INTERNATIONAL COURT OF JUSTICE

REPORTS OF JUDGMENTS,
ADVISORY OPINIONS AND ORDERS

CASE CONCERNING
THE BARCELONA TRACTION, LIGHT
AND POWER COMPANY, LIMITED

(NEW APPLICATION: 1962)
(BELGIUM ». SPAIN)

PRELIMINARY OBJECTIONS

JUDGMENT OF 24 JULY 1964

1964

COUR INTERNATIONALE DE JUSTICE

RECUEIL DES ARRETS,
AVIS CONSULTATIFS ET ORDONNANCES

AFFAIRE DE LA BARCELONA
TRACTION, LIGHT AND POWER
COMPANY, LIMITED

(NOUVELLE REQUETE: 1962)
(BELGIQUE c. ESPAGNE)

EXCEPTIONS PRELIMINAIRES

ARRET DU 24 JUILLET 1964
Official citation :

Barcelona <raction, Light and Power Company, Limited,
Preliminary Objections, Judgment, I.C.]. Reports 1964, p. 6.

Mode officiel de citation :

Barcelona Traction, Light and Power Company, Limited,
exceptions préliminaires, arrêt, C.I.J. Recueil 1964, p. 6.

Ne de vente: 28 4
Sales number

1964
24 July
General List :
No. 50

INTERNATIONAL COURT OF JUSTICE

YEAR 1964
24 July 1964

CASE CONCERNING
THE BARCELONA TRACTION, LIGHT
AND POWER COMPANY, LIMITED

(NEW APPLICATION: 1962)
(BELGIUM ». SPAIN)
PRELIMINARY OBJECTIONS

Preliminary objections —Compeience of the Couri—Admissibility of the
claim.

Discontinuance of previous proceedings —Effect of, under Article 69,
paragraph 2, of Court's Rules—Right to bring new proceedings following
upon such a discontinuance—Procedural character of the act of discontin-
uance—Onus of proof as to its finality in regard to further action before the
Court—Alleged understanding between the Parties as to this finality—
Plea of estoppel precluding further action before the Court—Relevance of
the Treaty founding the jurisdiction of the Court to the question of discon-
tinuance.

Compulsory jurisdiction of the Court by virtue of Article 37 of the Statute—
Question of relevance to this issue of the case concerning the Aerial Incident
of 27 July 1955 (Israel v. Bulgaria)—Interpretation of Article 37—Effect
of the dissolution of the Permanent Court of International Justice on juris-
dictional clauses providing for recourse to that Court, and on the applicability
of Article 37—Position of States becoming parties to the Statute of the present
Court only after the dissolution of the Permanent Court—Question of consent
to the exercise of compulsory jurisdiction—Interpretation of the jurisdictional
clauses of the Treaty founding the jurisdiction of the Couvt—Effect in this
respect of the dissolution of the Permanent Court—Effect ratione temporis
of applicability of Article 37 to disputes arising between the Treaty date
and the date when Article 37 became applicable.

Questions of admissibility—Jus standi or capacity of Applicant Govern-
ment to act—Exhaustion of local vemedies rule— Principles governing joinder
of preliminary objections to the merits— Grounds of joinder in respect of
the admissibility issues.

4
9 BARCELONA TRACTION (JUDGMENT)

JUDGMENT

Present: President Sir Percy SPENDER; Vice-President WELLINGTON
Koo ; Judges WINIARSKI, BADAWI, SPIROPOULOS, Sir Gerald
FITZMAURICE, KORETSKY, TANAKA, BUSTAMANTE Y RIVERO,
Jessup, MorEzLLt, PADILLA NERVO, Forster, Gros ; Judges
ad hoc ARMAND-UGon, GANSHOF VAN DER MEERSCH;
Registrar GARNIER-COIGNET.

In the case concerning the Barcelona Traction, Light and Power
Company, Limited,

between

the Kingdom of Belgium,
represented by
M. Yves Devadder, Legal Adviser to the Ministry of Foreign Affairs
and External Trade,
as Agent,

assisted by

Mme Suzanne Bastid, Professor at the Paris Faculty of Law and
Economics,

M. Henri Rolin, Professor emeritus at the Law Faculty of the Free
University of Brussels and professeur associé at the Strasbourg
Law Faculty, Advocate at the Brussels Court of Appeal,

M. Georges Sauser-Hall, Professor emeritus of the Universities of
Geneva and Neuchâtel,

M. Jean Van Ryn, Professor at the Law Faculty of the Free Univer-
sity of Brussels and Advocate at the Belgian Court of Cassation,

M. Angelo Piero Sereni, Professor at the Bologna Faculty of Law,
Advocate at the Italian Court of Cassation, Member of the New
York State and Federal Bars,

Sir John Foster, Q.C., Member of the English Bar,

Mr. Elihu Lauterpacht, Member of the English Bar and Lecturer at
Cambridge University,

as Counsel,

M. Michel Waelbroeck, Lecturer at the Free University of Brussels,

as Assistant Counsel and Secretary,

and
M. Leonardo Prieto Castro, Professor at the Madrid Law Faculty,
M. José Girôn Tena, Professor at the Valladolid Law Faculty,

as Expert-Counsel in Spanish law,
8 BARCELONA TRACTION (JUDGMENT)
and

the Spanish State,
represented by
M. Juan M. Castro-Rial, Legal Adviser to the Ministry of Foreign
Affairs,
as Agent,
assisted by
M. Roberto Ago, Professor of International Law at the University

of Rome,

M. Paul Guggenheim, Professor of International Law at the Univer-
sity of Geneva,

M. Antonio Malintoppi, Professor of International Law at the Uni-
versity of Camerino,

M. Paul Reuter, Professor of International Law at the University of
Paris,

Sir Humphrey Waldock, C.M.G., O.B.E., Q.C., Chichele Professor of
Public International Law, University of Oxford,

as Advocates and Counsel,

M. Maarten Bos, Professor of International Law at the University
of Utrecht,

M. Jorge Carreras, Professor of Procedural Law at the University
of Pamplona,

M. Eduardo G. de Enterria, Professor of Administrative Law at the
University of Madrid, Maître des requêtes, Conseil d'Etat,

M. Federico de Castro y Bravo, Professor of Civil Law at the Uni-
versity of Madrid, Legal Adviser, Ministry of Foreign Affairs,

M. Antonio de Luna Garcia, Professor of International Law at the
University of Madrid, Legal Adviser, Ministry of Foreign Affairs,
M. José Maria Trias de Bes, Professor emeritus of International Law

at the University of Barcelona, Legal Adviser, Ministry of Foreign
Affairs,
as Counsel,

and

M. Mariano Baselga y Mantecén, First Secretary at the Spanish
Embassy at The Hague,

as Secretary,

THE COURT,
composed as above,

delivers the following Judgment:

On 19 June 1962, the Belgian Ambassador to the Netherlands handed
to the Registrar an Application instituting “new proceedings in the
dispute between the Belgian Government and the Spanish Government

6
9 BARCELONA TRACTION (JUDGMENT)

concerning the Barcelona Traction, Light and Power Company, Lim-
ited”. The Application refers to an earlier Application by the Belgian
Government against the Spanish Government, dated 15 September 1958
and concerning the said company. The latter Application, which was
filed on 23 September 1958, was followed by the filing by the Parties
of a Memorial and Preliminary Objections, and, subsequently, by a
discontinuance referring to Article 69 of the Rules of Court, a discon-
tinuance which the Respondent stated, in accordance with the same
Article, that it did not oppose. By an Order of 10 April 1967 the
Court directed that the case be removed from the Court’s list.

The Application of the Belgian Government of 19 June 1962 seeks
reparation for damage claimed to have been caused to a number of
Belgian nationals, said to be shareholders in the Barcelona Traction,
Light and Power Company, Limited, a company under Canadian law,
by the conduct, alleged to have been contrary to international law,
of various organs of the Spanish State in relation to that company and
to other companies of its group. To found the jurisdiction of the
Court the Application relies on Article 17 of the Treaty of Conciliation,
Judicial Settlement and Arbitration between Belgium and Spain,
signed on 19 July 1927, and on Article 37 of the Statute of the Court.

In accordance with Article 40, paragraph 2, of the Statute of the
Court, the Application was communicated to the Spanish Government.
In accordance with paragraph 3 of the same Article, the other Members
of the United Nations and the non-Member States entitled to appear
before the Court were notified.

Time-limits for the filing of the Memorial and the Counter-Memorial
were fixed by an Order of 7 August 1962. The Memorial was filed
within the time-limit fixed. Within the time-limit fixed for the filing
of the Counter-Memorial, which expired on 15 March 1963, the Spanish
Government filed Preliminary Objections submitting that the Court
was without jurisdiction and that the claim was inadmissible. Accord-
ingly, an Order of 16 March 1963, which recited that by virtue of
Article 62, paragraph 3, of the Rules the proceedings on the merits
were suspended, fixed a time-limit for the presentation by the Belgian
Government of a written statement of its Observations and Submissions
on the Objections. That statement was presented within the time-
limit thus fixed, which expired on 15 August 1963. The case then
became ready for hearing in respect of the Preliminary Objections.

M. W. J. Ganshof van der Meersch, Professor at the Brussels Faculty
of Law, Avocat général to the Belgian Court of Cassation, and M. Enrique
C. Armand-Ugon, former President of the Supreme Court of Justice
of Uruguay and a former Member of the International Court of Justice,
were respectively chosen by the Belgian Government and the Spanish
Government, in accordance with Article 31, paragraph 3, of the Statute,
to sit as Judges ad hoc in the present case.

On 11 to 25 March, I to 23 and 27 to 29 April, and 4 to 15 and
19 May 1964, hearings were held” in the course of which the Court

7
10 BARCELONA TRACTION (JUDGMENT)

heard the oral arguments and replies of M. Castro-Rial, Agent, M. Reuter,
Sir Humphrey Waldock, MM. Guggenheim, Ago, Malintoppi, Counsel,
on behalf of the Spanish Government ; and of M. Devadder, Agent,
MM. Rolin, Van Ryn, Sereni, Mme Bastid, Mr. Lauterpacht, M. Sauser-
Hall, Counsel, on behalf of the Belgian Government.

In the written proceedings, the following Submissions were presented
by the Parties :

On behalf of the Government of Belgium,
in the Application :

“May it please the Court :

1. to adjudge and declare that the measures, acts, decisions
and omissions of the organs of the Spanish State described in the
present Application are contrary to international law and that the
Spanish State is under an obligation towards Belgium to make
reparation for the consequential damage suffered by Belgian
nationals, individuals or legal persons, being shareholders of
Barcelona Traction ;

2. to adjudge and declare that this reparation should, as far
as possible, annul all the consequences which these acts contrary
to international law have had for the said nationals, and that the
Spanish State is therefore under an obligation to secure, if possible,

-the annulment of the adjudication in bankruptcy and of the
judicial and other acts resulting therefrom, obtaining for the
injured Belgian nationals all the legal effects which should result
for them from this annulment ; further, to determine the amount
of the compensation to be paid by the Spanish State to the Belgian
State by reason of all the incidental damage sustained by Belgian
nationals as a result of the acts complained of, including the
deprivation of enjoyment of rights and the expenses incurred in
the defence of their rights ;

3. to adjudge and declare, in the event of the annulment of
the consequences of the acts complained of proving impossible,
that the Spanish State shall be under an obligation to pay to the
Belgian State, by way of compensation, a sum equivalent to
88 per cent. of the net value of the business on 12 February 1948 ;
this compensation to be increased by an amount corresponding to all
the incidental damage suffered by the Belgian nationals as the result
of the acts complained of, including the deprivation of enjoyment
of rights and the expenses incurred in the defence of their rights” ;

in the Memorial :

“May it please the Court :
I. to adjudge and declare that the measures, acts, decisions
and omissions of the organs of the Spanish State described in the
II

BARCELONA TRACTION (J UDGMENT)

present Memorial are contrary to international law and that the
Spanish State is under an obligation towards Belgium to make
reparation for the consequential damage suffered by Belgian
nationals, individuals or legal persons, being shareholders of
Barcelona Traction ;

II. to adjudge and declare that this reparation should, as far
as possible, annul all the consequences which these acts contrary
to international law have had for the said nationals, and that the
Spanish State is therefore under an obligation to secure, if possible,
the annulment by administrative means of the adjudication in
bankruptcy and of the judicial and other acts resulting therefrom,
obtaining for the said injured Belgian nationals all the legal effects
which should result for thém from this annulment; further, to
determine the amount of the compensation to be paid by the
Spanish State to the Belgian State by reason of all the incidental
damage sustained by Belgian nationals as a result of the acts
complained of, including the deprivation of enjoyment of rights
and the expenses incurred in the defence of their rights ;

III. to adjudge and declare, in the event of the annulment of
the consequences of the acts complained of proving impossible,
that the Spanish State shall be under an obligation to pay to
the Belgian State, by way of compensation, a sum equivalent to
88 per cent. of the sum of $88,600,000 arrived at in paragraph 379
of the present Memorial, this compensation to be increased by an
amount corresponding to all the incidental damage suffered by
the said Belgian nationals as the result of the acts complained of,
including the deprivation of enjoyment of rights, the expenses
incurred in the defence of their rights and the equivalent in capital
and interest of the amount of Barcelona Traction bonds held by
Belgian nationals and of their other claims on companies in the
group which it was not possible to recover owing to the acts com-
plained of.”

