INTERNATIONAL COURT OF JUSTICE

REPORTS OF JUDGMENTS,
ADVISORY OPINIONS AND ORDERS

CASE CONCERNING
THE ARBITRAL AWARD MADE
BY THE KING OF SPAIN
ON 23 DECEMBER 1906
(HONDURAS v. NICARAGUA)
JUDGMENT OF 18 NOVEMBER 1960

1960

COUR INTERNATIONALE DE JUSTICE

RECUEIL DES ARRETS,
AVIS CONSULTATIFS ET ORDONNANCES

AFFAIRE
DE LA SENTENCE ARBITRALE
RENDUE PAR LE ROI D’ESPAGNE
LE 23 DECEMBRE 1906
(HONDURAS c. NICARAGUA)

ARRET DU 18 NOVEMBRE 1960
This Judgment should be cited as follows:

“Case concerning the Arbitral Award made by the King of Spain
on 23 December 1906, Judgment of 18 November 1960 :
I.C.J. Reports 1960, p. 192.”

Le présent arrét doit étre cité comme suit:

\

« Affaire de la sentence arbitrale rendue par le roi
d'Espagne le 23 décembre 1906, Arrêt du 18 novembre 1960:
C.I. J. Recueil 1960, p. 192. »

Sales number 9 3 8
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192

INTERNATIONAL COURT OF JUSTICE

1960 YEAR 1960
18 November
Oe 18 November 1960

CASE CONCERNING
THE ARBITRAL AWARD MADE
BY THE KING OF SPAIN

ON 23 DECEMBER 1906
(HONDURAS wv. NICARAGUA)

Arbitration.—Contention that arbitrator not regularly designated
and Award a nullity.—Acceptance of designation of arbitrator and
af Award.—Grounds of nullity invoked.—Executability of Award.

JUDGMENT

Present: President KLAESTAD; Vice-President ZAFRULLA KHAN;
Judges HACKWORTH, WINIARSKI, BADAWI, ARMAND-UGON,
KoJEVNIKOV, MORENO QUINTANA, CORDOVA, WELLING-
TON Koo, SPIROPOULOS, Sir Percy SPENDER, ALFARO;
Judges ad hoc Aco and Urrutia HoLGuiN; Registrar
GARNIER-COIGNET.
193 ARBITRAL AWARD OF 23 XII 1906 (JUDGM. 18 XI 60)

In the case concerning the Arbitral Award made by the King of
Spain on 23 December 1006,

between

the Republic of Honduras,
represented by
M. Ramén E. Cruz, Former President of the Supreme Court of
Honduras,
M. Esteban Mendoza, Former Minister for Foreign Affairs of
Honduras,

M. José Angel Ulloa, Ambassador of Honduras to the Netherlands,

as Agents,
assisted by
M. C. Roberto Reina, Ambassador of Honduras to France,

as Adviser,
and by

M. Paul Guggenheim, Professor of International Law in the Law
Faculty of the University of Geneva and in the Graduate
Institute of International Studies at Geneva,

M. Paul De Visscher, Professor of International Public Law at
the University of Louvain,

Mr. Herbert W. Briggs, Professor of International Law at Cornell
University,

as Counsel,

and by

M. Christian Dominicé, Member of the Geneva Bar,

as Expert,

and

the Republic of Nicaragua,
represented by

M. José Sansén-Teran, Ambassador of Nicaragua to the Nether-
lands and Minister to Belgium,

as Agent,
assisted by
M. Diego M. Chamorro, Ambassador,

as co-Agent,
and by

M. Henri Rolin, Professor of International Law at the Free
University of Brussels,
194 ARBITRAL AWARD OF 23 XII 1906 (JUDGM. 18 XI 60)

M. Camilo Barcia Trelles, Dean of the Faculty of Law at the
University of Santiago de Compostela,

Mr. Philip C. Jessup, Professor of International Law at Columbia
University,

M. Gaetano Morelli, Professor of International Law at the
Faculty of Law of the University of Rome,

M. Antonio Malintoppi, Professor of International Law at the
University of Camerino,

as Counsel,

and by

M. Jaime Somarriba Salazar, Counselor of the Nicaraguan
Embassy to the Netherlands,

M. Michel Waelbroeck, Member of the Brussels Bar,
as Assistant Counsel and Secretaries,

THE CourRT,
composed as above,

delivers the following Judgment :

On 1 July 1958, the Minister of Honduras in the Netherlands
delivered to the Registry on behalf of his Government an Applica-
tion of the same date, instituting proceedings before the Court
with regard to a dispute between the Republic of Honduras and
the Republic of Nicaragua concerning the Arbitral Award made
by the King of Spain on 23 December 1906.

The Application relies on the Washington Agreement of 21 July
1957 between the Parties with regard to the procedure to be
followed in submitting the dispute to the Court; the Application
states, furthermore, that the Parties have recognized the com-
pulsory jurisdiction of the Court on the basis of Article 36, para-
graph 2, of its Statute.

In accordance with Article 40, paragraph 2, of the Statute, the
Application was communicated to the Minister for Foreign Affairs
of Nicaragua. In accordance with paragraph 3 of the same article,
the other Members of the United Nations and the non-member
States entitled to appear before the Court were notified.

Time-limits for the filing of the Memorial, the Counter-Memorial,
the Reply and the Rejoinder were fixed by Order of 3 September
1958; the time-limit for the filing of the Rejoinder was later
extended by Order of 7 October 1959. The case became ready for
hearing on the filing of the last pleading on 4 January 1960.

Dr. Roberto Ago, Professor of International Law at the Univer-
sity of Rome, and Professor Francisco Urrutia Holguin, Ambassa-
dor of Colombia, were respectively chosen, in accordance with

6
195 ARBITRAL AWARD OF 23 XII 1906 (JUDGM. 18 XI 60)

Article 31, paragraph 3, of the Statute, to sit as Judges ad hoc
in the present case by the Government of Honduras and the
Government of Nicaragua.

On 15, 16, 17, 19, 20, 21, 22, 23, 24, 27, 28, 29 and 30 September
and on 1, 3, 4, 6, 7, 10 and 11 October 1960 public hearings were
held in the course of which the Court heard successively the oral
arguments and replies of M. José Angel Ulloa, Agent, M. Paul
De Visscher, M. Paul Guggenheim and Mr. Herbert W. Briggs,
Counsel, on behalf of the Government of Honduras, and M. José
Sansén-Teran, Agent, Mr. Philip C. Jessup, M. Gaetano Morelli,
M. Camilo Barcia Trelles, M. Antonio Malintoppi, Counsel,
M. Diego M. Chamorro, co-Agent, and M. Henri Rolin, Counsel, for
the Government of Nicaragua.

