COUR PERMANENTE DE JUSTICE INTERNATIONALE

SERIE AIB
ARRETS, ORDONNANCES ET AVIS CONSULTATIFS

FASCICULE N° 63
AFFAIRE OSCAR CHINN

ARRET DU 12 DECEMBRE 1934
XXXIIIm SESSION

1934

XXXIIIrd SESSION
JUDGMENT OF DECEMBER 12th, 1934

PERMANENT COURT OF INTERNATIONAL JUSTICE

SERIES A./B.
JUDGMENTS, ORDERS AND ADVISORY OPINIONS

FASCICULE No. 63
THE OSCAR CHINN CASE

SOCIETE D’EDITIONS À. W. SIJTHOFF’S

LEYDE LEYDEN
A. W. SIJTHOFF PUBLISHING COMPANY
65

PERMANENT COURT OF INTERNATIONAL JUSTICE

1934.
December 12th.

THIRTY-THIRD (EXTRAORDINARY) SESSION. General List;
No. 612.

December 12th, 1934.

THE OSCAR CHINN CASE

Ministerial decision imposing upon a fluvial transport company
in the Belgian Congo under governmental supervision a reduction
of tts vates, in consideration of a promise of vepayment—which
might be temporary only—of its losses.

Convention of Saint-Germain of September roth, 1919, revising
the General Act of Berlin of February 26th, 1885, and the General
Act and Declaration of Brussels of July and, 1890. Principles
of freedom of navigation, of freedom of trade and of equality of
treatment.

General international law: the principle of vespect for vested
rights. .

A “de facto monopoly” ; special situation accorded to a company
under government supervision ; commercial competition. Discrimin-

ation based on nationality. Intevesis as opposed to vested righis.

JUDGMENT.

Before: M. GUERRERO, Vice-President (officiating President) ;
Baron  RoriN-JAEQUEMYNS, Count RosTworowskI,
MM. FROMAGEOT, ALTAMIRA, ANZILOTTI, URRUTIA,
Sir Cecix Hurst, MM. ScaückiNG, NEGULESsCo, Jhr.
VAN EYSINGA, Judges.
A./B. 63.—THE OSCAR CHINN CASE ‘ 66

In the case concerning reparation for loss and damage alleged
to have been sustained by Mr. Oscar Chinn, a British subject,
[as the result of certain measures taken by the Belgian Gov-
ernment,

Between the Government of the United Kingdom of Great
Britain and Northern Ireland, represented by Mr. W. E. Beckett,
Second Legal Adviser to the Foreign Office, as Agent,

and the Belgian Government, represented by M. de Ruelle, Legal
Adviser to the Ministry for Foreign Affairs, as Agent,

The Court,

composed as above—the President of the Court being a national
of one of the countries parties to the case, and the func-
tions of President having therefore, in accordance with Article 13
of the Rules of Court, passed in respect of this case to the
Vice-President—,

delivers the following judgment :

By a Special Agreement, signed at Brussels on April 13th,
1934, the Belgian Government and the Government of the
United Kingdom agreed to submit to the Court a dispute which
had arisen between them with regard to a claim made by the
Government of the United Kingdom in respect of loss and
damage alleged to have been sustained by Mr. Oscar Chinn, a
British subject, as the result of certain measures taken and
applied in the month of June 1031 and subsequently thereto
by the Belgian Government in connection with the limited.
liability Company “Union nationale des Transports fluviaux”
(commonly known as “Unatra’’) in relation to fluvial transport
on the waterways of the Belgian Congo.

Under its third Article, this Special Agreement, which came into
force on the date of signature, might “be notified to the Regis-
trar of the Court forthwith by either Party”. It was actually
notified on May Ist, 1934, on which date the diplomatic
representatives at The Hague of the two Governments con-
cerned forwarded to the Registrar certified copies of the Special
Agreement.

Under Article 1 of the Special Agreement, the Court is called
upon to give judgment on the following questions :

“x. Having regard to all the circumstances of the case, were
the above-mentioned measures complained of by the Govern-
ment of the United Kingdom in conflict with the international
obligations of the Belgian Government towards the Govern-
ment of the United Kingdom ?

)
A./B. 63.—THE OSCAR CHINN CASE . 67

2. If the answer to question 1 above is in the affirmative,
and if Mr. Oscar Chinn has suffered damage on account of the
non-observance by the Belgian Government of the above-mentioned
obligations, what is the reparation to be paid by the Belgian
Government to the Government of the United Kingdom ?”

Article 1, however, adds that the Court is requested, before
fixing the amount of any reparation that may be payable, to
indicate the principles upon which such reparation shall be
caleulated and to determine the procedure whereby the said
amount shall be ascertained, if within a time-limit to be fixed
by the Court the contracting Governments have not reached
an agreement on the sum to be paid.

The subject of the dispute is thus indicated in accordance
with Article 40 of the Statute of the Court.

The communications provided for in Article 40 of the
Statute and Article 36 of the Rules of Court were duly
despatched on May 3rd and 4th, 1934. Furthermore, on
May 3rd, 1934, the Registrar, pursuant to Article 63 of the
Statute and Article 60 of the Rules, gave notice of the institution
of these proceedings to the States which, together with Belgium
and the United Kingdom of Great Britain and Northern Ireland,
had signed the Convention of September roth, I9Ig, revising
the General Act of Berlin, of February 26th, 1885, and the
General Act and Declaration of Brussels, July 2nd, 1890;
when transmitting to the Court the text of the Special
Agreement, the Government of the United Kingdom had drawn
its attention to the fact that the case would raise questions
as to the construction of certain articles of that Convention.

In Article 2 of the Special Agreement, the contracting Govern-
ments agreed, in accordance with Article 39 of the Rules of
Court, that the written proceedings in the suit should com-
prise the successive presentation of a Case, Counter-Case, and,
if necessary, a Reply and a Rejoinder, the Case to be filed
by the Government of the United Kingdom, the Counter-Case
by the Belgian Government, and so on, In the same Article
the two Governments also agreed in proposing the duration of
the lime-limits to be fixed by the Court for the filing of the
documents above mentioned.

The time-limits were fixed in accordance with the Parties’
proposal by an Order made on May 2nd, 1934; after an exten-
sion granted at the request of both Parties by an Order dated
July zr4th, 1934, the time-limit for the filing of the Belgian
Government’s Rejoinder ultimately expired on September 24th,
1934. The documents of the written proceedings having been
duly presented within the periods fixed, the case became ready
for hearing on that date.

The Government of the United Kingdom, in its Case, asks
the Court to adjudge and declare:

6
A./B. 63.—THE OSCAR CHINN CASE 68

“(r) that the measures complained of by the Government of the
United Kingdom were in conflict (a) with the obligations of the
Belgian Government towards the Government of the United Kingdom
under the Convention of Saint-Germain ; and (8) with the obliga-
tions of. the Belgian Government towards the Government of the
United Kingdom under general international law;
© (2) that Mr. Oscar Chinn has suffered damage on account of the
non-observance by the Belgian Government of its international obli-
gations towards the Government of the United Kingdom, and that
the Belgian Government is accordingly liable to make reparation to
the Government of the United Kingdom”.

Other submissions are presented with regard to the manner in
which the reparation claimed should, if necessary, be calculated,
with regard to the ascertainment of the amount of reparation by
an expert, if the Parties have not reached an agreement within
a specified time; and lastly, with regard to the fixing by the
Court, on receipt of the expert’s report and after considering
the observations of the Parties, of the sum to be paid by the
Belgian Government to the Government of the United Kingdom.

These submissions are maintained unchanged in the written
Reply of the Government of the United Kingdom, which
simply adds thereto a request for the rejection of the submis-
sions of the Belgian Government.

