AFFAIRE RELATIVE A
L'USINE DE CHORZOW

(DEMANDE EN INDEMNITÉ)
(COMPETENCE)

PUBLICATIONS OF THE PERMANENT COURT
OF INTERNATIONAL JUSTICE.

SERIES A. — No. 9
July 26th, 1927

COLLECTION OF JUDGMENTS

CASE CONCERNING |
THE FACTORY AT CHORZOW

(CLAIM FOR INDEMNITY) —
(JURISDICTION)
PERMANENT COURT OF INTERNATIONAL ‘JUSTICE.

File E. c.

1927.
TWELFTH (ORDINARY) SESSION. July 26t!
—_——— . Fe Docket XI

Before:

MM. Huser, President,
- LopEr, Former President,

Lord FINLAY,

MM. NYHOLM,
Moore,
DE BUSTAMANTE,
ALTAMIRA,
Opa,
ANZILOTTI,
PEssôa,

M. YOVANOVITCE, Deputy-Judge,

MM. RABEI,
ERLICH,

Judges:

. National Judges.

JUDGMENT No. 8.

CASE CONCERNING THE FACTORY
AT CHORZOW
(CLAIM FOR INDEMNITY)
(JURISDICTION).

The Government of Germany, represented by Dr. Erich
Kaufmann, Professor at Bonn,

Applicant,
versus co,

The Government of the Polish Republic, represented by
Dr. Thadeus Sobolewski, Agent for the Polish Government before
the Polish-German Mixed Arbitral Tribunal, L

Respondent.
JUDGMENT No. .8.—CHORZOW FACTORY (JURISDICTION) 5
THE CouRT,
composed as above, |
having heard the observations and conclusions of the Parties,
delivers the following judgment :

The Government of the German Reich, by an Application insti-
tuting proceedings filed with the Registry of the Court on Feb-
ruary. 8th, 1927, in conformity with Article 40 of the Statute and
Article 35 of the Rules of Court, has submitted to the Permanent
Court of International Justice a suit concerning the reparation
which, in the contention of the Government of the Reich, is due by
the Polish Government to the Oberschlesische Stickstoffwerke A.-G.
(hereinafter designated as the Oberschlesische) and Bayerische
Stickstoffwerke A.-G. (hereinafter designated as the Bayerische),
by reason of the attitude adopted by that Government towards
those Companies at the time when it took possession of the nitrate
factory situated at Chorzéw, which attitude had been declared
by the Court in Judgment No. 7 (May 25th, 1926) not to have been
in conformity with the provisions of Article 6 and the following
articles of the Convention concerning Upper Silesia concluded at
Geneva on May 15th, 1922, between Germany and Poland (herein- .
after described as the Geneva Convention). —

It is submitted in the Application :

(1) that by reason of its attitude in respect of the Oberschlesische
Stickstoffwerke and Bayerische Stickstoffwerke Companies,
which attitude has been declared by the Court not to have been
in conformity with the provisions of Article 6 and the follow-
ing articles of the Geneva Convention, the Polish Government is
under an obligation to make good the consequent injury
sustained by the aforesaid Companies from July 3rd, 1922, until
the date of the judgment sought ; .

(2) that the amount of the compensation to be paid by the Polish
Government is 59.400.000 Reichsmarks for the injury caused
to the Oberschlesisché Stickstoffwerke Company and 16.775.200
Reichsmarks for the injury to the Bayerische Stickstoffwerke
Company ;

(3) in regard to the method of payment :

(a) that the Polish Government should pay within one month
from the date of judgment, the compensation due to the
Oberschlesische Stickstoffwerke Company for the taking
JUDGMENT No. 8.—CHORZOW FACTORY (JURISDICTION) 6

possession of the working capital (raw material, finished and
half-manufactured products, stores, etc.) and the compensa-
tion due to the Bayerische Stickstoffwerke Company for the
period of. exploitation from July 3rd, 1922, to the date of -
judgment ;

(6) that the Polish Government should pay the sums remaining
unpaid by April 15th, 1928, at latest ;

(c) that, from the date of judgment, interest at 6% per annum
should be paid by the Polish Government ;

(d) that, the payments mentioned under (a2)—(c) should be made
without deduction to the account of the two Companies with
the Deutsche Bank at Berlin ;

(e) that, until June 30th, 1931, no nitrated lime and no nitrate of -
ammonia should be exported to Germany, to the United
States of America, to France or to Italy.

In the Case filed with the Court on March 2nd, 1927, in
accordance with Article 35 of the Rules, the Applicant amended his ~

conclusions as follows:

(x) that by reason of its attitude in respect of the Oberschlesische
Stickstoffwerke. and Bayerische Stickstoffwerke Companies,
which attitude has been declared by the Court not to have been
in conformity with the provisions of Artiele 6 and the following
articles of the Geneva Convention, the Polish Government is
under an obligation to make good the consequent injury
‘ sustained. by the aforesaid Companies from July 3rd, 1922,
. until the date of the judgment sought ;

(2) that the amount of the compensation to be paid by the Polish
Government is 75.920.000 Reichsmarks, plus the present value
of the working capital (raw materials, finished and half-manu-
factured products, stores, etc.) taken over on July 3rd, 1922, for
the injury caused to the Oberschlesische Stickstoffwerke Company
and 20.179.000 Reichsmarks for the injury caused to the Baye-
rische Stickstoffwerke Company ;

(3) that until June 30th, I93x, no nitrated lime and no nitrate of
ammonia should be exported to Germany, to the United States
of America, to France or to Italy ;

(4) in regard to the method of payment :

(a) that the Polish Government should pay, within one month
from the date of judgment, the compensation due to the
Oberschlesische Stickstoffwerke Company for the. taking
JUDGMENT No. 8.—CHORZO6W FACTORY (JURISDICTION) 7

possession of the working capital and the compensation due
to the Bayerische Stickstoffwerke Company for the period of
exploitation from July 3rd, 1922, to the date of judgment ;

(6) that the Polish Government should pay the remaining sums
by April 15th, 1928, at latest ;
in the alternative, that; in so far as the payment may be
effected in instalments, the Polish Government shall deliver,
within one month from the date of judgment, bills of exchange
for the amounts of the instalments, including interest,
payable on the respective dates on which they fall due to the
Oberschlesische Stickstoffwerke Company and to the Bayeri-
sche Stickstoffwerke Company ;

(c) that from the date of judgment, interest at 6% per annum
should be paid by the Polish Government ; .

(d) that the Polish Government is not entitled to set off, against
the above-mentioned claim for indemnity of the German
Government, its claim in respect of social insurances in Upper
Silesia ; that it may not make use of any other set-off against
the above-mentioned claim for indemnity; and that the
payments mentioned under (a4)—-(c) should be made without

' any deduction to the account of the two Companies with the
Deutsche Bank at Berlin.

The Application instituting proceedings was, in accordance with
Article 40 of the Statute, communicated to the Polish Government
on February 8th, 1927 ; whereupon that Government, after having
received on. March 3rd, 1927, the German Case in the suit, on
April 14th, 1927, filed with the Registry of the Court in conformity
with Articles 34 and 38 of the Rules, a Preliminary Objection,
accompanied by a Preliminary Counter-Case in the suit concern-
ing the factory at Chorzéw (indemnities).

The Preliminary Objection denying the Court’s jurisdiction to
hear the suit brought before it, submitted that the Court should,
“without entering into the merits, declare that it had no jurisdic-
tion’’.

In accordance with Article 38 of the Rules, the German Govern-
ment was invited to present, before June rst, 1927, a written state-
ment setting out its observations and conclusions in regard to the
objection to the jurisdiction.

On April 25th, however, the German Government transmitted
to the. Polish Government a memorandum in which the former
Government—arguing that, even if the Court declined jurisdiction
JUDGMENT No. 8.—CHORZOW FACTORY (JURISDICTION) 8

on the basis of Article 23 of the Geneva Convention, it would have
jurisdiction under Article 1 of the Germano-Polish Arbitration
Treaty initialled at Locarno on October 16th, 1925—suggested
that the five tollowing questions concerning the case of the factory
at Chorzéw should be referred by mutual consent and by means
of a special agreement to the Court :

(x) Up to what amount is the Polish Government bound to make
compensation for the injury caused by its attitude to the Ober-
schlesische and Bayerisché Companies ?

(2) Is the German Government justified in claiming, over and
above the pecuniary compensation, that the exportation of nitrate
of lime, nitrate of ammonia, etc., to Germany, the United States of
America, France and Italy, should cease ?-

(3) What are the appropriate methods of payment for the
settlement of the indemnity fixed in accordance with (1) ?:

(4) At what rate should the sums in question bear interest until
paid in full ?

(5) Can the Polish Government set off against these sums claims
in respect of social insurances in Upper Silesia, or any other claim ;
must the sums to be paid by the Polish Government under (x), (3)
and (4), be paid in ready money and without deduction ?

The text of this memorandum was transmitted on April 29th
by the German Minister at The Hague to the Registrar of the Court.

