SEPARATE OPINION OF JUDGE JESSUP

I concur in the Judgment of the Court and especially in its conclusion
that the equidistance method or principle is not established as obligatory
in international law. It would be possible to emphasize by more detailed
quotations how crystal clear it is that neither the International Law
Commission nor its Committee of Experts considered that ‘‘equidistance”
was prescribed by existing law or that it was a concept inherent in the
very nature of the continental shelf.

In my opinion, more extended discussion than is to be found in the
Judgment of the Court may usefully be devoted to what, in the words of
Counsel for Denmark and the Netherlands, are “some of the realities
of the ‘just and equitable share’ in the present cases”. At the same time,
I agree with the Court that the contentions of the Federal Republic in
favour of this concept cannot be accepted in the form given to them.

Although, for reasons which were not fully disclosed, but which may
be surmised, the Parties in this case chose to deal obliquely in their
pleadings with the actuality of their basic interests in the continental
shelf of the North Sea, it is of course obvious that the reason why they
are particularly concerned with the delimitation of their respective
portions is the known or probable existence of deposits of oil and gas
in that seabed.

The North Sea is one of the great historic fishing grounds of the world,
but there is no indication in the pleadings of the Parties in this case that,
in connection with delimiting the shelf, they were in any way concerned
about control over such living organisms as are described in paragraph 4
of Article 2 of the 1958 Convention on the Continental Shelf.

In addition to the Parties in this case, Great Britain and Norway are
also actively interested in the exploitation of North Sea oil and gas, but
the petroleum industry has not evinced any interest in the area of the
continental shelf appertaining to Belgium or to France.

As indicated in the Court’s Judgment, a series of seven international
bilateral agreements among pairs of the littoral States have plotted lines
delimiting portions of the shelf which the Parties consider to be appurte-
nant to themselves and to each other. In these various areas during the
last five years, there has been a steadily increasing activity in the explora-
tion and drilling for oil and gas, although private interests for a time

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naturally hesitated to make the very large investments required | until
the enactment of national laws revealed the terms on which concessions
would be granted ? and until the settlement of disputed national claims
to certain areas. The ambivalence which characterized the pleadings of
the Parties in regard to the relevance of the mineral resources of the con-
tinental shelf will appear from a few passages in both the written and the
oral pleadings.

The Federal Republic of Germany

The Memorial of the Federal Republic, in Part 1, Chapter I, opens with
a physical description of the continental shelf of the North Sea. It notes
(in section 7):

“After the discovery of a very rich field of natural gas near Slochteren
in the Dutch province of Groningen close to the mouth of the Ems,
the first test drillings were made in 1963. Since then a number of
finds have been made, including several exploitable deposits of
natural gas in the British area...”

References are made to various governmental acts of Denmark, the
Federal Republic, Great Britain and the Netherlands, relative to future
development of these mineral resources (sections 12-15).

As the Memorial (in Chapter J of Part 1) begins to develop the legal
theory of “the just and equitable share”, there is clear reference to natural
resources (sections 29 and 30). The emphasis on resources is strengthened
in sections 34 and 35 especially by the invocation of the law on the ap-
portionment of the waters of a river basin. In section 48, Judge Hudson
is quoted as stating that “the economic value of proven deposits of
minerals” should be taken into consideration in the delimitation of the
continental shelf. In section 66, one reads:

“From the point of view of exploitation and control of such sub-
marine areas, the decisive factor is not the nearest point on the

1 E.g.. the cost for a fixed platform in 100 ft. of water has been estimated at
$3,500,000; in 500 ft. of water, at $14,250,000. Another estimate is for £6,000 a
day during drilling operations. The pipe-line from the productive wells on Leman
Bank to the shore terminal in Great Britain, a distance of some 20-40 miles, is said
to have cost £7 million to £8 million.

2 The United Kingdom and German orders, laws or decrees were not in effect until
mid-1964 and final Dutch regulations were operative only in 1967. The Federal
Republic faced difficulties like those encountered in the United States, that is to say.
the respective rights of the Federal Government and of the separate States or
Lander.

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68 CONTINENTAL SHELF (SEP. OP. JESSUP)

coast, but the nearest coastal area or port from which exploitation
of the seabed and subsoil can be effected. The distance of an oil,
gas or mineral deposit from the nearest point on the coast is irrele-
vant for practical purposes, even for the laying of a pipe-line, if
this point on the coast does not offer any possibilities for setting
up a supply base for establishing a drilling station or for the landing
of the extracted product.”

As the Memorial proceeds to develop the argument about ‘special
circumstances’, there are references and quotations to the effect that the
location of ‘indivisible deposits of mineral oil or natural gas” may con-
stitute such circumstances (section 70). These references are repeated in
section 79, where it is said that—

“the literature on the subject attributes relevance also to historical,
economic, and technical factors, in particular to the geographical
distribution of the mineral resources of the continental shelf and to
the maintenance of the unity of their deposits” !.