In the course of the written and oral proceedings, the following
submissions were presented by the Parties:

On behalf of the Government of Honduras,

in the Application:

“May it please the Court:

To communicate the present Application instituting proceedings
to the Government of the Republic of Nicaragua, in accordance
with Article 40, paragraph 2, of the Statute of the Court, and
Article 2 of the Agreement of 21 July 1957 between the Foreign
Ministers of Honduras and Nicaragua;

To adjudge and declare, whether the Government of Nicaragua
appears or not, after considering the contentions of the Parties:

I. that failure by the Government of Nicaragua to give effect to
the arbitral award made on 23 December 1906 by His Majesty
the King of Spain constitutes a breach of an international
obligation within the meaning of Article 36, paragraph 2 (c},
of the Statute of the International Court of Justice and of general
international law;

2. that the Government of the Republic of Nicaragua is under an
obligation to give effect to the award made on 23 December 1906
by His Majesty the King of Spain and in particular to comply
with any measures for this purpose which it will be for the
Court to determine;

The Government of the Republic of Honduras reserves in a
general way the right to supplement and modify its submissions.
In particular it reserves the right to request the Court to indicate
practical measures to ensure compliance by Nicaragua with the
judgment to be delivered by the Court”;

in the Memorial:

“May it please the Court:

To communicate the present Memorial to the Government of
the Republic of Nicaragua, in conformity with Article 43 of the
Statute of the Court;
196

ARBITRAL AWARD OF 23 XII 1906 (JUDGM. 18 XI 60)

To adjudge and declare, whether the Government of Nicaragua

appears or not, after considering the contentions of the Parties:

I.

that failure by the Government of Nicaragua to give effect to
the arbitral award made on 23 December 1906 by His Majesty
the King of Spain constitutes a breach of an international
obligation within the meaning of Article 36, paragraph 2 (c),
of the Statute of the International Court of Justice and of
general international law;

. that the Government of the Republic of Nicaragua is under an

obligation to give effect to the award made on 23 December 1906
by His Majesty the King of Spain and in particular to comply
with any measures for this purpose which it will be for the
Court to determine.

The Government of the Republic of Honduras reserves in a

general way the right to supplement and modify its submissions.
In particular it reserves the right to request the Court to indicate
practical measures to ensure compliance by Nicaragua with the
arbitral award of His Majesty the King of Spain.

Honduras reserves the further right to ask the Court to fix the

amount of reparation which Nicaragua shall pay to Honduras in
conformity with Article 36, paragraph 2 (d), of the Statute of the
Court”;

in the Replv:

“May it please the Court:
Whether the Government of Nicaragua appears or not:

1. To reject the submissions of Nicaragua;
2. To adjudge and declare that failure by the Government of

Nicaragua to give effect to the Arbitral Award made on 23 De-
cember 1906 by His Majesty the King of Spain constitutes
a breach of an international obligation within the meaning of
Article 36, paragraph 2 (c), of the Statute of the International
Court of Justice and of general international law; and that
this non-execution involves a consequent obligation to make
reparation ;

. To adjudge and declare that the Government of the Republic of

Nicaragua is under an obligation to give effect to the Award
made on 23 December 1906 by His Majesty the King of Spain
and in particular to comply with any measures for this purpose
which it will be for the Court to determine.

The Government of the Republic of Honduras reserves in parti-

cular the right to request the Court to indicate practical measures
to ensure compliance by Nicaragua with the arbitral award of
His Majesty the King of Spain”;

at the hearings, as final submissions:

“May it please the Court:

I. To adjudge and declare that the Government of the Republic
of Nicaragua is under an obligation to give effect to the arbitral
award made on 23 December 1906 by His Majesty the King
of Spain.
197

II.

IT.

ARBITRAL AWARD OF 23 XII 1906 (JUDGM. 18 XI 60)

Furthermore, to place on record the reservation which the
Government of Honduras formulates in regard to its right
to ask for compensation in respect of the prejudice that has
been caused to it as a result of the non-exeeution of the said
arbitral award.

To reject the submissions of Nicaragua.

The Government of Honduras will be able to give these submis-
sions a final character, to modify them or to supplement them

after hearing the statement of the opposing Party.

37

On behalf of the Government of Nicaragua,

in the Counter-Memorial:

“May it please the Court,
Rejecting the submissions of Honduras,

I.

IT.

Iii.

To adjudge and declare that, without prejudice to what is
said in paragraph II, Nicaragua violated no undertaking in
failing to execute the decision of King Alfonso XIII, dated
23 December 1906, its Government having pointed from the
beginning to the obscurities and contradictions which made
this execution impossible and having expressed readiness to
submit to arbitration or mediation the disagreement between
itself and the Government of Honduras concerning the validity
of the said so-called arbitral decision.
To adjudge and declare that the decision given by King
Alfonso XIII is not an arbitral award made in conformity
with the Gamez-Bonilla Treaty of 7 October 1894, and thereby
possessed of binding force:
because the above-mentioned treaty had expired at the
time when the King accepted the office of sole arbitrator,
a fortiori when he gave his decision described as ‘arbitral’;
because this ‘arbitral’ decision of King Alfonso XIII was
given by him as sole arbitrator in flagrant breach of the
provisions of the Gamez-Bonilla Treaty;
because the impugned decision is vitiated by essential errors;

because by this decision the King exceeded his jurisdiction;
because it is not supported by an adequate statement of
reasons.
To adjudge and declare that the so-called ‘arbitral’ decision
is in any case incapable of execution by reason of its obscurities
and contradictions.

. To adjudge and declare in consequence that Nicaragua and

Honduras are in respect of their frontier in the same legal
situation as before 23 December 1906.

. To adjudge and declare in consequence that, as all phases of

the disagreement have not been settled by the Judgment of
the Court, the Parties are bound, in accordance with the
agreement reproduced in the resolution of 5 July 1957 of
the Council of the Organization of American States, to con-
clude an additional agreement within a period of three months
198

ARBITRAL AWARD OF 23 XII 1906 (JUDGM. 18 XI 60)

from the date of the delivery of the Judgment, with a view
to submitting forthwith the disagreement concerning their
frontier to the arbitral procedure provided by the Pact of
Bogota” ;

in the Rejoinder:

“May it please the Court,

to reject the submissions of Honduras;

to find in favour of Nicaragua on the submissions which it made
to the Court in its Counter-Memorial’” ;

at the hearings, as final submissions:

10

““Whereas, in its submissions at the hearing filed on 15 September
10960, the Government of Honduras asks the Court to adjudge and
declare that the Government of the Republic of Nicaragua is under
an obligation to give effect to the arbitral award made on 23 De-
cember 1906 by His Majesty the King of Spain;

Whereas binding force can obviously be attributed to the royal
decision invoked only if it in fact constitutes a valid award;

Whereas therefore, contrary to what was pleaded by Counsel
for Honduras, the Court, to be able to adjudicate on the submissions
of that Party, must necessarily first verify whether the document
produced embodies an instrument which in fact offers the consti-
tuent elements of an arbitral award and, if so, whether the said
award is valid;

Whereas according to doctrine and to jurisprudence he who relies
upon an arbitral award in international proceedings as in private
proceedings is under an obligation to prove that the person or body
giving the decision described as an award was invested with the
powers of an arbitrator and that the said person or the said body
really acted within the limits of the powers possessed;

Whereas Honduras has not furnished such proof, whilst the
contrary follows from the facts of the case;

Whereas furthermore the acts and declarations of organs of
Nicaragua, relied upon by Honduras as recognitions or acquies-
cences rendering inadmissible the enumeration of the causes of
nullity specified in the submissions of Nicaragua of 5 May 1959
have neither the signification nor the effect attributed to them by
Honduras;

Whereas moreover the omissions, contradictions and obscurities
of the award which were denounced from the very first by Nicaragua
would suffice to prevent the execution demanded;

For these reasons,

May it please the Court,

Rejecting the submissions of Honduras,

J. To adjudge and declare that the decision given by King

Alfonso XIII on 23 December 1906 invoked by Honduras
does not possess the character of a binding arbitral award;
199

I

ARBITRAL AWARD OF 23 XII 1906 (JUDGM. I8 XI 60)

II. To adjudge and declare that the so-called ‘arbitral’ decision
is in any case incapable of execution by reason of its omissions,
contradictions and obscurities;

II. To adjudge and declare in consequence that Nicaragua and
Honduras are in respect of their frontier in the same legal
situation as before 23 December 1906;

IV. To adjudge and declare in consequence that, as ali phases

On

of the disagreement have not been settled by the Judgment
of the Court, the Parties are bound, in accordance with the
agreement reproduced in the resolution of 5 July 1957 of the
Organization of American States, to conclude an additional
agreement within a period of three months from the date of
the delivery of the Judgment, with a view to submitting
forthwith the disagreement concerning their frontier to the
arbitral procedure provided by the Pact of Bogota.”

