NORWEGIAN LOANS (JUDGMENT OF JULY 6th, 1957) 28

Done in French and English, the French text being authoritative,
at the Peace Palace, The Hague, this sixth day of July, one thousand
nine hundred and fifty-seven, in three copies, one of which will be
placed in the archives of the Court and the others will be trans-
mitted to the Government of the French Republic and to the
Government of the Kingdom of Norway, respectively.

(Signed} GREEN H. HACKWORTH,
President:

(Signed) J. LOPEZ OLIVAN,
Registrar.

Judge MorENo QUINTANA, after voting for the Judgment, made
the following declaration: |

The reason why I consider that the Court is without juris-
diction in this case is different from that given in the Judgment.
I base myself, not on the second ground of the first Objection
put forward by the Government of the Kingdom of Norway
but on the first ground of that Objection. State loans, as
being acts of sovereignty, are governed by municipal law.

Vice-President Bapawi and Judge Sir Hersch LAUTERPACHT,
availing themselves of the right conferred on them by Article 57
of the Statute, append to the Judgment of the Court statements of
their individual opinions.

Judges GUERRERO, BASDEVANT and READ, availing themselves
of the right conferred on them by Article 57 of the Statute, append
to the Judgment of the Court statements of their dissenting

opinions.

(Initialled) G.H.H.
(Initralled) J. L. O.

23


PUBLICATIONS DE LA COUR PERMANENTE DE JUSTICE
INTERNATIONALE

SERIE A — N° 12

RECUEIL DES ARRETS

AFFAIRE RELATIVE A L’USINE
DE CHORZOW (INDEMNITES)

ORDONNANCE DU 21 NOVEMBRE 1927

PUBLICATIONS OF THE PERMANENT COURT
OF INTERNATIONAL JUSTICE.

SERIES A—wNo. 12

COLLECTION OF JUDGMENTS

CASE CONCERNING THE FACTORY
AT CHORZOW (INDEMNITIES).

ORDER MADE ON NOVEMBER alist. 1927

Société d’Editions
A. W. Sijthoff
Leyde

A. W. Sijthoff's
Publishing Company
Leyden

REQUEST FROM THE GERMAN GOVERNMENT
FOR AN INTERIM MEASURE OF PROTECTION

IN THE CASE CONCERNING THE FACTORY AT CHORZOW
(INDEMNITIES).

[Translation.]

To the President and Members of the Permanent Court of Interna-
tional Justice. |

The undersigned, being duly authorized by the GERMAN
GOVERNMENT,

Having regard to the Application in the case concerning
the factory of Chorzéw (claim for indemnities) submitted on
February 8th, 1927,

Having regard to the judgment rendered by the Court
on July 26th, 1927, and

Having regard to Article 41 of the Statute and Article 57
of the Rules of Court,

Has the honour to submit the following request :

In Judgment No. 8 the Court laid down that “it is a prin-
ciple of international law that the breach of an engagement
involves an obligation to make reparation in an adequate form.
Reparation therefore is the indispensable complement of a
failure to apply a convention and there is no necessity for
this to be stated in the convention itself.” (Page 21.)

The obligation incumbent upon the Polish Government,
arising from its attitude in regard to the Oberschlesische
Stickstoffwerke and Bayerische Stickstoffwerke, which was
found by the Court in its Judgment No. 7 not to be in
conformity with the international engagements of Poland, is
thus established. In principle the German Government ask only
for pecuniary compensation which, in order to be adequate,
in accordance with the Court’s words, could not be less than
a certain minimum; it is therefore in reality only the upper
limit of the sum to be awarded that is in dispute.