As worded in the Counter-Case of the Belgian Government,
these submissions are as follows:

“May it please the Court,
To adjudge and declare:

that the measures for which the Belgian Government is blamed
are in conflict neither with its international obligations under the
Convention of Saint-Germain-en-Laye, nor with those ensuing from
general international law ; that accordingly the Belgian Government
is not called upon to make any reparation ;

alternatively, and should the Court not adopt the views of the
Belgian Government with regard to the character of the measures
complained of :

that, insufficient proof having been produced to establish according
to law that the loss and damage complained of by Mr. Oscar Chinn
are the outcome of the measures for which the Belgian Government
is blamed, no reparation is due by the latter ;

alternatively again :

that in any case the responsibility of the Belgian Government
was only partial and a secondary factor, the economic crisis and
the decision taken of his own account by Mr. Chinn to close down
certain branches of his business which were not affected by the
tariff measures adopted by the Belgian Colonial Administration being
other and more important factors in the losses which are alleged.”

7
A./B. 63.—THE OSCAR CHINN CASE 69

These submissions are not amended in the written Rejoinder
of the Belgian Government, but a request is added for the
rejection of “all submissions to the contrary”’.

In the course of public sittings held from October 23rd to
October 26th, 1934, the Court heard observations on the pro-
cedure to be followed, oral statements and a reply and rejoinder,
presented :

on behalf of the Government of the United Kingdom, by
Mr. Beckett, Agent, and by Mr. Fachiri, Barrister-at-law,
Counsel for that Government ;

on behalf of the Belgian Government, by M. de Ruelle, Agent,
and by M. Dumont, Director at the Belgian Ministry for the
Colonies.

The Agents informed the Court, in accordance with Article 46
of the Rules of Court, that they were agreed that the Agent
for the Government of the United Kingdom should be called
upon to speak first ; accordingly, Mr. Beckett opened the case.

The submissions presented on either side in the written pro-
ceedings were not amended in the course of the oral pro-
ceedings.

At the beginning of the hearing, the Agent for the Govern-
ment of the United Kingdom observed that, at the conclusion
of the written proceedings, there was still a considerable diver-
gence between the Parties in regard to several matters of
fact; he suggested that, in the first place, the Court should
decide in a judgment the questions of law in respect of which
the two Governments were in dispute; in its judgment the
Court might direct an enquiry to be held into the facts if the
nature of the Court’s judgment on the questions of law was
such as to render it necessary and if the Court did not feel
able upon the evidence already before it to hold that the effect
of the Belgian measures in question was to create a “de facto
monopoly”. The Agent for the Belgian Government, for his
part, pointed to the power possessed by the Court under Arti-
cle 50 of the Statute to order an enquiry at any time and
stated that, subject to certain reservations, he saw no reason
why the Court should not take note of the wish of the
representatives of the United Kingdom. As the proposal made
by the latter did not raise a preliminary issue, the Court
reserved its decision.

A certain number of documents in support of their contentions
were filed on behalf of each of the Parties as annexes to the
documents of the written proceedings. With the consent of the
Belgian Agent, the Agent for the United Kingdom submitted
some additional documents in the course of the hearings |.

1 See list in the Annex,
A./B. 63.—THE OSCAR CHINN CASE 70

These are the circumstances in which the Court is now
called upon to give judgment in the case submitted to it by
the Special Agreement of April 13th, 1934.

*
* *
According to the statements of the Parties, the dispute form-
ing the subject of these proceedings originated as follows :

Before the war of 1914-1918 and also afterwards until 1925,
transport services on the Congo had been operated by, or under
the auspices of, the Belgian Government, though not in any
way to the exclusion of private enterprises. In 1921 it abandoned
this business and transferred it to a Company known as the ‘‘Sona-
tra’? Company, which it formed and which was under its mana-
gement. In 1925, the Sonatra Company combined with a private
Company known as “Citas’’ and became the “Union nationale des
Transports fluviaux” known as “Unatra’. According to the
statutes of this Company, the State owned more than 70,000
shares out of 120,000; it still at the present time owns more
than one-half of the shares (128,987 out of 243,000 shares).

According to the terms of the ‘‘Cahier des charges” agreement,
which was made the subject of a Royal Decree dated March rath,
1925, and to which the statutes were appended, the Company
is under an obligation to the Colony to keep permanently in
service a fleet capable of meeting the present needs and future
expansion of transport traffic and to establish regular services
with fixed time-tables on the Congo and on the Kasai, as well
as on the navigable tributaries of those rivers. Transport rates
are to be approved by the Minister for the.Colonies or by the
Governor-General before being put into force. The Colony has
the right to insist on the maintenance of services even though
they show a deficit, but is bound to make up the receipts to
an amount equal to the running expenses. The Company can
not grant exceptional rates without the special permission of the
Colony. The State, for its part, is bound to entrust the Com-
pany with the transport by water of its officials and goods.
It also guarantees interest at 6 per cent. on the debentures
of the Company and the amortization of these debentures.
The debentures are free of all taxes, whether state or colonial,
over and above 2 per cent.

On October 18th, 1928, the Company wrote to the Government,
drawing its attention to the adverse results shown for some _
time past by its business, to the falling off in its receipts
though expenses remained practically at the same level, to its
obligation to provide regular services regardless of the cargoes
obtainable, to the expenses arising from its obligation to

9
A./B. 63.—THE OSCAR CHINN CASE 71

increase its fleet as provided in the cahier des charges, and,
finally, to the competition of trading companies, which,—
according to the Company—, “pursuing a policy which seems
to us to be economically unsound, prefer to undertake their
own transport by water and, furthermore, place their surplus
cargo space, when available, at the disposal of others at rates
much lower than those of our tariff’. Pointing out that in
this way a large proportion of. the transport traffic was
being diverted into other hands and that, restricted by the
cahier des charges and by the obligation to maintain fixed
rates, it could not compete, the Company asked that its
existing rates should be regarded as maximum rates, so that
it might enjoy the same freedom as its competitors to grant
special rates to regular and important customers, and also be
in a position to conclude with its customers fidelity contracts
enabling it to grant a rebate on the tariff charges to those
agreeing to entrust all their ‘transport business to it.

. The Belgian Government acceded to the Company’s request in

a letter dated October 24th, 1928, but at the same time pointed
out that all shippers of the same category must -be treated
on the same footing, adding that the slightest complaint might
entail, if justified, the withdrawal of this authorization.

A series of contracts were actually concluded by the Com-
pany in 1929 and the following years. These contracts were
of two kinds: fidelity contracts properly so-called—most of
which have, however, expired—and contracts for the taking
over or laying up of shipping. |

At the beginning of 1929, Mr. Chinn, a British subject,
who had worked in the Congo since 1927, came to Leopoldville
and established there a river transport and ship-building and
repairing business. According to the information furnished by
the Agent for the Government of the United Kingdom—which
has not been gainsaid in this respect by the Belgian Govern-
ment—Mr. Chinn was, apart from Unatra, the only fluvial
transporter in the Belgian Congo who did not at the same
time carry on business as a merchant or as a producer. The
Parties, however, disagree as to the volume of his business
and the amount of his profits.

In the course of 1930 and 1931, the severe commercial depres-
sion which prevailed throughout the whole world seriously affected
trade in the Congo colony. On May 11th, 1931, the Chamber
of Commerce of Leopoldville is stated to have appealed to
the Belgian Government to lend its assistance by effecting a
reduction of 50% in the cost of all transport, by granting
export premiums for the benefit of traders and by establishing
government control of production.

10
A./B. 63.—THE OSCAR CHINN CASE 72

... On June 2oth, 1031, the Belgian Minister for the Colonies
sent the following communication to various transport concerns
whose tariffs the Government was in a position to control,
informing them of the decision which he had taken in order
temporarily to relieve the critical state of trade:

{Translation. |
“Gentlemen,

The collapse of the prices obtained for colonial produce. in the
European markets necessitates an immediate reduction in the net
price of the following Congo products: timber, cocoa, coffee, rubber,
cotton, palm-oil, palm nuts, native rice, sesame, and other native
produce with the exception of copal.

After consideration of the question, I have come to the conclu-
sion that this reduction in the cost price must be effected, firstly,
by a reduction of the expenses of transportation and handling and,
secondly, by a diminution of the overhead charges of colonial pro-
ducers. °

Accordingly, I have decided that the rates at present in force
for the transport and handling of the above-mentioned products
shall be reduced as follows as from July ist, 1931:

(a) Manucongo.

Reduction of 60% in the rates at present in force for the car-
riage of raw cotton of native origin ; of 33% in the rates for the
carriage of palm-oil, palm nuts, and empty oil-containers.

