Certain Norwegian Loans (France v. Norway) - Judgment

Co~uniquB 57/?6
Unofficial . 1

The follo1iEing inf ornation from the Registuy of tlic 1nLci:n~tional
Court of Justice h2.s been corrnnunicated to the Press: 1

The International Cowt of Justkce gave its Judgment in the
Case of Certein h~omegian Loans (beiween France and Norway).
l
Proceedings in this Case wcre institute dy an Application of
the French Government whiclz rcquested the Court to adjudge thatcertaCn

loans issuedon the French market md on other foreign marketsby the
Kingdom of Nowqr, the Mortgage Bank of the ICingdonr or"Norway and the
Smallholding mcl Workers ' Housing 3a&, stipulzkei dr.gold the amaunt
of the borrower s obligation =andthat the borrower could only discharge
the substance of hi5 debt by the papient cf,the gold vallue of the
coupons and of the ~ledeemed bonds. The Appliczticn expressly referred
to Article 36(2) of the Statute of the Court and to the Declarations of
Aceeptance of the compulsory jurisdictio n ade by Frmce and by Nomay,
Far its part,the Nonregian Goverment raised certain freliminaigr
Objections which,at the request of the French Govemnent which the
Norwzgian Goverm~.ent did not oppose, the Court joined to the merits.

In its Judgnient the Court upheld one of the grounds relied upon
by Norr~ay, tuhich the Court considered more direct and conclusive: the
Objection te the effect that Norr<ayms entitled, by virtue of the
condition of reciprocity, to invoke the reservation relating to national
jurisdiction coniained in the French De clarat ion; and thatthis
rsservaticln excluded îrom the jurisdiction of th5 Court the dispute
which hasbeen referreci to it by tl-icApp15cakion of the French Government.
Considering Lhat it was not necéssary .to cw.*c the okhor
Nomegian Objecti~ns or the other subrnissions of the Parties, the Cowt
faund by twelve votes to three that It v,aswithout jurisdiction to
adjuacatc upon the dispute.

Judge lloreno Quintana doclared that l-ieconsidered thatthe Court
was without jurisdiction for a reason dilysrent iroiithat; givzn in the
Judpent . Vice Pre sident BzdauA and Judge Sir Bers ch Lauterpacht
appended ta the Judgmen-t or" the Courtstatements of ti~eir individmk
opinions, Judges Guerraro, Basdevantand Read apgended to the Judg-nent
of the Court statementsof 'cheir diçsenting opinions,

2nal S--.----the Juc&p$nG

In its Judgment the Court recalled the facts. The loans in
question were flo~ted between 1885 and 1909; the French Government

contended that tha bonds contained a gold clauseh-hich varied in fomn
from bond to bond, but w?-iich tha-iGavarrment regarded as sufficien+, in
the case of each band, thks being drspuled bg the IVonvegian Government.
The convertibility intoeold of noLes of the Bankof Nomay having ben
suspended on various dxtes since 1914, a Norwcgian Paw of December lrth,
1923, provided that Ijwhere a ùebtor ilasla~rfully agreed to pay in gold
a pecuniary debt in kroncr and where the creditor refuses to accept
papent in Bank of Nomay notes on the basis of their nominal goldvalue,
the debtor rnay requzst a postponernent of papont for such period as the
Bank is exempted f rom its obligation to redeem its notes Ui accordance
with their nominai value ". Prot racted diplornatic carrespandenee ensued
which la~ted frm 1925 i;o1955, in whick the French Governent contended
thatit wodd not secm thata uniletcral. decisicn could be relied upon
as against foreign cliedi.torsand requested the recognition of the rights

clalmed by the French hold-ei-sof the bonds- involvcd. The Noru~egian
Government ,eing unprepamd tu agree to the various proposs?ls for

international .... linternczt ional settlement put f orwa~d by France, maintairml that the
clahs of the bondholders Lram wTthin the jurisdiction of the
Nomegim courts and invalued solely the interpretation and application

of Norwegian law. The French bond!lolders refrahed from submikting
their case Go the I\Ionr.~gian courts. It was iiithese circmstances
that the French GovermeE.t referred the matter to the Court.

Such beinqthe fac-Ls, tne Court at the ou-tset directed its
attention t o the Preliminar ybjsct ions of thc Borc?regian Gcivermcnt,
beginning with the first of these Objections whichrclated direetly to
the jurisdiction of the Court and vrhich had tvm espects, In the first
place, it t~as contended thatthe Court, whose functianis to decide in
accordance with international law such disgutcs as are subinitteclto it,
c2ri be seised bg means of a unilateral apglicztion, only of lcgal disputes