On behalj of the Government of Spain,

in the Preliminary Objections,
on the first Preliminary Objection :

“May it please the Court,

to adjudge and declare :

that it has no jurisdiction to admit or adjudicate upon the
claim made in the Belgian Application of 1962, all- jurisdiction
on the part of the Court to decide questions relating to that claim,
whether with regard to jurisdiction, admissibility or the merits,
having come to an end by the letters of the Belgian and Spanish
Governments respectively dated 23 March and 5 April 1961 which
the Court placed on record in its Order of 10 April 1961” ;
12

BARCELONA TRACTION (JUDGMENT)

on the principal second Preliminary Objection :

“May it please the Court,

to adjudge and declare :

that it has no jurisdiction to entertain or decide the claims
advanced in the Application and the Memorial of the Belgian
Government, Article 17 of the Treaty of Conciliation, Judicial
Settlement and Arbitration not having created between Spain and
Belgium a bond of compulsory jurisdiction in respect of the Inter-
national Court of Justice which could enable the Belgian Govern-
ment to submit an Application to that Court” ;

on the alternative second Preliminary Objection :

“May it please the Court,

to adjudge and declare :

that it has no jurisdiction to entertain or decide the claims
advanced in the Belgian Application and Memorial, the dispute
raised by Belgium having arisen from and relating to situations

- and facts prior to the date on which the jurisdiction of the Court

could have produced its effects in relations between Spain and
Belgium (14 December 1955)” ;

on the third Preliminary Objection :

“May it please the Court,

to adjudge and declare :

that the claim advanced by the Belgian Government in its
Application and Memorial, in each and every one of the three
submissions in which it is expressed, is definitively inadmissible
for want of capacity on the part of the Belgian Government in
the present case, in view of the fact that the Barcelona company
does not possess Belgian nationality and that in the case in point
it is not possible to allow diplomatic action or international judi-
cial proceedings on behalf of the alleged Belgian shareholders of
the company on account of the damage which the company asserts
it has suffered” ;

on the fourth Preliminary Objection :

10

“May it please the Court,

to adjudge and declare :

that the Application filed by the Belgian Government concerning
the alleged damage caused to Barcelona Traction by the measures
of which it has been the object on the part of the organs of the
Spanish State is definitively inadmissible for want of utilization
of the local remedies.”
13 BARCELONA TRACTION (JUDGMENT)

On behalf of the Government of Belgium,

in the Observations and Submissions in reply to the Preliminary Objec-
tions,

on the first Preliminary Objection :

“May it please the Court,

to adjudge and declare that the arguments put forward by the
Spanish Government are inadmissible in so far as that Government
relies on alleged ambiguities which it did not remove as it was in
duty bound and able to do;

that these arguments are in any case unfounded and that the
discontinuance of the proceedings instituted by the Application
of 15 September 1958 is no bar to the institution of a new applica-
tion, the dispute between the Parties not having been the subject
of any settlement and persisting to the present day” ;

on the principal second Preliminary Objection :

“May it please the Court,

to adjudge and declare that the Preliminary Objection No. 2 is
inadmissible ;

in the alternative, that it has jurisdiction to hear and determine
the claims put forward by the Belgian Government in its Applica-
tion founded on Article 17, paragraph 4, of the Spanish-Belgian
Treaty of 1927 and Article 37 of the Statute of the International
Court of Justice” ;

on the alternative second Preliminary Objection :

“May it please the Court,

to dismiss the alternative Preliminary Objection No. 2 raised
by the Spanish Government and declare that it has jurisdiction to
deal with the dispute submitted to it by the Belgian Government’s
Application” ;

on the third Preliminary Objection :

“May it please the Court :

to dismiss the Preliminary Objection No. 3 raised by the Spanish
Government and declare that the claim of the Belgian Government
is admissible ;

in the alternative, to defer a decision on this Objection No. 3
and join it to the merits” ;

II
14 BARCELONA TRACTION (JUDGMENT)

on the fourth Preliminary Objection :

“May it please the Court :

to declare Objection No. 4 to be unfounded, or if not to join it
to the merits and defer a decision on it in so far as it applies to
certain of the complaints against the decisions of the Spanish
judicial authorities made in the Belgian Government’s claim.”

In the oral proceedings the following Submissions were presented by
the Parties :

On behalf of the Government of Belgium,
at the closure of the hearing on 23 April 1964:

“May it please the Court

to adjudge and declare that the arguments put forward by the
Spanish Government in support of Preliminary Objection No. 1
are inadmissible in so far as that Government relies on alleged
ambiguities which it did not remove as it was in duty bound and
able to do ;

that these arguments are in any case unfounded and that the
discontinuance of the proceedings instituted by the Application
of 15 September 1958 is no bar to the institution of a new appli-
cation, the dispute between the Parties still persisting today ;

to adjudge and declare that the principal Preliminary Objection
No. 2 is inadmissible ;

in the alternative, to declare that it is not well-founded and to
adjudge and declare that the Court has jurisdiction to hear and
determine the claims put forward by the Belgian Government by
an Application relying on Article 17, paragraph 4, of the Spanish-
Belgian Treaty of 1g July 1927 and Article 37 of the Statute of
the International Court of Justice ;

to dismiss the alternative Preliminary Objection No. 2 raised by
the Spanish Government ;

to adjudge and declare that the Court has jurisdiction to hear
and determine the claims put forward by the Belgian Government
by an Application relying on Article 17, paragraph 4, of the
Spanish-Belgian Treaty of 19 July 1927 and Article 37 of the
Statute of the International Court of Justice, there being no
ratione temporis restriction which can be validly advanced to deny
such jurisdiction ;

to dismiss as irrelevant in the present proceedings Preliminary
Objection No. 3 in so far as it is based on alleged protection by
the Applicant Government of the Barcelona Traction Company
incorporated under the laws of Canada ;

I2
BARCELONA TRACTION (JUDGMENT)

furthermore, to dismiss the said objection in so far as it seeks
to deny the Applicant Government the right in the present case
to take up the case of its nationals, natural and juristic persons,
who are shareholders of Barcelona Traction ;

in the alternative, to join the third Objection to the merits ;

to dismiss Preliminary Objection No. 4;

in the alternative, should the Court consider in respect of certain
complaints that it cannot find that sufficient use has been made
of the local means of redress relating to them without examining
the content and validity of the Spanish judicial decisions by
which the remedies in fact sought were disposed of, to join the
objection to the merits.”

On behalj of the Government of Spain,

at the closure of the hearing on 8 May 1964:

13

“May it please the Court :

For any of these reasons, and all others set out in the written and
oral proceedings, or for ail of these reasons,

Firstly, since any jurisdiction of the Court to decide issues
relating to the claim formulated in the new Belgian Application
of 1962, either to competence, to admissibility or to the merits,
came to an end as a result of the letters of the Belgian and Spanish
Governments, respectively dated 23 March and 5 April 10617,
which the Court placed on record in its Order of 10 April 1961 ;

Secondly, since the Court is without jurisdiction to deal with the
present case, the jurisdictional clause of Article 17 of the Treaty
of Conciliation, Judicial Settlement and Arbitration of 19 July 1927
not having created between Spain and Belgium a jurisdictional
nexus enabling the Belgian Government to submit-the Barcelona
Traction dispute to the International Court of Justice ;

Thirdly, since the Belgian Government is without capacity in
the present case, having regard to the fact that the Barcelona
Traction company, which is still the object of the claim referred
to the Court, does not possess Belgian nationality ; and having
regard also to the fact that no claim whatsoever can be recognized

- in the present case on the basis of the protection of Belgian na-

tionals, being shareholders of Barcelona Traction, as the principal of
these nationals lacks the legal status of a shareholder of Barcelona
Traction, and as international law does not recognize, in respect
of injury caused by a State to a foreign company, any diplomatic
protection of shareholders exercised by a State other than the
national State of the company ;
16 BARCELONA TRACTION (JUDGMENT)

Fourthly, since the local remedies and procedures were not used
by Barcelona Traction, as required by international law’;

to adjudge and declare :

that the Application filed by the Belgian Government on
14 June 1962 and the final Submissions presented by it are defini-
tively inadmissible.”

*
x Ox

In the present case, the Applicant Government alleges injury and
damage to Belgian interests in a Canadian registered company, known
as the Barcelona Traction, Light and Power Company, Limited, result-
ing from treatment of the company in Spain said to engage the inter-
national responsibility of the Respondent Government. In opposition
to the Belgian Application, the Respondent Government has advanced
four objections as being objections in respect of the competence of the
Court or the admissibility of the claim, and as having a preliminary
character. Briefly summarized, these objections are :

(1) that the discontinuance, under Article 69, paragraph 2, of the
Court’s Rules, of previous proceedings relative to the same events in
Spain, disentitled the Applicant Government from bringing the present
proceedings ;

(2) that even if this was not the case, the Court is not competent,
because the necessary jurisdictional basis requiring Spain to submit
to the jurisdiction of the Court does not exist ;

(3) that even if the Court is competent, the claim is inadmissible
because the Applicant Government lacks any jus séandi to intervene
or make a claim on behalf of Belgian interests in a Canadian company,
assuming that the Belgian character of such interests were established ;
and

(4) that even if the Applicant Government has the necessary jus
standi, the claim still remains inadmissible because local remedies in
respect of the alleged wrongs and damage were not exhausted.

FIRST PRELIMINARY OBJECTION

The original Belgian Application to the Court in respect of the events
said to engage the responsibility of the Respondent Government and
to entitle the Applicant Government to intervene, was filed on 23 Sep-

14
17 BARCELONA TRACTION (JUDGMENT)

tember 1958, and was followed in due course by the deposit of a Belgian
Memorial, and of a set of Spanish preliminary objections having the
same character as the second, third and fourth Preliminary Objections
in the present case. Before the Belgian observations on these objec-
tions were received however (the proceedings on the merits having
been suspended under Article 62, paragraph 3, of the Rules), the
representatives of the private Belgian and Spanish interests concerned
decided to engage in negotiations for a settlement. In connection with
this decision, and in circumstances which will be more fully stated
later, the Applicant Government informed the Court on 23 March 1967
that “at the request of Belgian nationals the protection of whom was
the reason for the filing of the Application in the case [and] availing
itself of the right conferred upon it by Article 69 of the Rules of Court
[it was] not going on with the proceedings instituted by that Applica-
tion”. Nothing more was stated in the notice as to the motives for the
discontinuance, and nothing as to the Applicant’s future intentions.
Since the case fell under paragraph 2 of Article 69 of the Rules (the
Respondent having taken a step in the proceedings) the discontinuance
could not become final unless, within a time-limit to be indicated by
the Court, no objection should be received from the Respondent Gov-
ernment. Within the time-limit so fixed, however, a notification was
in fact received from that Government stating that it “had no objection
to the discontinuance”. No motivation or condition was attached to
this notification, and on 10 April 1961 the Court made an Order in the
terms of Article 69, paragraph 2, “recording the discontinuance of the
proceedings and directing the removal of the case from the list”. In
due course discussions between representatives of the private interests
concerned took place but, no agreement being reached, the Application
introducing the present proceedings was filed on rg June 1962.

