215

DISSENTING OPINION OF JUDGES HACKWORTH,
BADAWI, LEVI CARNEIRO AND SIR BENEGAL RAU

We feel bound to dissent from the Court on the conclusions
relating to consular jurisdiction, fiscal immunity and the inter-
pretation of Article 95 of the Act of Algeciras.

Consular jurisdiction

The Court has found that the United States is not entitled
to exercise, as of right, consular jurisdiction in the French Zone
of Morocco in cases other than those expressly provided for in the
Treaty of 1836 (Articles 20 and 21) and in the Act of Algeciras.

There is hardly anyone to-day who will question the general
proposition that what is known as the capitulatory regime is an
anachronism which should be brought to a speedy end, wherever
it exists. In fact the United States Government itself has at all
times been ready to negotiate with both France and Morocco a new
arrangement or agreement “to replace and recast in a form more
properly adapted to present circumstances the treaty bounds origi-
nally contracted with the State of Morocco”. (Rejoinder, page 43.)

The question in the present case is not whether the capitulatory
regime is good or bad, but whether and to what extent it subsists
on a legal basis in respect of United States nationals in Morocco.
This is the issue raised in the first Submission of the French Govern-
ment and the third Submission of the United States Government.
In both Submissions the reference is to Morocco.

The judgment of the Court is concerned with consular jurisdiction
only in the French Zone.

The Court holds that except for the limited consular jurisdiction
aforesaid, the United States claim to such jurisdiction came to an
end with the termination of the capitulatory rights and privileges
of Great Britain in that Zone by virtue of the Anglo-French Conven-
tion of 1937. We cannot accept this view.

By Article ro of the Anglo-French Convention of 1937, the United
Kingdom agreed that henceforth it could not invoke that Article
or Article 20 (a most-favoured-nation clause) of the Anglo-Moroccan
General Treaty of 1856 for the purpose of claiming the “jurisdic-
tional privileges accorded on the basis of existing treaties concluded
by His Majesty the Sultan of Morocco and the United States of
America”. Article 16 of the same Convention contains a similar
provision referring to ‘‘jurisdictional privileges enjoyed by the
United States under treaties at present in force”. It mentions

43
216 DISS. OPIN. (U.S. NATIONALS IN MOROCCO)

Article 20 of the General Treaty of 1856 and also Article 13, another
most-favoured-nation clause. From these provisions it appears that
in the opinion of the parties to the Convention, that is to say, in
the opinion of the French Government and the British Govern-
ment, the United States would continue to enjoy “jurisdictional
privileges’, as of right, in Morocco, even after the Anglo-French
Convention of 1937 came into force.

After the signature of the Convention, the French Ambassador
in Washington wrote to the Secretary of State on August 26th,
1937: “The United States enjoys in Morocco the capitulatory
regime by virtue of the Treaty concluded between the two Powers
on September 16th, 1836.” He then referred to Article 25 of the
Treaty of 1836 and continued : ‘“‘The above-mentioned Convention
between the United States and Morocco not having been denounced,
the United States continues to benefit by the capitulatory regime
in Morocco. In fact, following the conclusion of the Franco-Britan-
nic Agreement (of 1937), it remains to-day the last Power in a
position to avail itself of that regime. In advising Your Excellency
of the desire of my Government to conclude with the American
Government an agreement which would put an end to this regime,
I take the liberty of recalling to Your Excellency that during the
Conference of Montreux, which ended the regime of the capitula-
tions in Egypt, the representative of the American Government
made declarations indicating the conciliatory spirit in which the
American Government intended to settle this question .... These
declarations have given my Government reason to think that, like
the British Government, the American Government will be willing
to consent to the abolition of the regime of capitulations in
Morocco.”

In the light of these statements, it seems clear that in 1937, the
French Government regarded the United States as entitled to avail
itself of the capitulatory regime even after the Anglo-French Conven-
tion of 1937. We concur in this view and consider that the “‘juris-
dictional privileges” referred to in Articles 10 and 16 of the Anglo-
French Convention of 1937 can mean nothing else than full consular
jurisdiction. According to those Articles, these jurisdictional privi-
leges rested ‘on the basis of existing treaties’. This brings us to the
most important of these treaties, viz., the Act of Algeciras.

We regard the Act of Algeciras as so fundamental that “every
article and clause thereof must be observed and fulfilled with good
faith’. These were the words addressed to the United States and
its citizens by President Theodore Roosevelt when causing the Act
to be made public in 1907. The importance of the Act and of the
principles which it embodies has been acknowledged by all. We

44
217 DISS. OPIN. (U.S. NATIONALS IN MOROCCO)

therefore consider that in interpreting the Act due effect must be
given not only to its express provisions but also to the underlying
implications which lend coherence and meaning to the express pro-
visions. Otherwise the entire structure of the Act may be under-
mined. So far as the United States is concerned, none of its provi-
sions have been abrogated or renounced.

The Act of Algeciras is a great multilateral convention directly
binding upon Morocco and the United States as well as the other
signatory Powers. Its status in regard to the old bilateral treaties,
as an independent and superior act, is formally expressed in its last
Article 123. The scheme of rights and obligations which it estab-
lished, whether expressly or by necessary implication, as between
Morocco and the United States can not, therefore, be allowed to be
impaired by any transactions concluded between any of the other
signatories without the concurrence of both Morocco and the United
States. This appears to us to be fundamental.