It is not wholly clear from the text, however, whether this is the ‘‘geo-
graphical criterion” to which the Federal Republic would attribute pri-
mary importance. However, in the following section, the Memorial, in
arguing for the “principle of equality”, asserts that all the coastal States
of the North Sea are interested, inter alia, ‘in the appropriate exploitation
of the mineral deposits of the seabed in order to avoid wasteful or harm-
ful methods of extraction which would lead to despoliation”. Here
reference is made to the Supplementary Agreement of 14 May 1962 to
the German-Netherlands Ems-Dollard Treaty of 8 April 1960, which
provides for joint exploitation and sharing of costs and profits in the
Ems Estuary ?.

Finally the Memorial, in section 95, at least hints that the Court would
be free to indicate that the location of mineral resources may be one of
the criteria to be taken into account “in order to achieve a just and equi-
table apportionment”.

In the Reply (section 31) there is a discussion of allegations in the

1 The citations could be supplemented by reference to the prestigious authority of
Gidel (A/CN. 4/32), by Admiral Mouton’s reiteration of his view in his article in
Marineblad, January 1959 and in his Tehran lectures in October 1959, and by the
opinions of Pearcy, Geographer of the United States Department of State and
Commander Kennedy (IV Whiteman’s Digest, 329 and 913).

2 In 1963 this co-operative arrangement was applied on a fifty-fifty basis to gas
wells on the German side of the line near Groothusen and on the Dutch side near
Bierum, according to Petroleum Press Service, 1963, p. 377 and 1964, p. 332. On the
adjacent land areas, there is the great Groningen field in the Netherlands, and the
large German resources found between the Netherlands frontier and the Ems and
further eastward to the Weser.

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69 CONTINENTAL SHELF (SEP. OP. JESSUP)

Danish Counter-Memorial to the effect that the Federal Republic had
been influenced by recently acquired knowledge of the prospects for
finding oil and gas in the continental shelf. The Reply asserts that—

“the German explorations referred to in the Counter-Memorial
could not possibly provide the Federal Republic of Germany with
reliable information about the existence of oil and gas deposits in
the disputed area. Only actual drilling as undertaken in 1967 under
a Danish concession, might have resulted in such information.”

It is added that “German explorations were stopped on the request of
the Danish Government in the disputed area” but that the latter granted
drilling concessions there.

Denmark

Chapter I of the Danish Counter-Memorial at once draws attention to
the interest in mineral resources by leading off in section 7 with a some-
what detailed discussion of explorations and drillings in the North Sea
beginning as early as 1963 with the single Danish concessionnaire making
its first drillings in 1966. The reader is referred to Annex 7 of the Counter-
Memorial which is a memorandum by the Adviser to the Danish Con-
cessionnaire together with a map showing the location of what then
(1967) were deemed the most promising locations for wells. The memo-
randum also called attention to the existence of a ridge extending about
220 kilometres into the North Sea known as the “Fyn-Grindsted High”.
It is stated that duc to its geological structure, this ridge is “considered
devoid of hydrocarbon prospects of importance, and ... consequently
reduces the prospective area of Denmark and the Danish North Sea
continental shelf considerably”. In Chapter IT of the Counter-Memorial,
sections 14-16 set forth further details concerning exploration and ex-
ploitation of oil and gas in the continental shelf area claimed by Denmark,
including mention of the 1963 concession to the A. P. Meller Companies.
In Chapter II, sections 21 and 22 describe German explorations in the
North Sea continental shelf “including the southern part of the Danish
shelf area”. Reference is made to the Danish protest and assertions which
have been mentioned in connection with the Reply of the Federal Repub-
lic. It is also remarked that the German proclamation of 1964 concerning
the exclusive rights in the continental shelf was probably inspired by press
reports that an American company ! was planning to drill outside the
German territorial sea.

1 Presumably Amoseas.

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70 CONTINENTAL SHELF (SEP. OP. JESSUP)

In sections 31 and 34, which deal with the negotiations between Den-
mark, the Federal Republic and the Netherlands, reference is made to
the German suggestions of possible joint utilization of resources in certain
areas, but no opinion is expressed.

Later, in section 49, the Danish Counter-Memorial argues that the
German Memorial confuses the question of “space” with the question of
“resources” and in this connection rejects the invoked analogy of the
waters of a river basin.

In section 125, the Danish Counter-Memorial replies to the point made
in section 66 of the German Memorial to the effect that the important
coastal point must be one useful in connection with drillings and extrac-
tions of minerals. The Counter-Memorial states that—

“experience shows that, if a deposit is exploited, the nearest points
on the coast, even if theretofore unused or scarcely inhabited, may
be developed into important elements of support for the exploita-
tion...”.

In section 149 there is reference to certain bilateral agreements between
North Sea States providing for consultation in regard to the exploitation
of resources bordering the boundary line !.