7 October 1894 Honduras and Nicaragua concluded a Treaty

—hereinafter referred to as the Gâmez-Bonilla Treaty—Articles I
to XI of which are as follows:

[Translation from the Spanish revised by the Registry]

II

“Article I

The Governments of Honduras and Nicaragua shall appoint

representatives who, duly authorized, shall organize a Mixed
Boundary Commission, whose duty it shall be to settle in a friendly
manner all pending doubts and differences, and to demarcate on
the spot the dividing line which is to constitute the boundary
between the two Republics.

Article IT

The Mixed Commission, composed of an equal number of members

appointed by both parties, shall meet at one of the border towns
which offers the greater conveniences for study, and shall there
begin its work, adhering to the following rules:

I.

Boundaries between Honduras and Nicaragua shall be those
lines on which both Republics may be agreed or which neither
of them may dispute.

. Those lines drawn in public documents not contradicted by
equally public documents of greater force shall also constitute
the boundary between Honduras and Nicaragua.

3. It is to be understood that each Republic is owner of the terri-

tory which at the date of independence constituted, respectively,
the provinces of Honduras and Nicaragua.

. In determining the boundaries, the Mixed Commission shall
consider fully proven ownership of territory and shall not
200

12

ARBITRAL AWARD OF 23 XII 1906 (JUDGM. I8 XI 60)

recognize juridical value to de facto possession alleged by one
party or the other.

5. In case of lack of proof of ownership the maps of both Republics
and public or private documents, geographical or of any other
nature, which may shed light upon the matter, shall be consulted;
and the boundary line between the two Republics shall be that
which the Mixed Commission shall equitably determine as a
result of such study.

6. The same Mixed Commission, if it deems it appropriate, may
grant compensations and even fix indemnities in order to estab-
lish, in so far as possible, a well-defined, natural boundary line.

7. In studying the plans, maps and other similar documents which
the two Governments may submit, the Mixed Commission shall
prefer those which it deems more rational and just.

8. In case the Mixed Commission should fail to reach a friendly
agreement on any point, it shall record this fact separately
in two special books, signing the double detailed record, with
a statement of the allegations of both parties, and it shall
continue its study in regard to the other points of the line of
demarcation, disregarding the above referred point until the
limit at the extreme end of the dividing line is fixed.

g. The books referred to in the preceding clause shall be sent by
the Mixed Commission, one to each of the interested Govern-
ments, for its custody in the national archives.

Article IIT

The point or points of the boundary line which may not have
been settled by the Mixed Commission referred to in this Treaty,
shall be submitted, no later than one month after the final session
of the said Commission, to the decision, without appeal, of an
arbitral tribunal which shall be composed of one representative
for Honduras and another for Nicaragua, and of one Member of
the foreign Diplomatic Corps accredited to Guatemala, the latter
to be elected by the first two, or chosen by lot from two lists each
containing three names, and proposed one by each party.

Article IV

The arbitral Tribunal shall be organized in the city of Guatemala
within twenty days following dissolution of the Mixed Commission,
and within the next ten days shall begin its work, which is to be
recorded in a Minutes Book, kept in duplicate, the majority vote
constituting law.

Article V

In case the foreign Diplomatic Representative should decline
the appointment, another election shall take place within the
following ten days, and so on. When the membership of the foreign
Diplomatic Corps is exhausted, any other foreign or Central Amer-
201

13

ARBITRAL AWARD OF 23 XIL 1906 (JUDGM. I8 XI 60)

ican public figure may be elected, by agreement of the Commissions
of Honduras and Nicaragua, and should this agreement. not be
possible, the point or points in controversy shall be submitted to the
decision of the Government of Spain, and, failing this, to that of
any South American Government upon which the Foreign Offices
of both countries may agree.

Article VI

The procedure and time-limit to which the arbitration shall be
subject, are as follows: ‘

x. Within twenty days following the date on which the acceptance
of the third arbitrator shall have been notified to the parties,
the latter shall present to him, through their counsel, their
pleadings, plans, maps and documents.

2. Should there be pleadings, he shall submit these, within eight
days following their presentation, to the respective opposing
counsel, who shall have a period of ten days within which to
rebut them and to present any other documents they may deem
appropriate.

3. The arbitral award shall be rendered within twenty days follow-
ing the date on which the period for rebutting pleadings shall
have expired, whether these have been presented or not.

Article VII

The arbitral decision, whatever it be, rendered by a majority
vote, shall be held as a perfect, binding and perpetual treaty between
the High Contracting Parties, and shall not be subject to appeal.

Article VIII

This Convention shall be submitted in Honduras and in Nicara-
gua to constitutional ratifications, the exchange of which shall
take place in Tegucigalpa or in Managua, within sixty days follow-
ing the date on which both Governments shall have complied
with the stipulations of this article.

Article IX

The provision in the preceding article shall in no way hinder
the immediate organization of the Mixed Commission, which shall
begin its studies no later than two months after the last ratification,
in conformity with the provisions of the present Convention,
without prejudice to so doing prior to the ratifications, should
these be delayed, in order to take advantage of the dry or summer
season.

Article X

Immediately following exchange of ratifications of this Conven-
tion, whether the work of the Mixed Commission has begun or not,
the Governments of Honduras and Nicaragua shall appoint their
representatives, who, in conformity with Article [V, shall constitute
202

ARBITRAL AWARD OF 23 XII 1906 (JUDGM. 18 XI 60)

the arbitral Tribunal, in order that, by organizing themselves in a
preliminary meeting, they may name the third arbitrator and so
communicate it to the respective Ministers of Foreign Affairs, in
order to obtain the acceptance of the appointee. If the latter should
decline to serve they shall forthwith proceed to the appointment
of another third arbitrator in the manner stipulated, and so on
until the arbitral Tribunal shall have been organized.

Article XI

The periods stipulated in this Treaty for the appointment of
arbitrators, the initiation of studies, the ratifications and the
exchange thereof, as well as any other periods herein fixed, shall
not be fatal nor shall they in any way produce nullity.

The object of these periods has been to speed up the work; but if
for any reason they cannot be complied with, it is the will of the
High Contracting Parties that the negotiation be carried on to its
conclusion in the manner herein stipulated, which is the one they
deem most appropriate. To this end they agree that this Treaty
shall be in force for a period of ten years, in case its execution
should be interrupted, within which period it may be neither
revised nor amended in any manner whatever, nor the matter of
boundaries be settled by any other means.”

The Mixed Boundary Commission provided for in Article I of

the

Treaty met from 24 February 1900 onwards and succeeded in

fixing the boundary from the Pacific Coast to the Portillo de Teote-
cacinte ; it was however unable to agree on the boundary from that
point to the Atlantic Coast and recorded its disagreement at its
meeting of 4 July 1901. With regard to the latter section of the
boundary, the King of Spain handed down, on 23 December 1906,
an arbitral award—hereinafter referred to as the Award—the
operative part of which reads as follows:

[Translation from the Spanish revised by the Registry |

14

“T do hereby declare that the dividing line between the Republics
of Honduras and Nicaragua from the Atlantic to the Portillo de
Teotecacinte where the joint Commission of Boundaries abandoned
it in 1901, owing to their inability to arrive at an understanding
as to its continuation at their subsequent meetings, is now fixed in
the following manner:

The extreme common boundary point on the coast of the Atlantic
will be the mouth of the River Coco, Segovia or Wanks, where it
flows out in the sea close to Cape Gracias a Dios, taking as the mouth
of the river that of its principal arm between Hara and the Island
of San Pio where said Cape is situated, leaving to Honduras the
islets and shoals existing within said principal arm before reaching
the harbour bar, and retaining for Nicaragua the southern shore of
the said principal mouth with the said Island of San Pio, and also
the bay and town of Cape Gracias a Dios and the arm or estuary
called Gracias which flows to Gracias a Dios Bay, between the main-
land and said Island of San Pio.
203 ARBITRAL AWARD OF 23 XII 1906 (JUDGM. I8 XI 60)

Starting from the mouth of the Segovia or Coco, the frontier line
will follow the vaguada or thalweg of this river upstream without
interruption until it reaches the place of its confluence with the
Poteca or Bodega, and thence said frontier line will depart from the
River Segovia, continuing along the thalweg of the said Poteca or
Bodega upstream until it joins the River Guineo or Namasli.