At the date of the Act of Algeciras, all the foreign signatory
States had acquired, by usage or by treaty and usage, full consular
jurisdiction in Morocco. The system in its entirety had been well
established for at least fifty years, as shown by the Anglo-Moroccan
General Treaty of 1856. The Act adopted the system as it stood and,
far from seeking to end it or to modify it in any way, extended it to
the new criminal prosecutions and civil suits that might arise under
the Act. We need not enumerate all the articles of the Act in which
this has been done, but shall mention only the salient ones. Article 29
extends the consular system to prosecutions for violations of the
Regulations in Chapter II of the Act, and Articles 101 and 102 to
those of the Regulations in Chapter V. Article 45 extends the system
to actions instituted by the State Bank of Morocco against foreign
nationals. The extent to which the capitulatory system, with all its
implications, is embedded in the Act is indicated by the fact that
when Great Britain renounced the system in the French Zone by
the Convention of 1937, the effect was declared in the Protocol of
Signature of the Convention to be ‘‘to involve the renunciation by
His Majesty the King of the right to rely upon’ no less than 78
articles out of the 123 articles of the Act.

We consider that the Act has adopted the system. It was the
natural thing to do at that date and it was an obvious inducement
to the foreign signatory Powers not only to assent to all the laws
and regulations made by or under the Act, but to uphold what was
of paramount importance to the ruler of Morocco at that time,
namely, ‘the triple principle of the sovereignty and independence
of H.M. the Sultan, the integrity of his domains and economic
liberty without any inequality”, which was declared in the Preamble
of the Act to be the foundation of a new order.

45
218 DISS. OPIN. (U.S. NATIONALS IN MOROCCO)

The consular system has been adopted in the Act, not so much by
express provision as by necessary implication. It would have
occurred to no one to do so except by implication, because the
system was part of the established order at that time. To give effect
to the bare provisions of the Act and ignore this basic implication
in respect of all other cases of the exercise of consular jurisdiction
would result in curious anomalies. For example, it is admitted that
actions against a United States national by the State Bank of
Morocco must, under Article 45 of the Act, be brought before the
United States consular court ; but not any other civil action by a
Moroccan or a foreigner. What is there peculiar to the Bank’s actions
that they and they alone should be tried by the consular court ?
Similarly, what is the special feature of prosecutions for breach of
customs and arms regulations that they and they alone should be
dealt with by the consular court under Chapters II and V of the
Act ? Furthermore, what is there peculiarly onerous about the taxes
mentioned in Chapter IV of the Act that they and only they should
be leviable from foreign nationals subject to the safeguards provided
in that Chapter, while other and perhaps heavier taxes may be
freely levied ? It is difficult to find a satisfactory answer to these
questions.

It seems to us that if the Act of Algeciras is to be maintained as
a logical and coherent structure, the full consular system embedded
in it must be adopted.

There is no danger that this adoption would confer upon the
system any longer lease of life than it would otherwise have had.
For, even without the Act, the system, being based inéer alia upon
long-established usage, which is only another name for agreement
by conduct, can only be terminated in the way in which interna-
tional agreements can be terminated ; and its adoption in the Act
makes no difference in this respect.

We now come to the implications of another important multi-
lateral treaty, the Convention of Madrid. Article 5 of the Conven-
tion makes special provision for the trial of civil suits against
protégés commenced before protection is granted and against
ex-protégés before protection is withdrawn ; it also provides that
the right of protection shall not be exercised towards protégés under
prosecution for a crime before they have been tried by the author-
ities of the country or before their sentence has been executed.
These provisions necessarily imply that civil suits and prosecutions
against the protégés of any foreign Power that signed the Conven-
tion are normally to be tried by the consular courts of that Power ;
otherwise the Article, which prescribes special rules for pending
cases, would be unintelligible. Amongst the protégés are not only

40
219 DISS, OPIN. (U.S. NATIONALS IN MOROCCO)

Moorish subjects employed by the legation and the consular officers
of the foreign Power, but also a certain number of Moorish factors,
brokers, or agents employed by foreign merchants for their business
affairs. Articles 1 and 10 of the Convention maintain the position
of these factors, brokers and agents unchanged.

The Convention in still in force, so far as the United States is
concerned, so that United States protégés are stil] entitled to its
benefits. If such is the position of United States protégés, who are
Moroccan subjects, a fortiori must it be the position of United
States nationals, who are in some cases their employers in business.
This was the view of the French Government itself in 1905, as
evidenced by a despatch dated August 21st, 1905, addressed by
the President of the French Cabinet to the French Diplomatic
Representatives in London, Petrograd, Berlin, Rome, Vienna,
Washington, Brussels, The Hague, Copenhagen, Stockholm and
Lisbon.

“Our Minister at Tangier informs me that the Shereefian Govern-
ment has imprisoned one of our Algerian subjects .... and made
known its intention to remove him from our jurisdiction.

This fact is a violation of treaties.

All the Powers signatories with Morocco to the Madrid Conven-
tion of July 3, 1880, or having adhered to it, have an interest in
the respect of the principles which are put in issue. By virtue of a
rule recognized by this international instrument, Moroccan protégés
are removed from Moroccan jurisdiction ; a fortiori the foreigners,
subjects of the Powers, must benefit of the same advantage.

I would appreciate your indicating to the Government to which
you are accredited the point of view of the Government of the
{French] Republic...” (Rejoinder, p. 34.)

At the date of the Madrid Convention, the signatory Powers were,
independently of the Convention, entitled to claim full consular
jurisdiction for their nationals, and therefore it was not necessary
to mention this right separately in the Convention itself. But even
where the external sources of the right have ceased, the right
continues to flow from the express provisions which have been
inserted in the Convention itself in respect of protégés.

The Court has rejected the contention of the United States
Government basing its claim to consular jurisdiction and other
capitulatory rights in Morocco on ‘‘custom and usage”. The rejec-
tion appears to proceed on the ground that sufficient evidence has

47
220 DISS. OPIN. (U.S. NATIONALS IN MOROCCO)

not been produced in support of the claim. We consider that the
evidence available is sufficient.