The Polish Government replied to it by a memorandum. dated
May 14th, of which the text was communicated to the Registrar
of the Court both by the German Minister (note of June 1st, 1927)
and by the Polish Minister at The Hague (note of June 2nd, 1927).
In this memorandum, the Polish Government, observing amongst
other things, that it was unable to share the opinion of the German
Government as to the relevance of the Germano-Polish Treaty —
of arbitration in regard to the present case, declined the proposal
made on behalf of the German Government.

The German Government, therefore, filed on June rst a reply
to the Preliminary Objection of the Polish Government.
. Since, under Article 38 of the Rules, the further proceedings had
to be oral, the Court, in the course of public sittings held on
June 22nd, 24th and 25th, 1927, heard the statements, replies and
rejoinder presented by Messrs. Sobolewski and Politis, Agent and
JUDGMENT No. 8 —CHORZOW FACTORY (JURISDICTION) 9

Counsel respectively for the Polish. Government, and Kaufmann,
Agent for the German Government.

THE FACTS,

The facts relevant to the present case are set out as follows in
Judgment No. 6 given by the Court on August 25th, 1925 :

On March 5th, 1915, a contract was concluded between the
Chancellor of the German Empire, on behalf of the Reich, and the
Bayerische Stickstoffwerke A.-G. of Trostberg, Upper Bavaria,
by which contract. this Company undertook ‘to establish for the
Reich and to begin forthwith the construction of”, amongst
other things, a nitrate factory at Chorzôw in Upper Silesia. The
necessary lands were to be acquired on behalf of the Reich and
entered in its name in the land register. The machinery and
equipment were to be in accordance with the patents and licences
of the Company and the experience gained by it, and the Company
undertook to manage the factory until March 31st, 1941, making
use of all patents, licences, experience gained, innovations and
improvements, as also of all supply and delivery contracts of which
it had the benefit. For this purpose aspecial section of the Company
was to be formed, which was, to a certain extent, to be subject to
the supervision of the Reich which had the right to a share of the
surplus resulting from the working of the factory during each finan-
cial year. The Reich had the right, commencing on March 3rst,
1926, to terminate the contract for the management of the factory
by the Company on March 31st of any year upon giving fifteen
month’s notice. The contract could be terminated as early as
March 31st, 1921, always on condition of fifteen month’s notice being
given, if the Reich’s share of the surplus did not reach a fixed level.

On December 24th, 1919, a series of legal instruments were
signed and legalized at Berlin with a view to the formation of a

-new Company, the Oberschlesische Stickstoffwerke A.-G., and the
sale by the Reich to that Company of the factory at Chorzéw, that
is to say, the whole of the land, buildings and installations belonging
thereto, with all accessories, reserves, raw material, equipment
and stocks. The management and working were to remain in
the hands of the Bayerische Stickstoffwerke Company, which, for
this purpose, was to utilize its patents, licences, experience gained
and contracts. These relations between the two Companies were
confirmed by means of letters dated December 24th and 28th, 1919,
exchanged between them. The Oberschlesische Stickstoffwerke
Company was duly entered on January 29th, 1920, at the Amts-
gericht of Kônigshütte, in the Chorzôw land register, as owner of
the landed property constituting the nitrate factory of Chorzéw.
4
JUDGMENT No. 8.—CHORZGW FACTORY (JURISDICTION) ro

On July rst, 1922, this Court, which had become Polish, gave a
decision to the effect that the registration in question was null and
void and was to be cancelled, the pre-existing position being restored,
and that the property rights of the lands in question were to be
registered in the name of the Polish Treasury. This decision,
which cited Article 256 of the Treaty of Versailles and the Polish

_law and decree of July 14th, 1920, and June xr6th, 1922, was put
into effect the same day.

On July 3rd, 1922, M. Ignatz Moscicki, who was delegated with
full powers to take charge of the factory at Chorzéw by a Polish
ministerial decree of June 24th, 1922, took possession of the factory
and took over the management in accordance with the terms of
the decree. The German Government contends and the Polish
Government admits that the said delegate, in undertaking the
control of the working of the factory, at the same time took
possession of the movable property, patents, licences, etc. .

On November roth, 1922, the Oberschlesische Stickstoffwerke
Company brought an action before the Germano-Polish Mixed
Arbitral Tribunal at Paris. It called upon that Court

“to allow the claim submitted by the Oberschlesische Stickstoff-
werke Aktiengesellschaft, and to order the Polish Government, the
Respondent in the suit, to restore the factory, to make any other
reparation which the Court may see fit to fix and to pay the costs
of the action’.

In its reply to this application, the Polish Government asked the
Court to declare that it had no jurisdiction (in the alternative to
non-suit the Applicant).

The suit was admitted to be ready for hearing on October 15th,
1923. Itis, however, still pending.

Furthermore, the Oberschlesische Stickstoffwerke Company
brought an action before the Civil Court of Kattowitz. It asked
that Court

“to order the Respondent to inform the Applicant as to the
movable property found at the Chorz6w nitrate factories at II a.m.
on the morning of July 3rd, 1922, when the working of those
factories was resumed by the Respondent; to state what debts
it had collected ; to restore to the Applicant or to the Bayerische
Stickstoffwerke Company such movable property, or, should this
be impossible, the equivalent valve, and also to repay to the
Applicant or to the Bayerische Stickstoffwerke Company the
amount of the debts collected”.

This action is still before that Court, which, however, decided on
December 7th, 1923, that there was no pendency,.as notice of the
action had not yet been served on the Procurature générale at
Warsaw.
JUDGMENT No. 8.—-CHORZOW FACTORY (JURISDICTION) II

In regard to this suit, the German Government stated in its
“Observations” filed on July gth, 1925, that the application made
to the Court of Katovice was mainly intended to serve as a basis
for claiming, under Article 588 of the Geneva Convention, the
reference of the suit to the Upper Silesian Arbitral Tribunal, but
that the Court rejected this claim.

These suits were pending when, on May 15th, 1925, Germany
filed in the Permanent Court of International Justice an Applica-
ation praying the Court to adjudge (x) that Articles 2 and 5 of the
Polish law of July 14th, 1920, constituted a measure of liquidation
of the property, rights and interests involved, (2) that this liquid-
ation was not in conformity with Articles 92 and 297 of the Peace
Treaty of Versailles, (3) that it was contrary to Article 6 and sub-
sequent articles of the German-Polish Convention concluded at
Geneva on May 15th, 1922; and finally to state (4) what the
attitude of Poland should have been under the Treaties men-
tioned,

Article 297 of the Versailles Treaty relates to the liquidation
by the Allied and Associated Powers of property, rights and inter-
ests belonging at the date of the coming into force of the Treaty
to German nationals, or companies controlled by them, within the
territories, colonies, possessions and protectorates of such Powers,
including territories ceded to them by the Treaty, and, while stipu-
‘ lating that the liquidation shall be carried out in accordance with
the laws of the Allied or Associated State concerned, Article 297
lays down certain rules, which connect the subject with that of
reparations, |

Article 92 of the Treaty of Versailles, however, in accordance with
Article 297 k of that Treaty, expressly provides that the property,
rights and interests of German nationals shall not be liquidated
under Article 297 by the Polish Government, except on condition
(x) that the proceeds of the liquidation shall be paid direct to the
owner, and (2) that if, on the owner’s application, the Mixed Arbitral
Tribunal... or an arbitrator appointed by it, is satisfied that the
conditions of the sale or measures taken by the Polish Government
outside its general legislation were unfairly prejudicial to the price
obtained, they shall have discretion to award to the owner equitable
compensation to be paid by the Polish Government.
JUDGMENT No. 8.—-CHORZOW FACTORY (JURISDICTION) I2

Poland, in answer to the German Application, asked the Court
to hold either (x) that it had no jurisdiction of the suit, or (2) that
the Application could not be entertained until the German-Polish
Mixed Arbitral Tribunal, at Paris, had given judgment.

Without repeating provisions of the Statute relating to thej juris-
diction of the Court, it suffices to say that the Court’s jurisdiction
was, in the present instance, invoked upon the stipulations of
Article 23 of the Geneva Convention. This article, consisting of
two paragraphs, reads:

“x. Si des divergences d’opinion, résultant de Vinterpré-
tation et de l’application des articles 6 à 22, s’élevaient entre
le Gouvernement allemand et le Gouvernement polonais,
elles seraient soumises à la décision de la Cour permanente de
Justice internationale. |

“2, Il n’est porté aucune atteinte à la compétence du
Tribunal arbitral mixte germano-polonais résultant des
dispositions du Traité de paix de Versailles 1,’

On the objection taken by Poland to the Court’s jurisdiction,
the Court, in its Judgment No. 6, August 25th, 1925, held:

(x) That the Court’s jurisdiction under Article 23 was not affected
by the fact that the rights claimed were contested on the strength
of provisions of other treaties as well as on those of Articles 6 to 22
of the Geneva Convention.

(2) That the suits pending before the German- Polish Mixed
Arbitral Tribunal at Paris and the Civil Court at Katovice, did not
prevent the Court from exercising its jurisdiction under Article 23.

(3) That the plea to the jurisdiction should be dismissed.

Judgment on the merits was reserved.

