
between different formulations on the question of limitation ralione tem-
poris employed in different legal instruments, the next question that the
Court is ta examine is what are such "facts or situations giving rise to the
dispute" in the present case.
   21. In determining the issue of which facts or situations are ta be
regarded as "factsor situations giving rise ta the dispute" in the context
of the present case, it is of cardinal importance that we base ourselves on
the characterization of the subject-matter of the dispute in the present
case as the Court has identified it. 1 have already stated in Part 1 of this
opinion that the proper way of looking at the present case, especially tak-
ing account of the claims of the Applicant as presented in its Application,
is to define the subject-matter of the present dispute as consisting in the
alleged change in the position of Germany in the 19908, through a series
of German court decisions, on the question of treaIment of Liechtenstein
property as "German external assets and other property" for the pur-
poses of Article 3, paragraph l, of Chapter Six of the Settlement Conven-
tion.
   22. lt is true that this allegation has not been fully elaborated by the
Applicant at this stage of the proceedings, while the Respondent flatly
denies that there has been any such change of position by Germany. In
fact this question can only be determined definitively when the Court
enters into a thorough examination of the facts of the case at the merîts
stage of the case. Nevertheless, on the basis of the relevant documents
and the oral presentations both of the Applicant and of the Respondent
submitted to the Court, it is difficult to deny that this Liechtenstein daim
is something more than a sheer allegation which patently is not sustain-
able even on a prima facÎe basis of the facts made available ta the Court.
Germany daims that there has been no change of position in the juris-
prudence of the German courts; and that its courts have consistently held
that they are barred by the Settlement Convention from adjudicating on
the lawfulness of any confiscation measures for the purposes named by
the Settlement Convention (CR 2004/24, p. 15, para. 17). However, a
glance at the jurisprudence of the German courts (cf. cases listed in
Observations of Liechtenstein, Appendix 1) seems to reveal that this

52

55                    CERTAIN PROPERTY (DISS. OP. OWADA)

latter statement does not seem to be entire!y accurate. It may be true that
in those cases where the application of the Seulement Convention was
involved, the German courts have consistently held that they lacked the
competence to penetrate the legal veil of the provisions of Article 3, para-
graph l, of Chapter Six of the Settlement Convention and refrained from
evaluating the lawfulness of the me as ures that had been applied to what
were unquestionably "German externat assets". As the Respondent itself
concedes (CR 2004/24, p. 13, para. 11), however, no concrete case had
arisen, until the Pieter van Laer Painting case was brought before the
court in Cologne in which the applicability ilself of the Seulement Con-
vention ta Liechtenstein property as "Gemmn external assets or other
property" was considered for the tirst time.
   23. The AKU4 case cited in this context by the Respondent as evidence
of the German position quoted above (CR 2004/24, p. 15, para. 17) might
appear ta serve as a precedent for holding that "[Article 3, Chapter Six,
of the Settlement Convention as amended by Schedule IV of the Paris Pro-
tocol of 23 October 1954J does not confer [upon German courts] a right
to examine this question [of applicability of the Convention] in accord-
ance with German law" (International Law Reports, Vol. 23 (1956),
p. 23). However, it is preceded by one important condition by way of a
proviso, which states as follows:

        "The sole condition ... which must now be satislied in order that
     the jurisdiction of the German Courts shall be excluded is that
     the claim is concerned with an asset seized for the purpose of repara-
     tion or one of the other purposes referred to in paragraph 1 [of
     Article 3]." (Ibid., p. 22.)
ft would seem therefore that this decision, with this expressly stated pro~
viso, could not be an authority on the point at issue here, i.e., that the
German courts have consistently held that they were barred under the
Settlement Convention from examining the applicability itself of the
Settlement Convention to neutral assets.
   24. To this extent at any rate, it thus seems undeniable that the posi-
tion of the German courts in the Pieter van Laer Painting case, culmi-
nating in the decision of the court of the final instance in civil matters,
i.e., the Bundesgerichtshof, followed by the decision of the Federal Con-
stîtutional Court of 14 January 1998 on a constitutional complaint which
held that Liechtenstein pro pert y fell within the scope of the Settlement
Convention, has had the effect of creating a new case law in applying the
principle - a principle that may weil have been consolidated in relation
{o uncontestably "German externat assets" fhat had been subjecl ta war-

  4 See AKU case, Judgment of the German Feueral Court of Justice (Bundesgerichlshol)
of 13 December 1956 (II ZR 86/54): see also International Law Report.)·, Vol. 23 (1956),
pp. 21-24; Nel/e JI/ris/ise/le Wochen.)·chrift, Vol. 10, Issue 6 (1957), p. 217.