(b) Mayumbe Railway Régie.
Reduction in the rates for the carriage of palm-oil and of empty
oil-containers to 1 franc per ton for any distance.

Reduction of 75 % in the rates at present in force for the car-
riage of palm nuts.

Reduction of 60% in the rates at present in force for the car-
riage of timber, coffee, cocoa, sesame and rubber.

(c) The “Compagnie du Chemin de fer du Congo”.

Reduction of 60 % in the rates at present in force for the car-
riage of raw cotton of native origin and of 33 % in the rates at
present in force for the carriage of palm-oil and empty oil-containers,
and also for the haulage of empty tanks.

(d) The “Union nationale des Transports fluviaux et Manuten-
tion Léo”.

Reduction of the rates for the carriage of coffee, rubber, cocoa,
cotton, palm-oil, sesame, native rice and empty oil-containers to
x franc per ton for any distance.

Reduction of 75 % in the rates for the carriage of palm nuts
for any distance.

2 Ir
A./B. 63.—THE OSCAR CHINN CASE 73

‘Reduction of the handling charges at present in force: by 60%
for’. cotton, 33 % for palm-oil and empty oil-containers and palm
nuts. 8

{e) Congo Local Railways.
Reduction of 60 % in the rates at present in force for the car-
riage of raw cotton of native origin.

(f) The “Société des Messageries automobiles du Congo”.

Reduction of 60 % in the rates at present in force for the car-
riage of raw cotton of native origin.

The above reductions will come into force as from July Ist, 1931,
for a period of three months, renewable on expiry.

The Colonial Administration requests you to open a special
account, showing in particular any costs or losses arising out of the
application of the above-mentioned measures. After carefully checking
and auditing the figures, the Colonial Administration will reimburse
you for any loss appearing in this special account, subject how-
ever to the express condition that the whole of your profits and
losses, as shown in your annual statement of accounts or in your
quarterly balance-sheets, show a deficit; only overhead expenses,
normal amortization and interest charges may however appear on
the debit side of the said profit and loss account.

Furthermore, it is clearly understood that the charge which the
Colony thus agrees to bear shall be recoverable, whenever the
economic position allows of the transport tariffs being again raised.

I will be glad if you will inform me that you are in agreement
With the above conditions, and if you will send the necessary instruc-
tions to your African office to enable the new regulations to come
into force as from July Ist next.

I have, etc.

(Signed) PAUL CROKAERT,
Minister.
Letter sent to:

Manucongo—Régie des Chemins de fer du

Mayumbé—Compagnie de Chemin de fer du

Congo—Union nationale des Transports flu-

viaux et Manutention Léo—Chemins de fer

vicinaux du Congo—Société des Messageries

automobiles du Congo.”

As will be seen, the decision, in so far as it applied to the
transport of the main products of the colony intended for
export, affected downstream traffic; and in so far as the
decision applied to the transport of empty containers, it
affected mainly upstream traffic. In both cases the charge,
reduced to one franc per ton, was, practically speaking, a
purely nominal one.

In consequence of the reduction in rates, the Colony under-
took to refund to the companies referred to above any losses
incurred by them, provided that the profit and loss account

12
A./B. 63.—THE OSCAR CHINN CASE 74

of each concern as a whole showed a deficit. On the other
hand, it was understood that any such refunds would be recov-
erable when the economic situation made it possible to raise
transport rates. Under the arrangement, the Belgian State
paid to Unatra 2,072,000 fr. in I93I, 312,107,000 fr. in 1932
and 7,456,000 fr. in 1933..

This measure, which was to take effect on July rst, 1931,
and to remain in force for three months subject to renewal,
gave rise to discontent in certain circles in the colony.

In a letter dated June 26th, 1931, the “Société commerciale
du Centre africain”, known as “Socca’’, asked the Minister for
the Colonies to state what conditions it must accept in order
to obtain compensation for the losses which, it averred, it was
bound to suffer as a result of this decision ; Socca added that
it did not imagine that the Government could have ‘‘intended
to create—in favour of one company—a preferential régime
amounting in fact to a monopoly”.

The Chamber of Commerce of Leopoldville also urged in a
letter from its President to the Governor-General of the colony
dated June 27th, 1931, that, ‘‘side by side with the assistance
given to trade by the Colony through Unatra, equivalent assist-
ance should be provided for those who prefer to entrust their
transport business to other concerns or who transport their
own produce’.

In the following letter to Socca, dated July 28th, 1931, the
Minister for the Colonies expressed his regret that he could
not comply with its request :

(Translation. ]

“Gentlemen,

I have the honour to acknowledge your letter of June 26th, 1937,
regarding the reductions granted in respect of the tariffs of Unatra,
and in which you ask that governmental aid should be extended
to you under the same conditions.

I would observe that the measure with regard to the reduction.
of transport rates is a measure taken in the general interest and
necessitated by the prices prevailing in the European markets for
produce of the Congo. These reductions are temporary. They are
only valid for periods of three months, at the expiration of which
they will be renewed if necessary.

The compensation to be accorded by the Colony to transport under-
takings will only be granted in so far as any expenses and losses
are incurred resulting from the application of this measure and sub-
ject to the express condition that the profit and loss account of an
undertaking as a whole shows a deficit, it being understood that on
the debit side of this account may only be placed general expenses,
normal amortization and interest charges.

The Government of the Colony moreover reserves the right, when
a favourable opportunity occurs, to recover by means of increases

13
A./B. 63.—THE OSCAR CHINN CASE 75

in the transport rates any sums which may have had to be advanced
as a result of these reductions.

It follows that governmental assistance must be confined to
transport undertakings over whose rates the Government has a right
of supervision. I regret that, in these circumstances, I am unable
to comply with your request.

I have, etc.”

According to the Government of the United Kingdom, the
effect of the decision of June zoth, 1931, was to ruin Mr. Chinn
by forcing him entirely to suspend both his transport business
and his ship-building and repairing business. According to the |
Belgian Government, on the contrary, this was not so and
Mr. Chinn’s last cargo was carried on May 13th, 1931, after
which date he carried no further cargo on the river, either upstream
or downstream. It is not disputed, moreover, that, on July 1st,
1931, Mr. Chinn’s vessels were laid up.

Whatever the facts may be in regard to this point, six
concerns interested in river transport, amongst them that of
Mr. Chinn, decided to have recourse to the courts. On March r8th,
1932, they brought an action against the Colony before the
Court of First Instance at Leopoldville, claiming on the basis
of the Convention of Saint-Germain of September 1roth, 1919,
as approved by the Belgian law of July 5th, 1920, reparation
of the damage—provisionally estimated at about twelve million
francs—alleged to have been suffered by them as a result of
the fact that the Colony “has concluded with the Société natio-
nale de Transports fluviaux, known as Unatra, without admit-
ting them to the benefit of similar treatment, an arrangement
under which that Company—in consideration of the refund of
the amounts involved—has made in its normal rates for the
shipment of produce progressive reductions down to a purely
nominal figure, and has thus established in favour of Unatra
a virtual monopoly of the river transport business in the most
important direction”.

Their suit having been dismissed by a judgment given on
September 21st, 1932, the claimants lodged an appeal with the
Court of Appeal at Leopoldville; the latter, in a judgment
given on December 13th, 1932, upheld the decision of the
Court below.

Meantime, as the acuteness of the depression did not dimin-
ish and as the measure of June 2oth, 1931, had only been
instituted for three months, the Belgian Government prolonged
it for successive periods, after attempting, without result, to
revise in respect of certain products the reduction which it
had made in Unatra’s rates.

In October, 1932, after a visit paid to the Congo by the
Minister for the Colonies, a further decision was taken and

14
A./B. 63.—THE OSCAR CHINN CASE 76

was promulgated by the Governor-General on October 3rd,
1932. This decision was as follows:

“NOTICE TO THE PUBLIC.

The Minister for the Colonies has decided, as from August rst,
1932, to grant, as an advance, to all private transporters making
application and offering the requisite guarantees, the refund of
losses suffered as a result of transporting products the down-
stream rates for which have been reduced.

This loss will be calculated per ton kilometre on the basis
of the loss suffered by Unatra up to December 31st, 1932.