Before proceeding to the judgment later rendered by the Court
on the merits, it is essential briefly to summarize the provisions

‘ This text, which is the sole and authoritative text of the article,
may be translated into English as follows:

“1, Should differences of opinion, resulting from the interpretation
and the application of Articles 6 to 22, arise between the German
and the Polish Governments, they should be submitted to the decision
of the Permanent Court of International Justice.

“2, The jurisdiction of the German-Polish Mixed Arbitral Tribunal
under the provisions of the Peace Treaty of Versailles is in no way
impaired.”
JUDGMENT No. 8.—CHORZOW FACTORY (JURISDICTION) 13

of Articles 6 to 22 of the Geneva Convention so far as they are
involved in the pending case.

Article 6 provides that Poland may expropriate in Upper Silesia
major industrial undertakings, conformably to the provisions of
Articles 7 to 23 of the Convention ; but that, with this exception,
the property, rights and interests of German nationals, or of com-
panies controlled by them, cannot be liquidated. By Article 7 this
right of expropriation may be exercised, in accordance with the
provisions of Articles 92 and 297 of the Versailles Treaty, during
fifteen years from the date of the transfer of sovereignty, “if, on
the request of the Polish Government, this measure has been recog-
nized by the Mixed Commission as being indispensable to the main-
tenance of the exploitation”, the Mixed Commission thus referred
to being an international tribunal for the establishment of which
provision is made by Article 562 of the Convention. Article 8 deals
with the subject of expropriation after the fifteen-year period above
mentioned. The stipulations of Articles 9 to 1x it is unnecessary
here to particularize. Articles 12 to 16 relate to the expropriation
of large rural estates, Article 19, paragraph x, assures to the
Polish Government the right from time to time to inquire into the
real ownership of a major industry or a large rural estate, and into
the real control of a company appearing as owner. If the Polish
Government reaches the conclusion that the owner is really a German
national, or that the Company is really controlled by such nationals,
and if, after receiving notice, the interested Party contends that the
facts are not as stated, the latter, during a month after the date
of the notice, may appeal to the German-Polish Mixed Arbitral
Tribunal which may provisionally suspend the procedure for
expropriation.

After the delivery by the Court of Judgment No. 6, the German
Government amended the submissions made in its Application,
so that, as the submissions finally stood, the Court was asked to
give judgment :

(x) That the application of the Polish law of July rath, 1920, in
Polish Upper Silesia, decreed by the law of June 16th, 1922, con-
stituted a measure of liquidation within the meaning of Article 6
and the following articles of the Geneva Convention, and that,
JUDGMENT No. 8.—CHORZOW FACTORY (JURISDICTION) 14

as it did not conform to those articles, any more than to Articles 92
and 297 of the Versailles Treaty, to which the Convention expressly
referred, such application was illegal.

(2) That the attitude of the Polish Government towards the Ober-
schlesische and the Bayerische was not in conformity with the
above-mentioned articles of the Geneva Convention, and, should
this be held to be so, that the Court would state what attitude
would have been in conformity with them.

In reply, the Polish Government asked the Court :

(1) To non-suit the Applicant as regarded submission No. x.

(2) To find that it was not necessary to decide as to the conformity
or non-conformity of the attitude of the Polish Government with
Article 6 and the following articles of the Geneva Convention, since
no measure of liquidation had been taken by that Government.

Issue being thus joined, the Court, at its tenth (extraordinary)
session, heard the case on the merits, and rendered judgment.

In this judgment—No. 7 (May 25th, 1926)—the provisions of the
Polish law of July 14th, 1920, are analyzed and set forth in detail.
The subject matter of this law is the “transfer of the rights of the
German Treasury and of members of reigning German houses to
the Treasury of the State of Poland”. Article x directs the Polish
Courts automatically to substitute in the. land registers of the
former Prussian provinces the name of the Polish Treasury for
that of “the Crown, the German Reich, the States of Germany,
the ex-Emperor of Germany or other members of reigning houses”,
entered after November 11th, 1918, as owners or as possessors of
real rights. Article 2, paragraph 1, directs the Polish Courts,
where such persons or institutions had, after November rith, r018,
alienated or charged the landed property, or requested or consented
to the cession, cancellation or modification of real rights, to restore
the registers to their condition on that date, Article 5 authorizes
the Polish Treasury to require the eviction of persons who, as the
result of a contract concluded with one of the persons or institutions
mentioned in Article 1, remained in occupation of the property
after the law came into force.
JUDGMENT No. 8.—CHORZOW FACTORY (JURISDICTION) I5
The Court held:

{1) That Articles 2 and 5 were incompatible with the provisions
of the Geneva Convention, and that Poland had invoked no title
ot international law which would permit Articles 2 and 5 of the
law of July 14th to be regarded as constituting the exercise of
a right overcoming the obligations ensuing from Head IIT of the
Geneva Convention ;

(2) That, in the transfer of the factory to the Oberschlesische,
there was no misuse by Germany ‘of the right of alienation of
property in the plebiscite area ; that the alienation was a genuine
transaction effected in good faith and was not designed to be
detrimental to Poland’s rights and that the Oberschlesische’s
right of ownership must be regarded as established, and could have
been disputed only before a competent tribunal ;

(3) That the property and operating rights claimed by the
Bayerische were also valid, and had been violated by Poland’s
action ;

(4) That expropriation without compensation was contrary to
Head IIT of the Geneva Convention ; and that the application of
the law of July r4th, 1920, was contrary to Article 6 and subsequent
’ articles of the Geneva Convention, and that the Court had express
and definite jurisdiction of the subject matter by Article 23 of that
Convention.

In conclusion, the Court held:

(1) That the application of Articles 2 and 5 of the law of
July 14th, 1920, decreed by the law of June 16th, 1922, constituted,
as to German nationals or companies controlled by them, within
Part I, Head III, of the Geneva Convention, an infraction of
Article 6 and the following articles of that Convention ;

(2) That the attitude of the Polish Government toward both
Companies was not in conformity with those articles, but that the
Court was not called upon to state what attitude would have been
in conformity with them.

It was on the basis of this decision of the Court that negotiations
were undertaken by the two Governments for an amicable
settlement of the claims of both Companies by the payment of
pecuniary damages.
JUDGMENT No. 8.—CHORZOW FACTORY (JURISDICTION) 16

Following upon the judgment of May 25th, 1926, the German
Government, on June 25th of the same year, sent to the Polish
Government a note in which it requested that Government “‘to take
the steps necessary to establish a situation conforming to the
judgment both in fact and in law”. These steps should, in the view
of the German Government, comprise three different features:

(x) the re-entry in the land registers of the Court of Kônigshütte
of the Oberschlesische as owners of the real estate constituting the
Chorzéw factory ;

(2) the restoration of the factory as an industrial enterprise to the
Bayerische ; |

(3) the payment to these two Companies of an indemnity, the
amount of which to be fixed by direct negotiations between the
two Governments.

The Polish Government replied to this note on September oth,
1926, the German Government having in the meantime asked the
Polish Government whether it did not intend to reply and whether
it would prefer that the question should be settled by the institution
of new proceedings before the Court. The Polish reply was to the
effect that the Warsaw Government was disposed “to settle by |
means of an agreement with the Berlin Government all questions
in dispute with regard to the Chorzéw factory’. But the Polish
Government stated in regard to the claim for the restoration of the
factory that it was unable to comply for reasons of fact and of law ;
it also made reservations as regards the validity, in municipal law,
of the entry of the Oberschlesische in the land register. Finally,
it suggested that it would be better ‘having regard to the nature of .
the matter” that representatives of the interested Companies should
directly approach the management of the factory and that the two
Governments should only intervene if agreement could not be
reached in this manner. Ina subsequent note, dated October 18th,
the Polish Government, whilst, maintaining that the disputed
questions were questions of private law, agreed that delegates of
the two Governments should also take part in the negotiations.

In these circumstances, the German Government proposed in
a note dated October 30th, that the negotiations should be begun
at Berlin on November 15th. Believing that it could be said that
differences of opinion still existed between the two Governments
“in regard to the legal principles established by the Court’s judg-
JUDGMENT No. 8 —CHORZOW FACTORY (JURISDICTION) 17

ment” of May 25th, 1926, the German Government reserved the
right to appeal to the Court in regard to the execution of that judg-
ment, should these differences of opinion subsist during the
negotiations and make such appeal necessary.

The Polish Government, whilst agreeing to enter into negotiations
at Berlin on November 22nd, maintained the standpoint taken in
its previous notes.