From this junction the line will follow the direction which corre-
sponds to the demarcation of the Sitio de Teotecacinte in accordance
with the demarcation made in 1720 to terminate at the Portillo de
Teotecacinte in such manner that said Sifio remains wholly within
the jurisdiction of Nicaragua.”

Following upon a series of exchanges between the two Govern-
ments, some of which will be referred to later, the Foreign Minister
of Honduras in a Note dated 25 April 1911 brought to the notice of
the Foreign Minister of Nicaragua certain steps taken by Honduras
in execution of the Award and made a proposal relating to the
demarcation of a certain part of the boundary line in accordance
with the concluding portion of the operative clause. In reply to this
Note, the Foreign Minister of Nicaragua, in a Note dated 19 March
1912, challenged the validity and binding character of the Award.
This gave rise to a dispute between the Parties.

Subsequently, the two Governments made several attempts at
settlement by direct negotiation or through the good offices or
mediation of other States, but these were all unfruitful. The good
offices of the United States of America in 1918-1920 did not succeed.
The Irias-Ulloa protocol of 21 January 1931, negotiated directly
between the two Governments, failed of ratification. Nor was the
joint mediation of Costa Rica, the United States of America and
Venezuela in 1937 productive of positive result. Certain incidents
between the two Parties having taken place in 1957, the Organi-
zation of American States, acting as a consultative body, was led
to deal with the dispute with the result that on 21 July 1957,
Honduras and Nicaragua reached an agreement at Washington
by virtue of which they undertook to submit:

“to the International Court of Justice, in accordance with its
Statute and Rules of Court, the disagreement existing between
them with respect to the Arbitral Award handed down by His
Majesty the King of Spain on 23 December 1906, with the under-
standing that each, in the exercise of its sovereignty and in accord-
ance with the procedures outlined in this instrument, shail present
such facets of the matter in disagreement as it deems pertinent.”

The Foreign Ministers of Honduras and Nicaragua attached the
following statements to the Agreement as Appendices A and B
thereto:

15
204 ARBITRAL AWARD OF 23 XII 1906 (JUDGM. I8 XI 60)
“Appendix ‘A’

STATEMENT OF THE MINISTER OF FOREIGN AFFAIRS OF HONDURAS
ON THE POSITION OF HIS GOVERNMENT IN RESORTING TO
THE INTERNATIONAL COURT OF JUSTICE

Honduras is submitting to the International Court of Justice its
claim against Nicaragua that the Arbitral Award of His Majesty the
King of Spain handed down on 23 December 1906 be carried out,
basing its stand on the fact that the Arbitral Award is in force and is
unassailable. Honduras has maintained and continues to maintain
that Nicaragua’s failure to comply with that arbitral decision
constitutes, under Article 36 of the Statute of the International
Court of Justice and in accordance with the principles of interna-
tional law, a breach of an international obligation.

The foregoing reference to the position of Honduras in this
proceeding is only of a general nature and in no wise constitutes
a definition or limitation of the matter to be submitted to the
Court, or a formula that restricts in any way the exercise of the
right that Honduras will maintain in the action before the Court.

Appendix ‘B’

STATEMENT OF THE MINISTER OF FOREIGN AFFAIRS OF NICARAGUA
ON THE POSITION OF HIS GOVERNMENT IN APPEARING BEFORE
THE INTERNATIONAL COURT OF JUSTICE

Nicaragua, when it appears before the International Court of
Justice, will answer the claim of Honduras, presenting reasons,
actions, and facts, and opposing the exceptions that it considers
appropriate, in order to impugn the validity of the Arbitral Award
of 23 December 1906, and its compulsory force, and also invoking
all those rights that may be in its interest. Nicaragua has main-
tained and now maintains that its boundaries with Honduras con-
tinue in the same legal status as before the issuance of the above-
mentioned Arbitral Award.

The foregoing reference to the position of Nicaragua in this
proceeding is only of a general nature and in no wise constitutes
a definition or limitation of the matter to be submitted to the Court,
or a formula that restricts in any way the exercise of the right that
Nicaragua will maintain before the Court.”

*
* *

By the Application instituting proceedings in the present case,
Honduras asks the Court inter alia to declare that Nicaragua is under
an obligation to give effect to the Award. This request was main-
tained in the final Submissions presented by Honduras at the
hearing.

In its final Submissions presented at the hearing, Nicaragua asks
the Court to reject the Submissions of Honduras and to adjudge and
declare inter alia that the decision given by King Alfonso XIII on

16
205 ARBITRAL AWARD OF 23 XII 1906 (JUDGM. 18 X1 60)

23 December 1906, invoked by Honduras, does not possess the
character of a binding arbitral award and that the so-called ‘‘arbi-
tral” decision is in any case incapable of execution by reason of its
omissions, contradictions and obscurities.

Honduras alleges that there is a presumption in favour of the
binding character of the Award as it presents all the outward
appearances of regularity and was made after the Parties had every
opportunity to put their respective cases before the Arbitrator. It
contends that the burden lay upon Nicaragua to rebut this presump-
tion by furnishing proof that the Award was invalid.

Nicaragua contends that, as Honduras relies upon the Award, it
is under an obligation to prove that the person giving the decision
described as an award was invested with the powers of an arbitra-
tor, and it argues that the King of Spain was not so invested inas-
much as:

(a) he was not designated arbitrator in conformity with the pro-
visions of the Gamez-Bonilla Treaty, and

{b) the Treaty had lapsed before he agreed to act as arbitrator.

+
* ES

In support of the first contention, Nicaragua has argued that the
requirements of Articles III and V of the Gamez-Bonilla Treaty
were not complied with in the designation of the King of Spain as
arbitrator. It has urged that, before the two national arbitrators
could proceed to this designation, it was necessary to exhaust the
membership of the foreign Diplomatic Corps accredited to Guate-
mala and thereafter to attempt to come to an agreement on any
other foreign or Central American public figure for the purpose of
constituting a three-man arbitral tribunal.

The record shows that on 2 December 1899, the two national
arbitrators designated the Mexican Chargé d’affaires in Central
America, Federico Gamboa, as third member of the arbitral tribunal.
In April 1902, he was recalled from Guatemala. On 21 August 1902,
the two national arbitrators designated the Mexican Minister to
Central America, Cayetano Romero, as third member of the tribunal.
He left Guatemala for reasons of health without having accepted
or rejected the designation. There is no record of any proceedings
taken by the national arbitrators thereafter for the purpose of orga-
nizing the arbitration until 2 October 1904. On that date the two
national arbitrators, José Dolores Gamez and Alberto Membrefio,
met in the City of Guatemala with the Spanish Minister to Central
America, Pedro de Carrere y Lembeye, and, as stated in the Minutes
of the meeting, “having verified their full powers and with the
express consent of their Governments appointed the Spanish
Minister to be the chairman of a meeting preliminary to the arbi-

17
206 ARBITRAL AWARD OF 23 XI 1906 (JUDGM. 18 XI 60)

tration which is to consider and settle the pending boundary
question”. At that meeting, “‘by common consent and the require-
ments of Articles III and IV of the Gamez-Bonilla Treaty having
previously been complied with” (de comün acuerdo y previos los
tramites que prescriben los articulos 3° y 4° del Tratado Gdmez-
Bonilla) the King of Spain was designated as arbitrator.