53

56                 CERTAIN PROPERTY (DlSS. OP. OWADA)

lime or post-war reparut ion régime by alIied or other powers -     ta a new
situation involving a neutral property of Liechtenstein.

   25. Whether this contention of Liechtenstein concerning the alleged
change in the position of Germany in the 1990s can stand the test of scru-
tiny in terms of facts and law surrounding the situation involving the
painting of Pieter van Laer i5 of course an entîrely different matter. This
is an issue which has ta be scrupulously examined when the Court cames
to the merits stage of the case. Suffice it to sayat this preliminary stage
on jurisdiction that there is at least sufficient basis for holding that the
subject-matter of the dispute is real and not just artificially constructed.
ln fact, this alleged "change of position of Germany", or more precisely,
the treatment by Germany of Liechtenstein property as falling within the
scope of Article 3 of Chapter Six of the Settlement Convention embodied
in the decision of the highest German court in the 1990s, which can only
be examined in detail at the merits stage of the case, is the key ta defini-
tively determining whether this situation amounted to the "facts or situa-
tions which have given rise to the dispute", thus satisfying the condi-
tions ratione temporis prescribed by the compromissory provisions of the
European Convention for the Peaceful Settlement of Disputes.

      IV. JURISPRUDENCE OF THE COURT ON "FACTS OR SITUATIONS"
                       GIYING RISE TO THE DISPUTE

   26. As the existence of a dispute between Liechtenstein and Germany
has been established in the Judgment itself, the next step for the Court is
to ascertain whether this dispute falls within or outside the scope of the
jurîsdîetion eonferred upon the Court by the compromissory provisions
of Article 27 (a) of the European Convention for the Peaceful Settlement
of Disputes. On the basis of the interpretation gîven above on the for-
mula "disputes relating to facts or situations" (Part II of this opinion),
the question for the Court to address Îs whether thi.\' dispute is one "relat-
ing ta facts or situations prior to the entry into force of [the] Convention
as between the parties" as interpreted above.
   27. In my view, an analysis of the past three cases before the Perma-
nent Court of International Justice and the International Court of Jus-
tice, in which the issue of what are the "faets or situations giving rise ta
the dispute" was addresscd by the Court and its predecessor, reveals that
there appear ta be two Enes of approaeh in the case !aw of the Permanent
Court and this Court:
(1) the approach to look to those faets or situations which are the real
    source of the dispute, but not the source of the rights whjch under/ie
    the dispute; and
(2) the approaeh to take the dispute as "the whole" of a chain of events

54

57                 CERTAIN PROPERTY (DISS. OP. OWADA)

     and looking to those faels or sÎlumions which crystallize the dispute
     by completing the cycle of its constituent elements.
The first approach places emphasis on the substantive problem of deter-
mining the real cause of the dispute, while the second approach looks to
a formai aspect of the process of crystallization of the dispute by identi-
fying the point in time at which a fact or a situation cornes to constîtute
the critical factor which gives rise to a dispute in a concrete form.

   28. These two hnes of approach, however, represent different angles
from which to look at the same situation, and therefore are not mutually
exclusive. Indeed, it is the importance of a nexus of close and direct Iink
between the dispute and the faets or situations which give rise to that dis-
pute that is emphasized in both of the two approaches. This nexus of
close and direct Iink connecting the dispute and the faets and situations
which give rise to it is so essential that an authority on this subject was
prompted to state that:
        "lt is believed ... that in the long run there is httle praetical sig-
     nificance in this distinction [between the date on which the dispute
     arase and the date of the facts and situations which gave rise to it],
     at least in so far as conceros what occurs in the process of reaching
     the decision: a distinction between the date of a dispute, and the
     date of the facts and situations regarding which that dispute exists,
     may be one of fonn only." (Shabtai Rosenne, The Time Factor and
     the Jurisprudence of the International Court of Justice, p. 40.)
   29. It is thus incumbent upon me to analyse how the case law in each
of the three precedents works out this nexus in a concrete context and see
how the case law is to be applied to the faets of the present situation. ln
the Phosphates in Morocco case, Italy brought daims against France,
alleging that by a series of decrees the French had denied certain rights of
Italian nationals in the Moroccan phosphates industry. The decrees pre-
ceded the critieal date in the French optional clause declaration, but Ital y
argued that there was a continuing illegality, whieh had only been eom-
pleted by certain acts subsequent to the date. After stating that "[s]itua-
tions or tacts subseq uent to the ratification [of the optional clause decla-
ration] could serve to found the Court's compulsory jurisdiction only if il
was with regard lo lhem that the dispute arase" (emphasis added), the
Permanent Court of Intemational Justice made the point that

     "it would be impossible to admit the existence of 5uch a relationship
     between a dispute and subsequent factors whieh either presume the
     existence or are merely the confirmation or development of earlier
     situations or faets constituting the real causes of the dispute" (Phos-
     phates in Morocco, Judgment, 1938, P.CI.J., Series A lB, No. 74,
     p. 24; emphasis added).