The negotiations had been in progress since November 22nd, 1926,

-when, on January roth, 1927, the German Delegation sent to the
Polish Delegation a note setting out two alternative proposals
for a compromise, which proposals, leaving aside the question of
restitution, solely related to the amount of the indemnities and the
method of payment : payment was to be effected by the issue on the
date of signature of the agreement, it concluded, of bills of exchange
payable at different dates ; in the event of the payments not being
made within the times specified, the German Government reserved
the right once more to have recourse to the Court Should one of
the two proposals be accepted, the existing differences of opinion
would be regarded as disposed of. But if not, the German Govern-
ment declared itself ready to reopen negotiations, but the possi-
bility of further negotiations would not prevent the German Govern-
ment from referring the existing differences of opinion to the Court ;
in the judicial proceedings that Government would not of course
be bound by the proposals for a compromise which it had made.
To the note was attached a memorandum in regard to the position
of negotiations on January 14th, 1927 ; this memorandum made
it clear, amongst other things, that the reason why the German
Government had abandoned its original claim for the restitution
of the factory was that it had come to the conclusion that the Chor-
zéw factory, in its present condition, no longer corresponded to the
factory as it was before the taking over in 1922, and that the Ger-
man Government reserved the right, should the Polish reply to the
German proposals be too long delayed, to bring the matter before
the Court so that it might be included in the list for the Court’s
twelfth session, it being always possible to withdraw the Applica-
tion, should an agreement be reached within a relatively short’
time. The reply of the Polish Government, dated February 1st,
accepted more or less completely the amounts suggested by the
German Government for the indemnities—the Polish Government
proposing for the amounts to be paid subsequently to the Bayeri-
JUDGMENT No. 8.—CHORZOW FACTORY (JURISDICTION) 18

sche, bills of exchange issued by the Chorzéw factory—but it stated
that. the Polish Government was not willing to meet the wishes
of the German Government in regard to the issue of bills of
exchange for the Oberschlesische, particularly for the reason that,
as it contended, it possessedcla ims on the German Government
for various amounts, one of which, in respect of social insurances in
Upper Silesia, had been fixed by the League of Nations at 25 million
Reichsmarks, and that, this being so, in the view of the Polish
Government, it was essential to set off the respective claims against
each other. It should be noted that, in its reply, the Polish Govern-
ment proposed the resumption of negotiations in regard, amongst
other things, to the “‘possible filing of an Application with the
Court”, a point which, according to that Government, “had not
yet been discussed”. Should the German Government not accept
the Polish proposals, the Polish Government would not consider
itself bound by them.

The German Government, by a note dated February 8th, 1927,
then informed the Polish Government that the points of view of the
two Governments seemed so different that it appeared impossible
to avoid recourse to an international tribunal, and that therefore
the German Minister at The Hague had received instructions to
file an Application with the Court. In its note, the German Gov-
ernment also drew attention to the fact that, throughout the whole
of the negotiations, the German Delegation had emphasized that,
failing an agreement, appeal to the Court would be inevitable.

THE LAW.

As has already been indicated, the Applicant has, in his Case
on the merits, made submissions which constitute an amendment >
of the submissions made in the Application.

‘Since this amendment has been effected in the first document
of the written proceedings, in a suit brought by Application—i.e.
at a time when, in accordance with Article 38 of the Rules, the Re-
spondent still retains a completely free hand to file preliminary
objections—no exception can be taken to it. Moreover, the Re-
spondent, in his preliminary plea, has referred to the Applicant’s
submissions as formulated in the Case and not as formulated in
the Application. It is, therefore, the submissions as formulated
in the Case that the Court has now before it.
JUDGMENT No. 8.—CHORZOW FACTORY (JURISDICTION)  I9

The submissions formulated in the Application were based,
apart from the above-mentioned provisions of the Statute and
Rules of Court, exclusively upon the jurisdictional clause contained
in Article 23 of the Geneva Convention. The basis of the amended
submissions set out in the Case remains unchanged.

It is true that, in this document, the German Government
has referred to the Germano-Polish Arbitration Treaty initialled
at Locarno on October 16th, 1925. The only object, however, of
this reference is, as shown by the context, to establish that, in the
contention of the German Government, a certain claim which Poland
may have against Germany cannot, without the consent of the other
Party, be set off extrajudicially against any indemnities which may
be awarded by the Court in the present case, especially having
regard to the procedure instituted by the above-mentioned Treaty.
This reference therefore cannot serve to modify the source from
which, according to the Application, the Court derives jurisdiction.

The same reasoning applies a fortiori with regard to the statement
made in Court by the Agent for the German Government to the
effect that, even if the arbitration clause contained in Article 23 of
the Geneva Convention does not apply in the present case, the
Court would have jurisdiction under the Arbitration Treaty of
Locarno “‘if it were applicable in this case”; for this statement
which was, moreover, made at a very late stage, can hardly have

. been intended to do more than affirm a more or less theoretical
opinion in regard to the interpretation of that Treaty.

The Court, therefore, holds that the submissions set out above
have been laid before it solely under Article 23 of the Geneva
Convention.

Before proceeding to set out the reasons for which it must overrule
the preliminary objection taken by Poland to its jurisdiction to
deal with these submissions, the Court would observe that, for the
purposes of this statement of reasons, as also for the purposes of its
future judgment on the merits, it cannot take account of declara-
tions, admissions or proposals which the Parties may have made
in the course of direct negotiations which have taken place between
them, declarations which, moreover, have been made without
prejudice in the event of the points under discussion forming the
subject of judicial proceedings. For the negotiations in question
have not, as acknowledged by the representatives before the Court
of the Parties themselves, led to an agreement between them.

2
J
JUDGMENT No. 8.—CHORZOW FACTORY. (JURISDICTION) 20

*
* *

It is common ground that the Application of February 8th, 1927,
and the submissions of the German Case of March 2nd, 1927, relate
to reparations alleged to be due by the Polish Government for acts
set out in the German Application of May 15th, 1925, and which
the Court, in Judgment No. 7, has declared not to be in conformity
with Articles 6 to 22 of the Geneva Convention. Poland denies
that the jurisdiction, which the Court, by Judgment: No. 6, decided
that it possessed in regard to the above-mentioned Application of
May xsth, 1925, also covers the new Application of February 8th, ©
1927, and the submissions in the Case of March 2nd, 1927. The
position of the Polish Government is mainly based on the two
following contentions : |

(x) that Article 23, paragraph I, of the Geneva Convention, which
gives the Court jurisdiction for “differences of opinion, result-
ing from the interpretation and the application of Articles 6 to 22”,
which may arise between the German Government and the Polish
Government, does not contemplate differences in regard to repara-
tions claimed for violation of those articles ;

(2) that the Geneva Convention has instituted special jurisdictions
for claims which private persons might assert in the event of the
suppression or diminution of their rights, and that the existence
of these jurisdictions would affect that of the Court even if
Article 23, paragraph 1, of the Geneva Convention could be con-

-strued as including differences of opinion in regard to reparations
amongst those relating to the application of Articles 6 to 22;
therefore, the interested Parties should themselves have recourse
to the jurisdictions in question.

In the first place, the meaning and scope of paragraph x of
Article 23 must be considered, for it is upon this clause—and upon
this clause only—that the Court’s jurisdiction in the present case
Tests. ;

The Court, by Judgments Nos. 6 and 7, has recognized that
differences relating to the application of Articles 6 to 22 include
not only those relating to the question whether the application of a
JUDGMENT No. 8.—CHORZOW FACTORY (JURISDICTION) 21

particular clause has or has not been correct, but also those bearing
upon the applicability of these articles, that is to say, upon any act
or omission creating a situation contrary to the said articles. It is
a principle of international law that the breach of an engagement
involves an obligation to make reparation in an adequate form.
Reparation therefore is the indispensable complement of a failure
to apply a convention and there is no necessity for this to be stated
in the convention itself. Differences relating to reparations, which
may be due by reason of failure to apply a convention, are conse-
quently differences relating to its application.

Now, Poland maintains that the words “differences of opinion,
resulting from... the application” in Article 23 cannot have the
meaning just indicated, but that they must be construed as cover-
ing merely the question whether, in a given case, the application of
Articles 6 to 22 is or is not correct, to the exclusion of any differences
in regard to reparations.

In this connection, the Polish Government, in support of its
contention that paragraph 1 of Article 23 of the Geneva Convention
should be restrictively construed, has traced the development of
general treaties of arbitration during the last fifty years, comprising
(x) the so-called clause compromissoire (arbitration clause) introduced
into commercial and other treaties during the last twenty-five years
of the XIXth century and subsequently, by which the contracting
Parties agreed to submit to arbitration any differences as to the
interpretation or application of the particular treaties ; (2) general
treaties for the compulsory arbitration of certain specified cate-
gories of disputes, concluded since 1900, and (3) treaties and clauses
for the arbitration of pecuniary claims. It is needless to say that
paragraph 1 of Article 23 is an example of the first of these three
classes of agreements.

Counsel for Poland admitted in Court, for the sake of the argu-
ment, that the clause compromissotre was originally interpreted as
including claims for reparation ; but he maintained that, because
of later developments, the clause must now be interpreted as
excluding such claims. The Court is unable to share this view.
By the Convention for the Pacific Settlement of International
Disputes, concluded at The Hague in 1899, although no exceptions.
JUDGMENT No. 8.—CHORZOW FACTORY (JURISDICTION) 22

‘were made in the provisions relative to “arbitral justice” included
in the first Chapter of Head IV of that Convention, arbitration
was not in any case made obligatory. An active movement was
then begun for the conclusion of treaties by which the submission
of differences would be made obligatory, treaties already fore-
shadowed by Article 19 of the said Convention. The attainment of
this object, so far as concerns general questions of legal right and
obligation, was found to be feasible by including only certain
classes of questions, and subjecting even these to reservations.
On the other hand, it had, ever since the end of the X VITIth cent-
ury, been found to be possible to conclude agreements for the
submission of pecuniary claims to arbitration without reserve.
These facts appear to be logically fatal to the inference sought to be
drawn from them, for they clearly show that, in the opinion of
governments, the differences concerning which reserves were deemed
to be necessary were those relating to legal rights and obligations
and not those relating to pecuniary reparation. To say, therefore,
that the clause compromissoire, while confessedly providing for.the
submission of questions of right and obligation, must now be
restrictively interpreted as excluding pecuniary reparation, would
be contrary to the fundamental conceptions by which the
movement in favour of general arbitration has been characterized.