falling within one of the four categorics of disputes enumcrated in
parzgraph 2 of Article 36 of the Statute and relating .tointernational
law. In the view of the Mor~;egi~ Govcrmcnt, the lom contracts wers
governed byrnunicipal lavrandnot by interna-tionallaw. In the second
place, the Norv~qi2m Goverment declared that if there sl-iouldstill be
some doubt on this point it would rely upan the reservat ion made in the
following tems by the French Govemmen.t in 5ts Declaration accepting
the com?ulsory jurisdiction of the Court: "This declaration does not
apply to différences relating to mattcrs which are essentidly icithin
the national jurisdiction as understood by the Govemcnt of the French
RepubLicl', The Noniagian Grivrnment considerad that by virtue oft lie
'of reciprocity which is embodied in Article 36, paragraph
clc7.usc .,
of the Statuk contahcd in -the corrcssandinN zolrac~Lm
Dsclaration, Nom~ay had the r ightt O rrely upon the rcstrlctions placed
by Francs on her ovm witjertakings. Convincod that the dispute was
within .the domesticjurisdiction, the Non~iegian Gaverment requested
the Court to decline, on grounds -that it lacked jwj.sdiction, the fmction
which the French Governrnent wodd have it assume.

The Court considered the second ground of this Objection and
noted thatthe jurisc?ic$ion of the Court in the present case depsnded
upon the Declarations mide by the Parties an condition of reoiprocity;
and that s jnce tî:~o unilateral declaration sere involved such juris-

diction res conferred upon the Court only to the extent to which the
Declarations coinc ided in conf orring it, Conseguently, the cornmon will
of the Parties, pihich the basis of thc Court" jurisdiction ,xisted
within the narrowzr 1inLGs indicatcd b- the French reservetion. The
Court reaffiried khis rriethodof'definin he liniits of its jurisdiction
which had alrezdy been adopted by the PermanentCourL,of Internationai
Justice, In accordance with the condition of rz ciprocj.ty Norway, equally
with France, wzs cntitled ta except from the conipulsoxy jurisdiction of
the Court disputes csnderstood by Nom;ty -ho bc essentiall yi.tilin its
nation2J jurisdiction,

The French Gevenment pointed out that between France and IVarway
there éxisted a treaty trrhichmade the payment of my contractua labt
a questionof internationa ai and thatin this connection the tvro

States couldno-i thercfore speak of domesticjurisdiction. But the
aim of the treaty rcfarred to, the Second Hague Convention of 1907
respccting the lki~itatlon of the eu lloyrnent of force fos the reçovery
of contract; debts,was no+, tu introd~~ca cmpulsoq~ arbitretiong the
onlg obligation imposed by the Convention w2s thst zrninkervening
power shouldnot haw recourse to force before it had tried arbitration,
The Court cauld, theraforc, find no reason why the fact that the two
Par-Lies were signat ories t o the Second Hague Convcnt ion should deprive
Nom~ay of the right to invoke ths rescrvation in the French Declaration.
The French Goverri~nent also referred tc the Franco Nomegian Arbitration
Convention of 1904 and to the Gt.nera1 Act of Geneva of September %th,
Neither of these references, hot~ever, could be regarded as
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sufficient .,.. sufficicnt to justify the view that the A~glicatian of the French Govern-
msnt was based upon the Convention or the Gcnera.1 Act: the Court wodd
not be justified in seeking 2 basis for its jwisdiction different from
that which the Frznch Chverment itself set out in its Application and
by reference tO tihic1-the case had been prosenbed by both Parties to the

Court,

The Cou* noted that from one point of view it might be said that
the gromd of the .firstObjection which was based on the reservation in
the Frsnch Declarati~n w2s solely subsidiery in ch~racter, But in the
opinion of the Court, the second ground co~ild not be regarded as subsidiary,
%ri the sense that Nomay would invoke the F~ench rcservation only in
the event of tfie first ground of this Objectionbeing heLd to be legally
unfounded. The CourtTscompc~cnce was chdlenged on both gromds and

the Court was frea to base its decision on the ground krhich in its
judeent was more direct and conclusive. Not ody dia the Nomegian
Governent involcet ho French reservat ion, but it maintained the second
ground of its fisst Objection throughout. Abandonment could nat be
presumed or inferredg it had to be declared oxpressly.

The Cciusltdid not consider that it should examine whether the
French reservation was cansistcrtt wikh the underteking of a legal
obligation and w3.s eamgatibl vith Article 36, paragraph 6, of the
The validity of tne reservation had not beer!questioned by
Statute.
the Parties. It was cle r thzt Francefully maintaincd Its Declaratiori
including the reservatian, and that Norway relied upon the rcservniion.
In consequenco, the Court had before it a provision which both Parties
to the dispute regarded as constituting an expression of their comon
will relating to the cornpetence of tRz Cou&. ' The Court eave effect
to the re~ervation 3.3 it stood and as the Parties recognised it.
-m
For these rezsons, $ho Court found that ii was w3thout juris-

diction to adjudica.te upcn the disputa whic!~ had been brought beÎalne
it by the Application of the French Goverment.

The Hague, July btk, 1957.