55

58                 CERTA!N PROPERTY (mss. OP. OWADA)

   30. Relying on this dictum, Gennany in the present case contends that
the acts after 1980, inc1uding the decision of the German courts, were
merely a confirmation or development of facts or situations that took
place in the 1940s and the 1950s, Le., the Benes Decrees of 1945 and the
Seulement Convention of 1952.
   31. Tt is a fact, however, that the Settlement Convention as such, with
its reference to "German external assets", created no dispute with neutral
Liechtenstein. Jt is also a fact that the Settlement Convention had never
before been applied to Liechtenstein assets by the German courts until
the decision in the Pieter van Laer Painting case. Thus it was in the con-
text of this new development of the 1990s which allegedly constituted a
"new legal situation" and not just a "confirmation or development of
earlier situations or tacts" (Phosphates in Maroeeo. Judgmenl, 1938.
P. CJ.J., Series AIB. No. 74, p. 24) that a concrete dispute arose between
Germany and Liechtenstein.

   32. ln the Eleetrieity Company of Sofia and Bulgaria case before the
Permanent Court of lnternational Justice, the Respondent, Bulgaria,
relied on the so-called "double exclusion clause" (or the "Belgian for-
mula") in the Belgian optional clause declaration. The Respondent argued
that the situation underlying the dispute was created by the awards of the
Be\go-Bulgarian Mixed Arbitral Tribunal, and in particular by the for-
mula established by the awards for the fixing of the priee, bath of which
antedated the critical date of the declaration. The complaints made by
the Applicant, Belgium, concerning the application ofthis formula by the
Bulgarian authorities related ta the working of that formula and made it
the centre point of the dispute.
   33. In rejecting the argument of the Respondent on this point, the
Court recalled what it said in the Phosphates in Morocco case, and stated
that
     "[t]he oilly situations or facts which must be taken into account from
     the standpoint of compulsory jurisdiction accepted in the terms of
     the Belgian declaratioll are those which must be cOllsidered as being
     the source of the dispute" (Eleclricily Company of Sofia and Bul-
     garia, Judgment, 1939, P. C1.1., Series AIB, No. 77, p. 82; emphasis
     added),
and concluded as follows:
        "lt is true that a dispute may presuppose the existence of some
     prior situation or fact, but it does not follow that the dispute àfises
     in regard to that situation or fact. A situation or fact in regard to
     which a dispute is said to have arisen must be the real cause of the
     dispute." (Ibid. ; emphasis added.)
Thus the Court round that it was the subsequent acts with which the Bel-
gian Government reproaches the Bulgarian authorities with regard to a

56

59                  CERTAIN PROPERTY (mss. OP. OWADA)

particular application of the fonnula - which in itself had never been
disputed - Le., the decision of the Bulgarian Administration of Mines of
 1934 and the judgments of the Bulgarian courts of 1936 and 1937 -
which formed the centre point of the argument and must be regarded
as constituting the facts with regard to which the dispute arase (cf. Elec-
 tricity Company of Sofia and Bu/garia, Judgment, 1939. P. CI.J.,
 Series AIB, No. 77).
    34. Tt seems c1ear that the present case has a close resemblance to the
 Electricity Company of Sofia and Bulgaria'case in terms of how we define
and apply the test of what constitutes le fait générateur in the context of
the facts of the present situation. In the present case, the BeneS Decrees
and the Seulement Convention are no doubt underlying factors of the
dispu te, and they relate to this dis pute in the factual sense; it co uld th us
be said that the dispute presupposes their existence. It does not follow,
however, that the dispute therefore arase in regard to {hase situations or
facts. ft was not until the subsequent alleged position taken by Ger-
many - the German court decisions applying the Settlement Convention
to Liechtenstein property - that the dispute came into being in the eyes
of Liechtenstein as against Germany.