Moreover, apart from the question whether expressions used in
conventions between other Powers and at different periods can be
taken into account in interpreting the intention of the signatories
of the Geneva Convention, the Court holds that, in view of the
fundamental difference between the nature of arbitration clauses
(clauses compromissoires) and the object of the classification of
‘disputes in general arbitration agreements, no conclusion can be
drawn from the terminology of the one class of provisions in
respect of the other.

The classification of international disputes which would be most
in point in the present case is undoubtedly the classification adopted.
in Article 13 of the Covenant of the League of Nations, and reap-
pearing in Article 36 of the Court’s Statute. For these instruments,
which are very close to the Geneva Convention in point of time,
constitute collective treaties of peculiar importance as they mark
JUDGMENT No. 8.—CHORZOW FACTORY (JURISDICTION) 23

a step forward towards the realization of compulsory arbitration.
But the classification which they contain would, in the Court’s
opinion, lead to the conclusion that the expression ‘‘differences of
opinion resulting from the interpretation and application” in
Article 23 of the Geneva Convention, should be construed as includ-
ing questions relating to reparations. It is true that the Covenant
and the Statute mention separately, in the first place, ‘disputes
as to the interpretation of a treaty’’ and, in the fourth place, those
relating to ‘‘the nature or extent of the reparation” ; but they
also mention, in the third place, as a separate category, disputes
telating to “‘the existence of any fact which, if established, would
constitute a breach of an international obligation”. Now it is
established by Judgments Nos. 6 and 7 that the Court has juris-
diction to decide whether a breach of Articles 6 to 22 has taken
place or not. The decision whether there has been a breach of
an engagement involves no doubt a more important jurisdiction
than a decision as to the nature or extent of reparation due for a
breach of an international engagement the existence of which is
already established. If Article 23, paragraph I, covers the disputes
mentioned in the first and third categories by the two provisions
above mentioned, it would be difficult to understand why—failing
an express provision to that effect—it should not cover the less
important disputes mentioned in the fourth category.

Poland has also drawn the Court’s attention to the Convention
which, acting also in the name of the Free City of Danzig, she
concluded with Germany in 1921,—i.e. at a time not far removed
from the conclusion of the Geneva Convention—in regard to free-
dom of transit between Eastern Prussia and the rest. of Germany.
Articles 11 and 12 of this Convention provide for the establishment
of an arbitral tribunal to which each High Contracting Party may
-refer “disputes which may arise either in the interpretation or in the
application” of the Convention. Poland observes that Article #1,
the first paragraph of which establishes the jurisdiction just referred
to, contains a special paragraph to the effect that the tribunal
will have jurisdiction, if necessary, to decide as to the reparation
to be made by the Party which may have been responsible for a
breach of the provisions of the Convention. Whatever may have.
been the reasons which led the Parties expressly to mention juris-
diction in regard to reparations in addition to that respecting inter-
pretation and application, the fact that a convention explicitly
JUDGMENT No. 8.—CHORZOW FACTORY (JURISDICTION) 24

confirms the conception generally adopted in regard to arbitration
clauses, cannot be construed to mean that the samie Parties, when
employing in another convention the wording ordinarily used in
conventions of this kind, have, by so doing, given evidence of an
intention contrary to that which is to be presumed when inter-
preting an arbitration clause in a convention.

It follows from the above that Article 23, paragraph x, which
constitutes a typical arbitration clause (clause compromissoire),
contemplates all differences of opinion resulting from the inter-
pretation and application of a certain number of articles of a
convention. In using the expression “differences of opinion
resulting from the interpretation and application’’, the contracting
Parties seem to have had in mind not so much the subject of such
differences as their source, and this would justify the inclusion of
differences relating to reparations amongst those concerning the
application, even if the notion of the application of a convention
did not cover reparations for possible violation. |

Having regard to the fact that Counsel for the Polish Government
has laid stress on the literal meaning of the word “‘application’’, the
Court thinks it well to remark that in Judgment No. 5—which has
been cited before it in this connection by the said Counsel—it
observed not only that ‘‘application” is a wider, more elastic and
less rigid term than ‘‘execution”, but also that ‘execution... .
is a form of application”. It follows that Judgment No. 5 cannot
be cited to support a restrictive interpretation of the term
“application”.

For the interpretation of Article 23, account must be taken not
only of the historical development of arbitration treaties, as well as
of the terminology of such treaties, and of the grammatical and
logical meaning of the words used, but also and more especially
of the function which, in the intention of the contracting Parties,
is to be attributed to this provision. The Geneva Convention
provides numerous means of redress to secure the observation of its
clauses and it does so in ways varying according to the subjects
dealt with under the different Heads, Parts or other subdivisions
of the Convention. Article 23 contains provisions of this kind
in so far as concerns Articles 6 to 22 which form the greater
portion of Head III of the First Part.
JUDGMENT No. 8.-CHORZOW FACTORY (JURISDICTION) 25

The object of these methods of obtaining redress—and that of
Article 23 in particular—-seems to be to avert the possibility that,
in consequence of the existence of a persistent difference of opinion
between the contracting Parties as to the interpretation or applica-
tion of the Convention, the interests respect for which it is designed
to ensure, may be compromised. An interpretation which would
confine the Court simply to recording that the Convention had been
incorrectly applied or that it had not been applied, without being
able to lay down the conditions for the re-establishment of the treaty
rights affected, would be contrary to what would, prima facie, be
the natural object of the clause; for a jurisdiction of this kind,
instead of settling a dispute once and for all, would leave open the
possibility of further disputes.

This conclusion, which is deduced from the object of a clause like
Article 23, and, in general, of any arbitration clause, could only be
defeated, either by the employment of terms sufficiently clear to
show a contrary intention on the part of the contracting Parties,
or by the tact that the Convention had established a special jurisdic-
tion for claims in respect of reparation due for the violation of the
provisions in question, or had made some other arrangement
regarding them.

It follows from what has been said in regard to the meaning and
scope of the words “‘differences of opinion resulting from the inter-
pretation and application of Articles 6 to 22” that the terms of
Article 23, first paragraph, do not establish the existence of any
such contrary intention. It now remains to consider the scope of
Article 23, paragraph 2, and Article 22 of the Geneva Convention.

*

The Polish Government contends in the second place that
there are other tribunals before which the injured companies
could assert their right to an indemnity and that, in these circum-
stances, the German Government cannot, by substituting itself
for these companies, disturb the jurisdictional system established
by the Geneva Convention.

The Court feels that it must consider this point, not only because
Counsel for Poland have cited the general principle with regard
to recourse to tribunals accessible to private persons, but also and
more especially in relation to the terms of Article 23, paragraph 2,
of the Geneva Convention.
JUDGMENT No. 8.—CHORZ6OW FACTORY (JURISDICTION) 26

It must first of all be observed that any jurisdiction which the
_ Polish Courts may have does not enter into account. For the act
on the part of the Polish Government, which the Court has held not
to be in conformity with the Geneva Convention, consisted in the
application of Articles 2 and 5 of the Polish law of July 14th, r920,
introduced into Polish Upper Silesia by the law of June 16th, 1922,
which application, in the opinion of the Court (Judgment No. 7),
is in itself a measure contrary to Article 6 and the following articles
of the Convention. The Court of Huta Krolewska (Kônigshütte)
effected this application by ordering the entry in the land register
of the Polish Treasury as owner of the factory in place of the
Oberschlesische. Accordingly, Poland has not argued that the
Polish Courts have jurisdiction in regard to reparation.

The tribunals to be taken into account are therefore those con-
templated by the Geneva Convention itself, namely, the Upper
Silesian Arbitral Tribunal and the Germano-Polish Mixed
Arbitral Tribunal. The Agent and Counsel for the Polish Govern-
ment spoke sometimes of the one and sometimes of the other
of these tribunals, without specifying which of them would be
competent in the particular case nor whether both of them would
be so competent.

The question whether the jurisdiction of these tribunals might
prevent the exercise of the jurisdiction bestowed upon the Court by
paragraph x of Article 23 of the Geneva Convention was brought
up before the Court during the proceedings in regard to the juris-
diction in the suit submitted to the Court by the German Govern-
ment’s Application of May 15th, 1925. The Polish Government
indeed submitted that that Application could not be entertained
until the Germano-Polish Mixed Arbitral Tribunal had delivered
judgment in the case concerning the same factory of Chorz6éw
brought by the Oberschlesische on November roth, 1922, betore
that Tribunal. The Polish. Government also argued that, as it
was a question of an alleged destruction of vested rights, the Upper
Silesian Tribunal might have jurisdiction under Article 5 of the
Convention. |
- Some of the reasons for which the Court, in Judgment No. 6,
overruled this plea that the suit could not be entertained—for in-
stance the argument relating to the fact that the Parties are not the
same-—might to some extent be applicable also in the present case.
It should however be observed that the position is not the same,
JUDGMENT No. 8. —CHORZOW FACTORY (JURISDICTION) 27

more especially i in view of the fact that the German Application
of May 15th, 1925, only asked the Court for a declaratory judgment
between States, which only the Court could give, whereas the
present Application seeks an indemnity which is not necessarily
different trom that which the Companies on whose behalf it is
claimed, might obtain from another tribunal, assuming that there
was one which was competent. For this reason, the Court will not
be content merely to refer to Judgment No. 6 and will once more
examinethe question in relation to the special conditions in which it
presents itself on this occasion.