The Netherlands

The Counter-Memorial of the Netherlands, like that of Denmark, but
in less detail, opens Chapter I with some references to the early drillings
in the North Sea. The discussion is expanded in section 11, showing
that gravity measurements and seismic explorations had been conducted
by Netherlands interests (especially Nederlandse Aardolie Maatschappij
—N.A.M.) in the North Sea since 1956. Since 1960 “these activities have
been especially concentrated on the northern part and up to the median
lines which separate the Netherlands part from the German and Danish
parts of the shelf’, Between August 1962 and 1966, a total of 24 licences
had been granted to about 19 companies or groups of companies repre-
senting American, Belgian, British, French, German and Italian interests;
these licences ‘‘cover all of that part of the continental shelf which comes
under the jurisdiction of the Netherlands on the basis of the equidistance
principle’.

Further licences have been issued since the new Netherlands legislation

went into effect in early 1967. Figure 2 on page 315 of the Netherlands

1 The Special Agreement between the United Kingdom and the Netherlands of
6 October 1965 concerning the exploitation of a single geological structure, is not
mentioned.

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71 CONTINENTAL SHELF (SEP. OP. JESSUP)

Counter-Memorial shows the charting of the blocks for which licences
are granted.

In section 18, the Counter-Memorial explains that the domestic legis-
lation and international agreements of the Netherlands—

“take into account the possibility of the presence of single geological
structures extending across the dividing line between parts of the
continental shelf under the North Sea”.

Section 29 refers to the Special Agreement with the Federal Republic
concerning co-operative activities in the Ems Estuary where the inter-
national frontier “has been disputed for centuries”’.

As in section 49 of the Danish Counter-Memorial, the Netherlands
Counter-Memorial in section 43 replies to the German argument in-
voking the rules on sharing waters of a river-basin. Similarly, section 119
develops the same argument as that in the Danish Counter-Memorial in
section 125, in respect of the relative importance of various points on
the coast. Likewise, in section 143, one finds the discussion of special
agreements covering situations in which there are “indivisible deposits
of mineral oil or natural gas”.

The Common Rejoinder of Denmark and the Netherlands adds little
to the general picture already presented. But in section 20, where the
issue of the distinction between “space” or ‘‘area”’ and “resources” is
further developed, it is stated that—

“there is no necessary connection between the surface of an area
and the amount of exploitable resources therein. ... Indeed the
total amount of the natural resources of the area, indicated as the
continental shelf beneath the North Sea, is unknown and the same
goes for the location of those resources.”

In section 21, where there is furthe: rebuttal of the argument based on
the use of waters of international rivers, there is the following statement
which is not lacking in significance:

“Surely it is possible that a single geological structure extends
across a boundary line on the continental shelf, as it is possible
that a single geological structure extends across the delimitation
lines between concession areas on the part of the continental shelf
appertaining to one State. Both municipal legislations and the inter-
national practice of States show that the problems arising from such
a situation are not solved by a modification of the boundaries of the
concession area or of the continental shelf as the case may be, but
by different methods which do not affect those boundaries. In this
connection reference is made to paragraph 18 of the Netherlands
Counter-Memorial . . .”

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72 CONTINENTAL SHELF (SEP. OP. JESSUP)

—which deals with consultations in case of imbrications or overlaps.
Section 22 argues that the Federal Republic itself renounced basing
its claim on the sharing of “resources”.

In section 51, it is recalled that in both the Counter-Memorials (Danish,
paragraph 88 and Netherlands, paragraph 82) it had been pointed out
that there had not been much occasion for States to make treaties con-
cerning lateral boundaries ‘before the question of exploiting the mineral
resources of the seabed and subsoil arose’.

It is apparent from the above extracts that the problem of the exploita-
tion of the oil and gas resources of the continental shelf of the North
Sea was in the front of the minds of the Parties but that none of them
was prepared to base its case squarely on consideration of this factor,
preferring to argue on other legal principles which are sometimes advanced
with almost academic detachment from realities.

In the oral proceedings, there are a number of statements which are
of interest in considering whether the known or probable location of
mineral resources is a key factor.

From the side of the Federal Republic, its Agent, in his opening
address on 23 October stated flatly:

“The main consideration that influences State practice in the acqui-
sition and delimitation of continental shelf areas is the idea of getting
a share in the potentialities of the continental shelf that have accrued
to the coastal States by the progress of modern technology.”

All of these various but often ambivalent references to the natural
resources of the shelf, considered in the light of the German argument
for a “just and equitable share”, led one Member of the Court to put
the following question to the Agent of the Federal Republic on 25
October:

“Will the Agent of the Federal Republic of Germany, at a con-
venient time, inform the Court whether it is the contention of the
Federal Republic of Germany that the actual or probable location
of known or potential resources on or in the continental shelf,
is one of the criteria to be taken into account in determining what
is a ‘just and equitable share’ of the continental shelf in the North
Sea?”