The Applicant Government maintains that the discontinuance re-
corded by the Court’s Order of 10 April 1961 was no more than a termina-
tion of the then current proceedings before the Court ; and that the nego-
tiations in view of which it was made having broken down, the Applicant
was fully entitled to bring new proceedings in regard to the same matters
of complaint. The Respondent Government, on the other hand, con-
tends that, both in principle and in the light of the circumstances
obtaining, this discontinuance precluded the Applicant Government from
bringing any further proceedings, and in particular the present ones.

The main arguments advanced by the Respondent in support of its
contention are as follows :

Firstly, that a discontinuance of proceedings under Article 69 of the
Rules is in itself a purely procedural act, the real import of which can

15
18 BARCELONA TRACTION (JUDGMENT)

only be established by reference to the surrounding circumstances—
the fact that it does not contain an express renunciation of any further
right of action not being conclusive ;

secondly, that in principle however, a discontinuance must be taken
to involve such a renunciation unless the contrary is stated, or the
right to take further action is expressly reserved ;

thirdly, that in the present case there was an understanding between
the Parties that the discontinuance did involve such a renunciation
and would be final, not only as regards the current proceedings but also
for the future ;

fourthly, that even if there was no such understanding, the Applicant
Government conducted itself in such a way as to lead the Respondent
to believe that the discontinuance would be, in the above-mentioned
sense, final, but for which the Respondent would not have agreed to it,
and in consequence of which the Respondent suffered prejudice ;

finally—a contention of a somewhat different order—that the intro-
duction of new proceedings in regard to the same matters of complaint
was incompatible with the spirit and economy of the treaty under
which the Applicant sought to found the jurisdiction of the Court.

Before examining these various contentions, the Court will deal
with certain preliminary matters.

The present case is one in which the Court is called upon for the
first time to consider the effect of a discontinuance followed by new
proceedings. This is because, ordinarily, discontinuances have been
final in fact, whether or not they would have proved to be so in law
had an attempt to bring further proceedings been made. Sometimes a
discontinuance, though in form unilateral, and therefore notified under
Article 69: of the Rules, has been consequent on a settlement of the
dispute ; in other cases the claimant State has had reasons, which
appeared to it to be of a final character, for not continuing to attempt
to prosecute its claim before the Court; in others yet, it might well
have been that, the current proceedings once discontinued, the juris-
dictional basis for instituting new ones would no longer have been
available..

But, in the opinion of the Court, these various considerations are
essentially fortuitous in character ; and the fact that past discontinuances
have in practice proved “final” cannot of itself justify the conclusion
that any a priori element of finality inherently attaches to them.
This can readily be demonstrated by reference to circumstances in
which the Court considers that no question could arise as to the right
to institute further proceedings following upon a discontinuance, quite

16
19 BARCELONA TRACTION (JUDGMENT)

irrespective of whether any reasons for it were given, or any right of
further action reserved. That this might be the case was indeed
expressly recognized in the Respondent’s written Preliminary Objec-
tions where, in discussing possible motives for a discontinuance, it was
stated that—

“For example, it may be that an applicant discontinues pro-
ceedings begun by him only because he finds that he has committed
an error of procedure and intends to institute a new action right
away.”

Similar possibilities are that the claimant State might have failed
to give certain notices which, under an applicable treaty, had to be
given before any valid application to the Court could be made ; or the
claimant State might discover that although it thought local remedies
had been exhausted, this was not in fact the case. Again, in a claim
on behalf of an individual, evidence might come to light indicating
that he was not, after all, a national of the claimant State, leading to
a discontinuance ; but subsequently it might be found that this evi-
dence was inaccurate. There are many other possibilities. It is,
moreover, clear that in certain of these cases, the discontinuing party
could have no foreknowledge of whether the defect or disability leading
to the discontinuance would subsequently be cured, in such a way as
to remove the obstacle to the renewal of the suit.

The existence of these possibilities suffices in itself to show that the
question of the nature of a discontinuance cannot be determined on
any @ priori basis, but must be considered in close relationship with the
circumstances of the particular case. In consequence, each case of
discontinuance must be approached individually in order to determine
its real character. There would therefore be little object in the Court’s
entering upon any exhaustive discussion of the theory of discontinuance
as it is provided for by Articles 68 and 69 of the Court’s Rules. But
certain points may be noticed by way of clarification.

Both the inherent character of these provisions and their drafting
records show that the main object which they have in view is to provide
a procedural facility, or rather—since it would in any everit never be
practicable to compel a claimant State to continue prosecuting its
case—to reduce the process of discontinuance to order. But these
provisions are concerned solely with the “how”, not with the “why”,
of the matter. They impose no conditions as to the basis on which a
discontinuance may be effected other than (in cases coming under
Article 68) that the parties shall be in agreement about it, or (in those
coming under Article 69, paragraph 2) that the respondent party has
no objection ; for it is clear that there-are few limits to the motives that
might inspire a discontinuance, and these two Articles are not concerned
with that aspect of the matter.

17
20 BARCELONA TRACTION (JUDGMENT)

One difference between the two provisions is, however, significant.
Whereas Article 68 contemplates a discontinuance which not only is
(in effect) an agreed one, but also takes the form of an agreed commu-
nication to the Court, Article 69 on the other hand contemplates a
notification to the Court which, whether it results from an agreed
settlement of the dispute or from some other cause, always takes the
form of a unilateral communication from the applicant or claimant
party, which is either immediately effective, if the case comes under
paragraph 1 of Article 69 (the respondent party having taken no step
in the proceedings), or which (if such a step has been taken) becomes
effective in the absence of any objections from the respondent party
within the time-limit fixed by the Court. The respondent can of course
signify expressly its non-objection, but is in no way obliged to do so.
Thus, whereas in cases coming under Article 68 the act of discontinuance
is to all intents and purposes a joint act, in those coming under Article 69
it is an essentially unilateral act, whatever may underlie it, and even
though acquiescence is necessary before it can actually take effect.
Under Article 69, any notifications, whether of intention to discontinue,
or in acceptance of discontinuance, are notifications made to the Court
and not passing between the parties, so that any understandings between
them (and such may certainly exist) must precede and be sought for
outside the act of discontinuance itself.

The right of objection given to a respondent State which has taken
a step in the proceedings is protective, to enable it to insist on the case
continuing, with a view to bringing about a situation of res judicata ;
or in other words (perhaps more pertinent for the present case), to
enable it to ensure that the matter is finally disposed of for good.

The role of the Court, there being no objection to the discontinuance,
is simply to record it and to remove the case from its list. In connection
with the discontinuance itself, the Court is not called upon to enquire
into the motives either of the discontinuing or of the respondent party :
Article 69 does not impose any obligation on the parties to give reasons
either for the wish to effect the discontinuance, or for not objecting to it.

One further element regarding the process of discontinuance which
may be noticed, is that the evidence of the drafting records of Articles 68
and 69 goes to show that in addition to making provision for what was
an evidently necessary procedural faculty, the aim was to facilitate as
much as possible the settlement of disputes—or at any rate their non-
prosecution in cases where.the claimant party was for any reason indis-
posed to discontinue. This aim would scarcely be furthered however,
if litigants felt that solely by reason of a discontinuance on their part
they would be precluded from returning to the judicial process before
the Court, even if they should otherwise be fully in a position to do so.

18
21 BARCELONA TRACTION (JUDGMENT)

*
* *

It is against this background that the Court must now consider the
contentions advanced by the Respondent Government in the present
case.

In the light of what has been said about the nature of the process of
discontinuance, the Court can accept the first of these contentions,
which is to the effect that giving notice of discontinuance is a procedural
and, so to speak, “neutral” act, the real significance of which must be
sought in the attendant circumstances, and that the absence of express
renunciation of any further right of action is inconclusive, and does not
establish in itself that there has not been such a renunciation, or that
the discontinuance is not being made in circumstances which must
preclude any further proceedings.

But for the very reason that the Court thinks this to be a correct
statement of the legal position, it cannot accept the Respondent’s
second principal contention, namely that a discontinuance must always
and in principle be taken as signifying a renunciation, unless the con-
trary is indicated or unless the right to start new proceedings is expressly
reserved. The two conceptions are mutually contradictory: a notice
of discontinuance of proceedings cannot both be in itself a purely pro-
cedural and “neutral” act, and at the same time be, prima facie and
in principle, a renunciation of the claim. There is no need to discuss
this contention any further, except to say that, in view of the reasonable
and legitimate circumstances which, as has already been seen, may
motivate a discontinuance, without it being possible to question the
right of further action, the Court would, if any presumption governed
the matter, be obliged to conclude that it was in the opposite sense to
that contended for by the Respondent; and that a discontinuance
must be taken to be no bar to further action, unless the contrary clearly
appeared or could be established. The problem is however incorrectly
formulated if it is asked (as it constantly has been in the present case)
what the “effect” of a discontinuance is; for the effect of a disconti-
nuance must always and necessarily be the same—to put and end to
the current set of proceedings. In this, precisely, lies its essentially
procedural character. The real question is not what the discontinuance
does—which is obvious—but what it implies, results from or is based
on. This must be independently established, except in those cases
where, because the notice itself gives reasons, or refers to acts or under-
takings of the parties, or to other circumstances, its import is clear and
apparent.

In the present case, the notice of discontinuance given by the Appli-
cant Government, contained no motivation apart from such impli-
cations (and they could be various) as might be drawn from the state-
ment that it was made at the request of the Belgian nationals whose
protection had led to the presentation of the original Application in
the case. On the other hand, the notice was very clearly related, and

19
22 BARCELONA TRACTION {J UDGMENT)

confined, to that Application, the date and character of which were
specified. It was “the proceedings instituted by that Application”
to which the notice referred, and nothing else.

In these circumstances, the Court considers that, if the notice itself
left it open whether or not it involved or was consequent on a renun-
ciation of all further right of action, its terms are nevertheless such as
to place upon the Respondent Government the onus of establishing
that it meant or was based upon something more than appeared on the
face of it, namely a decision to terminate the then current proceedings
before the Court, subject to the Respondent’s assent.

*
* *

In seeking to discharge this onus the Respondent has put forward
two contentions :

The first is to the effect that there was an understanding between
the Parties about the discontinuance ; and the foundation for it lies in
the fact that when, after the original proceedings had been started,
the representatives of the Belgian interests concerned approached the
representatives of the Spanish interests with a view to re-opening nego-
tiations, they were met with a firm refusal to do so unless the case
before the Court were first brought to a definite end; that a Belgian
offer for a suspension of the proceedings was rejected as insufficient,
and a “final withdrawal of the claim” was demanded ; that the Belgian
representatives thereupon undertook to request their Government to
effect a final discontinuance of the proceedings ; that it was perfectly
well understood on the Belgian side that the Spanish side meant and
assumed that the discontinuance would operate as putting a final end
to the claim, or at any rate to any further right of action ; and that the
Spanish representatives would not have agreed to negotiate on any
other basis, nor the Respondent Government to refrain from objecting
to the discontinuance under Article 69, paragraph 2, of the Rules of
Court.

On the Belgian side, it was denied that anything more was intended
or could reasonably be inferred from the Belgian statements, or from
the terms of the notice of discontinuance itself (which was before the
Respondent Government when it signified its non-objection), than a
simple, though final, termination of the then current proceedings—
particularly having regard to the prospective negotiations about to be
embarked upon.

The Court notes that, although there were various contacts at the
governmental level, the exchanges relied on took place initially almost
entirely between the representatives of the private interests concerned.
In so far as the Governments were privy to these exchanges, it was
evidently, at that stage, only on an unofficial basis. In order that the

20
23 BARCELONA TRACTION (JUDGMENT)

Governments on either side should in any way be committed by these
exchanges, it would be necessary to show that the representatives of
the private interests acted in such a manner as to bind their Govern-
ments. Of this there is no evidence : indeed on the Spanish side the
apparently very cautious nature of the contacts between the author-
ities and the private interests negatives the possibility. In this con-
nection the Court recalls that at one stage of the oral hearing, the Parties
were invited by the Court to clarify the situation by indicating how
far the acts of the representatives of the private interests were adduced
as engaging the responsibility of the Governments ; but no really clear
light was thrown on the matter.