Usage is an established source of extraterritorial jurisdiction and
has, for example, been enumerated as a lawful source in the
Preamble to the British Foreign Jurisdiction Act, 1890, which
recites that “by treaty, capitulation, grant, usage, sufferance and
other lawful means, Her Majesty the Queen has jurisdiction within
divers foreign countries”. Usage and sufferance are only different
names for agreement by prolonged conduct, which may be no less
binding than agreement by the written word. The full consular
jurisdiction which the United States in fact exercises in Morocco
to this day has been in existence for nearly a hundred years, if not
longer ; and during this long period both treaties and usage, in the
broad sense of these terms, have contributed to the total result in
varying measure. It is not possible, nor is it of any practical inter-
est, at this distance of time, to isolate and assess separately the
contribution made by each of these sources. Both were at work
supplementing each other.

The first treaty in which full consular jurisdiction was conceded
by the.ruler of Morocco to a foreign Power appears to be the Anglo-
Moroccan General Treaty of 1856. It is admitted in the French
Government’s Reply to the Counter-Memorial of the United States
Government that this Treaty incorporated existing usages, which
necessarily implies that usage was at work even before 1856. It is
true that the admission has been made for the purpose of contend-
ing that after incorporation the usages shared the fate of the Treaty,
a contention with which we do not agree ; nevertheless, there is
the admission that the Treaty incorporated prior usage.

Article XIV of that Treaty and Article XVI of the Treaty of
1861 between Morocco and Spain are, equally, evidence that usage
was at work before, as well as during, the period of these two
Treaties. These Articles provide that litigation between British sub-
jects or Spanish subjects and other foreigners shall be decided solely
in the tribunal of the foreign consuls without the interference of
the Moorish Government “‘according to the established usages which
have hitherto been acted upon or may hereafter be arranged between
such consuls”, or ‘‘could according to established forms, or accord-
ing to those which may be agreed upon among the said consuls”.
This shows that usage was operating and was supplementing
treaties both before and after 1856 and 1861.

It is also significant that United States Congressional legislation
has, ever since 1860, invested the consular courts in Morocco with
jurisdiction in both criminal and civil matters ‘‘so far as the same
is allowed by treaty, and in accordance with the usages of the
countries in their intercourse with the Franks or other Christian
nations”. In other words, the United States has been openly relying

45
221 DISS. OPIN. (U.S. NATIONALS IN MOROCCO)

on usage as one of the sources of its jurisdiction ever since 1860.

Even after 1937, when, according to the French Government, the
benefits of the capitulatory provisions of the Treaties of 1856 and
1861 were no longer available to the United States, the French
Government has been transmitting Moroccan taxation and other
laws to the United States Government in order to have them made
applicable to United States nationals in the French Zone. The
assent of the United States to taxation laws was sought in this
way some twenty-three times in the period 1938-1948. This could
only be on the ground that jurisdiction to enforce these laws
against United States nationals lay with the United States consular
courts.

The conduct of the French Government was not due merely
to what was described during the hearings as “gracious tolerance”.
As early as October 1937, the Secretary of State of the United
States wrote as follows to the French Ambassador in Washington :

“T observe that in your Note [of August 26, 1937], reference is
made to Article 25 of the American-Moroccan Treaty of Septem-
ber 16, 1836, which provides for the termination of the Treaty upon
one year’s notice given by either party. In order that there may
be no misunderstanding, I think it is pertinent to point out that
American capitulatory rights in Morocco are derived not only
from the American-Moroccan Treaty of 1836, but also from other
treaties, conventions, or agreements and confirmed by long-
established custom and usage.”

Thus the French Government knew in 1937 that the United States
was asserting usage as at least one legal basis of its rights, and
in spite of this knowledge, the French Government continued the
old practice without any reservation. It was not, therefore, a
case of mere “gracious tolerance”. As we have shown, usage has
been continuously at work, in varying measure, during a period
of nearly a hundred years, if not longer, and, therefore, what has
been happening since 1937 is evidence of a continuous process
which began nearly a century before that date.

It is significant that during the years 1914-1916, France negotiated
a series of agreements with foreign States by which they renounced
claiming their “rights and privileges arising out of the regime of
capitulations” in the French Zone. Some of these States, such as
Switzerland, Greece and Japan, had never entered into treaty
relations of any sort with Morocco. Only through usage could
these States have acquired the rights which they undertook not
to claim. The position of the United States can not be worse
merely because it had treaties with Morocco containing most-
favoured-nation clauses.

49
222 DISS. OPIN. (U.S. NATIONALS IN MOROCCO)

It has often been said in the course of this case that the United
States is now the only Power that has not renounced its capitulatory
rights in Morocco. This is hardly accurate. The renunciation by
Great Britain in the Anglo-French Convention of 1937 is confined
to the French Zone ; so too is the renunciation (such as it is) by
Spain in the Franco-Spanish Declaration of 1914. Neither of
these renunciations extends to the whole of Morocco which the
United States still treats as a single country. Moreover, there
are still “French tribunals’ in the French Zone and ‘Spanish
tribunals” in the Spanish Zone. These, it may be noted, are the
names used in the Franco-Spanish Declaration of 1914. Technically,
the French tribunals are not consular courts; but in fact they
exercise, as part of their functions, the jurisdiction formerly
exercised by the French consular courts. The United States is
not therefore claiming a unique position. Such inequality as may
appear to exist is the result, not of the claim of the United States,
but of attempts to secure piecemeal renunciation, from each
signatory Power, of rights which had accrued to all of them
equally through usage and treatics, particularly the Convention
of Madrid and the Act of Algeciras. This appears to be admitted
in the Memorial of the French Government :

“Moreover, in Morocco especially, the disappearance of capitul-
atory privileges in general had logically to result from simultaneous
action by all foreign Powers. Otherwise, inequalitics of status
would have resulted which would have been in contradiction with
the general contractual principles governing the international
status of the Shereefian Empire.” (Memorial, p. 47.)