The German Agent replied to this question on 4 November in the
following terms:

“In response to this question I would like to state the following:
First, the criteria to be taken into account in determining what

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is a just and equitable share of the continental shelf are primarily,
but not exclusively, geographical factors. The consideration of other
factors and the weight which should be attributed to them depends
on their merits under the circumstances of the concrete case.

Secondly, if, as in the North Sea, there is no reliable information
about the actual location of economically exploitable resources of
considerable importance, the geographical situation alone determines
the equitable apportionment. Once agreement had been reached on
the delimitation of the continental shelf, later knowledge as to the
location of such resources should not affect the agreed boundary.

Thirdly, economically exploitable resources of considerable impor-
tance, located in areas where the boundary is disputed or yet undeter-
mined may, under the principle of the just and equitable share, be
taken into account in determining the allocation of areas to one or the
other State. This may be accomplished either by changing the course
of the boundary line, or by means of joint exploitation if the latter is
feasible. Such a case may arise in particular if the boundary line would
cut across a single deposit. Since there are no such resources in the
North Sea, the delimitation of the continental shelf should be made
on the basis of the geographical situation, along the lines suggested
by the Federal Republic of Germany. (Emphasis supplied).

In this context, | may add that the simplest way to have achieved
an equitable apportionment with respect to known or unknown
resources would have been to place the areas of the continental
shelf of the North Sea situated farther off the coast under a régime
of joint control and exploitation. The Federal Republic had advo-
cated such a solution in the earlier stages of the negotiations: since
the North Sea States had begun to divide the continental shelf
among themselves by boundaries, such a situation seems to be out-
side the realm of reality. In the present situation, a division by
sectors reaching the centre of the North Sea is an effective way to
give the Parties an even chance with respect to the potentialities
of the continental shelf.”

Tt is difficult to reconcile the statement that “there are no such resources

in the North Sea”, i.e., where the boundary line would cut across a
single deposit, with the statement that “there is no reliable information
about the actual location of economically exploitable resources of con-
siderable importance” in the North Sea. Presumably the Agent had in
mind only that part of the North Sea which is in dispute in this case.

Subsequently, on the same day, the German Agent made the following

comments:
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74 CONTINENTAL SHELF (SEP. OP. JESSUP)

“If there are several States adjacent to the same continental shelf,
this transfer of jurisdiction [to the exclusive jurisdiction of the
coastal States] involves a partitioning, among those States, of area,
and the potential resources therein, which have accrued to the coastal
State from the common fund of mankind. The making of such an
apportionment implies that the self-evident principle of the just
and equitable share must be given effect. The necessary criteria
will have to be developed from the concept of the continental shelf
and adapted to the situation of the particular case.” (Emphasis
supplied.)

Then, after further invocation of the rules for the uses of waters of
international rivers:

“As F have... pointed out... the delimitation of continental shelf
areas is in its essence not a mere extension of sovereignty. It is
primarily a distribution of submarine areas in which each coastal
State is given an exclusive right to exploit the potential resources
of those areas. Since the resources of the continental shelf which
have to be distributed among several adjacent States are as much
limited as are the resources of an international water-basin, the
law is in both cases faced with the same problem, namely the equi-
table distribution of such resources.”

The sum total of these comments is somewhat ambiguous when one
seeks a direct answer to the question posed by a Member of the Court.
Nor is the matter greatly clarified by noting certain remarks of Professor
Oda, Counsel for the Federal Republic. On 25 October Professor Oda
cited an agreement between Iran and Saudi Arabia concerning a disputed
offshore area whereby they did not divide the area—

“by a median line or another geometrical demarcation but rather
by a novel, so-called ‘economic’ solution. This has been done by
dividing all of the ‘recoverable oil’ in the previously disputed area
into two equal parts. Ideas which had been advanced earlier, of
dividing the ‘oil in place’ were discarded. The equal share now
relates instead to all ‘recoverable oil’ contained in the pertinent
geological structure.”

On the other side, argument for Denmark and the Netherlands did
not fail to take account of the realities of the location of resources of
oil and gas. On 28 October, the Agent for Denmark made the following
statement:

“At the same time the Danish Government must consider this
case as being of the utmost importance. Denmark has so far had no
natural resources or riches. In the modern search for oil and gas

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75 CONTINENTAL SHELF (SEP. OP, JESSUP)

extensive exploration has taken place without positive results, apart
from the fact that not very far north of the boundary line in question
oil and gas have been found. Even if it is not yet known whether
commercial exploitation is possible, the position of the boundary
line must be considered as being of the utmost importance.”

On 31 October, the Netherlands Agent hinted, as had the Agent for
the Federal Republic, at the possibility of certain difficulties being over-
come by means other than changing a boundary line, scilicet. by joint
exploitation. He said:

‘In both cases there may be said to be an element of artificiality
in part of the truly equidistant boundary line ... Furthermore,
international law and practice demonstrate that there are other
means of solving the problems arising from the artificiality of
boundary lines—other means than the drawing of a different boun-
dary line.