In the circumstances, the Court sees no reason to depart from the
general rule that, in relation to an understanding said to exist between
States parties to a litigation before it, and to affect their rights in that
litigation, it can only take account of the acts and attitudes of govern-
ments or of the authorized agents of governments ; and, in the present
case, the Court can, at the governmental level, find no evidence of any
such understanding as is alleged by the Respondent. Indeed it seems
to have been above all on the part of the latter that the greatest reluc-
tance to become involved in any understanding over the discontinuance
was manifested.

Quite apart from these considerations however, the Court finds the
various exchanges wholly inconclusive. It seems that the Parties were
deliberately avoiding a problem they were unwilling to come to grips
with, lest by doing so they should shatter the foundation of their inter-
changes. The Respondent Government must have realized that an
immediate refusal would result from any official request that the Appli-
cant Government, in discontinuing the current proceedings, should
definitely renounce, or undertake that it did renounce, all further right
of action. As far as the Applicant was concerned, if it did not intimate
that it reserved the right to bring further proceedings, should the
negotiations fail, it equally avoided suggesting that it renounced that
right. The desire felt on the Spanish side not to negotiate whilst
proceedings were actually in progress before the Court, involving injur-
ious charges against Spanish authorities and nationals, was fully met
by the discontinuance effected, and nothing more was needed for that
purpose. Furthermore, it does not appear reasonable to suppose that
on the eve of difficult negotiations, the success of which must be un-
certain, there could have been any intention on the Belgian side to
forgo the advantage represented by the possibility of renewed proceed-
ings. In the face of this, only very clear proof of the understanding
alleged by the Respondent would suffice, and none is forthcoming.

The Court considers that in any case, and whatever ambiguities may
have existed in the private and official exchanges involved, the onus of
making its position clear necessarily lay on the Respondent Govern-
ment ; for it was that Government which had the right of objection to

21I
24 BARCELONA TRACTION (JUDGMENT)

the discontinuance, under Article 69, paragraph 2, of the Rules—a
right expressly given to respondent parties for their protection, and for
the purpose, inter alia, of enabling them to prevent what has occurred
in the present case. There is nothing to prohibit conditions being
attached to any abstention from exercising this right, but the Respon-
dent Government attached no conditions other than, implicitly, the
one already satisfied by the notice of discontinuance, that the proceed-
ings begun by the Belgian Application of September 1958 should be
brought to an end—as they were.

A second contention, having the character of a plea of estoppel, was
advanced by the Respondent Government in seeking to discharge the
onus of proof referred te above. This was to the effect that, indepen-
dently of the existence of any understanding, the Applicant Govern-
ment by its conduct misled the Respondent about the import of the
discontinuance, but for which the Respondent would not have agreed
to it, and as a result of agreeing to which, it had suffered prejudice.
Accordingly, it is contended, the Applicant is now estopped or precluded
from denying that by, or in consequence of, the discontinuance, it
renounced all further right of action.

This plea meets at the outset with two difficulties. In the first place,
it is not clear whether the alleged misleading conduct was on the part
of the Applicant Government itself or of private Belgian parties, or
in the latter event, how far it is contended that the complicity or res-
ponsibility of the Applicant Government is involved. In the second
place, the Court does not consider that the alleged misleading Belgian
representations have been established, any more than was the alleged
understanding between the Parties about the implications of the dis-
continuance. Nevertheless, since this aspect of its first Preliminary
Objection has been more strongly insisted upon by the Respondent
Party than perhaps any other, the Court will consider it.

Without doubt, the Respondent is worse off now than if the present
proceedings had not been brought. But that obviously is not the point,
and it has never been clear why, had it known that these proceedings
would be brought if the negotiations failed, the Respondent would not
have agreed to the discontinuance of the earlier proceedings in order to
facilitate the negotiations (the professed object) ; since it must not be
overlooked that if the Respondent had not so agreed, the previous pro-
ceedings would simply have continued, whereas negotiations offered a
possibility of finally settling the whole dispute. Given that without
the Respondent’s consent to the discontinuance of the original proceed-
ings, these would have continued, what has to be considered now is not
the present position of the Respondent, as compared with what it
would have been if the current proceedings had never been brought,

22
25 BARCELONA TRACTION (JUDGMENT)

but what its position is in the current proceedings, as compared with
what it would have been in the event of a continuation of the old ones.

In making this comparison, the essential point is that the Respondent
Government had entered certain preliminary objections in the earlier
proceedings which, if successful (and it was presumably hoped to
succeed on them), would necessarily have brought the case to an end,
and have prevented not only a decision about, but even any discussion
at all of the allegations made against Spanish nationals and authorities.
But so equally would successful negotiations have prevented this.
At the same time, the Respondent Government ran no risk, for if the
negotiations were not successful, and the case started again, it would
still be possible once more to put forward the previous preliminary
objections. Consequently, irrespective of whether the case would
begin again or not, it cannot be seen what the Respondent stood to lose
by agreeing to negotiate on the basis of a simple discontinuance, or
why it would not have agreed had it realized that this alone, without a
substantive renunciation, was involved. The explanations given seem
to the Court unconvincing.

As to the prejudice alleged, the only point that appears to require
examination arises from the fact that in bringing the new proceedings
the Applicant Government had the advantage of being able to frame
its Application and ensuing Memorial with a foreknowledge of the
probable nature of the Respondent’s reply—a foreknowledge which a
claimant State might not, at that stage of the proceedings, ordinarily
possess, even though, normally, previous negotiations and diplomatic
exchanges would have given it considerable information about the
opposing legal position. The scope of the Court’s process is however
such as, in the long run, to neutralize any initial advantage that might
be obtained by either side. As regards the substance, in so far as the
Applicant Government was, for the purposes of its Application in the
present proceedings, able to modify the presentation of its claim in order
to take account of objections advanced by the Respondent in the original
proceedings, it appears to the Court that the Applicant could, in the
light of those objections, have done exactly the same thing for the
purposes of its final submissions in those proceedings themselves,
which would have continued. The Applicant is always free to modify
its submissions and, in fact, the final submissions of a party frequently
vary from those found in the written pleadings. Consequently the
Court is not able to hold that any true prejudice was suffered by the

Respondent.

*
*° *

A final, though different order of contention advanced by the Res-
pondent in support of its first Preliminary Objection, was that the
present proceedings were contrary to the spirit and economy of the

23
26 BARCELONA TRACTION (JUDGMENT)

Hispano-Belgian Treaty of 19 July 1927, the jurisdictional clauses of
which are relied on by the Applicant as conferring competence on the
Court. The character of this Treaty is fully considered in connection
with the second Preliminary Objection, and it will suffice to say here
that according to its terms, before a dispute can be submitted to adju-
dication, various preliminary stages have to be gone through. These
stages were in fact gone through in connection with the original and
discontinued proceedings, and they were repeated in connection with the
present proceedings. The contention now advanced is that it cannot
have been the intention of the Treaty that the same processes should be
gone through twice in relation to the same claim, and that the present
proceedings are consequently out of order, on the basis of the very
instrument on which the Applicant founds the jurisdiction of the Court.

The Court is sensible of the element of artificiality involved in the
repetition of the Treaty processes in regard to the same matters of
complaint. But if the right to bring new proceedings exists, apart
from this, it would seem difficult to hold that precisely because it does,
the jurisdictional basis for its exercise is thereby destroyed.

It has been argued that the first set of proceedings “exhausted”
the Treaty processes in regard to the particular matters of complaint,
the subject of those proceedings, and that the jurisdiction of the Court
having once been invoked, and the Court having been duly seised in
respect of them, the Treaty cannot be invoked a second time in order
to seise the Court of the same complaints. As against this, it can be
said that the Treaty processes are not in the final sense exhausted in
respect of any one complaint until the case has been either prosecuted
to judgment, or discontinued in circumstances involving its final
renunciation—neither of which constitutes the position here. If, for
instance, to recall an illustration given earlier (and other instances are
possible) proceedings brought under the Treaty were discontinued
because it was found that local remedies had not been exhausted (and
it is of course at the moment of the application to the Court that they
require to be), it would be difficult to contend that (this deficiency
being remedied) a new application could not be made in the case, merely
because it would have to be preceded by a repetition of the Treaty
processes. This contention therefore cannot be accepted.

For all of the foregoing reasons, the Court holds that the first Pre-
liminary: Objection must be rejected.

SECOND PRELIMINARY OBJECTION (PRINCIPAL ASPECT)

Although, for the reasons given in connection with the first Prelimi-
nary Objection, the discontinuance of the action in the original pro-
ceedings before the Court did not disentitle the Belgian Government

24
27 BARCELONA TRACTION (JUDGMENT)

from commencing the present proceedings, it is nevertheless essential
that a valid jurisdictional basis for these should exist. In order to
establish this, the Applicant Government relies on the combined effect
of Article 37 of the Statute of the Court and the fourth paragraph of
Article 17 of the Hispano-Belgian Treaty of Conciliation, Judicial
Settlement and Arbitration, signed on 19 July 1927, and kept in force
by means of tacit renewals taking place at ten-yearly intervals, the
latest having occurred in 1957. This Treaty, which will henceforth
be called the 1927 Treaty, provided by its Article 2 for a reference to
adjudication of all disputes between the parties, involving a disagree-
ment about their legal rights. For this purpose, and if the methods of
conciliation also provided for by the Treaty failed, or were not utilized,
the parties were in each case to draw up a compromis. If, however,
agreement could not be reached upon the terms of a compromis within
a certain period, then the fourth paragraph of Article 17 of the Treaty,
now invoked by the Applicant Government, provided that :

[Translation]
“... either Party may, on the expiry of one month’s notice, bring
the question direct before the Permanent Court of International
Justice by means of an application”.

In combination with this provision, the Applicant invoked Article 37
of the Statute of the Court, the relevant portion of which in the English
text, reads as follows :

“Whenever a treaty or convention in force provides for reference
of a matter... to the Permanent Court of International Justice,
the matter shall, as between the parties to the present Statute,
be referred to the International Court of Justice.”

In the light of this provision, it was contended by the Applicant that,
the 1927 Treaty being “a treaty... in force”, and both the Parties in
dispute being parties to the Statute of the International Court of
Justice, that Court must, by virtue of Article 37, be deemed to have
replaced the Permanent Court in the relations between the Parties,
for the purposes of such a provision as the fourth paragraph of Article 17
of the Treaty—henceforth to be called Article 17 (4) ; and accordingly
that (the necessary time-limits having expired) this provision gave the
Applicant the right to bring the case unilaterally before the Court.

This view was contested by the Respondent Government, on the
ground that although the 1927 Treaty might as such still be in force,
the jurisdictional obligation represented by Article 17 (4) had neces-
sarily lapsed on the dissolution of the former Permanent Court on
18 April 1946, since this brought about the disappearance of the judicial
organ to which Article 17 (4) referred; that no previous substitution

25
28 BARCELONA TRACTION (JUDGMENT)

of the present for the former Court had been effected by virtue of
Article 37 before that date, Spain not being then a party to the Statute ;
and that, in consequence, the 1927 Treaty had ceased to contain any
valid jurisdictional clause by the time Spain did become a party to
the Statute upon admission to the United Nations in December 1955.
Thus, even if Spain would then in principle have become bound by
Article 37, there did not in the instant case, so it was contended, exist
at that date any clause of compulsory jurisdiction in respect of which
that provision could operate to confer jurisdiction on the present Court,
and since Article 37 could only apply to jurisdictional clauses already
in force, it could not operate to bring a former clause into force again,
which occurrence would require for its realization the express consent
of both parties, given de novo.

Another way of stating what was basically the same contention, was to
say that Article 37 only applied in the relations between parties to the
Statute which had become such through original membership of the
United Nations, or at least by acquiring membership (or by otherwise
becoming a party to the Statute), previous to the dissolution of the
Permanent Court in April 1946 ; for only in their case had the substitu-
tion of the present Court for the Permanent Court been able to take
place at a time when the jurisdictional clauses in respect of which this
was to occur were themselves still in force. Once any such clause had
lapsed by reason of the disappearance of the Permanent Court, there
could be no substitution of forum ; or rather, any question of substitu-
tion became pointless, since the basic obligation of compulsory adjudi-
cation itself no longer existed. Moreover, only those States which had
already become parties to the Statute before the dissolution of the
Permanent Court could be regarded as having given a true consent to
the process involved—that is a consent directly given in respect of
jurisdictional clauses still indubitably in force. Anything else, it was
contended, would be a fiction.