Our conclusion, upon this part of the case, is that the third
Submission of the Government of the United States, which relates
to its jurisdictional privileges, must be accepted, even apart from
the effect of the most-favoured-nation clauses in its Treaty of
1836 with Morocco.

Tiscal Immunity

The right to tax necessarily implies the right to take coercive
measures in case of non-payment. It follows from what we have
said on the issue of consular jurisdiction that no coercive measures
can be taken against the person or property of nationals of the
United States except with the aid of the consular courts of the
United States, which, in the ultimate analysis, means the assent
of the United States. In this sense, and to this extent, therefore,
they enjoy a general immunity from Moroccan taxation, apart
from the effect of any most-favoured-nation clause.

50
223 DISS. OPIN. (U.S. NATIONALS IN MOROCCO)

We need not repeat our arguments regarding consular juris-
diction based on the Convention of Madrid and the Act of
Algeciras. But there are certain special provisions both in the
Convention and the Act which relate to taxes on foreigners and
to which we would invite attention.

The Convention of Madrid provides for the levy of two taxes
on foreigners, the agricultural tax and the gate tax. Article 12
deals with the agricultural tax and is in the following terms :

“Foreigners and protected persons who are the owners or tenants
of cultivated land, as well as brokers engaged in agriculture, shall
pay the agricultural tax. They shall send to their Consul annually,
an exact statement of what they possess delivering into his hands the
amount of the tax.

He who shall make a false statement shall be fined double the
amount of the tax that he would regularly have been obliged to

ay for the property not declared. In case of repeated offense this
fine shall be doubled.

The nature, method, date and apportionment of this tax shall
form the subject of a special regulation between the Representatives
of the Powers and the Minister of Foreign Affairs of His Shereefian
Majesty.”

Article 13 deals with the gate tax and runs thus:

“Foreigners, protected persons and brokers owning beasts of
burden shall pay what is called the gate-tax. The apportionment
and the manner of collecting this tax which is paid alike by foreigners
and natives, shall likewise form the subject of a special regulation
between the Representatives of the Powers and the Minister of
Foreign Affairs of His Shereefian Majesty.

The said tax shall not be increased without a new agreement
with the Representatives of the Powers.”

Chapter IV of the Act of Algeciras provided for the levy of some
additional taxes from foreigners. In the case of every one of these
new taxes, as in the case of those provided for in the Convention of
Madrid, special safeguards are prescribed. The ‘‘tertib’’ leviable
under Article 59 is not to be applied to foreign subjects except under
the conditions stipulated by the Regulations of the Diplomatic
Body at Tangier on November 23rd, 1903. This Regulation provided,
inter alta, that if a foreigner or protégé refused to pay the tax in
time and coercive measures became necessary, these measures
would be taken exclusively through the consular authorities. Safe-
guards are provided under Article 61 in respect of the building
taxes ; under Article 64 in respect of certain taxes on trades, indus-
tries, and professions ; under Article 65 in respect of the stamp tax,
the transfer tax on the sale of real estate, the statistical and weighing
tax and the wharfage and lighthouse dues; under Article 70 in
respect of harbour dues; under Article 71 in respect of customs-
storage dues.

51
224 DISS. OPIN. (U.S. NATIONALS IN MOROCCO)

We would invite particular attention to the second paragraph of
Article 64 :

“Tf as the result of the collection of such taxes from Moorish
subjects the Diplomatic Body at Tangier should deem it advisable
to extend the same to those under foreign jurisdiction, it is hereby
specified that the said taxes shall be municipal.”

This should be read with Article 76, which implies that for the
purposes of Article 64, the decision of even a majority of the
Diplomatic Body would not suffice. Nothing could indicate more
clearly that foreigners were not to be taxed except with the consent
of their Government.

So jong as the provisions of the Convention of Madrid and the
Act of Algeciras to which we have referred are in force, as they
undoubtedly are in force so far as the United States is concerned, a
gencral immunity follows from those provisions by necessary
implication. For it would be meaningless to enumerate certain
special taxcs and provide safeguards for their levy from foreign
nationals, if the rest of the whole field of taxation were left open.
At the time of the Convention of Madrid and the Act of Algeciras,
foreign nationals enjoyed a general immunity from taxes. There-
fore, the taxes enumerated in these treaties were exceptions to a
prevailing general rule and they must now be read as if the general
rule were embodied in the treaties.

Our conclusion on this subject is that United States nationals
are entitled to a general immunity from taxes save those specific-
ally recognized by the Convention-of Madrid, the Act of Algeciras,
and any other relevant treaty or agreement.

We are consequently of opinion that the consumption taxes
provided for in the Dahir of February 28th, 1948, were wrongly
levied from United States nationals up to August 15th, 1950, the
date on which the United States consented to these taxes. But we
have not sufficient data upon which to base a conclusion as to the
refund of the taxes already paid.

Spanish Treaty of 18617

In view of the preceding considerations, the United States need
not, in our opinion, rely on the Spanish Treaty of 1861 as one of
“the existing treaties” of ‘‘the treatics at present in force” referred
to in Articles 10 and 16 of the Anglo-French Convention of 1937,
from which the United States derives its broader consular jurisdic-
tion and fiscal immunity. (Articles 5 and 16.)