In this connection, I may make reference, by way of. example,
to the United Kingdom/Netherlands Agreement coneerning the
exploitation of single geological structures overlapping the boundary
line.”

On 7 November the same Agent, after dealing again with the invocation
of the rules governing the use of the waters of international rivers, said
that while the Federal Republic relied on those rules —

“at the same time and on the other hand does not consider the
actual or probable location of known or potential resources on or
in the continental shelf in the North Sea as one of the criteria for
its scheme of so-called equitable apportionment. This, at least [said
the Agent] seems to be the upshot of the reply given by the learned
Agent of the Federal Republic to one of the questions . . .”

put by a Member of the Court, as described heretofore.

On the last day of the oral proceedings, 11 November, Counsel for
Denmark and the Netherlands, in the course of a somewhat satirical
discussion of what he called the ‘‘macrogeographical” approach, made
a somewhat detailed comparison of the economic and particularly of
the mineral resources of the three States parties to the case. He noted
that the Federal Republic ‘thas been rich in mineral and fuel” whereas,
“until recently, the Netherlands had quite minor mineral and fuel
resources”. Denmark, in turn, “in the past had altogether negligible
mineral and fuel resources”. He continued to note that the Netherlands
in recent years has uncovered “important sources of natural gas and

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76 CONTINENTAL SHELF (SEP. OP. JESSUP)

some crude oil” ?. As for Denmark, its economic position—

“might be transformed if oil or natural gas now became available
to her in the continental shelf. In this connection the Court was
informed, in Chapter I of Part I, and in Annex 7 of the Danish
Counter-Memorial, that the quite extensive exploration already
carried out indicates that the only areas of promise so far discovered
lie just to the north, on the Danish side, of the Danish equidistance
boundary. In short, the stretching of the Federal Republic’s conti-
nental shelf to the so-called centre of the North Sea in the manner
demanded by our opponents may well have the result of cutting
off Denmark from the one reasonable expectation which she has
of acquiring appreciable domestic sources of energy.”

All of these observations, Counsel informed the Court, were presented
“only to indicate some of the realities of the ‘just and equitable share’
in the present cases”. Finally, he was more dogmatic in asserting that
the German Agent’s reply to the question from a Member of the Court
constituted an agreement that the Court has only to consider ‘‘geographi-
cal factors”; in other words he was maintaining that despite his own
observations on relative wealth of the three States in mineral fuel resour-
ces, the Court was not called upon to take such resources in the continental
shelf into account if it sought to determine what is a “‘just and equitable
share”.

Although the arguments in the pleadings were deflected by the Parties
away from outright reliance on the location of hydrocarbons under the
North Sea, their bilateral and trilateral negotiations were specifically
related to such resources and indicated that more was known about
their location than the pleadings indicate 2.

The Government of the Federal Republic made it clear from the
outset (that is, in the spring of 1964) that it was primarily interested in
reaching an agreement with the Netherlands in the area close to shore
so that ‘‘the German oil companies will be able to commence drilling
operations at the points near the coast in which they are at present
mainly interested”. (German Docs., No. 8.) The area in question was
seaward of the Ems Estuary beyond that part already covered by the
1962 agreement for co-operative exploitation of the mineral resources

' The reserves in the Slochteren gas field have been estimated at more than
40 million million cubic feet. It is probably the second or third largest field in the
world.

2 The documents furnished in response to a request from the Court contain only
excerpts from the governmental records.

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77 CONTINENTAL SHELF (SEP. OP. JESSUP)

there. Both Governments noted that national legislation had not yet
been enacted and that there was danger of an “uncontrolled and hence
probably inefficient hunt for oil and gas”. But the ultimate reach of the
dividing line between the two national areas in the North Sea was
always reserved, it being noted that the value of various areas was still
unknown. The situation was summarized in a paper dated 10 August
1964, prepared for the Cabinet of the Federal Republic:

‘However, in view of the drilling operations for natural gas started
by a German syndicate this summer in the western part of the
German Bight, an early settlement of the boundary problem in
the coastal area was urgently required. Hence the first step was to
agree with the Netherlands on the partial boundary laid down in
the present draft treaty; it does not prejudice the further course of
the boundary in view of the reservations stated by both Parties in
the attached Joint Minutes of the Negotiations of 4 August 1964,
and it clarifies the situation in the area near the coast on which
the German mineral oil industry sets great hopes in view of the
large natural gas deposits found in the Netherlands northern pro-
vince of Groningen.” (German Docs., p. 23.)

The agreement was concluded on 1 December 1964.
From the point of view of the Government of the Federal Republic:

“As far as can be judged at this stage [6 October 1964], the talks
with Denmark will not be of the same economic importance as
those with the Netherlands, as so far there are no definite supposi-
tions that any mineral oil and natural gas deposits worth prospecting
are to be found in the German-Danish boundary area...” (German
Docs., p. 26.)