   35. In the Righ! of Passage case before this Court, the Applicant, Por-
tugal, in its Application indicated that the subject of the dispute was the
conflict of views which arase between Portugal and India when, in 1954,
India opposed the exercise of Portugal's right of passage to certain Por-
tuguese enclaves in the lndian territory. The Respondent, India, argued
on the other hand that the Court was without jurisdiction under India's
own optional clause declaration with limitation ratfone ternporis, because
the dispute was the continuation of a contlict of views on this alleged
right of passage, going back as far as 1818. There were also questions of
treaty Interpretation and practice dating back to 1779. Against the back-
ground of these complex hîstorical factors, the Court came out with the
conclusion that the critical factor that gave rise to the dispute occurred in
1954, when India opposed the exercise of Portugal's right of passage.
After noting that the dispute submitted to the Court had a threcfold sub-
ject - i.e., (1) the disputed existence of a right of passage in favour of
Portugal; (2) the alleged failure of India in 1954 to comply with its obli-
gations concerning that right of passage; and (3) the redre5s of the illegal
situation tlowing l'rom that failure - the Court stated that "[t]he dispute
before the Court, having this three-fold subject, could not arise until
aU its constituent elements had come into existence", in particular, the
obstacles which India was al!eged to have placed in the way of exercise
of passage by Portugal in 1954 (Right of Passage over lndian Territory,
 Merits, Judgment, I.Cl. Reports 1960, p. 34; emphasisadded). On that
basis the Court concluded that "[t]he dispute therefore as submitted to
the Court could not have originated until 1954" (ibid., p. 34).

     36. The conclusion that the Court arrived at as the real source of the

57

60                 CERTAIN PROPERTY (mss. OP. OWADA)

dispute in that case, applying the principle of looking for the origin of a
dispute through the process of fonnation of the dispute as "the whole", is
the following:
        "It was only in 1954 that such a controversy [as to the title under
     which passage was effected] arose and the dispute relates both to the
     existence of a right of passage ... and to India's failure to comply
     with obligations which, according to Portugal, were binding upon it
     in this connection. It was from ail of this that the dispute referred 10
     the Court arose; il is wüh regard la al! of this fhm the diJpute exists,
      This whole, whatever may have been the earlier origin of one of its
     parts, came inlO existence only after {the critical date as specified in
     the optional clause declaration as the limitation ratione temporis on
     jurisdiction]." (I. C 1. Reports 1960, p. 35; emphasis added,)
   37. When the criterion enunciated by the Court in the Right of Pas-
sage case is applied to the present case, it seems clear that the decisive
conclusive event that gave rise to the "difference in the legal positions"
between Germany and Liechtenstein concerning the treatment of the
Liechtenstein property, giving a concrete shape ta the dispute as "the
whole", whatever may have been the earlier origin of the factors that
affected the destiny of Liechtenstein property, was the alleged decision by
the German courts which held that the Settlement Convention was appli-
cable to the Liechtenstein property in question as "German external
assets and other pro pert y" for the purposes of the Seulement Convention
and that therefore the German courts were barred from passing a judg-
ment on the legality of the measures referred to in Article 3 of Chapter Six
of the Settlement Convention, Whilc the validity of this aIJegatian has ta
be tested in light of the facts of the case, the jurisprudence of the Right of
Passage case definitely tilts towards a conclusion that it is this develop-
ment which, if proved, constitutes le fait générateur du d!fférend which
arose,
   38, The present Judgment, in addressing the issue of jurisdiction
ratione temporis contained in the second preliminary objection of Ger-
many, cornes out with the conclusion that
     "the Court has no basis for concluding that prior to the decisions of
     the German courts in the Pie/er van Laer Painting case, there existed
     a common understanding or agreement between Liechtenstein and
     Germany that the Seulement Convention did not apply ta the Liech-
     tenstein pro pert y seized abroad as 'German external assets' for the
     purpose of repara tion or as a. result of the war" (J udgment, para, 50),

While the Applicant in its Application stated that "[s]ubsequent to the
conclusion of the Settlement Convention, it was accordingly undcrstood,
as between Germany and Liechtenstein, that the Liechtenstein property
did not faH within the régime of the Convention" (Application of Liech-
tenstein, p. 8, para, 10), it has not substantiated in the present proceed-

58

61                 CERTAIN PROPERTY (mss. OP. OWADA)

ings such cornmon understanding between Liechtenstein and Germany.
However, since the dispute at issue before the Court is whether Gennany
was in breach of its international obligations by ifs trcatment of Liech-
tenstein property by applying the Settlement Convention ta the property
in question, this finding of the Court on the aHeged change of position in
itself does not seem to be decisive in determining whether the dispute has
arisen with regard to this aHeged new development. Of course whether
such a "change of position", in the sense that Germany departed l'rom a
previously held position concerning the applicability of the Settlement
Convention, thm incurring an international responsibility of Germany,
has indeed taken place or not is an issue that has to be closely examined
as the central issue of the merifs of the case in subsequent proceedings.