Private transporters must produce thé manifest on unloading,
and if necessary they must send copies of the bills of lading
to support the manifest.

The guarantee must take the form of a guarantee by a bank
or other solvent institution or of a mortgage on immovable

property.”

After the Court of Appeal of Leopoldville had given judg-
. ment, the five enterprises which had associated with Mr. Chinn
in starting legal proceedings against the Administration of the
Colony do not appear to have carried the matter further. Only
the latter did not abandon his claim. Before the delivery of the
Court of Appeal’s judgment, he had already appealed to his Gov-
ernment for protection, and the latter had taken up his claim.

Negotiations ensued between the Government of the United
Kingdom and the Belgian Government with a view to a friendly
settlement. These negotiations proved fruitless and the two
Governments then agreed to submit the case to the Permanent
Court of International Justice. The Special Agreement of April 13th,
‘1934, by virtue of which the Court is called upon to give judg-
ment, was thereupon concluded.

*
* *

As the case has been brought before the Court by Special
Agreement, it is mecessary to be clear as to the positions
occupied by the respective Parties, according to the terms of
that instrument. |

Having regard to the order in which the documents of the
written proceedings were alternately filed, in conformity with
the method proposed in the Special Agreement, and having
regard also to the order in which the Agents were agreed
that they should address the Court, and to their attitude
during the pleadings, it is evident that, in the opinion of the
Parties in the present suit, the British Government is, in fact,
in the position of plaintiff, and the Belgian Government in that
of defendant.

15
A./B. 63.—THE OSCAR CHINN CASE | 77

According to the terms of the Special Agreement, the first
question on which the Court has to decide is whether, ‘‘having
regard to all the circumstances of the case”, certain measures
taken and applied in the month of June, 1931, and subsequently
thereto by the Belgian Governmient, in connection with the
Unatra Company and in relation to fluvial transport on the
waterways of the Belgian Congo, are in conflict with the inter-
national obligations of that Government towards the Govern-
ment of the United Kingdom.

It is first necessary to determine the nature of the measures of
which the Government of the United Kingdom complains,
the “circumstances of the case’, that is to say the circumstances
which are peculiar to the present suit, and, lastly, the inter-
national obligations with which—in the submission of the Govern-
ment of the United Kingdom—these measures were in conflict.

1.—It is apparent from the history of the case that the
measures taken and applied in the month of June 1931, and
subsequently thereto, in connection with the Unatra Company
and in relation to fluvial transport on the waterways of the
Belgian Congo, are primarily the decision of the Minister of the
Colonies, dated June zoth, 1931, and the refusal of the Belgian
Government, which ensued and which was maintained until Octo-
ber 3rd, 1932, to extend the benefit of these measures to fluvial
transport enterprises other than Unatra; the measures also
include the payments made by the Exchequer of the Colony
to that Company. It is evident that the fundamental issue
in the present suit is the lawfulness or otherwise under
international law of the measures taken in 1931.

The action of the Minister appears as a governmental act,
applying to several companies engaged in transport and in
particular to Unatra; in the case of the latter enterprise,
this act constituted a kind of rider to the Company’s cahier
des charges, and is to be accounted for by the right of super-
vision which the Government retained over that Company ;
it was also a governmental act, in virtue of the promises held
out on behalf of the Colonial Exchequer of reimbursement—
possibly only temporary—of any losses that might be incurred.
Moreover, it is plain from the Special Agreement itself that
the Parties are agreed in regarding the measure as a govern-
mental act, and it is in that character that it has been
impugned by the Government of the United Kingdom.

As regards its scope, the Belgian Government’s action had
in view—as has been shown—a substantial reduction in the
transport tariffs on certain native products ; it is not a measure
applying especially to the Unatra Company, since it also affects
certain land transport concerns under State supervision. On the
other hand, to compensate for the expenses and losses which it

16
A./B. 63.—THE OSCAR CHINN CASE 78

imposes, it provides for a refund to each of the enterprises
concerned, subject however to the condition that the profit
and loss account of that particular enterprise, as a whole,
reveals a deficit. These reimbursements are, moreover,
recoverable by the State, as soon as the economic situation
has improved sufficiently to allow the tariffs to be raised
again, they constitute a temporary loan, or advance, which
has to be refunded to the Colonial Exchequer. The measure
itself is of a temporary character ; it may, however, be prolonged.

2.—As regards the “circumstances of the case”, which the
Parties have expressly asked the Court, in the Special Agree-
ment, to take into account in judging the demand of the
Government of the United Kingdom, the information given in
the documents filed and in the oral pleadings shows them to
be briefly as follows.

In the first place is to be noted the peculiar importance of
fluvial transport for the whole economic organization of the
colony. The river Congo, owing to the magnitude and extent
of its waterways, constitutes the chief highway of the Belgian
colony. Penetrating, by means of its numerous tributaries,
to the remotest confines of the territory, it makes it possible
to exploit and turn to account the local sources of wealth of
every part of the colony, so that, from the point of view
of the evacuation of products to be exported, it constitutes
an essential factor in the commercial activities of the colony.

A special aspect of the circumstances in which the measure
of 1931 was adopted is revealed when one’ considers the
character of the Unatra Company. Having succeeded in 1925
to the Sonatra Company, which was under the direction of
the State, the Unatra Company was in form a private
company ; but it was charged, none the less—owing to the
terms of its cahier des charges and the supervision therein
reserved to the State—with the conduct of an organized public .
service, involving special obligations and responsibilities, with
a view, primarily, to satisfying the general requirements of the
colony.

The fact that Unatra was responsible for these services was,
it is true, no bar to the enterprises of other concerns who
were desirous of engaging in fluvial transport on their own
account, or for the. account of others. But these concerns,
carrying on business freely, and having pecuniary profit as
their main and legitimate object, had no claim to any
guarantee of their profits from the State. They could only
claim the freedom and equality guaranteed by treaty on the
Congo, as will presently be shown.

Finally, the circumstance which, according to the Belgian
Government, was the determining cause of the measure which

17
A./B. 63.—THE OSCAR CHINN CASE 79

it took on June 2oth, 1931, was the general economic depres-
sion and the necessity of assisting trade, which was suffering
grievously from the fall in prices of colonial products, and
of warding off the danger which threatened to involve the
whole colony in a common disaster.

The Belgian Government was the sole judge of this critical
situation and of the remedies that it called for—subject of
course to its duty of respecting its international obligations.

3.—As regards the international obligations of the Belgian
Government towards the Government of the United Kingdom,
these have been clearly indicated by the Parties in their
written. Memorials and in the course of the pleadings. They
are, in the first place, the obligations arising from the
international régime of the Congo Basin, under the Con-
vention of Saint-Germain-en-Laye of September roth, 1919,
and in the second place the obligations resulting from the
general principles of international law.

According to Article x of the Convention of Saint-Germain :

“The signatory Powers undertake to maintain between their
respective nationals and those of States, Members of the League
of Nations, which may adhere to the present Convention a complete
commercial equality in the territories under their authority
within the area defined by Article x of the General Act of Berlin
of February 26th, 1885, set out in the Annex hereto, but
subject to the reservation specified in the final paragraph of
that Article.

Annex.

Article 1 of the General Act of Berlin of February 26th, 1885.

The trade of all nations shall enjoy complete freedom :

1. In all the regions forming the basin of the Congo and its
outlets [according to the geographical boundaries].

2. In the maritime zone extending along the Atlantic Ocean
[according to the geographical boundaries].

3. In the zone stretching eastwards from the Congo Basin
[according to the geographical boundaries].

It is expressly recognized that in extending the principle of
free trade to this eastern zone, the Conference Powers only under-
take engagements for themselves, and that in the territories
belonging to an independent sovereign State this principle shall
only be applicable in so far as it is approved by such State.
But the Powers agree to use their good offices with the govern-
ments established on the African shore of the Indian Ocean for
the purpose of obtaining such approval, and in any case of
securing the most favourable conditions to the transit (traffic)
of all nations.”