On the Danish side, the concessionnaire, A. P. Moller Companies,
Ltd., who worked closely with the Government, shared a view which had
been expressed in the Netherlands-German negotiations, namely that the
German-Netherlands inshore agreement was due to pressure from the oil
companies, and that the German-Danish boundary area held very slight
prospects.

According to a Danish Government memorandum dated 17 February
1965:

‘‘At a meeting held to deal with the question of continuing the

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negotiations with Germany and attended by representatives of the
Ministry of Foreign Affairs, the Ministry of Public Works, and the
Danish Syndicate which has been granted an exclusive concession
to explore and exploit deposits of hydrocarbons in the Danish
underground and the continental shelf, the representative of the
Syndicate said that it was not actually or concretely interested in
having established a Danish-German equidistance line of demarca-
tion in the North Sea area next to the coast, because in view of the
results of the explorations made in that area and in view of other
information available it was to be assumed that there was only
little likelihood of finding deposits of gas or oil there; the Syndicate
would not be particularly active there. However, there were ap-
preciably greater possibilities of finding deposits of gas or oil further
to the west, i.e. towards the middle of the North Sea in the border
regions adjacent to Germany, the Netherlands, and Great Britain.
The Syndicate is particularly interested in that area, which area
would naturally be lost if the German aspirations were realized.”
(Danish Docs., p. 6.)

The concessionnaire accordingly hoped that Danish-Netherlands nego-
tiations would begin soon. But the Danish-German inshore agreement
was signed on 9 June 1965 and the Danish-Netherlands agreement was
not signed until 31 March 1966, after the close of the tripartite negotia-
tions.

It is of course true that there is no rule of international law which
requires States surrounding an area such as the North Sea to delimit
their respective sections of the continental shelf in such a way as to ap-
portion to each State a “fair share” of the mineral resources on or in that
shelf. Such a rule would be impossible of application since it would
require as a condition precedent precise knowledge of the location and
size or productivity of all parts of the area. Such knowledge is not com-
plete for the North Sea even today, some five years after numerous wild-
cat operations were undertaken; scientific surveys had begun much ear-
lier, and the Slochteren discovery goes back to 1959. The first British
licences for drilling in the North Sea were granted in 1964; the first Dutch
licences were issued between 1962 and 1966. The Danish concession was
extended to the continental shelf in October 1963 but the first wells
spudded in were not commercially exploitable. As already noted, more
promising results are now indicated in drillings slightly north of the
Danish-German “‘equidistance” line. In the German sector, 11 or 12 dry
holes were drilled in three years, 1964-1967.

If the argument for a “just and equitable share’ had been rested on a
notion of apportioning natural resources, the counter-argument might
have insisted (as indeed it hinted) that resources on the adjacent main-

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land or in the bed of the territorial sea must also be taken into account.
This would have been disadvantageous to the Federal Republic because
of its terrestrial supplies notably between the Dutch frontier and the
River Weser.

It has been stated that “the oil industry is strictly international” and
in many of the explorations in the continental shelf in the North Sea the
interests of one petroleum company are not confined to a single national
sector and are frequently blended in a group or consortium which may
contain as many as a dozen separate companies. The same drilling rigs,
barges or platforms are chartered to operate first in one national sector
and then in another.

“The process of exploring acreage which has already been explored
by another company using different ideas and with different hypo-
theses goes on continually. It frequently happens that significant
discoveries of oil and gas are made on acreage which a competitor
has given up after completing what he considers an adequate ex-
ploration programme.” (North Sea Gas, [U.K.] Labour Party:
Report of the North Sea Study Group (August 1967), p. 15.)

However, the interests of the petroleum companies are, of course, not
identical with those of the Governments of the several States. The latter
are concerned with the national revenue to be derived from fees, taxes,
royalties or profit-sharing, with increases in national productivity, and
also with the impact on the national balance of payments if imports of
fuels to meet domestic needs are eliminated or reduced by the production
of natural gas in the State’s portion of the continental shelf.

The Court must assume that the Parties have acted in good faith. This
means that Denmark and the Netherlands, in concluding their delimita-
tion agreement on 31 March 1966, believed that their action, which was
based on the equidistance method, was justified by existing international
law. In my view it would not be equitable to take the position that since
the Court has now held that the equidistance method has not been made
obligatory by international law, any acts such as the granting of licences
or concessions in the areas of the shelf claimed by Denmark or the Nether-
lands are to be treated as null and void ab initio. Rather, 1 think there
should be applied the following conclusion of the Arbitral Tribunal
which, in the Grishadarna case, on 23 October 1909, decided the delimita-
tion of a certain part of the maritime frontier between Norway and
Sweden:

‘... in the law of nations, it is a well established principle that it is
necessary to refrain as far as possible from modifying the state of

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things existing in fact and for a long time; ... that principle has a
very particular application when private interests are in question,
which, once disregarded, can not be preserved in an effective manner
even by any sacrifices of the State, to which those interested be-
long...” (Wilson, The Hague Arbitration Cases, 1915, pp. 111, 129).