  39. On this last point, however, the Judgment, ex cathedra and with-
out giving much substantive reasoning, declares as follows:
     "the Court points out that German courts did not face any 'new
     situation' when dealing for the first time with a case concerning the
     confiscation of Liechtenstein property as a resuit of the Second
     World War. The Court finds that this case, like previous ones on the
     confiscation of German exlernaf assets, was inextricably linked to
     the Seulement Convention. The Court further finds that the deci-
     sions of the German courts in the Pie ter van Laer Painting case can-
     not be separated from the Seulement Convention and the Benes
     Decrees, and that these decisions cannat consequently be considered
     as the source or real cause of the dispute between Liechtenstein and
     Germany." (Judgment, para. SI; emphasis added.)

   40. Tt is difficult to understand the logic of this conclusion, since the
point at issue in the context of determining what constituted le fait
générateur of this dispute is precisely the issue of whether a legal distinc-
tion can be made between the applicability of the Settlement Convention
to what is undisputably to be regarded as "German external assets" (a
thesis not contested by the Applicant) and the applicability of the Settle-
ment Convention to neutral Liechtenstein property as "German external
assets or other property" (a thesis fiercely contested by the Applîcant,
thus forrning the fons el origo of the present dispute).

   41. ft is indisputable, as the Judgment states correctly, that the deci-
sions of the German courts in the Pie ter van Laer Painting case cannot be
separatedfrom the Seulement Convention and the Bend Decrees. It does
not follow, however, that "these decisions cannot consequemly be con-
sidered as the source or real cause of the dispute between Liechtenstein
and Germany" as the J udgmen t suggests (J udgmen t, para. 51 ; em phasis
added). The fact that the BeneS Decrees and the Settlement Convention
are even non-negligible factors that underlie, and thus constÎtute an

59

62                 CERTAIN PROPERTY (mss. OP. OWADA)

important background of, the colourful destiny of the Pieter van
Laer painting is undeniable. In this sense it may be said that the decisions
of the German courts on the Pie ter van Laer Painting case cannat be
separated from the Seulement Convention and, further, from the BeneS
Decrees. However, this historical fact in itselfcannot turn such "facts and
situations" into les faits générateurs du différend (Phosphates in Morocco,
Judgment, 1938, P.c.!.J., Series AIB, No. 74, p. 23), Le., something
which generates the dispute, constituting "the real source of the dispute",
unless it is shown that indeed these facts and situations, directly and
without further intervening events, gave rise to the dispute. It seems
evident that such was not the case with either the Benes Decrees or the
Settlement Convention.

   42. Based on the deflllition of the subject-matter orthe dispute as iden-
tified earlier, and in light of the analysis offered above on the jurispru-
dence of the Court concerning the question of the limitation ratione tem-
poris upon the Court's jurisdiction, the conclusion seems inescapable
that, at any rate as far as this preliminary stage of the case is concerned,
where the task of the Court is to be strictly confined to the examination
of the question of whether the Court has jurisdiction ta hear the case on
the merits, il i8 difficult to agree with the conclusion of the Court, when
it declares that
     "[w]hile these decisions [of the German courts in the Pieter van
     Laer Painting case] triggered the dispute between Liechtenstein
     and Germany, the source or real cause of the dispute is to be found
     in the Settlement Convention and the Benes Decrees" (Judgment,
     para. 52).
   43. For these reasons, l come ta the conclusion that the second pre-
liminary objection of Gennany has either ta he rejected together with the
first preliminary objection of Germany which has been rejected by the
Judgment, or ta he joined to the merits for rurther investigation, in
accordance with Article 73, paragraph 7, of the Rules of Court.
   44. It might be added that as can be seen from what has been stated
above, 1 am not entirely in disagreement wilh the Judgment of the Court,
as far as its general legal analysis of the case law of the Court is coo-
cerned, on the issue of what constitutes "facts or situations giving rise to
the dispute" as represented by the three cases referred ta in the Judgment.
What 1 question is the manner in which this jurisprudence is applied to
the facts of the present case.

                   v. OTHER PRELIMINARY OBJECnONS
  45. Tt would follow l'rom this conclusion ofmine that the Court would
have to proceed further to the examination of four other preliminary

60

63                  CERTAIN PROPF.:RTY (mss. OP. OWADA)

objections of Germany relating to the jurisdiction of the Court and to the
admissibility of the daims of the A pplican t, in order to determine whether
it should go to the merits stage of the case. The present Judgment, how-
ever, has arrived at the conclusion that "[h]aving dismissed thefirst pre-
liminary objection of Germany, but upheld its second, the Court finds
that it is not required to consider Germany's other objections and that it
cannot rule on Liechtenstein's daims on the merits" (Judgment, para. 53).
Given my position as stated above, nevertheless, it is incumbent upon me
to examine each and ail of the remaining objections of Germany, in order
to determine whether the Court has the competence ta proceed to hear
the case on the merits. Thus in the following paragraphs 1 shall state my
views on the other preliminary objections raised by the Respondent; but
r shaH do sa only in a somewhat summary fashion. This is due to the
obvious point that there is no practical significance in 8uch an exercise,
seeing that the Judgment by majority has effectively terminated the
present case for ail purposes.