When, during the direct negotiations with the Polish Govern-
ment, the German Government declared themselves to be
ready to accept the sum then offered by the Polish Govern-
ment, they were prompted, inter alia, by the motive that at
that moment a very favourable opportunity had arisen which
would have permitted the Companies in question to re-estab-
lish the economically sound position which they had lost
through the occupation and expropriation of their undertaking
CHORZOW.—ORDER OF COURT (NOVEMBER Z21st, 1927) 5

without compensation. The same situation still existed when,
on February 8th, 1927, the German Government submitted
- their Application, seeing that they hoped that the final judgment
of the Court would be pronounced during its ordinary
session of 1927. These hopes were deceived by the objection
to the jurisdiction raised by the Polish Government, and the
possibility which then existed of making use of the moment |
for reconstruction was lost. The Polish Government’s request
for a prolongation of the time-limits fixed in the suit involves
a further considerable delay before the final rendering of
judgment. If it were necessary to wait for this judgment,
further opportunities for economic reconstruction which have
meanwhile arisen could also not be made use of.

The German Government emphasize that it is not only
the amount of the compensation which is essential, but, at.
least to an equal extent, the date of payment. Seeing that
opportunities of resuming economic activity do not arise
every day, the damage caused by the illegal occupation and
expropriation increases every month ; and, moreover, the prejudice
caused through further delay cannot be made good in actual
form. The object of an undertaking of an industrial nature,
particularly a chemical undertaking, consists not only in the
making of profit but also in obtaining at the right momenta
share in world production, in influencing the international
market and in increasing technical and scientific experiments.
If, during periods of the greatest importance for the develop-
ment of a branch of industry, an undertaking is excluded from
that development, not only its own but also the national
economic situation is prejudiced in a manner that no pecuniary
compensation, however great, can repair.

The increase of production, the technical progress made
and the growing importance of chemical fertilizers during
recent years are well known. The following figures may -be
given as examples. The world consumption of nitrate was

in 1913-1914, 770,000 metr. t. nitrate, of which 337,000 t. artificial,

» 1920-1921, 950,000 ,, .,, » oe 530,000 ,, 5»
» 1926-1927, 1,300,000 ,,  ,, 5 5 » 900,000 ,, 5» 0
n 1927-1928, 1,520,000 »» 5» 35  1,320,000 ,, »

As regards factories worked by the Bayerische Company,
that of Piesteritz (Central Germany), constructed with a capa-
city of 30,000 tons, produced in 1922 25,000 tons; and at
present, although only half the plant is used, thirty to thirty-
six thousand tons are produced ; the Trostberg factory (Upper
Bavaria) produced in 1920 7,000 tons of nitrate, and at the
present time 33,000 tons. During these last years, which
CHORZOW.—ORDER OF COURT (NOVEMBER 2Ist, 1927) 6

have been noteworthy for a very great increase in production
of artificial nitrate, the Bayerische and, with it, the Ober-
schlesische, would have had the opportunity of sharing in the
increase of world production, particularly in France, Belgium
and Italy. Having regard to the fact that the working of the
Chorzéw factory had passed out of their hands, no compensation
having been paid for the unlawful occupation and expropriation,
they were obliged to refuse offers made to them. The resulting
damage is irreparable.

At the present time several new schemes are afoot, the realization
of which would be of the utmost importance for the Com-
panies in question ; one of them is, further, of national economic
interest. The German Government, as regards these schemes,
refer to the solemn declaration duly sworn and annexed hereto 1.

In these circumstances, seeing that the principle of com-
pensation is recognized and that only the maximum sum to
be paid by the Polish Government is still in doubt, and seeing
that unless payment be immediate, the amount of the damage
and of the compénsation would considerably increase, and
seeing that the prejudice caused by a further delay would
actually be irreparable, the German Government consider that
an interim measure of protection whereby the Court would indi-
cate to the respondent Government the sum to be paid imme-
diately, as a provisional measure and pending final judgment,
is essential for the protection of the rights of the Parties, whilst
the affair is sub judice.