The Parties to the instant case have in effect recently acted upon this
same principle in respecting habitual fishing practices: Fisheries Conven-
tion of 9 March 1964, Articles 3 and 4, 581 United Nations Treaty Series,
pages 58, 60. That Convention provides for a transitional period in which
such established rights may be phased out, a provision which would not
be suitable in dealing with drilling operations already undertaken. But it
may also be noted that while in the Grisbadarna case the Tribunal spoke
of a state of things “existing. . . for a long time”, the Fisheries Convention
considers as “‘habitual’’, exploitations during a period of ten years.
Considering the rapidity of the progress of exploitation in the petroleum
industry in the North Sea, no restrictive limit should be placed on the
elapsed time. The existence of actual drilling or exploitation in a certain
place cannot be considered in the present circumstances to base a title
on prescription, or on prior user or occupation; nor is it to be assimilated
to “historic title’ which is mentioned as a “special circumstance” in
Article 12 of the 1958 Convention on the Territorial Sea. Nevertheless,
the Parties might well bear in mind a provision in the 1897 treaty be-
tween Great Britain and Venezuela which provided that:

“In determining the boundary line, if territory of one party be found
by the tribunal to have been at the date of this treaty in the occupa-
tion of the subjects or citizens of the other party, such effect shall
be given to such occupation as reason, justice, the principles of
international law, and the equities of the case shall, in the opinion
of the tribunal, require.” (5 Moore, International Arbitrations,
p. 5018.)

In any event, an agreed delimitation of the continental shelf by the
three States in conformity with the Judgment of the Court, would not
seem to impinge upon most of the areas which have already proved pro-
ductive, but would involve an area for wildcatting. In the British sector,
the major producing fields, e.g., Leman Bank and Indefatigable Bank,
are located south of the 54th degree of latitude and between 2° and 3° E.
The West Sole Field and the Hewett Field are even further to the west.
All of these lie to the west of the median line between the Federal Repub-
lic and Great Britain. The widely heralded, but still unproved, Mobil gas
strike in November 1968 in Netherlands Block P-6, is south of the 53rd
parallel and therefore not in an area to which the Federal Republic
could justly lay claim. The productive locations in the Norwegian sector

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are north of the median line between the Federal Republic and Norway.
The promising locations in the Danish sector could be involved in a new
delimitation of the Federal Republic’s portion, and to them the Gris-
badarna principle might, in all equity, be applied. These would seem to
be the only locations where exploitation has already produced promising
results, within the limits of the sector delineated in the chart No. 6 in-
troduced by the Agent of the Federal Republic on 4 November 1968.
This sector is marked by the lines B-F and D-F on map No. 3 which is
included in the Judgment of the Court. The Agent of the Federal Republic
stated that ‘the present claim of the Federal Republic of Germany is
within the limits of such an equitable sector’. He stated that they
accepted or acquiesced in the partial boundary lines agreed upon with
the Netherlands on 1 December 1964 and with Denmark on 9 June 1965.
Accordingly, any possible claim to the shelf north of the Danish line or
west of the Netherlands line must be deemed to be relinquished. More-
over, the westernmost point of such a German triangular sector could not
justifiably lie to the west of the true median line between the Federal
Republic and the United Kingdom, or to the north of the true median
line between the Federal Republic and Norway.

However, as the Judgment of the Court points out, there will be areas
in which, in accordance with rules and principles indicated by the Court,
two States may have equally justifiable claims, or, in other words, areas
in which those claims will overlap. As the Court indicates, in such situa-
tions the solution may be found in an agreed division of the overlapping
areas or in an agreement for joint exploitation “the latter solution ap-
pearing particularly appropriate when it is a question of preserving the
unity of a deposit” (paragraph 99).

Of the existing North Sea agreements relating to joint exploitation
and mentioned in paragraph 97 of the Judgment of the Court, that be-
tween the Netherlands and the Federal Republic applying to the Ems
Estuary is, as already noted, the most complete example of full co-
operation in both exploitation and profit-sharing. The Agreement of
6 October 1965 between the Netherlands and the United Kingdom calls
for consultation on the most effective exploitation of overlapping de-
posits and on “the manner in which the costs and proceeds relating there-
to shall be apportioned”’. If the two Governments fail to reach agreement,
the matter is to be referred, at the request of either one, to an arbitrator
whose decision is binding. If licensees are involved, their proposals are
to be considered by the Governments. The other agreements in general
call for consultation with a view to agreement; in the United Kingdom-

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Norway Agreement of 10 March 1965 there is aguin provision for con-
sulting any licensees.