Before undertaking this examination, the Court feels called upon
to call to mind the following : In Judgment No. 7 it held that, as the
expropriation allowed under Head III of the Geneva Convention,
is a derogation from the rules generally applied as regards the treat-
ment of foreigners and from the principle of respect for vested
rights, and this derogation is itself of a strictly exceptional character,
any other measure affecting the property, rights and interests of
German nationals contemplated. in Head III and not supported
by some special authority having precedence over the Convention,
and which oversteps the limits of generally accepted international
law, is incompatible with the régime established by the Convention.
The seizure of the property, rights and interests belonging to the
Oberschlesische and Bayerische was precisely a measure of this
kind. It is in this sense that the measures taken by the Polish
Government in respect of the above-mentioned Companies are,
in the Court’s opinion, contrary to Head ITI of the Geneva Conven-
tion, and this in spite of the fact that they do not, properly speaking,
fall within the expropriations or liquidations regulated under that
Head. The measures in question are therefore of a special
nature; and it is only in relation to those measures, thus
qualified, and to the régime established in Upper Silesia, that it
must be considered whether the dispossessed Companies could
apply either to the Upper Silesian Arbitral Tribunal or to the
German Polish Mixed Arbitral Tribunal for reparation of the
injury sustained.

The Polish Government argues that the Upper Silesian Tribunal
has jurisdiction on the basis of Article 5 of the Geneva Convention.
This article, which. is the last of Head II of the Convention, is.
as follows:
JUDGMENT No. 8.—CHORZOW FACTORY (JURISDICTION) 28

« La question de savoir si et dans quelle mesure une indem-
nité pour la suppression ou la diminution de droits acquis
doit être payée par l’État, sera directement tranchée par le
Tribunal arbitral sur plainte de Payant droit 1. »

In the Court’s opinion, it is impossible to accept this proposition.
Whatever the scope and limits of the jurisdiction conferred on the
Upper Silesian Tribunal by this article may be in other respects, the
fact remains that this jurisdiction relates to the subject matter
dealt with in Head II of the Convention which concerns the
protection of vested rights. Now the Court, in Judgment No. 7,
has decided that the dispossession of the Oberschlesische and
Bayerische was a violation of Head III and it has decided thus
even though it may be true that any violation of this Head, which
constitutes an exception to the general principle of respect for
vested rights, is at the same time necessarily a violation of Head II
also. 1t follows that the competent tribunals can only be those
provided for by Head III. This is also borne out by the fact that
the Upper Silesian Arbitral Tribunal, under Article 5, can only
allow pecuniary indemnities ; now it is certain that Head III of
the Convention is mainly designed to preserve the status quo in
Polish Upper Silesia and therefore that, whenever possible, restitutio
in pristinum is the natural redress of any violation of, or failure to
observe, the provisions therein contained.

The jurisdiction of the Germano-Polish Mixed Arbitral Tribunal
derived from the Treaty of Peace of Versailles, is expressly reserved
by Article 23, paragraph 2.

In order to understand this provision, it should be remembered
that Head III of the Geneva Convention has not abolished, although
it limits in several respects, the liquidation régime instituted by
the Treaty of Versailles, and that some provisions of that Treaty
_ concerning that régime have been expressly declared applicable
in Polish Upper Silesia. Thus Articles 7 and 8 of the Geneva
Convention refer to Articles 92 and 297 of the Treaty.

' This text, which is the sole and authoritative text of the article, may
be translated into English as follows:

“The question whether and to what extent an indemnity fur the
suppression or diminution of vested rights must be paid by the State,
will be directly decided by the Arbitrai Tribunal upon the complaint
of the interested Party.”
JUDGMENT No. 8.—CHORZOW FACTORY (JURISDICTION) 29

These articles, amongst other things, allow private persons to
appeal to the Mixed Arbitral Tribunal. The right to do so
is given to the interested Party in the event of the conditions of
sale or measures taken by the liquidating government outside its
ordinary legislation being unfairly prejudicial to the price; the
Tribunal may then grant the interested Party a reasonable
indemnity which is to be paid by the liquidating government.

As the Geneva Convention was intended to secure to German
nationals in Polish Upper Silesia treatment more favourable than
that resulting from the Treaty of Versailles, there could be no
question of abolishing or diminishing the guarantees given by the
Treaty to persons liable to have their property liquidated. Again,
the jurisdiction bestowed upon the Court by Article 23, paragraph x,
which has no equivalent under the liquidation régime of the Treaty
of Versailles, might have left some doubt as to whether the means
of obtaining redress open to interested Parties under the Treaty
of Versailles would remain open notwithstanding. Cases of the
same kind as those contemplated by the provisions of that Treaty
concerning the régime of liquidation are certainly possible, even in
connection with the expropriations or liquidations authorized
by the Geneva Convention. It was therefore natural expressly to
reserve the right possessed by private persons to appeal in such
cases to the Mixed Arbitral Tribunal : this is what paragraph 2 of
Article 23 does.

The Court has also not omitted to examine Article 22 of the
Geneva Convention, in so far as it bestows jurisdiction upon the
Germano-Polish Mixed Arbitral Tribunal. It is however clear that
this article also contemplates regular expropriations effected within
the limits fixed by the preceding articles. That this is the case
is proved by, amongst other things, the fact that the contingency
contemplated in the article is that of a claim for damages greater
than the indemnity fixed ; the case is therefore one of expropriation,
in the proper sense of the term, and the jurisdiction given to the
Mixed Arbitral Tribunal does not differ from that bestowed upon
it by Articles g2 and 297 of the Treaty of Versailles.

This being so, there would seem to be no doubt that neither
this provision nor Article 23, paragraph 2, expressly contem-
plates acts of the kind for which the German Government
claims an indemnity on behalf of the dispossessed Companies. As
has already been stated, these acts constitute special measures
JUDGMENT No. 8.—CHORZOW FACTORY (JURISDICTION) 30

which fall outside the normal operation of Articles 6 to 22 of the
Geneva Convention, whereas the jurisdiction reserved by. Article 23,
paragraph 2, assumes the application of those articles. In the
present case reparation is the outcome, not of the application of
Articles 6 to 22, but of acts contrary to the provisions of those
articles.

It has not escaped the Court that the Oberschlesische supported
the action brought by it before the Germano-Polish Mixed Arbitral
Tribunal upon, amongst other things, Article 305 of the Treaty
of Versailles. This cannot, however, affect the conclusion just
arrived at by the Court. The aim of Article 305—to which,
besides, neither the Agent nor Counsel for the Polish Government
have made any allusion—-is to secure to interested Parties the possi-
bility of having recourse to the Mixed Arbitral Tribunal, even if
measures contrary to the terms of the Treaty of Versailles have
been embodied in a judgment. Whatever construction in other
respects the Mixed Arbitral Tribunals have placed or may place
upon this article, with which construction the Court wishes in no
way to interfere, the Court, when it has to define its jurisdiction in
relation to that of another tribunal, cannot allow its own compet-
ency to give way unless confronted with a clause which it considers
sufficiently clear to prevent the possibility of a negative conflict.
of jurisdiction involving the danger of a denialofjustice. The Court
does not consider that, in regard to the applicability of Article 305
to the situation of the Oberschlesische, all possible doubt is elimin-
ated; it weuld observe, however, that it is not called upon to
decide this point. Furthermore, it should be noted that the Polish
Government, in regard to the action brought by the Oberschlesi-
sche before the Germano-Polish Mixed Arbitral Tribunal on Nov-
ember roth, 1922, filed a plea to the jurisdiction on the ground,
amongst others, that Article 305 was not considered as applic-
able in that case.

There is, moreover, another reason which the Court feels called
upon to invoke in order to show that the jurisdiction of the Mixed
Arbitral Tribunal cannot be urged in this case in opposition to the
jurisdiction conferred on the Court by Article 23 of the Geneva
Convention. ‘

A careful examination of the provisions of Head III of the Geneva
Convention brings out—as the Court.has already had occasion to
point out in Judgment No. 7—that one of the fundamental prin-
JUDGMENT No. 8.—CHORZOW FACTORY (JURISDICTION) 31

ciples upon which this Head is based, as regards procedure, is that
no dispossession may be effected without previous notice to the
real or apparent owner, affording himan opportunity of being heard
before the competent tribunal. It is certain—having regard to the
promulgation by the Polish Government of the laws of July r4th,
1920, and of June 16th, 1922, and to the application given to those
laws—that in this case such a procedure has not been adopted, for
the dispossession of the Companies concerned had, in the Polish
Government’s contention, taken place outside the framework of the
Geneva Convention. Consequently, the Polish Government cannot
in this particular case require the interested Parties to look for
redress of the injury sustained by them to the tribunals which might
have been open to them if the Convention had been applied.
For, thereafter, the utmost that the interested Parties could obtain
from these tribunals would be reparation for the wrong, whereas,
if that procedure had been followed out, the wrong would perhaps
never have occurred. |

From what has been said, it follows that once dispossession
has taken place without previous investigation of the right of owner-
ship, the possible undertaking of this investigation in order to justify
such dispossession after it has taken place, cannot undo the fact that
à breach of the Geneva Convention has already taken place, or
affect the Court’s jurisdiction.