The United States having in its pleadings relicd on this Treaty,
the Court thought it necessary to adjudicate on the contention and
reject it on the ground that the relevant part of the Treaty has

52
225 DISS. OPIN (U.S. NATIONALS IN MOROCCO)

been abrogated by the Declarations of 1914 made by Spain and
France on behalf of Morocco.

In view of the fact that Spain was not represented before the
Court during the hearings, we think it inadvisable to base any
conclusion upon a definite finding that any part of the Treaty of
1861 with Spain has been abrogated or that it has not been abro-
gated. Without pronouncing any definite opinion one way or the
other, we may point out that the abrogation of the Treaty is more
than doubtful.

Article 63 provides :

“It is agreed that after 10 years have transpired from the day
of the exchange of the ratifications of the present Treaty, either
of the two contracting Parties shall have a right to demand the
modification of the Treaty ; but until such modification shall have
taken place by mutual agreement, or a new treaty shall have been
concluded and ratified, the present one shall continue in full force
and vigour.”

Neither the Convention of 1912 between France and Spain, nor
the Declarations of 7th March and of 14th November 1914, seem
to accomplish the modification of the Treaty by mutual agreement,
since in neither of them did France purport to act on behalf of
Morocco. The letter of the French Embassy of roth January 1917
to the Department of State (see Annexes to Counter-Memorial,
p. 277), referring to the Spanish rights mentioned in Article 1 of
the Treaty of Fez, specifies expressly that they were defined “by
an agreement between the Governments, not of Morocco, but of
France and Spain”.

On the other hand, these agreements do not seem to stipulate any
renunciation by either of the two Governments of its capitulatory
rights in the other zone, in the way the United Kingdom renounced
its own rights by the 1937 Convention. The difference between the
formula adopted in the Declarations of 1914 and that of the 1937
Convention is not without significance. To renounce claiming a
right may be nothing more than the suspension of the exercise of
that right.

The renunciation was made in view of the guarantees of judicial
equality offered to foreigners by the French or Spanish tribunals
respectively. It may therefore be considered as subject to a condi-
tion. In this case, each of the two Governments would be entitled
to re-open the question of its rights in the event of the guarantees
proving to be ineffective, or the tribunals ceasing to exist or being
substantially modified, or in the event of a change in the political
position of either of them.

It has been contended that there is no difference between the
two formulas, that the choice of the wording of the Declarations of
1914 is merely due to considerations of diplomatic convenience, and

53
226 DISS. OPIN, (U.S. NATIONALS IN MOROCCO)

finally that it was the same formula which was used by France in
more than 20 Declarations by which it obtained between 1914 and
1916 the renunciation of the Powers subscribing to these Declara-
tions. It is asserted that France was entirely free to choose either
of the two formulas, and that its choice must therefore be construed
as evidence of their perfect equivalence.

In fact, these 20 Declarations which are posterior to the Spanish
Declaration, have simply followed the pattern of that Declaration.
They would not, by themselves, impair any conclusion which may
be drawn from the wording of their model.

In these conditions, the most-favoured-nation clauses granted to
the United States by the Treaty of 1836 !, when applied to the
Treaty of 1861, viewed in the light of the 1914 Declarations, may
have the effect of extending to the United States all the rights and
favours granted by that Treaty, notwithstanding the suspension of
their exercise by Spain.

It is recognized that the failure by a Power, to which a favour
has been granted, to exercise that favour does not affect or prejudice
the right of any other Power entitled to that favour by virtue of a
most-favoured-nation clause. For all useful purposes, suspending
the exercise of a favour is equivalent to failure to exercise it, Therc-
fore, nothing would or should preclude the United States from exer-
cising the capitulatory rights granted by the Treaty of 1861.

This conclusion may be considered to be supported by a decision
of t2th July 1924, delivered by the Court of Appeal of Rabat, the
highest French judicial authority in Morocco (see Dalloz, Recueil
périodique, 1925, Part II, p. 35).

By this decision the Court granted an exequatur (executory title)
for the execution of a judgment by one of the national Moroccan
tribunals in a case relating to a matter of real property, a matter
which had always been considered in the capitulatory regime to be
within their exclusive jurisdiction. This regime had, however,
developed an indirect control on the exercise of that jurisdiction,
by subjecting the execution of such judgments to an exequalur to
be granted by the consul.

According to the decision of the Court of Rabat, this right for
the consul derives from Article 5 of the Treaty of 1861 between
Morocco and Spain and has been extended to all the other capitul-
atory Powers by virtue of the most-favoured-nation clause.

In exercising that right in 1924, the Court must therefore have
held that at that period both the French and Spanish Capitulations
were still in force in the French Zone of Morocco. The Spanish
Capitulations continued then to be a source of that right in that

1 The most-favoured-nation clause in Article 24 of the Treaty of 1936 runs as
foilows : .... and it is further declared that whatever indulgence, in trade or other-
wise, shall be granted to any of the Christian Powers, the citizens of the United
States shall be equally entitled to them”.

54
227 DISS. OPIN. (U.S. NATIONALS IN MOROCCO)

Zone, while the French Capitulations, by virtue of the most-favoured
nation clause, made it possible for the French Court of Rabat,
successor of the French consular court, to receive and exercise that
right.

Article 95

Both France and the United States agree that Article 95 of the
Act of Algeciras defines the value on the basis of which the ad
valorem duties of 124 % are to be liquidated. Each of them gives
an interpretation of this provision, as regards imported goods, dif-
ferent from the other’s and each disputes the other’s interpretation.