‘Furthermore, according to Article 5:
x8
A./B. 63.—THE OSCAR CHINN CASE 80

“Subject to the provisions of the present Chapter, the navi-
gation of the Niger, of its branches and outlets, and of all the
rivers, and of their branches and outlets, within the territories
specified in Article x, as well as of the lakes situated within
those territories, shall be entirely free for merchant vessels and
for the transport of goods and passengers.

Craft of every kind belonging to the nationals of the signa-
tory Powers and of States, Members of the League of Nations,
which may adhere to the present Convention, shall be treated
in all respects on a footing of perfect equality.”

The Convention of Saint-Germain was the successor—so far
as the Parties in the case are concerned and as regards the
relations between them—of the General Act of Berlin of
February 26th, 1885, and of the Act and Declaration of Brussels
of July 2nd, r8g90—to which Acts it is linked up by its
Preamble; but it should be pointed out that, according to the
terms of Article 13 of the Convention signed by the two
Governments concerned,

“Except in so far as the stipulations contained in Article 1
of the present Convention are concerned, the General Act of
Berlin of February 26th, 1885,.and the General Act of Brussels
of July 2nd, 1890, with the accompanying Declaration of equal
date, shall be considered as abrogated, in so far as they are
binding between the Powers which are Parties to the present
Convention.”

“No matter what interest may in other respects, attach to
these Acts—the Berlin Act and the Act and Declaration of
Brussels—in the present case the Convention of Saint-Germain
of 1919, which both Parties have relied on as the immediate
source of their respective contractual rights and obligations,
must be regarded by the Court as the Act which it is asked to
apply; the validity of this Act has not so far, to the knowl-
edge of the Court, been challenged by any government.

The Parties are not agreed as to whether paragraph 1 of
Article x of the Berlin Act—this Article is reproduced as an
Annex to Article 1 of the Convention of Saint-Germain—which
proclaims ‘complete freedom” of trade for. all nations, is, or
is not, embodied in the last-named Article. In the view of
the Government of the United Kingdom, the clause in ques-
tion constitutes an integral part of that Article. The Court
cannot however agree with that opinion, which is inconsistent
with the express terms of Article 1 of the Convention of Saint-
Germain; for this Article only maintains in force Article x of
the Berlin Act, which is annexed thereto, in so far as concerns
the clauses fixing the limits of the territories to which the
Convention applies, and the last paragraph. But that question
loses much of its interest in the present case, when it is observed

3 19
A./B. 63.—THE OSCAR CHINN CASE 81

that paragraph 1 of Article 5 of the Convention applies this
principle of freedom of trade in regard to the very question
of fluvial navigation with which the Court is now concerned.
It is, indeed, hardly open to doubt that the fluvial transport
industry is a branch of commerce.

It is true that the Convention of Saint-Germain, by Article 13
referred to above, has abolished the régime of freedom of trade
so far as concerns the exemption from customs duties stipu-
lated in Article IV of the Berlin Act. But there is no evidence
that it intended to depart, so far as concerns commerce, from
the general principle of freedom which was laid down at Berlin
in regard to the river system in question. On the contrary,
the signatory States of the Convention of Saint-Germain expressly
referred to that principle not only—as has already been shown
—in Article 5 quoted above, -but also in the concluding para-
graph of the Annex to Article 1 and in Article ro.

In regard to the general principles of international law, on
which the Government of the United Kingdom has altern-
atively relied, it is apparent from the written Memorials and
pleadings of the Parties that the Government of the United
Kingdom relies on the obligation incumbent upon all States
to respect the vested rights of foreigners in their territories,
and that it is this obligation which the Belgian Government
is alleged to have infringed in regard to Mr. Chinn.

*
* *

In considering, in accordance with the terms of the Special
. Agreement, whether the impugned measures were or were not
in conflict with the international obligations of the Belgian
Government, the Court, having regard to the positions occupied
by the ‘respective Parties—as indicated above—will examine
the arguments advanced by the Government of the United
Kingdom against the compatibility of these measures with the
obligations in question.

Relying.on the international obligations incumbent upon the
Belgian Government, the Government of the United Kingdom
impugns the measures taken. by the Belgian Minister of the
Colonies on June 20th, 1931, in the following respects.

In the first place, it is alleged that the Belgian Government,
by ‘enjoining a reduction of tariffs on the Unatra Company
in return for a promise of temporary pecuniary compensation,
made it impossible for the other fluvial transporters, including
Mr. Chinn, to retain their customers, and in consequence to
carry on their business; in this way, it is argued, it enabled
the Unatra Company to exercise a de facto monopoly which—in
the view of the Government of the United Kingdom—is incom-

20
A./B. 63.—THE OSCAR CHINN CASE 82

patible with the Belgian Government’s obligation to maintain
commercial freedom and equality, and also with the obligation
arising out of Article 5 of the Convention of Saint-Germain,
which applies those principles to fluvial navigation. The Bel-
gian Government is alleged to have acted thus not only with
a view to assisting trade in the Colony, but also in order
to concentrate fluvial transport in the hands of Unatra.

Alternatively, it is alleged that the Belgian Government, by
creating for the advantage of the Belgian Company Unatra a
régime in the benefits of which Mr. Chinn, a British subject,
was not entitled to share, was practising a discrimination, con-
trary to the equality of treatment stipulated in the Conven-
tion of Saint-Germain.

Lastly, in case the Court should not find that the measures
taken in 1931 constituted a breach of the said Convention, the
Government of the United Kingdom submits that, by making
it commercially impossible for Mr. Chinn, a British subject, to
carry on his business, these measures constituted—it is alleged
—a violation of vested rights, protected by the general principles
of international law.

For its part, the Belgian Government submits the following
considerations :

The measures which it adopted became necessary in order
to safeguard the interests of the community as a consequence
of the position of colonial products in the markets of the
world ; it never formed part of the intentions of the Belgian
Government to create a monopoly of any kind for Unatra in
order to drive embarrassing competitors out of business. The
measures that it took were lawful from the standpoint of
international law, whether conventional or customary.

The Belgian Government further maintains that a distinction
must be drawn between the sphere of navigation and that of
the management of national shipping. Whereas, in the former
sphere, the riparian State is forbidden to encroach on freedom
of navigation, its freedom of action in the latter sphere is
not subject to restriction.

Lastly, in regard to the British Government’s contention
based on general international law, the Belgian Government
considers that no injury has been caused to already existing
vested rights; at the utmost, injury may have been caused to
private interests.

(2) The main argument of the Government of the United
Kingdom is the alleged inconsistency between the measures

ar
A./B. 63.—THE OSCAR CHINN CASE 83

taken by the Belgian Government and the principles of equal-
ity and freedom of trade and freedom of navigation.

According to the conception universally accepted, the freedom
of navigation referred to by the Convention comprises freedom of
movement for vessels, freedom to enter ports, and to make use
of plant and docks, to load and unload goods and to transport
goods and passengers.

From this point of view, freedom of navigation implies, as
far as the business side. of maritime or fluvial transport is
concerned, freedom of commerce also. But it does not follow
that in all other respects freedom of navigation entails and
presupposes freedom of commerce.

What the Government of the United Kingdom is concerned
with in this case is the principle of freedom of navigation
regarded from the special aspect of the commercial operations
inherent in the conduct of the transport business; for that
Government has never contended that. the impugned measures
constituted an obstacle to the movement of vessels.

For this reason the Covrt—whilst. recognizing that freedom
of navigation ‘and freedom of commerce aïe, in principle,
separate conceptions--considers that it is not necessary, for
the purposes of the present case, to examine them separately.

The Government of the United Kingdom has relied, as
regards freedom of commerce, on the first sentence of the
Annex to Article 1 of the Convention of Saint-Germain. But,
as has been shown above, this argument has not been accepted
by the Court, having regard to the wording of Article 1.
~The idea of freedom of trade has not, however, disappeared.
from the Convention of Saint-Germain. Its first Article is
devoted to the principle of commercial equality, and the
latter in itself presupposes in principle, freedom of trade.
The last paragraph of Article 'r of the Act of ‘Berlin, which
is maintained by the Convention of Saint-Germain, contains,
as has been recalled above, the following reservation: “It is
expressly recognized that in extending the principle of free
trade to this eastern zone, the .... Powers only undertake
engagements for themselves’, etc. Commercial freedom is
therefore expressly contemplated.