It has been suggested that this mention of Article IV was by
mistake in place of Article V. Be that as it may, what was meant
was that the procedure laid down in the Treaty to be followed
antecedent to the designation of the King of Spain as arbitrator
had already been complied with. In these circumstances, an alle-
gation that such was not in fact the case must be established by
positive proof. No such proof has been placed before the Court.

In the opinion of the Court it was within the power of the arbi-
trators to interpret and apply the articles in question in order to
discharge their function of organizing the arbitral tribunal. Whether
they had in fact exhausted the membership of the Diplomatic Corps
accredited to Guatemala and failed to reach agreement on the
election of any other foreign or Central American public figure or
whether they had considered such steps as optional and unlikely
to lead to a fruitful result, the fact remains that after agreeing that
the relevant articles of the Treaty had been complied with they
agreed to proceed to the designation of the King of Spain as arbi-
trator. The Court, therefore, concludes that the requirements of the
relevant articles of the Gamez-Bonilla Treaty as interpreted by the
two national arbitrators had already been complied with when, at
the meeting of 2 October 1904, it was agreed by common consent
that the King of Spain be designated as arbitrator and that he
should be requested on behalf of both Governments to undertake
the task.

On 4 October 1904, the Spanish Minister sent telegrams to the
Presidents of Honduras and Nicaragua stating that it had been
agreed to designate the King of Spain as arbitrator in the case.

On 6 October 1904, the President of Honduras expressed his
satisfaction at the designation of the King of Spain to decide the
question of boundaries of Honduras and Nicaragua, and expressed
the hope that the King would accept the task.

On 7 October 1904, the President of Nicaragua replied that it
would ‘‘be satisfactory and an honour for Nicaragua if H.M. the
King of Spain will accept the designation of arbitrator to settle the
boundaries dispute between Honduras and Nicaragua”.

On 17 October 1904, the acceptance of the King of Spain was
communicated to the Spanish Minister in Central America, who
immediately dispatched telegrams to the Presidents of Honduras
and Nicaragua informing them of the King’s agreement “‘to be the

18
207 ARBITRAL AWARD OF 23 XII 1906 (JUDGM. I8 XI 60)

arbitrator in the question of the boundaries between Nicaragua and
Honduras”.

In his Note of 21 December 1904, addressed to the Spanish
Minister of State, the Foreign Minister of Nicaragua renewed in
the name of his Government “to His Majesty the King of Spain the
expression of my deep gratitude for the generosity shown’ in
accepting his “‘designation as arbitrator to settle the question of
boundaries between Nicaragua and Honduras”.

In his Report to the National Legislative Assembly dated 30
November 1905, the Foreign Minister of Nicaragua stated:

“At a meeting in Guatemala City in October 1904, under the
presidency of His Excellency the Minister for Spain to Central
America, the moment came to elect the third arbitrator who is
to settle the affair definitively. His Majesty King Alfonso XIII
of Spain was elected as the third arbitrator, the two arbitrators
voting in favour, and no choice could have been more appropriate.
The affair is now brought to the august cognizance of His Catholic
Majesty, who has already appointed a commission of investigation
made up of distinguished persons.

I have already declared in the chapter referring to Honduras that
His Majesty King Alfonso XIII is the arbitrator who is to settle
our boundary question; I am glad to add that the August Sovereign
of the Mother Country has generously informed the Nicaraguan
Government, through his Minister of State, that he feels it a very
great pleasure to have been appointed to settle the question pending
between these two American Republics, for which he has a warm
sympathy. For this we are very grateful to the Spanish Monarch and
his enlightened Government.”

No question was at any time raised in the arbitral proceedings
before the King with regard either to the validity of his designation
as arbitrator or his jurisdiction as such. Before him, the Parties
followed the procedure that had been agreed upon for submitting
their respective cases. Indeed, the very first occasion when the
validity of the designation of the King of Spain as arbitrator
was challenged was in the Note of the Foreign Minister of Nicara-
gua of 19 March 1912. |

In these circumstances the Court is unable to hold that the desig-
nation of the King of Spain as arbitrator to decide the boundary
dispute between the two Parties was invalid.

In support of its second contention, namely, that the Gamez-
Bonilla Treaty had lapsed before the King of Spain agreed to act
as arbitrator, Nicaragua argues that the Treaty came into effect
on 7 October 1894, the date on which it was signed, and that, by

19
208 ARBITRAL AWARD OF 23 XII 1906 (JUDGM. 18 NI 60)

virtue of Article XI, it lapsed ten years later, on 7 October 1904. As
the King of Spain agreed to act as arbitrator on 17 October 1904,
his designation as arbitrator took effect ten days after the Treaty
had, according to Nicaragua, ceased to be in force. On this view of
the matter, it is contended that the whole proceeding before the
King of Spain as arbitrator and his decision of 23 December 1906
was null and void and of no effect whatever. The reply of Honduras
is that the Treaty did not come into effect till the exchange of rati-
fications between the Parties, which was effected on 24 December
1896, and that consequently the period of ten years laid down in
Article XI of the Treaty expired on 24 December 1906. According
to Honduras, therefore, the arbitral proceedings were completed,
and the Award was handed down, during the currency of the Treaty.

It is argued on behalf of Nicaragua that Article IX of the Treaty,
which provided that the requirements laid down in Article VIII
with regard to ratifications and the exchange thereof should not
hinder the immediate organization of the Mixed Commission, meant
that the period of time specified in Article XI commenced to run,
not as from the date of the exchange of ratifications, but as from
the date of signature of the Treaty. Honduras, on the other hand,
relies upon Article IX as making provision for an exception to
the coming into effect of the Treaty, which was to await the
exchange of ratifications, the object of the exception being that
the organization of the Mixed Commission need not be delayed
pending the coming into force of the Treaty on the date of the
exchange of ratifications.

There is no express provision in the Treaty with regard to the
date on which it was to come into force. Taking into consideration
the provisions of Articles VIII, IX and X, the Court is of the view
that the intention of the Parties was that the Treaty should come
into force on the date of exchange of ratifications and that the
ten-year period specified in Article XI should begin to run from
that date but that, in the meantime, in pursuance of Article IX,
the immediate organization of the Mixed Commission might be
proceeded with. That this was the intention of the Parties is put
beyond doubt by the action taken by the two Parties by agreement
in respect of the designation of the King of Spain as arbitrator.
Agreement on the designation of the King of Spain as arbitrator was
reached on 2 October 1904. The Court finds it difficult to believe
that the Parties, or one of them, had in mind an interpretation of
the Treaty according to which the period provided for in Article XI
should expire five days later and that the Treaty should then lapse.
Indeed, on the very day on which, according to the present sub-
mission of Nicaragua, the Treaty expired, the President of Nica-
ragua stated in his telegram to the Spanish Minister to Central
America that it would be satisfactory and an honour for Nicaragua
if the King of Spain would accept his designation as arbitrator to
settle the boundary dispute between Honduras and Nicaragua. This

20
209 ARBITRAL AWARD OF 23 XII 1906 (JUDGM. 18 XI 60)

furnishes a clear indication that Nicaragua did not regard the Treaty
as having lapsed on that day.