That the two Governments are justified in considering that
Article 95 defines that value is borne out by Article 96, which,
while setting up a committee on valuations, requires that com-
mittee to appraise the value of the chief articles of merchandise
dutiable in the Moorish customs under the conditions specified in the
foregoing article. Article 95 must therefore be considered to have
laid down the definition of that value.

Which, then, of the two interpretations is the correct one ?

France interprets the value in question to be the local market
value, while the United States interprets it to be the export value
plus freight, insurance and similar expenses.

Both methods of valuation have been and are known in Morocco
as well as in other countries, either as exclusive or as combined
methods. In Morocco, the local market value had been adopted by
the German Treaty of 18go (Article 2). The greater number of
countries adopt, however, the other method of valuation. Some-
times, the local market value is adopted when the export or foreign
market value can not be ascertained, or when it is desired to adopt
protectionist measures or to conceal a higher customs duty under
the guise of a moderate one.

The point which concerns us here is what the framers of the Act
of Algeciras intended to establish by Article 95, and how this
provision was understood by the Moroccan authorities from 1906
to 1912 and has been understood by the Protectorate authorities
since.

In Article 95 two phrases are the subject of contention between
the Parties. In the following sentence they are underlined :

“The wholesale value of the merchandise delivered in the
custom-house and free from customs duties and storage dues.”

If the natural sense of these two phrases yields a coherent and
reasonable proposition, then this proposition can only be set aside

55
228 DISS. OPIN. (U.S. NATIONALS IN MOROCCO)

if sufficient evidence is adduced to prove that it could not have
been contemplated.

The first phrase refers to transportation of merchandise from
the place of origin to the custom-house and thereby conveys an
indication of the two elements of the value inseparably connected,
viz., export value and expenses of transportation.

The second phrase describes, in the technical language of
customs, an article of merchandise without or before the levy
of customs dues. This description excludes any connection with
local market value, since the latter includes customs dues and
can only be used as a basis for valuation after these dues have
been deducted. The usual expression in this case would be “after
deduction of customs duties’ (see below Treaty of Commerce of
1938 between the United Kingdom and Morocco, signed but
not ratified).

Both phrases, therefore, point to the export or foreign market
value of country of origin plus freight and insurance.

It is true that Article 95 applies to exports and imports, but
this double function must imply that the terms employed refer
equally to both operations. In fact, local market value for exports
would correspond perfectly to market value of the country of
origin.

It must be noted that Article 95 does not provide for the whole
procedure of valuation. To ascertain this procedure, Article 95
must be read in conjunction with Article 96. This last provision
sets up a committee on customs valuations to appraise annually
the chief articles of merchandise dutiable in the Moorish customs.
This appraisal is, however, to be made under the conditions spect fied
in Article 95. Article g6 does not prescribe the establishment of
minimum and maximum values, but the schedule referred to in
that Article has contained both, either to allow for the different
qualities or for the different countries of origin of goods, or for
any other reason.

In any case, two methods of valuation have been adopted in
the execution of the Act of Algeciras, one for the chief articles
of merchandise and another for others. Both these methods have
a common basis.

In our view, this common basis is the market value of the
country of origin. Any necessary guidance for verifying declared
values is provided for by the Schedule of Values fixed under
Article 96.

This brings us to the provisions relating to declarations contained
in Articles 82 to 86.

Article 82 of the Act requires importers to file in the custom-
house a declaration stating, znter alta, the value of the merchandise.

56
229 DISS. OPIN. (U.S. NATIONALS IN MOROCCO)

Articles 83 to 86 provide penalties for inaccurate statements
by the importer concerning the kind, quality or value of imported
goods.

As to value, Article 85 states that if the declaration should
be found to be inaccurate as to the ‘declared value” and the
declarant should be unable to prove his good faith, certain results
shall follow.

Now it would be reasonable to suppose that had it been intended
that the market value in Morocco should be the basis for deter-
mining the customs duty, there could have been little purpose
in attaching such importance to a declaration by the importer.

Moreover, the market value in Morocco would reflect many
charges attaching to the goods after leaving the custom-house,
such as transportation, warehousing, handling, commissions and
other expenses incident to placing the goods on the market, and
the profit realized by the importer and by any brokers or middle-
men. Obviously, there is room for a wide difference between the
local market value of goods and the value at the time of delivery
to the custom-house. Local market values may fluctuate, depending
upon the plenitude or scarcity of the goods at a given time.

In conclusion, the text of Article 95 presents no ambiguity,
unless we do violence to the word “vendue’’ to find therein a
reference to the local market or to the word “franche” by making
it synonymous with ‘déduction faite”.

Assuming that the text is ambiguous, the examination of the
travaux préparatoires might throw some light on its interpretation.

The original draft (Art. 19) submitted to the Conference of
Algeciras provided :

“Les droits ad valorem seront liquidés et payés d’après la valeur
en gros et au comptant de la marchandise au port de débarquement
ou au bureau d’entrée s’il s’agit d’importation.”

[Translation ]

“The ad valorem duties shall be liquidated and paid according
to the wholesale value of the merchandise at the port of landing,
or at the bureau of entry, in the case of imports.”

The provision contrasts with that in the older treaties, especially
the Treaty between Morocco and Germany (1890). It does not
make the market value either of the port of landing or the bureau
of entry the basis of liquidation of customs duties. The reference
to the port or to the bureau relates simply to the destination
of the merchandise and is clearly made with a view to including
the expenses incurred in transporting the merchandise up to the
port or to the bureau. This reference naturally implies the adoption
of the market value of the country of origin.

57
230 DISS. OPIN. (U.S. NATIONALS IN MOROCCO)

To this draft an amendment was proposed by the delegate of
Great Britain at the 8th sitting of the Conference and was accepted.