Article 2 of the Convention concerns freedom of trade;
it guarantees free access for merchandise, in the same way
as it does for vessels flying ,the flag of any contracting
Power, while reserving to the State concerned complete liberty
of action as to’ the customs and navigation regulations and
tariffs to be applied in its territory.

Finally, Article 10 refers to this principle in the following
terms: “The signatory Powers recognize the obligation to

22
A./B. 63.—THE OSCAR CHINN CASE . 84

maintain in the regions subject to their jurisdiction authority
and police forces sufficient to ensure protection of persons and
of property and, if necessary, freedom of trade and of transit.”

Whilst therefore it is certain that the Convention of Saint-
Germain is also based on the idea of commercial freedom, it is
however to be observed that this idea has not the same import
in the Convention as in the Act of Berlin. This Act really meant’
by free trade the régime of the open door. By abolishing—as
has already been stated—the prohibition to levy customs
duties found in Article IV of the Act, the Convention has
abandoned this régime; in this connection it should also
be observed that Article V of the Act, the second paragraph
of which corresponds to Article 3 of the Convention, con-
tained a first paragraph which does not reappear in the
Convention and which prohibited the granting of a monopoly
or privilege in matters of trade.

It cannot be supposed that the contracting Parties adopted
new provisions with the idea that they might lend them-
selves to a broad interpretation going beyond what was expressly
laid’ down.

Freedom of trade, as established by the Convention, con-
sists in the right—in principle unrestricted—to engage in any
commercial activity, whether it be concerned with trading
properly so-called, that is the purchase and sale of goods,
or whether it be concerned with industry, and in particular the
transport business; or, finally, whether it is carried on inside
the country or, by the exchange of imports and exports,
with other countries. Freedom of trade does not mean the
abolition of commercial competition ; it presupposes the exist-
ence ‘of such competition. Every undertaking freely carrying
on its commercial activities may find itself confronted with
obstacles placed in its way by ‘rival concerns which are
perhaps its superiors in capital or organization. It may also
find itself in competition with concerns in which States
participate, and which have occupied a special position ever
since their formation, as is the case of Unatra.. Mr. Chinn,
a British subject, when, in 1926, he entered the river trans-
port business, could not have been ignorant of the existence
of the competition which he would encounter on the part of
Unatra, which had been established since 1925, of the magni-
tude of the capital invested in that Company, of the connection
it had with the Colonial and Belgian Governments, and of the
predominant rôle reserved to the latter with regard to the fixing
and application of transport rates.

The Government of the United Kingdom maintains that”
the reduction. in transport rates together with the Belgian

23
- A./B. 63.—-THE OSCAR CHINN CASE 85

Government’s promise temporarily to make good losses enabled
Unatra to exercise a de facto monopoly inconsistent with
freedom of trade.

The Court must therefore consider whether the aileged
concentration of transport business in the hands of Unatra,
of which the Government of the United Kingdom complains,
and the fact that, because of this concentration, it was com-
mercially impossible for Mr. Chinn to carry on his business,
are inconsistent with the conception of freedom of trade pro-
pounded above.

A concentration of business of this kind will only infringe
freedom of commerce if commerce is prohibited by the conces-
sion of a right precluding the exercise of the same right by
others; in other words, if a “monopoly” is established which
others are bound to respect.

The Court sees nothing in the measure taken by the Belgian
Government indicative of such a prohibition. Moreover, the
Government of the United Kingdom does not contend that
such a monopoly has been created; but it maintains that the
impugned measure had the effect of making it commercially
impossible for Mr. Chinn, amongst others, to carry on his busi-
ness and thus led to what is described as a “‘de facto monopoly’’.
In what the Government of the United Kingdom describes in
this case as a “de facto monopoly’, the Court, however, sees
only a natural consequence of the situation of the services under
State supervision as compared with private concerns. The Court
also sees therein, in some respects, a possible effect of com-
mercial competition; but it cannot be argued from this that
the freedom of trade and the freedom of navigation, provided
for by the Convention of Saint-Germain, imply an obligation
incumbent on the Belgian Government to guarantee the success
of each individual concern. If the term “de facto monopoly”
should be understood, in so far as concerns trade, navigation
or the transport business, as covering all measures likely to
render it difficult or impossible for others to carry on their
businesses at the same prices and under the same commercial
conditions, it would follow that all measures affording to
customers facilities, reductions ‘in prices, abatements or other
advantageous conditions which other concerns are unwilling or
unable to offer and which, aftet all, are calculated to promote
commerce, would be incompatible with freedom of trade. Such
a contention would be inconsistent with the very notion of
trade; for there is nothing to prevent a merchant, a ship-owner,
a manufacturer or a carrier from operating temporarily at a
loss if he believes that by so doing he will be able to keep
his business going.

24
A./B. 63.—THE OSCAR CHINN CASE 86

To sum up, having regard to the exceptional circumstances
in which the measures of June 20th, 1931, were adopted and
to the nature of those measures, that is to say, their tem-
porary character and the fact that they applied to companies
entrusted by the State with the conduct of public services, these
measures cannot be condemned as having contravened the under-
taking given by the Belgian Government in the Convention of
Saint-Germain to respect freedom of trade in the Congo.

Even supposing that Unatra took advantage of the tempor-
ary lowering of its rates to endeavour to concentrate in its
hands the business of its competitors, it cannot be inferred,
especially having regard to the circumstances already mentioned,
that this was the motive and aim of the action of the
Belgian Government.

In these circumstances, it is unnecessary for the Court to
consider whether, as alleged by the Government of the United
Kingdom, the Belgian Government, in taking the measures which
are said to have resulted in this concentration of business, was
to a certain extent actuated also by motives other than the
desire to assist trade during a period of depression. Moreover,
the circumstances in which the impugned measures were taken
are such as to preclude any idea that the Belgian Government
intended by indirect means to escape the obligations incumbent
on it under the Convention of Saint-Germain.

On the other hand, the Court is unable to accept the general

proposition of the Belgian Government regarding its concep- :

tion of “the management of national shipping’. However legi-
timate and unfettered governmental action in connection with
the management and subsidizing of national shipping may be,
it is clear that this does not authorize a State to evade on
this account its international obligations.

(6) With regard to the alternative contention of the Govern-
ment of the United Kingdom, alleging discrimination inconsistent
with the equality of treatment provided for in the Convention
of Saint-Germain, it should, in the first place, be remembered
that the principle of equal_treatment is the characteristic feat-
ure of the legal réginie established in the Congo Basin. The
Convention of Saint-Germain applies this principle in most
of its articles, namely in Articles I, 2, 3, 4, 5, 6, 7, 9 and
11. Moreover, this. equality of treatment is only guaranteed
by the Convention to the nationals of Powers which are parties
to the Convention or of Powers adhering to it.

Thus, Article x of the Convention provides that : “The signatory
Powers undertake to maintain between their respective nation-
als .... a complete commercial equality”, etc. Article 3 guar-
antees to nationals of the same Powers the same treatment
and the same rights as those enjoyed by nationals of the Power

25

~~
A./B. 63.—THE OSCAR CHINN CASE 87

exercising authority in the territory, and thus provides for assim-
ilation to nationals. The second paragraph of Article zx pro-
vides that the signatory Powers will protect and favour, without
distinction of nationality or of religion, religious, scientific or
charitable institutions.

The form of discrimination which is forbidden is therefore
discrimination based upon nationality and involving differen-
tial treatment by reason of their nationality as between persons
belonging to different. national groups.

It should be recalled in this connection that the treat-
ment accorded to Unatra was based on the special position of
that Company, as a Company under. the supervision of the
Belgian Government. The special advantages and conditions
resulting from the measures of June 2oth, 1931, were bound
up with the position of Unatra as a Company under State
supervision and not with its character as a Belgian Company.
These measures, as decreed, would have been inapplicable to
concerns not under government supervision, whether of Belgian
or foreign nationality. The inequality of treatment could only
have amounted to a discrimination forbidden by the Convention
if it had applied to concerns in the same position as Unatra,
and this was not the case.