     The Third Preliminary Objection relating to Domestic Jurisdiction

  46. Germany con tends that "the outcome of the German court pro-
ceedings would have been exactly the same even if the Settlement Con-
vention did not exist", since accordîng ta the applicable mIes of private
internationallaw and confiscation law as applied and recognized in Ger-
many, as in so many other countries in the world,

      "[tJhe painting found on German territory for the exhibition would
      have been returned ta the owner according to Czech law, the
      museum, because Czechoslovakian law and now Czech law have
      governed the law of property for that painting for the last 50 years"
      (CR2004/24, p. 33, para. 94).
On this basis Germany argues that "the decisions of the German courts,
as ta their results, were not a matter of international law" and that
"as far as Liechtenstein is concerned, the matter was sole\y within the
domestic jurisdiction of Germany" (ibid., para. 95).
   47. Ta this argument, Liechtenstein counter-argues that such an asser-
tion i8 clearly a matter for the merits. lt daims that in diplomatie con-
sultation on the present dispute Germany at no time argued that this was
a matter within its domestic jurisdiction, and further aIgu es that

      "[t]he issue [then] was not whether this was a matter for Germany
      alone, but whether neutral property seized as a result of a war could
      be treated by German courts as 'German ex!ernal assets' whîch were
      'seized for the purpose of reparation or restitution' as a result of the
      Second World War" (CR 2004/25, p. 35, para. 12).

61

64                 CERTAIN PROPERTY (mss. OP. OWADA)

   48. A careful examination of the arguments of the two Parties on this
issue of domestic jurisdiction leads me to the following conclusions. First,
the German argument that the German courts were simply applying a
rule of priva te international law, accepted by the practice of States and
the doctrine of internationallaw, that the title ta property is governed by
[ex loci sirae rei seems to be misdirected, inasmuch as the Liechtenstein
cause of action in the present case is no! based on the alleged violation of
internationallaw by the German courts in recognizing the validity of the
Czechoslovak confiscation measures of 1945, but on their alleged viola-
tion in treating the neutral Liechtenstein property as "German external
assets and other property" for the purposes of the Seulement Conven-
tion. On this basis, the dispute cannat be said ta lie solely with the
domestic jurisdiction of Germany. Also Germany, as the second line of
de l'en ce on this objection has brought into its pleadings the argument
that the Settlement Convention in effect disposed of the question and
that Germany had no choice but to accept the terms of the Seulement
Convention in the circumstances of the situation. Whatever the validity
and the legal relevance of this argument, such a contention defeats the
very legal basis of the third preliminary objection of Germany by bring-
ing in the element of an international convention as relevant.

 The Fourth PrelimÎnary Objection relating ta Article 40 of the Statute
   49. On the admissibîlîty of the Liechtenstein claims before the Court,
Germany raises as its fourth objection the point that the Application is
tainted by such profound flaws that the minimal requirement set out in
Article 40, paragraph l, of the Statu!e and in more detail in Article 38,
paragraph 2, of the Rules of Court cannat be deemed to have been met.
More specifically, it claims that "the Applicant has failed sufficiently ta
substantiate its contention that Germany has incurred responsibility on
account of an internationally wrongful act" (CR 2004/24, p. 35. para. J 01).

   50. Liechtenstein counters this argument by stressing that Germany
reshaped the Liechtenstein case into one entirely different from the one
actually before the Court. Liechtenstein's point is that what is at issue in
this case is "Germany's treatment of Liechtenstein property as German
externa! assets under the Seulement Convention . .. which is the corner-
stone of the present dispute" (CR 2004/25, p. 38; emphasis added).
Liechtenstein further argues that "Article 40 (1) of the Statute and
Article 38 (2) of the Rules of Court do nol require an exhaustive state-
ment of facts and grounds on which the daim is based in the application,
but only a 'succinct' one" (ibid., p. 37) and that the Applicant has done
precisely that.