There were other ways in which the Spanish contention was or could
be put, some of which will be noticed later ; but however it might be
put, it always involved at bottom the same basic contention, that the
dissolution of the Permanent Court brought about the final extinction
of all jurisdictional clauses providing for recourse to that Court, unless
they had already, previous to this dissolution, been transformed by the
operation of Article 37 of the Statute into clauses providing for recourse
to the present Court ; and that in respect of any jurisdictional clause
not thus transformed previous to the dissolution of the Permanent Court,
Article 37 was, thereafter, powerless to effect the transformation.

This line of reasoning was not put forward by the Respondent Gov-
ernment in the original diplomatic exchanges between the Parties.

26
29 BARCELONA TRACTION (JUDGMENT)

It was first advanced after the decision given by the Court on
26 May 1959, in the case concerning the Aerial Incident of 27 July 1955
(Israel v. Bulgaria) (I.C.J. Reports 1959, p.127). This case had
reference, not to Article 37 but to Article 36, paragraph 5, of the Sta-
tute ; and not to a treaty, such as the Hispano-Belgian Treaty of 1927,
but to a unilateral declaration in acceptance of the compulsory juris-
diction of the former Permanent Court, made under the “optional
clause” of its Statute (paragraph 2 of Article 36). It was however
contended by the Respondent that the legal considerations applicable
in that case were applicable also in the present one ; and the arguments
advanced by the Respondent were, mutatis mutandis, similar in character
to those advanced on behalf of Bulgaria in that case. The Court will
therefore consider this matter.

The Court notes in the first place that the decision in the Israel v.
Bulgaria case was confined entirely to the question of the applicability
of Article 36, paragraph 5, in a somewhat unusual situation ; that it
made only one passing and routine reference to Article 37 and notice-
ably avoided any finding on, or even consideration of the case of that
provision, the position of which it was evidently intended to leave
quite open. The Court moreover considers that there are differences
between the two cases which require that the present one should be
dealt with independently and on its merits. Not only is a different
category of instrument involved—an instrument having a conventional
form, not that of a unilateral declaration—but the essential require-
ment of being “in force”, which in the cases contemplated by Article 36,
paragraph 5, bore directly on the jurisdictional clause—the unilateral
declaration itself—is, in Article 37, formally related not to the clause
as such, but to the instrument—the treaty or convention—containing
it, from which follow certain consequences to be noticed later.

Nor can the Court be oblivious to other differences which cannot but
affect the question of the need for the Court to make an independent
approach to the present case. The case of Israel v. Bulgaria was in
a certain sense sui generis. As some of the separate but concurring
opinions show (and as is evident in other ways), it might have been
decided—and still in favour of Bulgaria—on grounds which would not
have involved the particular issue of the effect of the dissolution of the
Permanent Court on the continued existence and validity of a declara-
tion not previously “transformed” into an acceptance of the compulsory
jurisdiction of the present Court. Moreover, any decision of the Court,
relative to Article 37, must affect a considerable number of surviving
treaties and conventions providing for recourse to the Permanent
Court, including instruments of a political or technical character, and
certain general multilateral conventions of great importance that seem
likely to continue in force. It is thus clear that the decision of the
Court in the present case, whatever it might be, would. be liable to
have far-reaching effects. This is in no way a factor which should be

27
30 BARCELONA TRACTION (JUDGMENT)

allowed to influence the legal character of that decision: but it does
constitute a reason why the decision should not be regarded as already
predetermined by that which was given in the different circumstances
of the Israel v. Bulgaria case.

It will be convenient at this point to mention briefly the question
of the other cases cited in the course of the proceedings, in which
Article 36, paragraph 5, or 37, of the Statute have been involved.
None is directly in point ; for, with the exception of the declaration of
Thailand in the case concerning the Temple of Preah Vihear, Prelimi-
nary Objections (I.C.]. Reports 1961, p. 17), all the jurisdictional clauses
concerned related to countries which were original Members of the
United Nations and parties to the Statute, so that the various processes
provided for by the Statute had already been completed as regards
these clauses before the extinction of the Permanent Court. In the
Temple of Preah Vihear case, Thailand had deposited a declaration
purporting to accept the present Court’s compulsory jurisdiction, by
means of a “renewal” of a previous declaration of 1940, accepting that
of the former Permanent Court. As Thailand had only become a
Member of the United Nations and a party to the Statute after the
disappearance of that Court, it was argued, in the light of the Jsrael
v. Bulgaria decision, that the 1940 declaration had ipso facto lapsed and
become extinguished, and was consequently incapable of “renewal”,
so that the 1950 declaration purporting to effect such a renewal was
without legal validity. The Court however decided the matter on a
different basis, holding that, in sending in its notice of renewal, Thailand
must have intended to accept the jurisdiction of a court of some kind—
and this could only have been the present one since, as Thailand knew,
the former Court no longer existed. Hence, despite the language of
“renewal”, the notice (on its correct interpretation) Operated as a
direct acceptance of the compulsory jurisdiction, made in relation to
the present Court. Consequently, irrespective of whether or not the
previous declaration relative tu the Permanent Court had lapsed, Thai-
land had accepted the compulsory jurisdiction of the present Court.
It is clear that this case has no relevance whatever to the present one.

In the light of the foregoing considerations therefore, the Court
must decide the present case independently and without further reference
to Article 36, paragraph 5, or to the previous cases which have, in one
way or another, involved that provision or Article 37 of the Statute—
even though in three of them, the Court did actually apply Article 37.

28
31 BARCELONA TRACTION (JUDGMENT)

Although it will be necessary to revert to the matter at a later stage,
it is desirable at this point to say something about what appear to
have been the objects and purposes of Article 37 at the time when the
Statute was being drafted in the period April-June 1945.

Historically, two main considerations appear to have moved the
drafters. In the first place, owing to the decision to create an inter-
national court of justice which would in law be a new entity, and not
a continuation of the existing Permanent Court, the dissolution of the
latter became essential, for it would not have been a tolerable situation
for two such Courts to be co-existing. The disappearance of the Per-
manent Court was in any event certain to occur in fact, for lack. of
machinery to replace its Judges, but it was not known precisely when
this disappearance, either as a fact or as the result of a formal dissolu-
tion, would come about. At the same time, there were then in existence
a very large number of treaties, conventions and other instruments,
bilateral and multilateral, containing jurisdictional clauses providing
for recourse to that Court. If therefore nothing had been inserted in
the new Statute to meet this situation, and to meet it automatically
and in advance, the preservation of these clauses would have been left
to the uncertain action of the individual parties to the various instru-
ments concerned.

It was this situation that Article 37 was designed to meet, and the
governing concept evidently was to preserve. as many jurisdictional
clauses as possible from becoming inoperative by reason of the pro-
spective dissolution of the Permanent Court ; and moreover, to do this
by a process which would automatically substitute the new Court for
the Permanent Court in the jurisdictional treaty relations between
all Members of the United Nations and other parties to the Statute,
thus avoiding the necessity for piecemeal action by special agreement
between the parties to the various instruments. The intention there-
fore was to create a special régime which, as between the parties to
the Statute, would automatically transform references to the Perma-
nent Court in these jurisdictional clauses, into references to the present
Court.

In these circumstances it is difficult to suppose that those who
framed Article 37 would willingly have contemplated, and would not
have intended to avoid, a situation in which the nullification of the
jurisdictional clauses. whose continuation it was desired to preserve,
would be brought about by the very event—the disappearance of the
Permanent Court—the effects of which Article 37 both foresaw and
was intended to parry ; or that they would have viewed with equanim-
ity the possibility that, although the Article would preserve many
jurisdictiorial clauses, there might be many others which it would not ;
thus creating that very situation of diversification and imbalance
which it was desired to avoid.

Whether Article 37 was aptly framed to carry out these objectives
remains for consideration ; but that such were the objectives, and the

29
32 BARCELONA TRACTION (JUDGMENT)

motives influencing the drafting, the Court can hardly doubt. This
conclusion finds strong support in a second historical consideration.
As is well known, Article 37 represented, so far as treaties and conven-
tions were concerned, a compromise between two extreme and opposed
schools of jurisdictional thought. There were, on the one hand, those
who wanted to insert in the Statute of the new Court a clause of universal
compulsory jurisdiction, automatically applicable to all disputes
between parties to the Statute, of whatever kind and howsoever arising.
Such a clause would have rendered the insertion of jurisdictional clauses
in particular treaties or conventions unnecessary except for any special
purpose, and would have rendered a provision such as Article 37 un-
necessary also, or caused it to be differently drafted. On the other
hand, there were those who were opposed to the idea of compulsory
jurisdiction in any form, and considered that the Court should only be
competent in cases brought before it with the express consent of the
parties, given ad hoc.

The compromise between these two points of view which Article 37
represented (so far as jurisdictional clauses in treaties and conventions
were concerned) involved the rejection of the notion of a universal
compulsory jurisdiction ; but on the other hand (and for that very
reason) it also involved the preservation at least of the already existing
field of conventional compulsory jurisdiction. It was a natural element
of this compromise that the maximum, and not some merely quasi
optimum preservation of this field should be aimed at.

With this background in mind, the Court will now consider the text
of Article 37. Looking simply at its actual language, the Court sees
it primarily as a provision conferring jurisdiction upon the International
Court of Justice in respect of a certain category of disputes, and which
mentions the Permanent Court for one purpose and one only—namely
that of defining or identifying the category of dispute covered. Only
three conditions are actually stated in the Article. They are that there
should be a treaty or convention in force ; that it should provide (ie.,
make provision) for the reference of a “matter” (ie., the matter in
litigation) to the Permanent Court ; and that the dispute should be
between States both or all of which are parties to the Statute. No
condition that the Permanent Court should still be in existence at any
given moment is expressed in the Article. The conclusion, in so far as
it is to be based on the actual language of Article 37 must be that the
1927 Treaty being in force ; it being a treaty which contains a provision
for a reference of the matter in dispute to the Permanent Court ; and
the Parties to the dispute both being parties to the Statute—then, as
between them, the matter is to be. (“shall be”) referred to the Inter-

30
33 BARCELONA TRACTION (JUDGMENT)

national Court of Justice, or (according to the French text) that Court
is to be the competent forum.

Two central issues evidently.arise here. One, which will be consi-
dered later, is whether, although the words “in force” are directly related
to the treaty or convention as such, they must nevertheless be regarded
as relating also, and independently, to the jurisdictional clause as
such. The other main issue is, what is the meaning to be ascribed to
the phrase “provides for”. Clearly this cannot mean “provides for”
operationally, here and now, for the Permanent Court no longer being
in existence, no treaty could still provide for that. It follows that to
impart rationality to the term “provides for” in its context, it must be
read in a figurative sense, almost as if it had been put between inverted
commas, and as denoting a treaty or convention still in force as such,
containing a clause providing, or making provision for, a reference to
the Permanent Court, this being simply a convenient method of defining
or identifying the category of dispute in respect of which jurisdiction
is conferred upon the International Court of Justice.

It was however argued that since Article 37, wherever it was appli-
cable, transferred jurisdiction from the Permanent Court to the present
Court, it was necessary that the former Court should still be in existence
at the moment of the transfer ; for otherwise there would no longer
exist any jurisdiction to be transferred. But the Court considers that
Article 37 did not in fact operate to effect any “transfer” of jurisdiction
as such. What was created was a new Court, with a separate and
independent jurisdiction to apply in the relations between the parties
to the Statute of that new Court. In the field of the jurisdictional
clauses of treaties and conventions already in force, referring to the
Permanent Court, the modus operandi could, technically, have been
to annex to the Statute a list of all such instruments. Such a listing
eo nomine would have left no doubt that any listed treaty was covered,
so long as it remained in force, irrespective of the date at which the
parties became parties to the Statute, and independently of the con-
tinued existence of the Permanent Court. Instead of any such cum-
brous procedure, the same result was achieved by resort to the common
factor involved in all these jurisdictional clauses, namely the provision
they contained for reference to the Permanent Court. By mentioning
this, Article 37 identified and defined the category involved, and nothing
else was needed.