The origin of the provisions of Article 41 of the Statute
shows that not only an omission by the Parties but also a
definite act was considered as the subject of a measure of
protection. The first draft of the provision in question, as
it came from the Committee of Jurists (Minutes of the Committee,
1920, pp. 561 et sgq., 608, 735), referred only to omissions to be
pointed out in the case of acts which had already taken place
or which were imminent. But, in the Third Committee, set
up by the Council of the League of Nations at its Brussels
Session in December, 1920, M. Lafontaine (Belgium) asked
the question whether the proposed article would also be
applicable in the case where an omission to act and not an act
which has already taken place or Was imminent threatened the
rights of one-of the Parties. The discussion on this subject
ended with a change in the original draft, proposed by
M. Ricci-Busatti, as a result of which the words ‘‘act which has
already taken place or is imminent” were struck out and the
wider expression to be found in Article 41 of the Statute was

1 Not reproduced.
[CHORZOW.—ORDER OF COURT (NOVEMBER 2Ist, 1927) 7

selected. As a reason for this change, it was pointed out that
‘thus all possible cases would be covered” (cf. League of Nations,
Permanent Court of International Justice, Documents, pp. 103,
104). And in the report of the Third Committee, M. Hagerup
said: “The Committee has slightly altered this article im
such a way as io make tt cover omissions which infringe a right
as well as positive acts” (loc. cit., p. 172).

As regards the amount which the German Government ask

the Court to indicate to the Polish Government that they should pay
immediately, they have in mind only a minimum sum such as
is indispensable for the moment.
. Asa means of provisionally estimating the value of the factory
(land and buildings, etc., set up thereon), the German Government
attach to the present Application the expert opinion 4 of the American
firm Lybrand, Ross Bros. and Montgomery, Accountants and
Auditors, Members of the American Institute of Accountants,
Berlin, Unter den Linden. The Company in question has
its headquarters in New York and branches in Berlin, London,
Paris, etc. It has carefully examined the books of the Baye-
rische and arrives at a conclusion of 65 million Reichsmarks.
This result, arrived at by different methods of calculation from
those employed in the Application, is almost identical with
the result reached in the Application. The German Govern-
ment consider that this concordance furnishes a noteworthy
confirmation of the accuracy of their conclusions. In any
case, they are of opinion that, for the purposes of the present
request, the figure of 65 million may serve as a basis for
provisional and immediate payment. Leaving on one side
interest at 6% up to July 3rd, 1927 (about 17 million Reichs-
marks), and depreciation fixed in the Case at about eight million,
if 65 million be divided by two, a sum of 32,500,000 Reichsmarks is
obtained. In asking now for 25 million—which was, moreover,
the sum on which the two Governments all but agreed in
January of this year—the German Government are convinced
that their request is well within the limits of their established
rights.

: As regards the value of patents, licences, etc., wrongfully used by
the Polish Government up to the present time, the represent-
ative of the latter Government formally admitted in Court at
the sitting of February zoth, 1926, that the Polish Government
in no way deny their obligation to compensate ; this admission
is repeated in the Polish Government’s note of September oth,
1926 (cf. German Government’s Case, P- 4). According to the

1 Not reproduced.
CHORZOW.—-ORDER OF COURT (NOVEMBER 21st, 1927) 8

calculation given in the above Case, page 20, up to July 3rd,
1927, a sum of seven and a half million was involved. In
asking at the present moment for five million under this head,
the German Government are similarly convinced that that
sum. falls well within the limit of their legitimate demands.

It goes without saying that if, contrary to all expectation,
the final sum arrived at by the Court in its definitive judgment
were less than 30 million Reichsmarks, the German Government
hereby declare themselves ready to refund the surplus.

THE COURT WILL BE PLEASED,
+

in virtue of Article 41 of the Statute, to indicate to the
Polish Government that they must pay to the German Govern-
ment as a provisional measure the sum of thirty millions of
Reichsmarks within one month from the date of the Order
sought.

(Signed) Dr. E. KAUFMANN, _
Agent for the German Government.

Berlin, October r4th, 1927.