  51. As has been stated earlier, some more substantiation may be
needed for establishing this point both in terrns of facts surrounding the

62

65                 CERTAIN PROPERTY (mss. OP. OWADA)

Liechtenstein allegation, as weil as in terms of law that can \egally link
the German courts' judgments to an internationally wrongful act that is
attributable to Germany. This does not lead us to the conclusion, how-
ever, that therefore the Liechtenstein Application does not satisfy the
minimal conditions set out in Article 40, paragraph l, of the Statute. The
question of whether this claim of the Applicant, supported by the legal
grounds offered by the Applicant, will meet the test of rigorous scrutiny
by this Court is an entirely different matter. But this is a matter to be
closely examined when the Court cornes to the merits stage of the
proceedings.

       The Fifth Preliminary Objection relating 10 the Absence of
                            the Third Party
  52. In the fifth preliminary objection relating to the admissibility of
the Liechtenstein daim, Germany raises the issue of the absence of a
"necessary third party" and contends that the core of the Application of
Liechtenstein is
     "the legality or îllegality of the Benes Decrees, that is to say decrees
     adopted by aState whose successor State is today visibly absent
     from these proceedings before [the] Court - not because it could
     not be present, but because it did not wish to be" (CR 2004/24, p. 48,
     para. 130; emphasis in the original).
   53. Relying as authority on the jurisprudence of this Court in the
Monetary Gohl RemO\led /rom Rome in 1943 case of 1954 (hereinafter
referred to as the "Afonelary Gold" case), Germany argues that in order
to determine whether Liechtenstein is entitled ta reparation on account
of the damage it has suffered, il is necessary first ta determine whether
Czechoslovakia has committed an international wrong against it. To do
that, according to Germany, it would be necessary to decide whether the
Benes Decrees were contrary to international law. On the basis of this
so-called "necessary party" fuie as established by the jurisprudence in the
Monetary Golrl case, Germany condudes that "the review of the lawful-
ness of the expropriations effected by Czechoslovakia constitutes a pre-
requisite for an examination of the unlawful acts attributed by Liechten-
stein to Germany" (CR 2004/24, p. 52, para. 144). Vnder the circum-
stances of the present case, however, the Court cannot entertain
Liechtenstein's daims whîch would oblige the Court to rule on the rights
and obligations of the Czech Republic in its absence and without its con-
sent.
   54. Liechtenstein accepts that there is no disagreement on the analysis
of jurisprudence of the Court offered by Germany that "[î]f ... the legal
interests of a third State constitute the 'very subject-matter' of a dispute
brought ta the Court and this third State is absent from the proceedings,
the Court cannot exercise jurisdiction on the matter" and that "~]egal

63

66                   CERTAIN PROPERTY (mss. OP. OWADA)

interests of a third State do constitute the very subject-matter of a dispute
if ... the Court cannot decide on the daims before il without prior deter-
mination as to the rights or obligations of the third State" (CR 2004/25,
p. 51, para. 5).
   55. In applying this principle to the concrete situation of the present
case, however, Liechtenstein argues a contrario thal:
     "it equally fo11ows that the Court not only has the right, but also the
     dut y, to adjudicate on the application where the right:; of a third
     State do not constitute 'the very subject-matter' of the judgment
     sought, even if that State's interests might be 'affected' 5, or [if] it has
     an 'in terest of a legal na t ure' wh ich migh t 'be affecte d' 6 or [if], as in
     the Nauru case, the Court's decision might 'have implications for the
     legal situation of the [third] States concerned'7" (CR 2004/25, p. 51).

   According to Liechtenstein, the present case falls in this category,
where neither the illega.lity of the Benes Decrees nor Czechoslovakia's
right to war reparation are in any sense the "very subject-matter" of the
present proceedings. While Liechtenstein considers thal it has been the
viclim of the Benes Decrees of 1945, which resulted in the unjust confis-
cation of Liechtenstein assets wrongly equated wilh German property,
it nevertheless daims thal the dispute between Liechtenstein and the
successor States of Czechoslovakia is completely separate from the one
which is the subjecl of the present proceedings.
   56. In light of the nature of the subject-matter of the dispute as char-
acterized above (cf. Judgment, para. 26), i.e., the one consisting in the
question of whether, by applying Article 3, Chapter Six, of the Settlement
Convention to Liechtenstein property that has bccn confiscated in
Czechoslovakia under the Benes Decrees in 1945, Gem1any was in brcach
ofits obligations il owed to Liechtenstein, it would seem difficult to argue
that the Application in question relates to a case in which the legal inter-
ests of a Ihird State constitutes the "very subject-matter" of this dispute.
If there should be any question on this point in view of the complex
nature of the facts surrounding the case, this question could also be
joined to the merits in accordance with Article 79, paragraph 7, of the
Rules of Court.