It is, moreover, a principle generally accepted in the jurisprudence
of international arbitration, as well as by municipal courts, that one
Party cannot avail himself of the fact that the other has not ful-
filled some obligation or has not had recourse to some means. of
redress, if the former Party has, by some illegal act, prevented the
latter from fulfilling the obligation in question, or from having
recourse to the tribunal which would have been open, to him.

If, against what has just been stated by the Court, it were con-
tended: that the measures taken by the Polish Government in regard
to the Oberschlesische and Bayerische did not constitute expro-
priation within the meaning of Head III of the Geneva Convention,
the Court would be called upon to repeat what it has already had
occasion to say not only in Judgment No. 7, but also in the present
Judgment, namely, that if expropriation in consideration of an
indemnity is prohibited by that Head, a fortiori is a seizure, without
compensation to the interested Parties, prohibited.
JUDGMENT No. 8.—CHORZOW FACTORY (JURISDICTION) . 32

It has been argued repeatedly in the course of the present pro-
ceedings that in case of doubt the Court should decline jurisdiction.
It is true that the Court’s jurisdiction is always a limited one,
existing only in so far as States have accepted it ; consequently, the
Court will, in the event of an objection—or when it has automatic-
ally to consider the question—only affirm its jurisdiction provided
that the force of the arguments militating in favour of it is prepond-
erant. The fact that weighty arguments can be advanced to sup-
port the contention that it has no jurisdiction cannot of itself
create a doubt calculated to upset its jurisdiction. When consider-
ing whether it has jurisdiction or not, the Court’s aim is always to
ascertain whether an intention on the part of the Parties exists to
confer jurisdiction upon it. The question as to the existence of a
doubt nullifying its jurisdiction need not be considered when, as
in the present case, this intention can be demonstrated in a manner
convincing to the Gourt.

*
* *

It follows from the foregoing considerations that the Court affirms
its jurisdiction and reserves the suit for judgment on the merits in
so far as the first of the submissions of the Case of March 2nd, 1927,
is concerned, that is to say, as regards the question whether, “by
reason ofits attitude in respect of the Oberschlesische and Bayerische,
which attitude has been declared by the Court not to have been in
conformity with the provisions of Article 6 and the following articles
of the Geneva Convention, the Polish Government is under an
obligation to make good the consequent injury sustained by the
aforesaid Companies from July 3rd, 1922, until the date of the
judgment sought”.

The other submissions (Nos. 2-4) of the Case relate to the amount
of the indemnities to be paid by Poland, a prohibition of export
affecting certain products and, finally, the method of payment. The
Court’s right to deal with these points and to grant or refuse the
German Government’s claim, follows from the fact of its jurisdic-
tion to hear the claim for reparation.

Whilst denying that the Court has jurisdiction to deal with claims
seeking reparation for a breach of Articles 6 to 22 of the Geneva
Convention, Poland, in her preliminary Counter-Gase, has in the
alternative submitted certain objections in regard, particularly, to
JUDGMENT No. 8.—CHORZOW FACTORY (JURISDICTION) 33

the German submission concerning a prohibition of export and to the
other submission to the effect that Poland should not be allowed
to set off, against any amount which may be due as reparation, a
claim which she has against Germany under the decision of the
Council of the League of Nations of December oth, 1924. The
Court is not called upon to give a decision on these points at this
stage of the proceedings ; they belong to the merits of the suit.

Consideration of the question of the forms of reparation which

are admissible in this case and of the methods of payment indicated
would presuppose that the Court had satisfied itself of the existence
of an obligation to make reparation and of the existence, nature
and extent of the injury resulting from an attitude contrary to
Articles 6-to 22.
' As regards conclusion No. 4 (d) of the German Case, the question
whether Poland could, if the case arise, assert a claim to set off
against her debt to Germany any debt due to her by Germany
remains therefore entirely reserved.

FOR THESE REASONS, .
The Court, having heard both Parties,
by ten votes to three,

(x) dismisses the plea made by the Polish Government requesting
the Court to declare that it has no jurisdiction to deal with the
suit brought by the German Government on February 8th, 1927,
and reserves this suit for judgment on the merits ;

(2) instructs the President to fix the times for the deposit of the
Counter-Case, Reply and Rejoinder on the merits.

Done in French and English, the French text being author-
itative, at the Peace Palace, The Hague, this twenty-sixth day of
JUDGMENT No. 8.—CHORZOW FACTORY (JURISDICTION) 34

July, nineteen hundred and twenty-seven, in three copies, one of
which is to be placed in the archives of the Court, and the others
to be forwarded to the Agents of the applicant and respondent
Parties respectively.

(Signed) Max HUBER,
President.

(Signed) À. HAMMARSKJOLD,

Registrar.

M. Ehrlich, Polish National Judge, availing himself of the right
conferred on him by Article 57 of the Statute, has delivered the
separate opinion which follows hereafter.

(Initialled) M. H.

(Initialled) À. H.


ORDONNANCE
1928. ,

Le 13 septembre. RENDUE A LA DATE DU 13 SEPTEMBRE 1928.
Dossier E. c. XIII. _

QUATORZIEME SESSION (ORDINAIRE)

Présents :

MM. ANZILOTTI, Président,
HUBER, ancien Président,
Lord FINLAY,
MM. Lover,
NYHOLM,
DE BUSTAMANTE, Jusges,
ALTAMIRA,
ODA,
PEssôa,
M. BEICHMANN, Juge suppléant,
MM. RaBEL,

uges natronaux,
ERRLICH, Jug

AFFAIRE RELATIVE A L’USINE DE CHORZOW
{INDEMNITÉ)

entre le Gouvernement d'Allemagne, représenté par M. le
D' Erich Kaufmann, professeur à Berlin,

Demandeur,

et le Gouvernement de la République polonaise, représenté
par M. le D' Thadée Sobolewski, agent du Gouvernement
polonais auprès du Tribunal arbitral mixte polono-allemand,

Défendeur,
La Cour,

Vu la Requête ‘introductive d’instance déposée, au nom du
Gouvernement allemand, au Greffe de la Cour, le 8 février

1927;
100  CHORZOW. — ORDONNANCE DU 13 SEPTEMBRE 1928

Vu l’Arrêt n° 13, rendu par la Cour sur cette Requête à la
date de ce jour d’hui; :
Vu les articles 48 et 50 du Statut de la Cour ;

Décide :

x x

I. — Il sera procédé à une expertise destinée à permettre
à la Cour de fixer en pleine connaissance de cause, confor-
mément aux principes établis dans son Arrêt n° 13, le mon-

tant de l’indemnité à verser par le Gouvernement polonais au

Gouvernement allemand en vertu dudit Arrêt n° 13.

2. — L’expertise portera sur les points suivants :

I A. — Quelle était la valeur, exprimée en KReichsmarks.
actuels, au 3 juillet 1922, de l’entreprise pour la.
fabrication de produits azotés dont l'usine était sise
à Chorzôw en Haute-Silésie polonaise, telle que cette
entreprise (y compris les terrains, bâtiments, outillage,
stocks, procédés dont elle disposait, contrats de four-
niture et de livraison, clientèle et chances d'avenir),
se trouvait à la date indiquée entre les mains des.
Bayerische et Oberschlesische Stickstoffwerke ?

B. — Quels auraient été les résultats financiers, exprimés
en Reichsmarks actuels (profits ou pertes) que l’entre-
prise ainsi constituée aurait vraisemblablement donnés.
depuis le 3 juillet 1922 jusqu'à la date du présent.
‘arrêt, entre les mains desdites Sociétés ?

II. — Quelle serait la valeur, exprimée en Reichsmarks.
actuels, à la date du présent arrêt, de ladite entre-
prise de Chorzéw, si cette entreprise (y compris les.

terrains, bâtiments, outillage, stocks, procédés dis-
ponibles, contrats de fourniture et de livraison,
clientèle. et chances d’avenir), étant restée entre les.
mains des Bayerische et Oberschlesische Stickstoff-
werke, soit était demeurée essentiellement en l’état
de 1922, soit avait reçu, toutes proportions gardées,
un développement analogue a celui d’autres entre-
prises du méme genre, dirigées par la Bayerische,
par exemple l’entreprise dont l'usine est sise à
Piesteritz ?

3. — L’expertise sera confiée à un comité composé de la
manière suivante: le Président de la Cour désignera, par
IOI  CHORZOW. — ORDONNANCE DU 13 SEPTEMBRE 1928

ordonnance, trois experts. Chacune des Parties aura le droit de
désigner, dans les quinze jours à compter de ladite ordonnance,
un assesseur qui prendra part aux travaux du comité avec
voix consultative. Les experts désignés par le Président de la

Cour éliront parmi eux le président du comité.