Outside the North Sea, the problem of a deposit extending across a
boundary line is dealt with in a similar manner in the Agreement between
Italy and Yugoslavia of 8 January 1968 concerning the delimitation of
their respective areas of the intervening continental shelf in the Adriatic.
In the Persian Gulf, there are examples of agreements for shared exploita-
tion and shared profits at least in the Kuwait-Saudi Arabia Agreement
of 7 July 1965, and the Bahrein-Saudi Arabia Agreement of 22 February
1958. An equal division of recoverable oil seems to have been provided
for in a recently initialled agreement between Iran and Saudi Arabia
which was mentioned by both sides in the oral proceedings.

Most of the North Sea agreements, and the agreement in the Adriatic,
specifically relate to a deposit which extends across a boundary line, but
the German-Dutch Agreement on the Ems Estuary and agreements in
the Persian Gulf provide for joint exploitation or profit-sharing in areas
of considerable extent where the national boundaries are undetermined
or had been recently agreed upon subject to the provision for joint in-
terests, as particularly in the case of the Partition of the Neutral Zone.
Therefore, while, as the Court states, the principle of joint exploitation
is particularly appropriate in cases involving the principle of the unity
of a deposit, it may have a wider application in agreements reached by
the Parties concerning the still undelimited but potentially overlapping
areas of the continental shelf which have been in dispute.

Nor is it irrelevant to recall that the principle of international co-
operation in the exploitation of a natural resource is well established in
other international practice. The Federal Republic invoked the Helsinki
Rules of the International Law Association concerning the sharing of
the waters of a river basin traversing or bordering more than one State.
Whether or not those Rules are the most accurate statement of the exist-
ing international law, as to which 1 express no opinion, there are numer-
ous examples of co-operative use and of sharing of fluvial resources.
The history of ocean fisheries is full of examples of co-operative agree-
ments and the Preamble of the 1958 Geneva Convention on Fishing and
Conservation of the Living Resources of the High Seas recites—

“... that the nature of the problems involved in the conservation
of the living resources of the high seas is such that there is a clear
necessity that they be solved, whenever possible, on the basis of
international co-operation through the concerted action of all the
States concerned . . .”,

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A striking example of co-operation in the exploitation of a living resource
is the Convention between the United States, Canada. Japan and the
Soviet Union concerning the fur seals of the North Pacific Oceans: the
United States and the Soviet Union harvest the pelts and then share the
proceeds with Canada and Japan (cf. 314 United Nations Treaty Series,
106).

On land, Austria and Czechoslovakia have agreed upon co-operative
exploitation of an oil pool which crosses under the frontier, and as far
back as 1866 Bolivia and Chile agreed to divide the produce of the guano
deposits in an area where they were defining the common boundary.

Moreover, “Today, the municipal laws of most of the oil-producing
nations of the world have passed through the earlier phases of non-
regulation and limited co-relative rights and now contain specific provi-
sions requiring co-operative development of a shared petroleum resource
pool by all common interest-holders”. Many laws require the interested
parties to “adopt a unitized plan of development under which competi-
tion is now altogether eliminated and co-operation is required on co-
ordinating such points as number and spacing of wells tapping the same
common source”. (Onorato, “Apportionment of an International
Petroleum Deposit’, 17 /nternational and Comparative Law Quarterly,
85 (1958).) The British and Norwegian, and apparently the Dutch regula-
tions all provide for ministerial action to avoid irrational operation
when a deposit underlies more than one concession area. Co-operative
executive action for a like purpose deals with comparable situations
across state borders in the United States. (Morris, “The North Sea
Continental Shelf: Oil and Gas Legal Problems”, 2 The International
Lawyer, 191, 210 ff. (1968).)

Clearly, the principle of co-operation applies to the stage of explora-
tion as well as to that of exploitation, and there is nothing to prevent the
Parties in their negotiations, pending final delimitations, from agreeing
upon, for example, joint licensing of a consortium which, under ap-
propriate safeguards concerning future exploitation, might undertake
the requisite wildcat operations.

Tam quite cognizant of the fact that the general economy of the Court's
Judgment did not conduce to the inclusion of the detailed, and largely
factual, analysis which I have considered it appropriate to set forth in
this separate opinion, but I believe that what is stated here, even if it 1s
not considered to reveal an emerging rule of international law, may at
least be regarded as an elaboration of the factors to be taken into ac-
count in the negotiations now to be undertaken by the Parties. Beyond

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that, I hope it may contribute to further understanding of the principles
of equity which, in the words of Judge Manley O. Hudson, are “‘part of
the international law which it [the Court] must apply”. (Diversion of
Water from the Meuse, P.C.I.J., Series A!B, No. 70, 1937, p. 77.)

I wish to state also that I associate myself with the points made in the
Declaration of Judge Sir Muhammad Zafrulla Khan.

Difficult as the problems are, it is fortunate that the three States which
confront them are expressly committed to various methods of amicable
settlement. They are aware of their right, under Article 60 of the Statute,
to return to this Court for further guidance, or they may, if the need
should arise, resort to the procedures of arbitration and conciliation
set forth in the treaties of 1926 which are cited in the Special Agreements
of 2 February 1967.

(Signed) Philtp C. Jessup.

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