It simply replaced ‘at the port of landing or at the bureau of
entry, in the case of imports,”’ by the words “au bureau de douane
et franche des droits de douane”. {{ Translation /—‘‘At the custom-
house and free from customs duties’’.) Later, at the 15th sitting,
the German and British delegates deposited amendments, not to
Article 19 but to Article 20, which has become Article 96 of the
Act of Algeciras.

The German amendment reads as follows :

[Translation ]

“The duties ad valorem levied in Morocco on imports shall be
calculated on the value which the imported article has in the place
of loading or buying, increased by expenses for transportation
and insurance to the port of unloading in Morocco.

In order to fix for a specified period the value in the port of entry
of the more important articles which are taxed, the Moroccan Cus-
toms Administration will invite the principal merchants interested
in the import trade to proceed in agreement with it, to the establish-
ment of a tariff for a period not to exceed twelve months. The tariff
so established shall be communicated by the Moroccan Customs to
the Diplomatic Body and shall at the same time be officially
published.

it will be considered officially recognized so far as concerns
the products of the ressortissants of signatory States, in so far
as no member of the Diplomatic Body will have formally opposcd it
during the two weeks which will follow the official publication and
the communication addressed to the Diplomatic Body.”

The amendment not only provides for a procedure for establish-
ing a tariff for a specified period, which was the subject-matter cf
the provisions of the original Article 20, but takes up again the
question of fixation of value, which had already been decided at
the 8th sitting.

This amendment raised the objection of the French delegate, not
as regards the method of fixation of value, which no one opposed,
but as regards the composition of the body or commission for the
establishment of the tariff. The two amendments were referred to
the Drafting Committee, which adopted a text based on the British
amendment to the same Article (Art. 20). Therefore, all that can
be said in respect of the first paragraph of the German amendment
is that it was not maintained by the Drafting Committee. But the
reason for this lies in the fact that the question raised in that para-
graph had already been adopted as Article 19, which has become
Article 95. It can not then be said that it has been rejected on the
ground that it stated a rule which the Conference was unwilling to
adopt. In fact, it repeated in more detailed form the purport of the
British proposal presented at the 8th sitting.

55
231 DISS. OPIN. (U.S. NATIONALS IN MOROCCO)

In short, the German amendment was not adopted, not because
it was controverted on the point with which we are now concerned,
but because of its other unsatisfactory features.

In the final draft, Articles 19 and 20 of the draft of Customs
regulations (which became in the final Act of Algeciras Articles 95
and 96) were slightly modified, the first by the addition of the word
“rendue” before the words ‘‘au bureau’? and the second by the
addition of the phrase ‘“‘dans les conditions spectfiées à l’article pré-
cédent’”’, thus linking the two provisions.

As regards the practice followed in the period subsequent to the
Act of Algeciras, the evidence resulting from the documents filed
by the Parties is in favour of the interpretation put forward by the
United States in respect of the measures adopted during the period
of 1908-1912. It is even decisive in respect of the period following the
Protectorate up to 1928. The letter of 1912 of M. Luret, the chief
representative in Morocco of French bondholders in control of the
Moroccan Customs Administration 1, as well as the Regulations
published by the Customs Administration in 19287, relevant
extracts of which are reproduced below, can leave no doubt in this
respect.

1 “Following a complaint from the American Minister concerning customs
duties assessed against imports of the Vacuum Oil Company, he wrote to the Amer-
ican Minister that the Company had failed to furnish the original invoices which
could be checked against quotations on the market of origin and defined the dutiable
value of imported merchandise under Article 95 of the Act of Algeciras thus :

[Translation]

“This value comprises the purchase price of the petroleum f.o.b. New York
increased by all expenses subsequent to the purchase, such as outgoing dues
paid at foreign custom-houses, transportation, packing, freight, insurance,
manipulation, landing, et cetera, in a word, everything that contributes to
constitute, at the moment of presentation at the custom-house, the cash
wholesale value of the product, on the basis of which, according to Article 95
of the Act of Algeciras, the duties must be paid.” (Translation ; quoted in the
Note dated November 13, 1947, from the American Consul General at Casa-
blanca to the Diplomatic Counsellor of the French Residency ; Annex 59.)

ro

{| Translation] ‘‘ (81) Merchandise taxed on value :

By the terms of Article 95 of the Act of Algeciras, the duties ad valorem
are liquidated according to the cash wholesale value of the merchandise
delivered to the custom-house and free from customs duties and storage fees.
The value of this merchandise for the application of the tariff is consequently
that which it has in the place and at the moment it is presented for payment
of duties. It comprises, therefore, in addition to the purchase price in the

59
232 DISS. OPIN. (U.S. NATIONALS IN MOROCCO)

However, since 1930 a new policy of valuation based, more or
less, on the local market value has been asserted by draft regula-
tions prepared by the Protectorate authorities. They have given
rise to protests from various foreign Powers and bodies. As evi-
denced by the documents filed by the Parties, the same policy was
equally asserted in the proceedings of the Committee on Valuation
instituted by Article 50 of the Statute of Tangiers to replace that
provided for by Article 96 of the Act of Algeciras. It gave rise to
conflicting attitudes by the member representing the International
Zone of Tangier and the two other members representing the French
and Spanish Zones. The two sides sustained the two interpretations
put forward in the present instance, without the issue being settled
in one way or the other. The Committee had no authority to decide
the issue, but the concrete decisions on valuation were generally
taken by a majority vote of the French and Spanish members.