Some support for Nicaragua’s contention was sought to be drawn
from the suggestion made by the Spanish Minister to Central
America to the President of Honduras on 21 October 1904 and to
the President of Nicaragua on 24 October 1904 that the period of
the Treaty might be extended. In the opinion of the Court, the time
at which this initiative was taken shows that it did not carry with
it any implication that the Treaty had expired on 7 October 1904.
In actual fact, no action was taken to extend the duration of the
Treaty. This furnishes confirmation of the view which the Court
takes that the Treaty was not due to expire till ten years after the
date of the exchange of ratifications, that is to say, on 24 December
1906. Had this not been so, the two Governments, when confronted
with the suggestion made by the Spanish Minister to Central
America, would either have taken immediate appropriate measures
for the renewal or extension of the Treaty or would have terminated
all further proceedings in respect of the arbitration on the ground
that the Treaty providing for arbitration had already lapsed. On
the contrary, the two Governments proceeded with the arbitration
and submitted their respective cases to the arbitrator. This shows
that the intention of the Parties had been that the Treaty should
come into force on the date of the exchange of ratifications.

Again, it may be noted that no objection was taken before the
King of Spain to his proceeding with the arbitration on the ground
that the Gamez-Bonilla Treaty had already expired. Indeed, the
very first allegation that the Treaty had expired on 7 October 1904
was made as late as 1920 during a mediation procedure undertaken
by the Government of the United States of America in an effort to
resolve the boundary dispute between Honduras and Nicaragua.

The Court, therefore, concludes that the Gamez-Bonilla Treaty
was in force till 24 December 1906, and that the King’s acceptance
on 17 October 1904 of his designation as arbitrator was well within
the currency of the Treaty.

*
2 *

Finally, the Court considers that, having regard to the fact
that the designation of the King of Spain as arbitrator was freely
agreed to by Nicaragua, that no objection was taken by Nicaragua
to the jurisdiction of the King of Spain as arbitrator either on the
ground of irregularity in his designation as arbitrator or on the
ground that the Gamez-Bonilla Treaty had lapsed even before the
King of Spain had signified his acceptance of the office of arbitrator,
and that Nicaragua fully participated in the arbitral proceedings
before the King, it is no longer open to Nicaragua to rely on either
of these contentions as furnishing a ground for the nullity of the
Award.

21
210 ARBITRAL AWARD OF 23 XII 1906 (JUDGM. 18 XI 60)

*
* *

Honduras is thus seeking execution of the Award made on 23 De-
cember 1906 by the King of Spain who, in the opinion of the Court,
was validly designated arbitrator by the Parties during the currency
of the Gamez-Bonilla Treaty. Nicaragua urges that even under
those conditions the Award is a nullity and seeks to establish the
nullity of the Award on the grounds that it was vitiated by:

(a) excess of jurisdiction;
(b) essential error;

(c) lack or inadequacy of reasons in support of the conclusions
arrived at by the Arbitrator.

Nicaragua also contends that the Award is in any case incapa-
ble of execution by reason of its omissions, contradictions and
obscurities.

Honduras contends that the conduct and attitudes of Nicaragua
show that it accepted the Award as binding and that in conse-
quence of that acceptance and of its failure to raise any objection
to the validity of the Award for a number of years, it is no longer
open to Nicaragua to question the validity of the Award on the
grounds alleged or indeed on any ground at all. Honduras further
contends that the Award is clear and definite and is not incapable
of execution.

As already stated, the Award was handed down on 23 December
1906. On 24 December 1906 the President of Nicaragua received
a telegram from the Nicaraguan Minister in Madrid, which sum-
marized the operative clause of the Award as follows:

“Boundary begins mouth principal arm River Segovia leaving
to Nicaragua Island San Pio, with the bay and the town of Gracias
and arm called Gracias; line follows Segovia upstream until encoun-
ters Guineo; thereafter boundary takes direction corresponding
Sitio Teotecacinte, according to marking established 1720, finishing
at Portillo de Teotecacinte, said Sitio remaining entirely to Nicara-
gua.”

On the next day, the President of Nicaragua sent the following
telegram to the President of Honduras:

“Through a cable of today’s date I have taken cognizance of
the arbitral award made by the King of Spain in the matter of
the delimitation of the frontier. Having regard to this decision,
it appears that you have won the day, upon which I congratulate
you. A strip of land more or less is of no importance when it is a
question of good relations between two sister nations. The irksome
question of the delimitation of the frontier has been resolved in
such a satisfactory manner thanks to friendly arbitration. I hope
that in the future no obstacle will disturb the good relations between
our respective countries.”

22
211 ARBITRAL AWARD OF 23 XII 1906 (JUDGM. 18 XI 60)

In a Note dated 9 January 1907, addressed to the Spanish
Chargé d’affaires in Central America, the Foreign Minister of
Nicaragua expressed the appreciation of his Government “for the
graciousness of the King of Spain who, by his arbitral award, has
terminated our frontier dispute with the neighbouring state of
Honduras”.

On 28 January 1907, the full text of the Award was published
in the Official Gazette of Nicaragua.

On 1 December 1907, the President of Nicaragua, in his message
to the National Legislative Assembly of Nicaragua, stated as
follows:

“On 23 December 1906, His Majesty the King of Spain made
the Arbitral Award in the matter of the delimitation of the frontier
between this Republic and that of Honduras. My Government has
noted with satisfaction that this important dispute has been termi-
nated by the highly civilized method of arbitration and, although
it accepts this decision with pleasure, it has given instructions
to Minister Crisanto Medina with a view to requesting a relevant
clarification since this decision contains some points that are
obscure and even contradictory.”

In the course of his report (Memoria) to the National Legislative
Assembly of Nicaragua, dated 26 December 1907, covering the
period between 1 December 1905 and 30 November 1907, the
Foreign Minister of Nicaragua, José Dolores Gamez, referring to
Honduras, stated: ‘Our long-standing question of boundaries with
this sister Republic, which, as you will remember, we had sub-
mitted to arbitration by the King of Spain, was finally settled
by the latter on 23 December 1906, on which date he made his
Award.” He went on to explain that, despite every effort that had
been made by the Government of Nicaragua to obtain a more
favourable decision, the decision was somewhat disappointing. The
report continued: “The Award in question also contains contra-
dictory concepts which make it difficult to put it into effect, for
which reason our Minister in Spain has been instructed to ask for
a clarification to avoid possible difficulties in the interpretation of
these concepts by the parties interested in the case.’’ The report
then stated that, if satisfactory light was not thrown by the King
upon the points submitted to him, a friendly approach would be
made to the Government of Honduras so that ‘‘these final details”
might be settled in all harmony and to the satisfaction of both
countries. The report affirmed “‘that the irksome question of
frontiers which has preoccupied us for so many years and which
might at any moment have impaired the good relations which
have always attached us to our Honduran brothers, has been
settled. Boundary questions are normally of a very serious and
dangerous character, and as a rule they leave in their wake feelings
of deep resentment which are difficult to overcome. For that
reason we must rejoice at the friendly solution we have been able

23
212 ARBITRAL AWARD OF 23 XII 1906 (JUDGM. 18 xi 60}

to find in the settlement of so delicate a question, whatever lines
of demarcation have today been laid down for our frontiers with
Honduras.” In conclusion the report sounded a note of caution
for the future with regard to the seeking of settlements by arbitra-
tion without appeal.

The section of the report dealing with Spain set out the Award
in full.

The National Legislative Assembly of Nicaragua took note of
the report and by decree of 14 January 1908 approved ‘the acts
of the executive power in the field of foreign affairs between:
1 December 1905 and 26 December 1907”.