In these circumstances, the Court is unable to attach any
legal importance to the argument based by the Government
of the United Kingdom on the fact—which is not disputed by
the Belgian Government—that Mr. Chinn was the only private
transporter who, like Unatra, confined his business to the
transport of goods belonging to others.

On the other hand, the Government of the United Kingdom
does not maintain, and there is no justification for supposing,
that it was owing to his status. as a British national that
Mr. Chinn was not given the benefit of the arrangement accorded
to the Belgian Company Unatra. In this respect, the position
of the British national Mr. Chinn was not, as such, either
better or worse than that of the other concerns not under
State supervision; these included, according to the evidence
produced, Belgian concerns and a French concern. _

The Court therefore is equally unable to accept the altern-
ative plea as to an alleged discrimination.

(c) It remains to consider the last alternative plea of the
Government of the United Kingdom to the effect that the
measure of June 2oth, 1931, by depriving indirectly Mr. Chinn
of any prospect of carrying on his business profitably, con-
stituted a breach of the general principles of international law,
and in particular of respect for vested rights.

26
A./B. 63.—THE OSCAR CHINN CASE |: 88

The Court, though not failing to recognize the change that
had come over Mr. Chinn’s financial position, a change which
is said to have led him to wind up his transport and ship-
building businesses, is unable to see in his original position—
which was characterized by the possession of customers and
the possibility of making a profit—anything in the nature of a
genuine vested right. Favourable business conditions and good-
will are transient circumstances, subject to inevitable changes ;
the interests of transport undertakings may ‘well have suffered
as a result of the general trade depression and the measures
taken to combat it.

No enterprise—least of all a commercial or transport enter-
prise, the success of which is dependent on the fluctuating
level of prices and rates—can escape from the chances and
hazards resulting from general economic conditions. Some
industries may be able to make large profits during a period
of general prosperity, or else by taking advantage of a treaty
of commerce or of an alteration in customs duties; but they
are also exposed to the danger of ruin or extinction if circum-
stances change. Where this is the case, no vested rights are
violated by the State.

It is true that in 1932 the Belgian Government decided to
grant Belgian or foreign ship-owners, whose business was endan-
gered, advances similar to those allowed to the Unatra Com-
pany; the taking of this measure cannot, however, be regarded
in itself as an admission by the Belgian Government of a legal
obligation to indemnify the transporters for an encroachment
on their vested rights ; it is rather to be ascribed to the desire
of every government to show consideration for different business
interests, and to offer them some compensation, when possible.
The action of the Government appears to have been rather in
the nature of an act of grace.

For the foregoing reasons, the Court holds that the answer
to the first question submitted to it by the Special Agreement
must be in the negative.

Accordingly, the point concerning reparation for Mr. Chinn,
which forms the subject of the second question in the Special
Agreement, does not arise.

In these circumstances, there is no occasion to order the
enquiry suggested at the beginning of the hearings by the
Agent for the Government of the United Kingdom.

4 27
A./B. 63.—THE OSCAR CHINN CASE 89

FoR THESE REASONS,
The Court,
by six votes to five,

decides :

that the measures taken and applied in the month of June 1931
and subsequently thereto by the Belgian Government in connec-
tion with the limited liability Company Union nationale des Trans-
ports fluviaux (commonly known as Unatra) and in relation
to fluvial transport on the waterways of the Belgian Congo,
are not, having regard to all the circumstances of the case, in
conflict with the international obligations of the Belgian Govern-
ment towards the Government of the United Kingdom.

Done in French and English, the French text being authori-
tative, at the Peace Palace, The Hague, this twelfth day of
December, one thousand nine hundred and thirty-four, in three
copies, one of which shall be placed in the archives of the
Court, and the others forwarded to the Belgian Government
and to the Government of the United Kingdom respectively.

(Signed) J. G. GUERRERO,
Officiating President.

(Signed) À. HAMMARSKJÜLD,
Registrar.

M. DE Bustamante, Judge, who sat as a member of the
Court during the extraordinary session devoted to the present
case until December roth, 1934, and who took part in the
deliberation and in the vote on the judgment, was compelled
to leave The Hague before it was delivered. He stated that
he concutred both in the operative part of the judgment and
in the grounds on which it was based.

Sir CEciLz Hurst, President of the Court, MM. ALTAMIRA,
ANZILOTTI and SCHÜCKING, and Jonkheer vAN Eysinea, Judges,

28
A./B. 63.—THE OSCAR CHINN CASE go

declare that they are unable to concur in the judgment given
by the Court and, availing themselves of the right conferred
on them by Article 57 of the Statute, have appended to the
judgment the separate opinions which follow.

(Initialled) J. G. G.
(Initialled) A. H.

29


OPINION INDIVIDUELLE DE M. B. WINIARSKI

L'avis constate que la question soumise à la Cour se réfère
seulement à des jugements rendus par le tribunal administratif
dans les limites de sa compétence et qu’elle a en vue des jugements
rendus par le tribunal régulièrement constitué. «Il est vrai, dit
l'avis, que cette question invite la Cour à dire si l’Assemblée
générale a le droit de refuser d'exécuter un jugement pour une
raison quelconque. Mais il serait difficile de considérer que l’As-
semblée générale, en insérant ces mots, ait voulu modifier le sens
qui découle naturellement des autres termes de la question ainsi
que des considérations contenues dans sa résolution. » En consé-
quence, la Cour formule ainsi la question telle qu’elle l’entend
et à laquelle l’avis doit répondre : «la Cour est invitée à examiner
la question générale et abstraite de savoir si l’Assemblée générale
est fondée en droit à refuser d'exécuter un jugement accordant
indemnité, rendu par le tribunal administratif régulièrement
constitué et agissant dans les limites de sa compétence statu-
taire » ; plus loin, l'avis ajoute que «les considérations énoncées
ci-dessus par la Cour reposent sur cette base ».

A cette formule 1l faudrait, à mon avis, ajouter un troisième
élément qui la compléterait utilement : tribunal régulièrement
constitué, agissant dans les limites de sa compétence et en confor-
mité avec les règles de sa procédure. Si l’avis constate que « dans
aucun de ces rapports ou textes pertinents on ne trouve de
suggestion qui donnerait à penser que le tribunal, lorsqu'il a
rendu ses jugements dans les onze affaires, n'était pas légalement
constitué », on pourrait ajouter avec autant de raison: ou qu’il
a méconnu une règle essentielle de sa procédure. De toute façon
je comprends l'avis comme ayant en vue des jugements qui ne
sont pas entachés de nullité et par conséquent j'ai pu voter avec
la majorité, car je considère avec elle que l’Assemblée générale
n’a pas le droit de refuser d’exécuter un jugement si la raison
qu'elle invoque se réduit à une mauvaise application du droit
ou à une constatation ou appréciation erronée des faits.

Après avoir ainsi interprété la question à laquelle il donne sa
réponse dans le dispositif, l'avis formule Vhypothése suivante
qui, 4 mon sens, est en dehors de la base sur laquelle reposent
les considérations de la Cour: «Si, cependant, en insérant les
mots «pour une raison quelconque » l’Assemblée générale avait
entendu se référer aussi à des jugements dépassant la compétence
du tribunal ou à quelque autre vice pouvant affecter un jugement,

2T
65 TRIB. ADM. DES N. U. (OP. INDIV. DE M. WINIARSKI)

un problème se poserait qui appelle quelques observations géné-
rales. »

Je regrette de ne pas pouvoir m'’associer à ces observations ;
et comme elles m'obligent à préciser mon vote, je me vois amené
à joindre à l’avis quelques considérations qui résument brièvement
mon point de vue.