The Court will now turn to the question of the scope to be given to
the words “in force” in Article 37. According to the actual text,
this phrase relates solely to the treaties and conventions in question,
and as such, But this cannot be considered as finally conclusive in
itself, because it is necessary to take into consideration not only what

3r
34 BARCELONA TRACTION (JUDGMENT)

this provision was intended to do, but also what it was not intended to
do. It was intended to preserve a conventional jurisdictional field
from a particular threat, namely the extinction which would otherwise
follow from the dissolution of the Permanent Court. But that was
all it was intended to do. It was not intended to create any new
obligatory jurisdiction that had not existed before that dissolution.
Nor, in preserving the existing conventional jurisdiction, was it intended
to prevent the operation of causes of extinction other than the disap-
pearance of the Permanent Court. In this sense but, however, in this
sense only, is it correct to say that regard must be had not only to
whether the treaty or convention is still in force, but also to whether
the jurisdictional clause it contains is itself, equally, still in force. And
precisely because it was the sole object of Article 37 to prevent extinc-
tion resulting from the particular cause which the disappearance of the
Permanent Court would represent, it cannot be admitted that this
extinction should in fact proceed to follow from this very event itself.
Such a possibility would not only involve a contradiction in terms, but
would run counter to the whole intention and purpose of the Article.

The argument to the contrary is based on seeking to draw a distinc-
tion between those States which became parties to the Statute previous
to the dissolution of the Permanent Court, and those which became
parties afterwards. But that is not an independent argument, for the
alleged distinction is itself only a part, or another aspect, of the same
fundamental question, namely the effect of that dissolution on the
status of these jurisdictional clauses—since the sole relevance of the
date of admission to the United Nations, if it was subsequent to the
dissolution, is whether there still remained in existence any jurisdic-
tional clause in respect of which Article 37 could take effect. It is in
this way alone that any distinction between different parties to the
Statute could be introduced ; for otherwise it must be entirely arbi-
trary, and it is not recognized by Article 37 itself which, on the contrary,
speaks of the “parties to the present Statute”, not the “present parties
to the Statute”. Except for the supposed effects of the dissolution,
therefore, the ordinary rule of treaty law must apply, that unless the
treaty or provision concerned expressly indicates some difference or
distinction, such phrases as “the parties to the Statute”, or “the parties
to the present convention”, or “the contracting parties”, or “the Mem-
bers of the Organization”, apply equally and indifferently to cover all
those States which at any given time are participants, whatever the
date of their several ratifications, accessions or admissions, etc.

Consequently, since the Court cannot, for reasons already stated,
accept the dissolution of the Permanent Court as a cause of lapse or
abrogation of any of the jurisdictional clauses concerned, it must hold
that the date at which the Respondent became a party to the Statute
is irrelevant.

32
35 BARCELONA TRACTION (JUDGMENT)

Certain other considerations serve to reinforce this view; for if it
is clear from what was said earlier about the origins of Article 37,
that the aim was to be comprehensive, it is equally clear that to admit
what may for convenience be called the “dissolution” argument, would
not only be to make serious inroads upon that objective, but quite
possibly—for all that those who were drafting Article 37 could tell at
the time—to defeat almost entirely its intended purpose.

In the period April-June 1945, it was impossible to forecast when the
Permanent Court would be dissolved, or when—or on the basis of how
many ratifications—the Charter of the United Nations would come
into force. Circumstances delaying the latter event, or causing it to
occur on the basis of only a relatively small number of ratifications,
might have given rise to a situation in which, if the “dissolution”
argument were correct, many, or possibly even most, of the jurisdic-
tional clauses concerned would have fallen outside the scope of
Article 37, a result which must have been contrary to what those who
framed this provision intended. It was suggested in the course of the
oral hearing that these possibilities, had they threatened to materialize,
could and would have been avoided. by taking steps to postpone the
dissolution of the Permanent Court. This however serves only to show
what the real intentions of Article 37 must have been—namely to make
any such postponement unnecessary because, whatever the date of the
coming into force of the Charter, or of the dissolution of the Permanent
Court, and whatever the date at which a State became a party to the
Statute, Article 37 would ensure in advance the preservation of the
relevant jurisdictional clauses, by causing them to confer competence
on the present Court, as between parties to its Statute. This was its

purpose.

It has been objected that the view set forth above leads, in such a
case as that of the Respondent Government, to a situation in which
the jurisdictional clause concerned, even if in existence, is necessarily
inoperative and cannot be invoked by the other party to the treaty
containing it; and then, after a gap of years, suddenly it becomes
operative again, and can be invoked as a clause of compulsory juris-
diction to found proceedings before the Court. It is asked whether,
in these circumstances, any true consent can be said to have been given
by the Respondent Government to the exercise of jurisdiction by the
Court in this class of case.

Noting in passing that this situation results from the act of the
Respondent itself in applying for membership of the United Nations

33
36 BARCELONA TRACTION (JUDGMENT)

which, upon admission, entailed, by virtue of Article 93, paragraph 1,
of the Charter of the United Nations, becoming a party to the Statute,
the Court would observe that the notion of rights and obligations that
are in abeyance, but not extinguished, is perfectly familiar to the law
and represents a common feature of certain fields.

In this connection, and as regards the whole question of consent,
the Court considers the case of the reactivation of a jurisdictional
clause by virtue of Article 37 to be no more than a particular case of
the familiar principle of consent given generally and in advance, in
respect of a certain class of jurisdictional clause. Consent to an obli-
gation of compulsory jurisdiction musi be regarded as given ipso facto
by joining an international organization, membership of which involves
such an obligation, and irrespective of the date of joining. In conse-
quence, States Joining the United Nations or otherwise becoming parties
to the Statute, at whatever date, knew in advance (or must be taken
to have known) that, by reason of Article 37, one of the results of
doing so would, as between themselves and other parties to the Statute,
be the'reactivation in relation to the present Court, of any jurisdictional
clauses referring to the Permanent Court, in treaties still in force, by
which they were bound. It is the position maintained by the Respon-
dent Government which would create inequality, and discriminate in
favour of those entering the United Nations, or otherwise becoming
parties to the Statute, after April 1946, particularly as regards the
obligations contained in the jurisdictional clauses of important general
multilateral conventions, thus giving rise to just the kind of anomaly
Article 37 was intended to avoid.

The Respondent Government, in the course of the diplomatic corres-
pondence preceding the original proceedings before the Court, and in
particular in the Notes exchanged in the period May 1957 to February
1958, implicitly recognized the competence of the Court for the purposes
of Article 17 (4) of the 1927 Treaty, and challenged the right of the
Applicant Government to resort to the Court only on grounds connected
with the third and fourth Preliminary Objections in the present case.
It did not demur when the Applicant stated that the International
Court of Justice had been substituted for the Permanent Court in
Article 17 (4) of the Treaty. It did not even broach the possibility
that there might be a question as to the competence of the Court gua
forum. If this attitude was based on the assumption that Article 37
of the Statute—by which the Respondent had by then become bound—
conferred jurisdiction on the Court (an assumption the correctness of
which the reasoning of the decision in the Israel v. Bulgaria case might
appear to call in question), then the present finding of the Court, that
this assumption was in fact correct, operates to restore the basis on
which the Respondent itself appears originally to have recognized the
same thing.

34
37 BARCELONA TRACTION (JUDGMENT)

*
x” x

The Court has thought it desirable to base itself up to this point
wholly on considerations relating to Article 37 of the Statute which,
in its opinion, would (in the absence of any relevant special factor) be
applicable to the case of all the jurisdictional clauses in the treaties
and conventions to which Article 37 applies. In the case of treaties
having the character of the Hispano-Belgian Treaty of 1927, however,
there are special features which afford additional support for the con-
clusions arrived at on the basis of Article 37 alone.

Article 17 (4) of the Treaty was discussed between the Parties in
the course of the written and oral proceedings, largely in relation to the
question of its “severability” from the rest of the Treaty. Into this
question, which has implications reaching far beyond the scope of the
present case, the Court does not consider it necessary to go. What
must be true, on any view of the matter, is that Article 17 (4) is an
integral part of the Treaty as a whole ; and its judicial fate cannot be
considered in isolation.

It is at this point necessary to note that Article 17 (4), the relevant
terms of which are cited above, had as its primary object in the scheme
of the 1927 Treaty, what was more a matter of mechanics—namely to
indicate in what circumstances, and at what precise point in the attempt
to dispose of the dispute, either party would have the right to take the
matter to the Court. This right was to be exercisable if the (optional)
conciliation procedure provided for by the Treaty had not been made
use of, or had failed ; and if agreement had not been reached within a
certain period on the terms of a compromis for the submission of the
dispute by mutual consent to the Court or to arbitration ; and if,
thereupon, a month’s notice was given of the intention to take the matter
to the Court unilaterally.

The basic obligation to submit to compulsory adjudication, however,
‘was and is carried by two other provisions of the Treaty, namely
Article 2, and the first paragraph of Article 17. The relevant para-
graph of Article 2 reads as follows :

[Translation ]

“All disputes of every kind between the High Contracting Parties
with regard to which the Parties are in conflict as to their respec-
tive rights, and which it may not have been possible to settle
amicably by the normal methods of diplomacy, shall be submitted
for decision to an arbitral tribunal or to the Permanent Court of
International Justice.”

The Treaty then goes on to provide for the conciliation procedure,
and continues in Article 17 (x) to reaffirm the essence of Article 2 as
follows :

35
38 BARCELONA TRACTION (JUDGMENT)
[Translation]

“In the event of no amicable agreement being reached before
the Permanent Conciliation Commission, the dispute shall be
submitted either to an Arbitral Tribunal or to the Permanent
Ceurt of International Justice, as provided in Article 2 of the present
Treaty.”

In the light of these provisions, it would be difficult either to deny
the seriousness of the intention to create an obligation to have recourse
to compulsory adjudication—all other means of settlement failing—
or to assert that this obligation was exclusively dependent on the exis-
tence of a particular forum, in such a way that it would become totally
abrogated and extinguished by the disappearance of that forum. The
error of such an assertion would lie in a confusion of ends with means—
the end being obligatory judicial settlement, the means an indicated
forum, but not necessarily the only possible one.

This double aspect appears particularly clearly on the basis of the
several jurisdictional clauses of the 1927 Treaty, taken as a whole;
and these considerations furnish the answer to the contention that the
obligation of compulsory adjudication in the Treaty was so indissolubly
bound up with the indication of the Permanent Court as the forum,
as to be inseparable from it, and incapable of continued existence in the
absence of that Court. On the very language of Articles 2 and 17 (1),
this is not the case. An obligation of recourse to judicial settlement
will, it is true, normally find its expression in terms of recourse to a
particular forum. But it does not follow that this is the essence of the
obligation. It was this fallacy which underlay the contention advanced
during the hearings; that the alleged lapse of Article 17 (4) was due to
the disappearance of the “object” of that clause, namely the Permanent
Court. But that Court was never the substantive “object” of the
clause. The substantive object was compulsory adjudication, and the
Permanent Court was merely a means for achieving that object. It
was not the primary purpose to specify one tribunal rather than another,
but to create an obligation of compulsory adjudication. Such an
obligation naturally entailed that a forum would be indicated ; but
this was consequential.

If the obligation exists independently of the particular forum (a
fact implicitly recognized in the course of the proceedings, inasmuch
as the alleged extinction was related to Article 17 (4) rather than to
Articles 2 or 17 (1)), then if it subsequently happens that the forum
goes out of existence, and no provision is made by the parties, or other-
wise, for remedying the deficiency, it will follow that the clause con-
taining the obligation will for the time being become (and perhaps
remain indefinitely) inoperative, i.e., without possibility of effective
application. But if the obligation remains substantively in existence,

36
39 BARCELONA TRACTION (JUDGMENT)

though not functionally capable of being implemented, it can always
be rendered operative once more, if for instance the parties agree on
another tribunal, or if another is supplied by the automatic operation
of some other instrument by which both parties are bound. The
Statute is such an instrument, and its Article 37 has precisely that
effect.

