92

OBSERVATIONS BY M. NYHOLM.

The wish to have recourse to expert opinion for the purpose
of estimating the compensation due in respect of the Chorzéw
factory is certainly legitimate, but is it also possible to
obtain a result by this means? If it were a question of an -
expert report on a purely mathematical basis, such as the
drawing up of a balance sheet. prepared from accounts, experts
appointed by the Court and by the Parties—working entirely
independently and with no liaison with the Court, on a
footing of equality amongst themselves and authorized to
obtain any information—-would doubtless be of decisive
assistance in arriving at a ‘just settlement of the matter.
But in this case the hypothetical nature of the questions
involves an equally hypothetical answer. As it is a question
of estimating what financial results the factory would have
produced between 1922 and 1928, if it had remained in
German hands, the experts will find themselves in a sphere
in which they will have difficulty in replying otherwise than
by hypothetical answers.

A considerable number of circumstances enter into account.
Amongst others the capacity of the various persons concerned
in the management to undertake technical control and to
take advantage of the situation of the general market and
of the formation of the various groups of factories into
consortiums which is a characteristic of the years 1922-1928;
the capital which might have been at the disposal of the
factory, the favourable or unfavourable effect of Polish legis-
lation, etc.

The answer can hardly take the form of the indication
of a precise sum which would enable the affair to be imme-
diately settled.

Even supposing that, thanks to the declarations of the
experts, it might be possible to arrive more nearly at the
true situation, the greater or less degree of progress thus
made would not be of much importance in a case when the
Court’s estimate must always be based on a number of
detailed decisions, all arrived at separately, in order to reach
JUDGMENT No. 13.—OBSERVATIONS BY M. NYHOLM 93

the total sum. It matters but little whether in regard to
some points the figure estimated is for instance 110 instead
of 100, if the net result of all the decisions is still in the
nature of an approximation.

It may be wondered therefore whether it is worth while to
delay the settlement of the case and to incur the difficulties
connected with an expert report, including amongst others
the choice of the experts who must, if they are to perform
their task properly, possess qualifications but seldom found in
one and the same person.

In the end the Court may be confronted with precisely the
same situation as before the expert report and may find that
the discussion upon the report between the Parties involves a
rediscussion of the case on the same bases as those already
considered. |

Again, the numerous data afforded by the documents in
the case would appear to make an immediate decision possible.
A study of the information and statistics furnished by the
documents in regard ‘for instance to the condition of the
factory and general development in the industry in question
would appear to afford a sufficient basis for the general
assessment which the Court must in any case undertake.
The application, mutatis mutandis, of this information to the
sister factory of Piesteritz would seem particularly likely to
produce useful results. There would seem to be a possibility
of obtaining corroborative evidence, for instance, by examining
the offer of sale made to the Swiss Company, taking into
account the situation existing at that time.

*
* *

Certain points in this case, which as a whole is of a specific
nature, may attract attention from the point of view of law.

*
% *

As regards the assessment of the damage, the Respondent
again seeks in the present proceedings to revert to points
“already dealt with, maintaining that it should not pay the
JUDGMENT No. I3.—OBSERVATIONS BY M. NYHOLM 94

indemnity because it is not the two Companies which are
entitled to receive it, but the Reich.. These questions have
been decided by Judgment No. 7, which definitely lays down
that any damages are due to the two Companies and not to
the Reich, which is not the owner, since it sold the factory
under the contracts of 1919. The judgment therefore unneces-
sarily again deals with the Polish objections on this point.

The Polish contention based on Article 256 of the Treaty of
Versailles, again seeks to show that the Reich should be
regarded as owner. But this question is already dealt with
by the decisions of Judgment No. 7. This is also the case as
regards the position of the Reich as pledgee. |

The Court therefore need not again concern itself with this,
If Poland is to succeed in her claim based on Article 256, it
must be before some other tribunal and not this Court. If
she succeeded in establishing her claim before such other
tribunal, the result would simply be that Poland would in
the future regain what she has to pay now. This claim,
therefore, cannot be opposed to the decision contained in
Judgment No. 7, which is being applied by the present
judgment. There is therefore no reason for again undertaking
an examination of Article 256, as is done in the judgment ;
nor need the Court again consider the question whether the
Reich has become owner in consequence of its position as
pledgee. This matter, as also the question regarding Article 256,
relates to a stage reached long before the present judgment,
and it cannot be reopened on the pretext that, when the
preceding judgments were given, the question was to establish
the principle of damages, but that now the problem is to
estimate these damages. Both are points which have already
been decided.

A question of more general legal interest arises as regards
the situation of Germany in the proceedings; that Germany
alone, to the exclusion of the two Companies, can sue, is
undeniable, since this is a suit within the jurisdiction of the
Permanent Court, which is open only to States. But what is
JUDGMENT No.’ 13.—OBSERVATIONS BY M. NYHOLM 95

the situation of Germany as regards the claim for indemnity ?
It cannot be denied that judgment must in form be given in
favour of the German State; but since the damage has been
sustained by others, it is not in the capacity of ‘owner that..
Germany can claim an indemnity,

The claim put forward in the Reich’s conclusions seems
tather to relate to the award of a sum as reparation for
wrong inflicted upon its subjects. In the judgment the
expressions vary: “The amount of compensation to which the

German Government: is entitled, on the basis of the damage  ~

suffered by the two Companies’ (page 55). Another passage
runs as follows: ‘What sum must be awarded to the German
Government in order to enable it to place the dispossessed
Companies.... in the economic situation...?” (page 49). A
precise indication of the Applicant’s position is not to be
found in the judgment. It seems that the problem may be
solved in accordance with the following considerations.