This part of the history of Article 95, revealed by the documents
filed at the end of the oral proceedings, brings no contribution to
the interpretation of that provision. It merely shows that the conflict
goes as far back as 1930. However, a document referred to in the
annexes of the Counter-Memorial throws great light on this matter
of interpretation. It is the Treaty of Commerce of 1938 between
Moroceo and the United Kingdom, signed but not ratified. It had
been communicated to the United States in order to be considered
with the 1937 Anglo-French Convention as models for a double
convention of the same nature between Morocco and the United
States (Annexes to Counter-Memorial, p. 322).

There was an exchange of Notes between the French and British
Governments at the time of the signature of the Convention on
July 18th, 1938. In its Note (No. 5) of that date, the British
Government states that it has been informed by the French Govern-
ment that the provisions contained in Chapter V of the Act of
Algeciras (which includes Article 95) are, in the opinion of that
Government, incompatible with modern conditions and that the
said Government has communicated to it certain provisions which
it intends to incorporate in the customs legislation. It also states
that the Government of the United Kingdom is prepared to give
its consent to the abrogation of the provisions contained in the
said Chapter. A new text is annexed to this Note which is intended
to be substituted for the provision of Article 95 and which sets out

foreign country, the expenses following the purchase such as the export
duties paid to foreign customs, the transportation or freight, insurance,
expenses for unloading, in a word all which contributes to form upon arrival
in Morocco the wholesale value of the merchandise (excepting customs duties
and storage fees), that is the current price of the merchandise in the place
where the customs duties are assessed.”

60
233 DISS, OPIN. (U.S. NATIONALS IN MOROCCO)

the view now put forward by France. (Command 5823 (1938),

Pp. 49-54.

All this shows that the view now put fcrward by France as an
interpretation of Article 95 was described by France and the United
Kingdom in 1938 as an abrogation of that Article.

Accordingly we find that, in applying Article 95 or the Act of
Algeciras, the only value to be taken account of is the value in the
country of origin plus expenses incident to transportation to the
custom-house in Morocco.

(Signed) Green H. HACKWORTH.
(Signed) A. BADAWI.

(Signed) Levi CARNEIRO,
(Signed) B. N. Rav.

61


COUR INTERNATIONALE DE JUSTICE

RECUEIL DES ARRETS,
AVIS CONSULTATIFS ET ORDONNANCES

AFFAIRE
DE L’ANGLO-IRANIAN OIL Co.

(ROYAUME-UNI / IRAN)

ORDONNANCE DU 5 JUILLET 1951

1951

INTERNATIONAL COURT OF JUSTICE

REPORTS OF JUDGMENTS,
ADVISORY OPINIONS AND ORDERS

ANGLO-IRANIAN
OIL Co. CASE

(UNITED KINGDOM / IRAN)

ORDER OF JULY 5th, 1951

SOCLETE D’EDITIONS A. W. SIJTHOFF’S

LEYDE LEYDEN
A W. SIJTHOFF PUBLISHING COMPANY
La présente ordonnance doit étre citée comme suit :

«Affaire de VAnglo-Ivanian Oil Co., Ordonnance du
5 juillet 1951: C. I. J. Recueil 1951, p. 100.»

This Order should be cited as follows :

“Anglo-Iranian Oil Co. Case, Order of July 5th, 1957:
I.C. J. Reporis 1951, p. roo.”

Ne de vente: 64
Sales number

100

INTERNATIONAL COURT OF JUSTICE

YEAR 1951

Order of July 5th, 1951

ANGLO-IRANIAN
OIL Co. CASE

(UNITED KINGDOM / IRAN)

The International Court of Justice,
having regard to Article 48 of the Statute of the Court,
having regard to Article 37 of the Rules of Court,

Makes the following Order :

Having regard to the Application dated May 26th, 1951, depos-
ited and filed in the Registry on that day, whereby the Government
of the United Kingdom of Great Britain and Northern Ireland,
referring to the declarations made by that Government and by the
Imperial Government of Iran accepting the Optional Clause pro-
vided for in Article 36, paragraph 2, of the Statute, instituted pro-
ceedings before the Court against the Iranian Empire in the Anglo-
Iranian Oil Company case ;

Whereas the text of this Application was on the same day trans-
mitted to the Iranian Government in accordance with Article 40,
paragraph 2, of the Statute, and the submissions therein made
were, also on the same day, communicated by telegraph to the
said Government ;

Having regard to the telegram dated Tehran, May 28th, 1951,
whereby the Minister of Foreign Affairs of Jran acknowledged
receipt of the telegraphic notification of the Application and stated
that his Government was of the opinion that the Court had no
jurisdiction to adjudicate in this case and that on receipt of the
Application the said Government would submit a detailed reply ;

Having regard to the Order of to-day’s date, by which, following
the Request of the Government of the United Kingdom dated

4

1951
July sth

General List
No. 16
ORDER OF 5 VII 5I (ANGLO-IRANIAN OIL Co.) 101

June 22nd, 1951, the Court indicates interim measures of protection
in the case, which indication in no way prejudges the jurisdiction
of the Court to consider the merits of the case,

Fixes as follows the time-limits for the presentation by the
Parties of the written proceedings :

for the Memorial of the Government of the United Kingdom :
September 3rd, 1951 ;

for the Counter-Memorial of the Imperial Government of Iran :
December 3rd, 1051.

And reserves the rest of the procedure for further decision.

Done in French and English, the French text being authoritative,
at the Peace Palace, The Hague, this fifth day of July, one thousand
nine hundred and fifty-one, in three copies, one of which will be
placed in the archives of the Court and the others transmitted to
the Government of the United Kingdom and to the Imperial
Government of Iran, respectively.

(Signed) BASDEVANT,
President.

(Signed) E. HAMBRO,
Registrar,