4. — En acceptant la mission qui leur est confiée aux ter-
mes du paragraphe 2 ci-dessus, les experts et assesseurs pren-
dront, soit oralement devant le Président, soit par lettre adres-
sée au Président, l'engagement solennel suivant :

« Je déclare solennellement que j’accomplirai en tout honneur
et dévouement, en pleine et parfaite impartialité et en toute
conscience la mission d'expert (d’assesseur) qui m'a été confiée
en vertu de l’Ordonnance de la Cour permanente de Justice
internationale du 13 septembre 1928, et que je m/’abstiendrai
de divulguer ou d’utiliser à mon profit les secrets d’ordre
économique ou technique dont je pourrai obtenir connaissance
dans l’accomplissement de cette mission. »

5. — Le Greffier pourvoira au secrétariat du comité d’experts
et a la liaison entre celui-ci et la Cour. A cette fin, il
détachera,. notamment, auprés du comité d’experts un des
fonctionnaires supérieurs du Greffe de la Cour. Ce fonction-
naire servira d’intermédiaire pour toutes comimunications entre
la Cour et ses services, d’un côté, et le comité d’experts, de
l’autre.

6. — Le Greffier communiquera au comité d’experts les élé-
ments de la procédure qui a abouti à l’Arrêt n° 13 de la Cour
ainsi que les éléments de la procédure qui a abouti à son
Arrêt n° 6. Il est autorisé à tenir à la disposition du comité
d’experts, sur la demande de celui-ci, également les éléments
des procédures qui ont abouti aux Arrêts n® 7, 8 et ir de la
Cour.

7. — Le comité d'experts aura la faculté de demander la
production de tous documents et de toutes explications qu’il
estimera utiles pour l’accomplissement de sa mission; à cet
égard, il statuera à la majorité des voix. Ces demandes seront
adressées au Greffier de la Cour qui y donnera suite dans les
limites de l’article 24 du Règlement, ou, le cas échéant, les
T02 CHORZOW. — ORDONNANCE DU 13 SEPTEMBRE 1928

soumettra au Président de la Cour aux fins de l’article 49 du
Statut.

8. — Le comité d’experts aura, de méme, la faculté de
demander toutes autres facilités qu'il estimera utiles pour
l’accomplissement de sa mission, notamment l'autorisation de
visiter les lieux; dans ce cas, la procédure établie au para-
graphe 7 sera appliquée.

9. — Le comité d'experts sera convoqué une première fois
par le Président de la Cour. Il déposera son rapport, en deux
exemplaires originaux, au Greffe de la Cour, dans un délai, à
compter de cette convocation, à fixer par le Président après
avoir entendu les experts. Le rapport, auquel seront jointes
toutes les pièces dont il y sera fait état, contiendra l'opinion
motivée, au sujet de chaque question posée, de chacun des
experts. Il sera communiqué, avec les pièces y jointes, par les
soins du Greffe aux membres de la Cour ainsi qu'aux agents
des Parties. La Cour, ou, si elle ne siége pas, son Président,
fixera une audience de la Cour à laquelle seront convoqués les
experts et qui sera destinée à permettre aux agents des Par-
ties de discuter le rapport, et à la Cour et auxdits agents de
demander des explications aux experts.

10. — Les honoraires des experts désignés par le Président
de la Cour, honoraires dont le montant sera fixé par le Pré-
sident, après avoir entendu les experts, seront versés à ceux-ci
par le Greffier à l'issue de la procédure d'expertise. Les hono-
raires comprendront les frais de séjour et de représentation
des experts, mais non leurs dépenses de voyage, etc. Ces
dépenses seront remboursées aux intéressés par le Greffier sur
bordereau présenté à l’issue de ladite procédure, sauf déduction

de toutes avances éventuelles faites au titre de ces dépenses.

Chaque Partie paiera les frais et honoraires de l’assesseur
nommé par elle. Tous autres honoraires, frais et dépenses, y
compris les dépenses de secrétariat et de chancellerie, ainsi que
les dépenses pour le personnel technique dont le comité pourra
s’entourer avec l’assentiment du Président de la Cour, seront
avancés par la Cour et remboursés par les Parties dans la
103 CHORZOW. — ORDONNANCE DU 13 SEPTEMBRE 1928

x

proportion que la Cour fixera, conformément à l’article 64 du
Statut.

Les Parties sont invitées à payer au Greffier de la Cour,
dans les quinze jours à compter de la date de la présente

Ordonnance, chacune la somme de 25.000 florins 4 valoir sur
les frais de l’expertise.

II. — La Cour réserve à elle-même ou, si elle ne siège
pas, au Président, le pouvoir d'interpréter et, le cas échéant,
de compléter les dispositions qui précèdent.

12. — En cas d’une demande de prorogation des délais pré-
vus dans les dispositions qui précèdent, l’article 33 du Règle:
ment de la Cour s’appliquera. |

°

Fait en français et en anglais, le texte français faisant foi,
au Palais de la Paix, 4 La Haye, le treize septembre mil neuf
cent vingt-huit, en trois exemplaires, dont l’un restera déposé
aux archives de la Cour et dont les autres seront transmis aux
agents du Gouvernement d’Allemagne et du Gouvernement de
la République polonaise respectivement.

Le Président :
(Signé) D. ANZILOTTI.

Le Greffier-adjoint :
(Signé) PAUL RUEGGER.


INTERNATIONAL COURT OF JUSTICE

REPORTS OF JUDGMENTS,
ADVISORY OPINIONS AND ORDERS

CASE CONCERNING
LEGALITY OF USE OF FORCE

(YUGOSLAVIA r. PORTUGAL)

ORDER OF 8 SEPTEMBER 2000

2000

COUR INTERNATIONALE DE JUSTICE

RECUEIL DES ARRETS,
AVIS CONSULTATIFS ET ORDONNANCES

AFFAIRE RELATIVE A LA LICEITE
DE L'EMPLOI DE LA FORCE

(YOUGOSLAVIE c. PORTUGAL)

ORDONNANCE DU 8 SEPTEMBRE 2000
Official citation:

Legality of Use of Force (Yugoslavia v. Portugal),
Order of 8 September 2000, I C.J. Reports 2000, p. 167

Mode officiel de citation:

Licéité de l'emploi de la force ( Yougoslavie c. Portugal),
ordonnance du 8 septembre 2000, C.J. Recueil 2000, p. 167

Sales number
ISSN 0074-4441 N° de vente: 798
ISBN 92-1-070874-1

8 SEPTEMBER 2000

ORDER

LEGALITY OF USE OF FORCE
(YUGOSLAVIA v. PORTUGAL)

LICEITE DE L'EMPLOI DE LA FORCE
(YOUGOSLAVIE c. PORTUGAL)

8 SEPTEMBRE 2000

ORDONNANCE
2000
8 September
General List
No. 111

167

INTERNATIONAL COURT OF JUSTICE

YEAR 2000

8 September 2000

CASE CONCERNING
LEGALITY OF USE OF FORCE

(YUGOSLAVIA r. PORTUGAL)

ORDER

The Vice-President of the International Court of Justice, Acting Presi-
dent,

Having regard to Article 48 of the Statute of the Court and to
Articles 31 and 79 of the Rules of Court,

Having regard to the Order of 30 June 1999, whereby the Court fixed
5 January 2000 and 5 July 2000 as the time-limits for the filing, respec-
tively, of a Memorial by the Federal Republic of Yugoslavia and of a
Counter-Memorial by the Portuguese Republic:

Whereas on 5 July 2000 Portugal filed certain preliminary objections to
jurisdiction and to admissibility;

Whereas accordingly, by virtue of Article 79, paragraph 3, of the Rules
of Court, the proceedings on the merits are suspended and a time-limit
has to be fixed for the presentation by the other Party of a written state-
ment of its observations and submissions on the preliminary objections;

Whereas, at a meeting between the Vice-President, Acting President,
and the Agents of the Parties, held on 6 September 2000, Yugoslavia
indicated that it would require nine months for the preparation of that
written statement; and whereas Portugal did not object to such a time-
limit being fixed, but stressed that it expected that Yugoslavia would pro-
vide specific answers to the preliminary objections made by the Portu-
guese Government,
168 LEGALITY OF USE OF FORCE (ORDER 8 IX 00)

Taking account of the views of the Parties and the special circum-
stances of the case,

Fixes 5 April 2001 as the time-limit within which the Federal Republic
of Yugoslavia may present a written statement of its observations and
submissions on the preliminary objections made by the Republic of
Portugal; and

Reserves the subsequent procedure for further decision.

Done in English and in French, the English text being authoritative, at
the Peace Palace, The Hague, this eighth day of September, two thou-
sand, in three copies, one of which will be placed in the archives of the
Court and the others transmitted to the Government of the Federal
Republic of Yugoslavia and the Government of the Portuguese Republic,
respectively.

(Signed) Sut Jiuyong,
Vice-President.

(Signed) Philippe COUVREUR,
Registrar.