  The Sixrh Preliminary Objection relating to the Exhaustion of Local
                              Remedies
  57. In the sixth and final objection relating to the admissibility of
Liechtenstein claim, Germany raises the issue of non-exhaustion of local

  5 Monetary Gold Removed Jrom Rome in 1943, Judgment, ,. CJ. Reports 1954, p. 32.
  6 Eust Timo!'                                  r
               (Porfugal v. AIISfralia), Judgment, CI Reports 1995, p. 104, para. 34,
  7 Certain Phosphale Lands in Nauru (Nauru v. AIIS!rO!iO), Prelimina!'y abjectiom'.
          r
Judgmt:llt. CJ, Rt:ports 1992, p. 261, para. 55.

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67                 CERTAIN PROPERTY (mss. OP. OWADA)

remedies. Specifically, it con tends that "the Liechtenstein nationals who
had been victims of Czechoslovak confiscations had not exhausted ail the
local remedies with a view ta recovering the property of which they had
been dispossessed or to claiming compensation" (CR 2004/24, p. 57).
Against this contention, Liechtenstein argues that "[i]n its Application
lit] raises claims against Germany primarily on ifs own account, as
Germany's conduct directly violated Liechtenstein's own rights as a
sovereign State and as aState which was neutral during the Second
World War" (CR 2004/25, p. 43; emphasis added), and "additionally on
account of its citizens" (ibid., p. 42).

   58. Liechtenstein argues that the local remedies rule is restricted ta
cases of diplomatie protection, but is not applicable to cases where a
State is directly injured in its State-to-State rights. This distinction,
endorsed by the Court in the Interhandel and Elettronica Sicula
Sp.A. (ELSl) cases, is accepted by Germany as a matter of general
principle; at the same time Germany, denying its application to the
present case, asserts that "it is impossible to find that there has been any
infringement whatsoever of the sovereign rights of Liechtenstein as a
State" (CR 2004/26, p. 24). As far as the Liechtenstein cla.im that il has
suffered a direct injury as aState from Germany by its conduct is COn-
cerned, it is clear that the requirement of exhausting 10caJ remedies Can-
nat be a procedural bar to this part of the daims presented by Liechten-
stein.
   59. As for injuries suffered by nationals of Liechtenstein, Germany
argues that "the Liech tens tein na tionals concerned did not defend thei r
rights before the Czechoslovak courts when the confiscation strategy was
implemented" (CR2004/24, p. 59, para. 151). Germany daims that it is
entitled 10 invoke this inaction of the Liechtenstein nationals concerned
as a defence in the application of the rule of exhaustion of local remedies,
"because the Czechos10vak measures were the decisive acts, depriving the
owners of the enjoymenl of Iheir property" (CR 2004/24, p. 60, para. 152).

   60. This is indeed a bizarre defence by the Respondent on the question
of non-exhaustion of local remedies in relation ta a daim whose cause of
action lies, not in the illegal confiscation of assets of Liechtenstein nation-
aIs carried out by Czechoslovak authorities, but in the alleged illegal
action by German authorities of treating these assets of neutral nationals
as "German external assets and other property" for reparation purposes
of Germany. Given this nature of the Liechtenstein daims, the principle
of exhaustion of local remedies should be examined in relation ta what-
ever local remedies avaîlable in Germany in relation ta this point, and
not in Czechoslovakia in relation ta the confiscation measures.

  61. In this respect, the final character in the German j udicial sys lem of
the judgment of the Federal Constitutional Court of Germany in the

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68                CERTAIN PROPERTY (mss. OP. OWADA)

matter of the Pie ter van Laer Painting case would seem to be conclusive.
Given the nature of this pronouncement by the highest court in Ger-
many, this decision should serve as the conclusive evidence to establish
the point that the possibility for the Liechtenstein citizens concerned to
exhaust local remedies for pursuing their cases in relation to their prop-
erty before German courts is effectively foredosed to them. Thus tbis
case would seem to fall within the category to which the maxim "no need
ta exhaust local remedies where no remedies exist ta exhaust" is appli-
cable.
   62. For ail these reasons, 1 come to my final conclusion that the Court
has jurisdiction to entertain the Application filed by the Principality of
Liech tenstein on 1 June 2001. That is why 1 res pectfully voted against the
cond usions of the present J udgmen t, as con tained in paragra phs (1) (h)
and (2) of the dispositif                                        .

                                              (Signed) Hisashi OWADA.

66