The asset claimed by the two Companies is in itself an
asset in the hands of the Polish State, which may be claimed
by civil action against the Polish Government and under
Polish law; but as the result of the Geneva Convention, the
asset has acquiréd also an international character. In seizing
the factory the Polish Government has also infringed the
obligations accepted by it as regards the German State. In
basing its action on this infringement, Germany is relying on
the wrong done to the Companies; but she cannot lay claim
to the indemnity as her own property. Germany may suffer,
as the result of Poland’s action, moral damage represented by
the demand for an imaginary sum, and also, maybe, material
damage ; but the latter is always based on a fact affecting the
State itself. To measure such damage by the actual amount
of damage caused to its subjects is to make a claim that
finds no support save as regards the special cases where the
wrong done to subjects directly affects the State as being
privately interested in the enterprise. In the present affair
such a case might have arisen, owing to the situation of
Germany as pledgee; no such claim has however been put
forward in the proceedings. The State must therefore, as [far
JUDGMENT No. I13.—OBSERVATIONS BY M. NYHOLM 96

as itself is concerned, limit its claim to the moral or material
damage directly caused to it. . .

But at the same time international precedent has laid down
that the State may put forward before an international court
the claims of its subjects, may “take up” their case, with the
result that such claims must then be decided according to
international law (see judgments of the Permanent Court of
International Justice—Wimbledon and Mavrommatis affairs).

In this situation the new question arises, since the creation
of the International Court, whether the State has the right
to take upon itself or at any rate to bring before the Court
on its own initiative the claims of individuals.

As regards this point, it appears that there is no reason for

assuming that in international law any change has taken place
in the general principles which grant to individuals the
protection of their property rights. These rights remain
always protected, and the putting forward of a particular
claim in international proceedings can only be the result of
the existence of a tacit or expressed mandate, arising either
from a demand or from the consent of the Parties. That such
a mandate exists in the present case cannot be doubted. The
documents in the case show that the German State is working
in full collaboration with the Companies, who have evidently
supplied all information in order that the proceedings may
have a favourable issue. From what precedes it results that the
claims must indeed be granted to the German Government in
name, but only as mandatory for the Companies. The Court
cannot therefore award the money to Germany without further
comment and without considering the question whether the
German State can in law make free disposition of the amount
of the indemnity as owner, and without the legal obligation
to pay it to the parties dispossessed. The position of the
Applicant must be regarded as one of mandatory.

ok
* 2

The argument set out above has an effect upon the question
of the award of a lump sum in compensation in favour of the
two Companies, the system adopted by the judgment. In the

vos
JUDGMENT No. 13.—OBSERVATIONS BY M. NYHOLM 97

documents there is indeed no trace of the existence of a
mandate conferring on the German State the right to, lump
together the two claims. On the contrary, the whole of the
pleadings were conducted on the basis of a complete separation.
The amalgamation of the claims of the Oberschlesische
and Bayerische, officially declared by the judgment, seems
therefore to have no support in law. And further, in fact,
it meets with great difficulties. The claim of the Bayerische
is composed of one part representing a percentage on the
profits of the Oberschlesische; but there are other special
claims, rights resulting from..the management of the factory
in relation to other factories united in a consortium under
the direction of the Bayerische. As regards the relations
‘between the two Companies, the figures cannot be compared ;
for from a financial point of view we have on the one hand a
balance sheet for the Oberschlesische for 1928, or a question
of capital, and on the other hand, for the Bayerische, a
remuneration for the exploitation running as far as 1941.
There seems therefore to be no reason for departing from the
express wishes of the Parties set out in the pleadings.

As regards the question of set-off, the judgment has concluded
that there was no ground for deciding it, especially because,
in any case, the matter had not been raised by the Respond-
ent. It appears therefore that the Court decides that it has
jurisdiction.

On the other hand, the judgment states (page 61) that:
“It is clear that the question whether international law
allows claims to be set off against each other and if so under
what conditions such set-off is permitted is in itself outside
the jurisdiction derived by the Court from Article 23 of the
Geneva Convention.”

This paragraph appears to have for consequence a declaration
of want of jurisdiction to deal with the dispute itself.

It appears however that the Court, which has jurisdiction
as regards the sums in dispute, will also have the right to
JUDGMENT No. 13.—-OBSERVATIONS BY M. NYHOLM 98

hear and determine the objections. To those which relate to
the extinction of the credit claimed may be added the decla-
ration of a set-off which cancels out the credit. In interna-
tional law no principle can be raised which would establish
on this subject a difference between national and international
law.

(Signed) D. G. NYHOLM.