On 25 April 1911, the Foreign Minister of Honduras addressed
a Note to the Foreign Minister of Nicaragua pointing out that

“it would be desirable to demarcate the small portion of the
line which, in conformity with the last paragraph of the Arbitral
Award, extends from the junction of the River Poteca or Bodega
with the River Guineo or Namasli as far as the Portillo de Teote-
cacinte, since the Arbitral Award fixed the rest of the line along
natural boundaries; for this purpose, as soon as the time is thought
opportune, my Government will approach Your Excellency’s
Government with a view to carrving out this demarcation by agree-
ment.”

Early in September 1911, certain Nicaraguan papers carried a
report attributed to the Ministry of Foreign Affairs of Nicaragua
that one of its representatives, who was then in Europe, had been
instructed to request the King of Spain for a clarification of the
Award. The Honduran Chargé d’affaires in Nicaragua thereupon
approached the Foreign Minister of Nicaragua and enquired
whether the newspaper report was accurate. According to the Note
of the Honduran Chargé d’affaires dated 8 September 1911, address-
ed to his own Foreign Minister, a document presented to the Court
by Nicaragua, the Foreign Minister of Nicaragua replied that the
press reports were not true and

“that all that he had intimated to the journalists was that,
together with the Chargé d’affaires, he was engaged in examining
whatever had any reference to fixing, in accordance with the Award,
the line of demarcation running from the junction of the Poteca
or Bodega River as far as the Portillo de Teotecacinte; and that
everything would be done in a satisfactory manner in view of the
sincere and cordial relations existing between the Governments
of Honduras and Nicaragua.”

It follows from the facts referred to above that Nicaragua took
cognizance of the Award and on several occasions between the
date of the Award and 19 March rg12 expressed its satisfaction to
Honduras that the dispute concerning the delimitation of frontiers

24
213 ARBITRAL AWARD OF 23 XII 1906 (JUDGM. I8 XI 60)

between the two countries had been finally settled through the
method of arbitration.

Nicaragua urges that, when the President of Nicaragua
dispatched his telegram of 25 December 1906 to the President of
Honduras, he was not aware of the actual terms of the Award.
From the telegram of the Minister of Nicaragua in Madrid of
24 December 1906, the President of Nicaragua had however learned
where the boundary line was to begin under the Award, and the
course it was to follow in order to join up with the point reached by
the Mixed Boundary Commission. The President’s own telegram
to the President of Honduras shows that he considered that the
Award was on the whole in favour of Honduras, and he gave
expression to his feeling that the loss of a certain area of territory
was not too serious a sacrifice as against the strengthening of
friendly relations between the two countries. In any event, the
full terms of the Award must have become available to the Nica-
raguan Government fairly soon since the Award was published
in the Official Gazette of Nicaragua on 28 January 1907. Even
thereafter, the attitude of Nicaragua towards the Award continued
to be one of acceptance, subject to a desire to seek clarification of
certain points which would facilitate the carrying into effect of
the Award. This desire was, however, not carried beyond the
giving of certain instructions to the Nicaraguan Minister in Madrid
and no request for clarification was in fact submitted to the King
of Spain. Changes of Government in Nicaragua and Honduras did
not bring about any change in this attitude till March of 1912 when
the Foreign Minister of Nicaragua, in his reply dated 19 March 1912
to the Note of the Foreign Minister of Honduras, dated 25 April
1911, for the first time raised the question of the validity of the
Award on the grounds that the King of Spain had not been validly
designated arbitrator, that the Award did not comply with the
conditions laid down by the Gamez-Bonilla Treaty and that it
was not ‘a clear, really valid, effective and compulsory Award”.

* *

In the judgment of the Court, Nicaragua, by express declaration
and by conduct, recognized the Award as valid and it is no longer
open to Nicaragua to go back upon that recognition and to challenge
the validity of the Award. Nicaragua’s failure to raise any question
with regard to the validity of the Award for several years after the
full terms of the Award had become known to it further confirms
the conclusion at which the Court has arrived. The attitude of the
Nicaraguan authorities during that period was in conformity with
Article VII of the Gamez-Bonilla Treaty which provided that the
arbitral decision whatever it might be—and this, in the view of the
Court, includes the decision of the King of Spain as arbitrator—

25
214 ARBITRAL AWARD OF 23 XII 1906 (JUDGM. 18 XI 60)

“shall be held as a perfect, binding and perpetual Treaty between
the High Contracting Parties, and shall not be subject to appeal’.

Nicaragua, however, contends that having in Appendix B
of the Washington Agreement of 21 July 1957 made the reservation
that, “when it appears before the International Court of Justice,
it will answer the claim of Honduras, presenting reasons, actions
and facts, and opposing the exceptions that it considers appropriate,
in order to impugn the validity of the Arbitral Award of 23 Decem-
ber 1906, and its compulsory force, and also invoking all those rights
that may be in its interest”, it is entitled to ask the Court for a
decision on the grounds of nullity put forward by it against the
Award. The reply of Honduras to this contention is that the effect
of Appendix A and Appendix B to the Washington Agreement was
no more than to leave it open to the Parties to present their respective
cases to the Court in any manner permissible to them under
international law and the Statute and Rules of Court, that Nica-
ragua was free to submit to the Court any grounds on which it
placed reliance in order to establish the nullity of the Award but
that it was equally open to Honduras to submit that, having regard
to the conduct and attitudes of Nicaragua, the Court was not called
upon to pronounce on all or some of those grounds. The Court is
inclined to the view that the Honduran contention is well-founded.

However, even if there had not been repeated acts of recognition
by Nicaragua which, as the Court has found, debars it from relying
subsequently on complaints of nullity and even if such complaints
had been put forward in proper time, the Award would, in the
judgment of the Court, still have to be recognized as valid. The
Court will proceed to indicate very briefly the reasons for arriving
at this conclusion. Before doing so, the Court will observe that the
Award is not subject to appeal and that the Court cannot approach
the consideration of the objections raised by Nicaragua to the
validity of the Award as a Court of Appeal. The Court is not called
upon to pronounce on whether the arbitrator’s decision was right
or wrong. These and cognate considerations have no relevance to
the function that the Court is called upon to discharge in these
proceedings, which is to decide whether the Award is proved to
be a nullity having no effect.

Nicaragua’s first complaint is that the King of Spain exceeded
his jurisdiction by reason of non-observance of the rules laid down
in Article II of the Gamez-Bonilla Treaty. It is contended in the
first place that the arbitrator failed to observe the rules laid down
in paragraphs 3 and 4 of that Article. The first of these two rules
states that ‘‘each Republic is owner of the territory which at the
date of Independence constituted respectively the provinces of
Honduras and Nicaragua”. The rule in paragraph 4 calls upon
the arbitrator to consider ‘fully proven ownership of territory”
and precludes recognition of “juridical value to de facto possession

26
215 ARBITRAL AWARD OF 23 XII 1906 (JUDGM. 18 XI 60)

alleged by one party or the other’. Nicaragua contends that the
arbitrator fixed what he regarded as a natural boundary line without
taking into account the Laws and Royal Warrants of the Spanish
State which established the Spanish administrative divisions
before the date of Independence. In the judgment of the Court
this complaint is without foundation inasmuch as the decision of
the arbitrator is based on historical and legal considerations (dere-
cho histérico) in accordance with paragraphs 3 and 4 of Article IT.