Accordingly, “International Court of Justice” must now be read
for “Permanent Court of International Justice” in Articles 2 and 17
of the Treaty. The same applies in respect of Article 23, under which
the Court is made competent to determine any disputed question of
interpretation or application arising in regard to the Treaty; and
similar substitutions in Articles 21 and 22 would follow consequentially.

*
* *

SECOND PRELIMINARY OBJECTION (SUBSIDIARY ASPECT)

The Respondent Government also advanced. a subsidiary plea in
relation to its second Preliminary Objection, which requires to be
considered only if the Court should reject the objection in its principal
aspect. Since the Court does reject it, it must now consider this sub-
sidiary plea. This was to the effect that the dissolution of the Perma-
nent Court having extinguished Article 17 (4) of the 1927 Treaty, or
at any rate deprived it of its force, then if (contrary to the principal
contention of the Respondent) Article 37 of the Statute operated to
re-activate this clause upon Spain’s admission to the United Nations in
December 1955, what in consequence came into existence at that date
was a new or revised obligation between the Parties ; and that just as
the original obligation only applied to disputes arising after the Treaty
date, so the new or revised obligation could only apply to disputes
arising after the date of Spain’s admission to the United Nations,
creative of that obligation. Since the dispute had in fact arisen pre-
vious to that date, it was accordingly not covered; or could only be
regarded as covered by a retroactive application of the obligation which
its terms, as they must now be deemed to stand, excluded.

In the Respondent’s written Preliminary Objections, what was
postulated as emerging in 1955 was not merely a new jurisdictional
obligation but a whole new “treaty”. In the Respondent’s Final Sub-
missions, however, as lodged at the end of the oral hearing, what was
referred to was a “revised” Article 17 (4) of the 1927 Treaty. It is in
fact clear that no new Treaty as such could have emerged in 1955,
because it was common ground in the case that, apart from the question
of Article 17 (4), the Treaty of 1927 had never ceased to be in force,
and had been operative throughout. At the most, therefore, what
might have happened in 1955 was that the Treaty was amended by
the inclusion in it of a new or revised jurisdictional clause, providing

37
40 BARCELONA TRACTION (JUDGMENT)

for a reference to the International Court of Justice instead of to the
former Permanent Court. However, as the Respondent’s Submissions
recognize, the limitation ratione temports regarding the cases which
were justiciable under the Treaty was contained in, or arose from
Articles 1 and 2, and from the Final Protocol to the Treaty. As these
provisions had ex hypothest never ceased to be in force, they would have
applied automatically to any new or revised obligation when the latter
arose. This must have been so, for otherwise the revised Treaty would
have contained two independent and incompatible sets of requirements
ratione temporis; but in truth, it continued to contain only one set,
since the “revised” obligation (as stated in the Respondent’s Final
Submissions) related to Article 17 (4), which itself contained no require-
ment ratione temporis, while the “revision” related only to the substitu-
tion of the present for the former Court. It follows that any new or
revised obligation could only operate ratione temporis in the same way
as the original one, and therefore it must cover all disputes arising after
the Treaty date.

However, it is not necessary to rely on this conclusion, for in the
opinion of the Court, the grounds on which the second Preliminary
Objection has been rejected in its principal aspect, necessarily entail
its rejection in its subsidiary aspect also. These grounds are that the
basic obligation to submit to compulsory adjudication was never extin-
guished by the disappearance of the Permanent Court, but was merely
rendered functionally inoperative by the lack of a forum through
which it could be implemented. What therefore happened in 1955,
when this lacuna was made good by Spain’s admission to the United
Nations, was that the operation of the obligation revived, because the
means of implementing it had once more become available ; but there
was neither any new creation of, nor revision of the basic obligation.
Its operation having revived, by virtue of Article 37 of the Statute,
this obligation could only function in accordance with the terms of the
Treaty providing for it, as the Parties must be deemed to have intended,
and it consequently continued to relate (as it always had done) to any
disputes arising after the Treaty date.

Alternatively, to refer to another part-of the grounds on which the
objection in its principal aspect was rejected, once Article 37 was appli-
cable, the Court became, in the language of that provision, competent
as between parties to the Statute to adjudicate on any matter which,
under a treaty or convention in force, would have fallen to be referred
to the Permanent Court had it still existed and had Article 37 never been
framed. The present case is such a matter.

For the reasons given, therefore, the Court rejects the second Pre-
liminary Objection both in its principal and in its subsidiary aspects.

*
* *

38
41 BARCELONA TRACTION (JUDGMENT)

THIRD AND FOURTH PRELIMINARY OBJECTIONS

Having decided, in rejecting the first Preliminary Objection, that
the discontinuance of the original proceedings did not bar the Applicant
Government from reintroducing its claim, and having determined, in
rejecting the second Preliminary Objection, that the Court has juris-
diction to entertain the Application, the Court has now to consider the
third and fourth Preliminary Objections which involve the question
of whether the claim is admissible.

In considering whether these Preliminary Objections should be up-
held, the Court recalls the fact that the Applicant has submitted alter-
native pleas that these objections, unless rejected by the Court, should
be joined to the merits. It will therefore be appropriate at this point
to make some general observations about such joinders. These are
effected under Article 62, paragraph 5, of the Rules of Court, which
reads as follows :

“After hearing the parties the Court shall give its decision on
the objection or shall join the objection to the merits. If the
Court overrules the objection or joins it to the merits, it shall once
more fix time-limits for the further proceedings.”

Since this paragraph repeats verbatim the like provision in the 1936
Rules of the Permanent Court of International Justice, it is pertinent
to take note of the various reasons which that Court gave for deciding
to join a preliminary objection to the merits.

In the Pajzs, Csdky, Esterhazy case (Hungary v. Yugoslavia), the
Court, on 23 May 1936, issued an Order joining the Yugoslav objections
to the merits because “the questions raised by the first of these objections
and those arising out of the appeal as set forth in the Hungarian Govern-
ment’s submissions on the merits are too intimately related and too
closely interconnected for the Court to be able to adjudicate upon the
former without prejudging the latter” ; and because “the further pro-
ceedings on the merits ... will place the Court in a better position to
adjudicate with a full knowledge of the facts upon the second objection”
(P.C.I.J., Series A /B, No. 66, p. 9).

Shortly after this, in the Losinger case, the Court, in an Order dated
27 June 1936, stated with reference to a plea to the jurisdiction made
in that case, that such a plea “may be regarded ... asa... defence on
the merits, or at any rate as being founded on arguments which might
be employed for the purposes of that defence”. Consequently,

“the Court might be in danger, were it to adjudicate now upon
the plea to the jurisdiction, of passing upon questions which
appertain to the merits of the case, or of prejudging their solution”.

39
42 BARCELONA TRACTION (JUDGMENT)

Therefore, the Court concluded, the objection to the jurisdiction
should be joined to the merits, so that “the Court will give its decision
upon it, and if need be, on the merits, in one and the same judgment”.
The Court went on to say in regard to another objection, relating to the
admissibility of the suit, that “the facts and arguments adduced for or
against the two objections are largely interconnected and even, in
some respects, indistinguishable”. Accordingly, this objection also
was joined to the merits (P.C.I.J., Series A/B, No. 67, pp. 23-24).

In the Panevezys-Saldutiskis Railway case, the Court, in its Order
of 30 June 1938, joining two preliminary objections to the merits,
said that—

“at the present stage of the proceedings, a decision cannot be taken
either as to the preliminary character of the objections or on the
question whether they are well-founded ; any such decision would
raise questions of fact and law in regard to which the Parties are
in several respects in disagreement and which are too closely linked
to the merits for the Court to adjudicate upon them at the present
stage”.

Two further reasons which were given were that—

“if it were now to pass upon these objections, the Court would
run the risk of adjudicating on questions which appertain to the
merits of the case or of prejudging their solution”

and that—

“the Court may order the joinder of preliminary objections to the
merits, whenever the interests of the good administration of justice
require it” (P.C.I.J., Series A /B, No. 75, pp. 55-56).

The present Court has been guided by like considerations in the two
cases in which it has had occasion to join the preliminary objections to
the merits. In the case of Certain Norwegian Loans, the Court, on the
basis of an understanding between the Parties to that effect, joined the
preliminary objections to the merits “in order that it may adjudicate
in one and the same judgment upon these Objections and, if need’ be,
on the merits” (J.C. J. Reports 1956, p. 74).

In the case concerning Right of Passage over Indian Territory, the
Court found that both the elucidation of the facts, and the legal effect
or significance of certain practices and circumstances, would be involved
in pronouncing on one of the preliminary objections, and that the
Court could therefore not pronounce upon it “without prejudging the
merits”. In regard to another objection, the Court said that “having

40
43 BARCELONA TRACTION (JUDGMENT)

heard conflicting arguments” it was “not in a position to determine at
this stage” certain issues which had been raised. It further found
that in regard to certain other questions, it was not “in possession of
sufficient evidence to enable it to pronounce on these questions”, and
that to attempt an evaluation of certain factors involved, “although
limited to the purposes of the Sixth Preliminary Objection, would
entail the risk of prejudging some of the issues closely connected with
the merits” (.C.J. Reports 1957, pp. 150-152).

*

The Permanent Court of International Justice drew attention to an
important aspect of the matter when, as mentioned above, it said that
“the Court may order the joinder of preliminary objections to the
merits, whenever the interests of the good administration of justice
require it”. But the safeguarding of the rights of respondent States
is equally an essential part of “the good administration of justice”,
and it is in the interests of the respondents that the Rules of Court
should contain Article 62 permitting the filing of preliminary objec-
tions. It must not be overlooked however, that respondents are given
broad powers by this provision, since merely by labelling and filing a
plea as a preliminary objection they automatically bring about the
suspension of the proceedings on the merits (paragraph 3 of Article 62).
This assures the respondent State that the Court will give consideration
to its objection before requiring it to respond on the merits ; the Court
takes no further step until after hearing the parties (paragraph 5 of
Article 62—see the discussion on this point by the Permanent Court in
1936, P.C.I.J., Series D, Third Addendum to No. 2, pp. 646-649). The
attitude of the respondent State is however only one of the elements
that the Court may take into consideration ; and paragraph 5 of the
Article simply provides that, after the hearing, “the Court shall give
its decision on the objection or shall join the objection to the merits”.

In reaching its conclusion, the Court may decide that the objection
does not in fact have a preliminary character, and that therefore,
without prejudice to the right of the respondent State to raise the same
question at another stage of the proceedings, if such there be, the objec-
tion cannot be entertained as a “preliminary objection”. Again, the
Court may find that the objection is properly a preliminary one as,
for example, to the jurisdiction of the Court, and it may dispose of it
forthwith, either upholding it or rejecting it. In other situations, of
which examples are given in the cases referred to above, the Court may
find that the objection is so related to the merits, or to questions of
fact or law touching the merits, that it cannot be considered separately
without going into the merits (which the Court cannot do while pro-
ceedings on the merits stand suspended under Article 62), or without
prejudging the merits before these have been fully argued. In these
latter situations, the Court will join the preliminary objection to the

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merits. It will not do so except for good cause, seeing that the object
of a preliminary objection is to avoid not merely a decision on, but
even any discussion of the merits. Gn the other hand, a joinder does
not in any respect indicate that the objection has been ignored. Indeed,
as happened in the case of Certain Norwegian Loans, the Court, at the
stage of the merits, to which the objections had been joined, upheld an
objection to the jurisdiction, and therefore did not adjudicate upon
the merits at all.

The Court will proceed to consider the third and fourth Preliminary
Objections with these considerations in mind.

By its third Preliminary Objection the Respondent Government denies
the jus stand: of the Applicant Government in the present proceedings,
and its legal capacity to protect the Belgian interests on behalf of
which it claims, the Belgian national character of most of these being
also contested. The grounds of the objection can be stated in various
ways, but briefly its main basis is that the acts complained of, said to
engage the international responsibility of the Respondent Government,
took place not in relation to any Belgian natural or juristic person but
to the Barcelona Traction company, which is a juristic entity registered
in Canada, the Belgian interests concerned being in the nature of share-
holding interests in that company. In these circumstances, it is con-
tended that (citing a passage from the Respondent’s final Submissions)
“International law does not recognize, in respect of injury caused by
a State to a foreign company, any diplomatic protection of shareholders
exercised by a State other than the national State of the company”.
Hence, it is said, no claim can be made by the Applicant Government.
The latter, for its part, contests the view of international law thus put
forward, and asserts its right to intervene on behalf of Belgian nationals,
shareholders in the company.