L'avis dit que le problème envisagé dans cette hypothèse ne
poserait pas la question de la nullité d’une sentence arbitrale
rendue au cours d’un arbitrage ordinaire entre États, car dans
le cas présent il s’agit des jugements prononcés par un tribunal
permanent établi par l’Assemblée générale, fonctionnant en vertu
d'un statut spécial adopté par l’Assemblée générale et dans le
cadre du système juridique organisé des Nations Unies. Si ce
passage vise un jugement entaché de nullité, je ne vois aucune
différence entre la nullité d’une sentence arbitrale et celle d’un
jugement rendu par le tribunal administratif. Une sentence
arbitrale, qui est toujours définitive et sans appel, peut être
entachée de nullité ; dans ce cas la partie à l’arbitrage est justifiée
dans son refus de l’exécuter. Ceci n’est pas une règle propre au
seul arbitrage ordinaire entre États ; c’est une application naturelle
et inévitable du principe général de tout droit: non seulement
un arrêt, mais aucun acte ne peut produire d'effets légaux s’il
est juridiquement nul. Le tribunal administratif, organisé comme
il l’est, pour d'importantes raisons pratiques, est un tribunal
permanent offert par les Nations Unies et accepté par le fonction-
naire dans un contrat librement consenti. Il ne constitue pas et
ne peut pas constituer une exception à la règle générale. Ses
jugements sont définitifs et sans appel; mais cette disposition
du statut dit ce qu'elle dit, et l'avis cite la déclaration du rap-
porteur de la Vme Commission de l’Assemblée générale lors de la
discussion du projet de statut du tribunal administratif. En
indiquant, à la $éance du 15 novembre 1946, que les décisions
du tribunal seraient sans appel, le rapporteur a continué : «appeler
à une compétence supérieure des jugements du tribunal administra-
tif, ce serait retarder le règlement définitif des affaires....». Une
procédure d’appel n’est pas possible sans une disposition expresse
organisant avant tout une instance d’appel. Mais l’appel est une
chose, le refus d'exécuter un jugement entaché de nullité en est
une autre. L'opinion d’après laquelle il serait possible pour une
partie d’invoquer la règle de la nullité seulement dans le cas où
une procédure à cet effet serait organisée, ne trouve pas d'appui
dans le droit international. Une telle procédure peut être organisée
ad hoc entre États comme dans l'affaire de l’Orinoco Steamship
Company, elle a été organisée en ce qui concerne le tribunal
administratif de l'Organisation internationale du Travail; mais
l'absence de procédure organisée ne supprime pas la nullité ; la
thèse: pas de nullité sans instance, n'est pas fondée. Il n’est
pas besoin non plus que le principe d’après lequel la partie est

22
66 TRIB. ADM. DES N. U. (OP. INDIV. DE M. WINIARSKI)

fondée à refuser d'exécuter un jugement juridiquement nul soit
consacré par une disposition expresse.

Il‘ se peut cependant que l'avis, lorsqu'il examine l’hypothèse
qui a donné lieu à la présente opinion individuelle, n'ait en vue
qu'une revision organisée, revision dans le sens d’un nouvel examen
de l'affaire ainsi qu’il paraît résulter des lignes finales de l'alinéa
visé dans ces observations: «la Cour estime que l’Assemblée
générale elle-même .... ne pourrait guère agir comme un organe
judiciaire examinant les arguments des parties, appréciant les
preuves produites par elles, établissant les faits et disant le droit
qui s’y applique ». Ici l’avis paraît avoir en vue un examen en
appel, peut-être aussi en annulation, mais ceci est en dehors de
la question posée par l’Assemblée générale et qui a pour objet
non pas une pareille revision mais simplement un refus d'exécuter.

Ayant accepté l'avis sur la base définie par la Cour, je peux
me limiter à ces brèves remarques pour constater un désaccord
avec ce que je crois être le sens des «observations générales ».
Comme elles me paraissent sortir du cadre de ce qui a déterminé
Vattitude de la Cour, je m’abstiens de présenter des développe-

x

ments Cétaillés à ce sujet.

(Signé) B. WINIARSKI.

23


JUDGMENT No. 7. — POLISH UPPER SILESIA 94

Annex I,

DECISION CONCERNING THE JOINDER OF THE TWO
SUITS INTRODUCED SUCCESSIVELY BY THE GERMAN
GOVERNMENT.

Before :

MM. Huser, President,
Lover, Former President,
Weiss, Vice-President,

Lord FInvay,

MM. Nynorm,

ALTAMIRA, ( /¥48¢s,
.ANZILOTTI,

YOVANOVITCH,
BEICHMANN,
NEGULESCO,

Deputy-Judges,

Count ROSTWOROWSKI, .
° M. RABEL, L National Judges.

Case concerning certain German interests in Polish Upper Silesia.

The Government of Germany, represented by Dr. Erich Kauf-
mann, Professor at Bonn,

Applicant,

versus

The Government of the Polish Republic, represented by
M. Mrozowski, President of the Supreme Court of Warsaw, and
M. Sobolewski, Assistant Delegate to the Reparation Commission,

Respondent.

Joinder of two suits introduced successively by the German
Government.

Whereas by an Application instituting proceedings filed with the
Registry of the Court on May 15th, 1925, in accordance with
Article 40 of the Statute, the German Government, in its conclusion
No. 3, requested the Court, infer alta, to give judgment that :
JUDGMENT No. 7. — POLISH UPPER SILESIA 95

“The liquidation by the Polish Government of the rural
estates belonging to Count Nikolaus Ballestrem ; to the
Georg Giesche’s Erben Company; to Christian Kraft, Fürst zu
Hohenlohe-Oehringen ; to the Vereinigte Kénigs- und Laura-
hiitte Company ; to the Baroness Maria Anna von Goldschmidt-
Rothschild (née von Friedländer-Fuld) ; to Karl Maximilian,
First. von Lichnowsky ; to the City of Ratibor; te Frau
Gabriele von Ruffer (née Grafin Henckel von Donnersmarck) ;
to the Godulla Company and to Frau Hedwig Voigt, would not
be in conformity with the provisions of Article 6 and the
following articles of the Geneva Convention” ;

Whereas in its Judgment delivered on August 25th, 1925, the
Court declared the Application to be admissible and reserved it for
judgment on the merits ;

Whereas in a second Application filed with the Registry on
August 25th, 1925, in accordance with Article 40 of the Statute, the
German, Government requested the Court to give judgment that :

“The liquidation of the rural estates belonging to the Duke
of Ratibor and Count Saurma-Jeltsch would not be in conform-
ity with the provisions of Article 6 and the following articles
of the Geneva Convention” ;

Whereas in its Application dated August 25th, 1925, the German
Government further asked that the Court may be pleased to join
the said Application to the Application filed on May r5th, 1925 ;

Whereas in a letter dated September 11th, 1925, the Minister of
the Polish Republic at The Hague informed the Registrar of the
Court that the Polish Government, to whom the Application of
August 25th, 1925, had been duly communicated in accordance
with Article 40 of the Statute, agreed that the said Application
should be joined to the Application filed on May 15th, 1925 ;

THE Court,
composed as stated above,

Having regard to Article 48 of the Statute ;

Having regard to Article 61, paragraph x, of the Rules of Court,

Duly records the agreement reached between the Parties in
regard to the joinder of the proceedings instituted by the German
Government against the Polish Government on May 15th and
August 25th, 1925 ; and |

For the purpose of proceedings on the merits, joins the causes
of action mentioned in the Application of August 25th, 1925,
to those mentioned in Conclusion No. 3 of the Application of
May 15th, 1925. |
JUDGMENT No. 7. — POLISH UPPER SILESIA 96

Done in French and English, the French text being authoritative,
cat the Peace Palace, The Hague, this fifth day of February, one
thousand nine hundred and twenty-six, in three copies, one of
‘which is to be placed in the archives of the Court, and the others
‘to be forwarded to the Agents of the Applicant and Respondent
Parties respectively.

(Signed) Max HUBER,
President.

(Signed) A. HAMMARSKJÜLD,
| Registrar.

Annex II.
ORDER OF COURT DATED MARCH z22nd, 1926.

TENTH SESSION (EXTRAORDINARY).
Before :

MM. Huser, President,
LoDER, Former President,
Weiss, Vice-President,

Lord FINLAY,

MM. Nyxoiw,
ALTAMIRA,
ANZILOTTI,

Judges,

YOVANOVITCH, }
BEICHMANN, Deputy- Judges,
NEGULESCO, (
Count RoSTWOROWSKI, } . .
M. RABEL, ( National Judges.

Case concerning certain German interests in Polish Upper
‘Silesia. |

THE COURT,

composed as above,
after deliberation,
makes the following order :

The Court

(x) invites the Parties to furnish, at a public hearing, by whatever
‘means they may think fit, further information regarding the points