With regard to the same complaint, Nicaragua, in the second
place, stresses that the arbitrator purported to exercise his discre-
tion in granting compensations in order to establish, in so far as
possible, a well-defined natural boundary line as provided for in
paragraph 6 of Article II of the Treaty. Nicaragua contends that
this discretion was, under the said paragraph, vested in the Mixed
Boundary Commission and could not be exercised by the arbitrator.
In exercising this discretion, the arbitrator, it is urged, exercised
a power which he did not possess, or which, if conferred upon
him, he exercised far beyond its legitimate limit. The Court is
unable to share this view. An examination of the Treaty shows
that the rules laid down in Article II were intended not only for
the guidance of the Mixed Commission to which they expressly
referred, but were also intended to furnish guidance for the arbi-
tration. No convincing reason has been adduced by Nicaragua
in support of the view that, while the remaining paragraphs of
Article If were applicable to the arbitrator, paragraph 6 was
excluded and that, if it was not excluded, the arbitrator, in applying
it, exceeded his powers. In the view of the Court, the arbitrator
was under obligation to take into account the whole of Article II,
including paragraph 6, to assist him in arriving at his conclusions
with regard to the delimitation of the frontier between the two
States and, in applying the rule in that paragraph, he did not go
beyond its legitimate scope.

The Court, having carefully considered the allegations of Nica-
ragua, is unable to arrive at the conclusion that the King of Spain
went beyond the authority conferred upon him.

Nicaragua next contends that the Award is a nullity by reason
of “essential error’. The Court has not been able to discover in
the arguments of Nicaragua any precise indication of “essential
error” which would have the effect, as alleged by Nicaragua, of
rendering the Award a nullity. Under paragraph 7 of Article II of
the Gamez-Bonilla Treaty, “in studying the plans, maps and
other similar documents which the two Governments may submit”,
the arbitrator was to prefer those which he ‘‘deems more rational
and just”. The instances of “essential error” that Nicaragua has
brought to the notice of the Court amount to no more than eval-
uation of documents and of other evidence submitted to the arbi-
trator. The appraisal of the probative value of documents and

27
216 ARBITRAL AWARD OF 23 XII 1906 (JUDGM. 18 XI 60)

evidence appertained to the discretionary power of the arbitrator
and is not open to question.

The last ground of nullity raised by Nicaragua is the alleged
lack or inadequacy of reasons in support of the conclusions arrived
at by the arbitrator. However, an examination of the Award shows
that it deals in logical order and in some detail with all relevant
considerations and that it contains ample reasoning and explana-
tions in support of the conclusions arrived at by the arbitrator.
In the opinion of the Court, this ground is without foundation.

*
* *

It was further argued by Nicaragua that the Award is not capable
of execution by reason of its omissions, contradictions and obscur-
ities, and that therefore on this ground the Court must reject the
submission of Honduras praying that the Court should adjudge
and declare that Nicaragua is under an obligation to give effect
to the Award.

The operative clause of the Award fixes the common boundary
point on the coast of the Atlantic as the mouth of the river Segovia
or Coco where it flows out into the sea, taking as the mouth of the
river that of its principal arm between Hara and the Island of San
Pio where Cape Gracias a Dios is situated, and directs that, from
that point, the frontier line will follow the thalweg of the river
Segovia or Coco upstream without interruption until it reaches the
place of its confluence with the Poteca or Bodega and that thence
the frontier line will depart from the river Segovia or Coco con-
tinuing along the thalweg of the Poteca or Bodega upstream until
it joins the river Guineo or Namasli. From this junction, the line
will follow the direction which corresponds to the demarcation of
the Sitzo of Teotecacinte in accordance with the demarcation made
in 1720 to terminate at the Portillo de Teotecacinte in such manner
that the said Sifio remains wholly within the jurisdiction of Nica-
ragua.

Nicaragua has argued that the mouth of a river is not a fixed
point and cannot serve as a common boundary between two States,
and that vital questions of navigation rights would be involved
in accepting the mouth of the river as the boundary between
Honduras and Nicaragua. The operative clause of the Award, as
already indicated, directs that ‘starting from the mouth of the
Segovia or Coco the frontier line will follow the vaguada or thalweg
of this river upstream’’. It is obvious that in this context the
thalweg was contemplated in the Award as constituting the bound-
ary between the two States even at the ‘mouth of the river”. In
the opinion of the Court, the determination of the boundary in
this section should give rise to no difficulty.

Nicaragua argues further that the delimitation in the operative
clause leaves a gap of a few kilometres between the point of depar-

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217 ARBITRAL AWARD OF 23 XII 1906 (JUDGM. 18 xi 60)

ture of the frontier line from the junction of the Poteca or Bodega
with the Guineo or Namasli up to the Portillo de Teotecacinte, which
was the point to which the Mixed Commission had brought the
frontier line from its western boundary point. An examination of
the Award fails to reveal that there is in fact any gap with regard
to the drawing of the frontier line between the junction of the
Poteca or Bodega with the Guineo or Namasli and the Portillo de
Teotecacinte.

In view of the clear directive in the operative clause and the
explanations in support of it in the Award, the Court does not
consider that the Award is incapable of execution by reason of any
omissions, contradictions or obscurities.

For these reasons,

THE Court,

by fourteen votes to one,

finds that the Award made by the King of Spain on 23 December
1906 is valid and binding and that Nicaragua is under an obligation
to give effect to it.

Done in English and in French, the English text being authorita-
tive, at the Peace Palace, The Hague, this eighteenth day of Novem-
ber, one thousand nine hundred and sixty, in three copies, one of
which will be placed in the archives of the Court and the others
transmitted to the Government of the Republic of Honduras and
the Government of the Republic of Nicaragua, respectivelv.

(Signed) Helge KLAESTAD,
President.

(Signed) GARNIER-COIGNET,
Registrar.

Judge MoRENO QUINTANA makes the following Declaration:

Although I am in agreement with the virtually unanimous
opinion of my colleagues with regard to the decision reached in this
case, I consider that it should have been arrived at by a different
procedural method. As a representative on this Court of a Spanish-
American legal system and confronted with a dispute between two
Spanish-American States, I believe that the legal questions which
are of particular concern to them should have been dealt with in the
first place. I refer in particular to that provided for in Article IT,
paragraph 3, of the Gamez-Bonilla Treaty, which relates to the
29 |
218 ARBITRAL AWARD OF 23 XII 1906 (JUDGM. 18 XI 60)

application by the arbitrator of the principle of wt: possidetis juris
which for more than a century has governed the territorial situation
of the Spanish-American States. By reason of its importance this
principle called for initial attention by the Court since Nicaragua
based a major ground of nullity of the Award of the King of Spain
on the arbitrator’s failure to observe it.

Again, the case essentially involves the validity or invalidity of
an international legal act. The Judgment might therefore with
advantage have established the intrinsic regularity of the Award,
after having analysed its extrinsic regularity, instead of—as it
does—resting the solution of the case in advance upon acquiescence
in the Award by the Parties. This latter situation, in the present
case, in which one of the Parties contends for the nullity of the
Award, is of no more than subsidiary importance. It provides a
procedural argument based on a situation of fact, but it does not
provide an adequate legal ground upon which to base the Judgment.

Furthermore, the features of the case do not put in issue the
good faith of the unsuccessful party. Nicaragua, during the half
century in which the Award was not implemented and in which
the question of its non-implementation was not referred by Hondu-
ras to any international tribunal, may have had reasons, although
ill-founded, for believing in the nullity of that legal act. A number
of attempts by Nicaragua to obtain an arbitral decision to that
effect remained unsuccessful. There was nothing to prevent the
Court from so finding. Honour was due to the State which, together
with the successful party and with Costa Rica, Guatemala and
EI Salvador, gave so splendid an example of devotion to the cause
of law in setting up in 1907 the Central American Court of Justice.
the first example in the world of an international judicial tribunal.
The technical function of the Court is not incompatible with that
of rendering in its judgments peace to the spirit, particularly in the
case of sovereign States. Pax est justitia.

Judge Sir Percy SPENDER appends to the Judgment of the Court
a statement of his Separate Opinion.

M. Urrutia HoLGuix, Judge ad hoc, appends to the Judgment
of the Court a statement of his Dissenting Opinion.

(Initialled) H. K.
(Initialled) G.-C.

30