Put as stated above, the objection evidently has a preliminary
character or aspect. But it can also be put in another way, which does
not directly raise the question of the Applicant Government’s jus
standi—or does so only at one remove. It can be asked whether
international law recognizes for the shareholders in a company a separate
and independent right or interest in respect of damage done to the
company by a foreign government ; and if so to what extent and in
what circumstances and, in particular, whether those circumstances
{if they exist) would include those of the present case. Put in this
way, the question appears as one not simply of the admissibility of the
claim, but of substantive legal rights pertaining to the merits which
are not confined solely to such matters as whether the acts complained
of took place, and if so what their legal effect was, internationally :

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or rather, this latter question itself constitutes the greater part of the
real issue in this case, and pertains to the substantive legal merits. In
short, the question of the jus stand: of a government to protect the
interests of shareholders as such, is itself merely a reflection, or con-
sequence, of the antecedent question of what is the juridical situation in
respect of shareholding interests, as recognized by international law.
Where, in a case such as the present one, a government is not merely
purporting to exercise diplomatic protection, but to make a claim before
an international tribunal, it necessarily invokes rights which, so it
contends, are conferred on it in respect of its nationals by the rules of
international law concerning the treatment of foreigners. Hence the
question whether international law does or does not confer those rights
is of the essence of the matter. In short, a finding by the Court that
the Applicant Government has no jus standi, would be tantamount to
a finding that these rights did not exist, and that the claim was, for that
reason, not well-founded in substance.

If the Court were to take the view that the issues raised by the
Respondent’s third Preliminary Objection had no other character than
that of substantive issues relating to the merits, it would have to
declare the objection irreceivable as such, and the issues it involved
as being part of the merits. Since however the objection clearly has
certain aspects which are of a preliminary character, or involves ele-
ments which have hitherto tended to be regarded in that light, the
Court will content itself with joining the objection to the merits.

By way of illustration of the sort of situation which the Court con-
siders to exist here, in regard to the question of joinder—and it is not
suggested that there are any other analogies—it may be recalled that
when in the Panevezys-Saldutiskis Railway case the Permanent Court
joined two preliminary objections to the merits, it said in its Order of
30 June 1938 that at the preliminary stage it could not even decide
“as to the preliminary character of the objections” (P.C.I.J., Series A /B,
No. 75, p. 56) ; and subsequently on the merits said that :

“Though it is true that an objection disputing the national
character of a claim is in principle of a preliminary character, this
is not so in the actual case before the Court” (P.C.I.J., Series A /B,
No. 76, p. 17).

It is evident that certain kinds of objections (of which the second
Objection in the present case affords an example) are so unconnected
with the merits that their wholly preliminary character can never be
in doubt. They could arise in connection with almost any set of facts
imaginable, and the Court could have neither reason nor justification
for not deciding them at once, by way either of acceptance or rejection.
Any such clear cut situation is, however, far from existing as regards

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the third Preliminary Objection in the present case, and the same thing
is even more true of the fourth Objection.

The third Objection involves a number of closely interwoven strands
of mixed law, fact and status, to a degree such that the Court could not
pronounce upon it at this stage in full confidence that it was in posses-
sion of all the elements that might have a bearing on its decision.
The existence of this situation received an implicit recognition from the
Parties, by the extent to which, even at this stage, they went into
questions of merits, in the course of their written and oral pleadings.
Moreover, it was particularly on behalf of the Respondent that it was
sought to justify the process of discussing questions of merits, as in-
volving matters pertinent to or connected with the third and fourth
Objections, which the Respondent had itself advanced.

The Court is not called upon to specify which particular points,
relative to the questions of fact and law involved by the third Objec-
tion, it considers an examination of the merits might help to clarify,
or for what reason it might do so. The Court will therefore content
itself by saying that it decides to join this objection to the merits
because—to quote the Permanent Court in the Pajzs, Csdky, Esterhäzy
case (P.C.I.J., Series À /B, No. 66, at p.g)—“the ... proceedings on the
merits ... will place the Court in a better position to adjudicate with a
full knowledge of the facts” ; and because “the questions raised by ...
these objections and those arising ... on the merits are too intimately
related and too closely interconnected for the Court to be able to adju-
dicate upon the former without prejudging the latter”.

As regards the fourth Preliminary Objection, the foregoing consider-
ations apply a fortiori for the purpose of requiring it to be joined to
the merits; for this is not a case where the allegation of failure to
exhaust local remedies stands out as a clear-cut issue of a preliminary
character that can be determined on its own. It is inextricably inter-
woven with the issues of denial of justice which constitute the major
part of the merits. The objection of the Respondent that local remedies
were not exhausted is met all along the line by the Applicant’s con-
tention that it was, inter alia, precisely in the attempt to exhaust local
remedies that the alleged denials of justice were suffered. This is so
obvious on the face of the pleadings, both written and oral, that the
‘Court does not think it necessary to justify it further at this stage, by
any statement or consideration of the events in question, which can be
left until the merits are heard.

Accordingly, the Court decides to join the third and fourth Prelimi-
nary Objections to the merits.

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For these reasons,

THE Court,

by twelve votes to four,
rejects the first Preliminary Objection ;

by ten votes to six,
rejects the second Preliminary Objection ;

by nine votes to seven,
joins the third Preliminary Objection to the merits ;

by ten votes to six,
joins the fourth Preliminary Objection to the merits.

Done in English and French, the English text being authoritative,
at the Peace Palace, The Hague, this twenty-fourth day of July, one
thousand nine hundred and sixty-four, in three copies, one of which
will be placed in the archives of the Court and the others transmitted
to the Government of the Kingdom of Belgium and to the Government
of the Spanish State respectively.

(Stgned) Percy C. SPENDER,
President.

( Signed ) GARNIER-COIGNET,
Registrar.

President Sir Percy SPENDER makes the following declaration :

I concur in the Judgment of the Court. I wish, however, to say a
few words on the second Preliminary Objection of the Government of
Spain.

Whilst the text of Article 37 of the Court’s Statute is quite different
to that of Article 36 (5), which was the subject of examination in
Israel v. Bulgaria, and its terms are, in my view, so clear as to admit
of no doubt as to their meaning, it is difficult to discern any decisive
distinction in principle between Article 36 (5) and Article 37 in relation
to the cardinal questions raised by the second Preliminary Objection.

For my part, for reasons which appear in the Joint Dissenting Opinion
in Israel v. Bulgaria, to which I continue to adhere, I would, apart
from other considerations. referred to in the Court’s Judgment, be
compelled to reject this Preliminary Objection.

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48 BARCELONA TRACTION (JUDGMENT)

Judge SpiRoPOULos makes the following declaration :

I regret that I am unable to share the view of the Court in regard
to the second, third and fourth Preliminary Objections.

As to the second Preliminary Objection, my position is determined
by the Court’s Judgment in the case concerning the Aerial Incident
(israel v. Bulgaria). Starting from the concept that the purpose of
Article 37 of the Statute of the Court is the same as that of Article 36,
paragraph 5, and basing myself on the considerations of the Judgment
in question, I consider that the Court should have found that it is
without jurisdiction.

As to the third Preliminary Objection, I think the Court should have
considered as relevant the arguments on which the Spanish Government
founds its third Preliminary Objection.

Judge KoRETSKY makes the following declaration :

I agree with the Judgment and its reasoning. I venture to make
some additional observations as regards the first Preliminary Objection.

Much has been said in the written documents and in the oral pro-
ceedings about discontinuance of the action (désistement d’action) and
discontinuance of the proceedings (désistement d'instance). But this
dichotomy is unknown to the Rules of Court. Articles 68 and 69 know
only discontinuance of the proceedings in its two possible forms—
either by mutual agreement of the parties (Article 68), or by unilateral
declaration of the applicant (Article 69).

Under Article 68 the parties inform the Court in writing either that
they have concluded an agreement as to the settlement of the dispute
or that they are not going on with the proceedings, whilst under
Article 69 the applicant informs the Court that it is not going on with
the proceedings. In either case the Court directs the removal of the
case from its list. Under Article 68 however it officially records the
conclusion of the settlement or the mutual agreement to discontinue,
whilst under Article 69 it officially records the discontinuance of the
proceedings.

The conclusion of a settlement is not the discontinuance of an action
(if one tried to understand the latter expression as the abandonment of
a substantive right), for a settlement is usually the realization of a
right which was in dispute. A dispute may subsequently arise in con-
‘nection with the implementation of this settlement giving rise (possibly)
to new proceedings.

It is to be recalled that the heading for Articles 68 and 69 is “Settle-
ment and Discontinuance”. At the time of the deliberations on the
Rules of Court in 1935 Judge Fromageot (P.C.I.J., Series D, Acts and

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49 BARCELONA TRACTION (JUDGMENT)

Documents concerning the Organization of the Court, Third Addendum
to No. 2, pp. 313 et seg.) said that he “wished to change the heading
of the whole section. The word ‘agreement’ was not sufficiently
explicit as an indication of its contents.” He was of the opinion that
the section should have been héaded : “Settlement and abandonment
of proceedings.”

The emphasis on the settlement of the dispute in Article 68 and in
the heading of the section was to all appearances not accidental.
Generally speaking, the main task of the Court is to sedééle disputes
between States. Article 33 of the Charter in the section headed “Pacific
settlement of disputes” provides that “the parties to any dispute ...
shall ... seek a solution by [among the peaceful means mentioned there]
judicial settlement”.

In Article 68 settlement occupies the first position. In the light of
the Court’s task in the settlement of disputes, we have to resolve the
procedural questions in this case, especially the question of the conse-
quences of the discontinuance of the proceedings, the question of the
permissibility of a reinstitution of the proceedings after discontinuance.

The discontinuance of the proceedings in this case was in a sense a
conditional one. Though the Belgian Government made no reservation
of its substantive rights the conditionality of the discontinuance is
evident. One may consider this conditionality as tacit (from a formal
point of view), implied, but the documents show that a withdrawal of
the proceedings instituted before the Court was demanded of Belgium
as a precondition for the opening of negotiations proper (Preliminary
Objections, Introduction, paragraph 4, and Observations, paragraph 25) ;
it was then evident that the demand was related to Belgium’s Appli-
cation to the Court, but not to the substantive right, about which
the proceedings were instituted. About what then was it intended to
carry on negotiations if it be considered that the Belgian Government,
by the withdrawal of its Application, decided not to remove an obstacle
to promising negotiations but to abandon even its (and its nationals’}
substantive rights? If no substantive rights existed there would be no
subject for negotiations. And we may conclude that discontinuance
of the proceedings does not involve an abandonment of a corresponding
substantive right. Discontinuance even by mutual agreement is not
necessarily a pactum de non petendo, which supposes not only discon-
tinuance of a given action but an obligation not to sue at all, which is
tantamount to the abandonment of the claim. And it has not been
proved in this case that the renunciation of a substantive right has
taken place.

Judge Jessup makes the following declaration :

I am in full agreement with the Court that no one of the Preliminary
Objections could be upheld at this stage, and that the first two must

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be rejected now for reasons stated in the Judgment. I am also in
accord with what the Court has to say about the general considerations
which govern a decision to join a preliminary objection to the merits.
I agree that those general considerations require that the third and
fourth Preliminary Objections should be joined to the merits. Con-
sequently, in order to be consistent with those general considerations,
conclusions of law applicable to arguments involved in those two
objections; even though I would find them capable of formulation now,
may appropriately be deferred until a subsequent stage of the case.

Vice-President WELLINGTON Koo and Judges Tanaka and
BUSTAMANTE Y Rivero append Separate Opinions to the Judgment of
the Court.

Judge More LI and Judge ad hoc ARMAND-UGoN append Dissenting
Opinions to the Judgment of the Court.

(Initialled) PS.
(Initialled) G.-C.

48