INTERNATIONALCOURTOFJUSTICE
CASECONCERNINGCERTAINPROPERTY
(LIECHTENSTEINV. GERMANY)
PRELIMINARYOBJECTIONS
OF THE FEDERALREPUBLIC OF GERMANY
27JUNE2002 TABLEOFCONTENTS
PART1 INTRODUCTION .............................................. 8...........................
...............
PARTII STATEMENTOFFACTS ........................................4................................
CHAPTE1 RTHECOURT HASNOJURISDICTI ONENTERTAIN
LIECHTENSTEI NA'SE...................................................
.29........................
Section1 ThereExistsNo Dispute betweenLiechtensteinand Germany ............2.....
A .The Court's JurisprudenontheConceptof "Dispute" ....................................
B .The CourtshouldDeclinetoAdjudicateArtificiallyConstructedCases..........3...
C .ThereisNo DisputebetweenthePartiessincein Reality
No PositivelyOpposed Claims Exis............................................................
D .TheDisputeRegarding ExpropriationofLiechtensteinAssetsin Former
Czechoslovakiais in Reality a DisputebetweenLiechtenstein
andthe Czech Republic.....................................................
.....................
E Conclusion ......................................................
.......43................................
SectionII.The CourtLach Jurisdictionrationetemporis.....................................
A .TheAlleged Basis for JurisdictisnotApplicablerationetemporis .................
1.TheCaseLawof thePermanentCourt Concerning Restrictionsrationetemporis
ShowsthatthePresent Case is Excluded......................................................
2 .A Cornparisonwith theCaseLawoftheInternationalCourt of Justice
Showsthat thePresent Case is Excludedfiomthe Jurisdiction
of the Courtrationetempori......................................................
.................B .The Dispute between Liechtensteinand Germany asAllegedbyLiechtensteinis
outsidetheTemporal Jurisdictionofthe Court ..........................................................
1. NoNewFactsof RelevanceAroseafter 1980 ....................................3..........
2. TheConfiscationsbyCzechoslovakiaare not within the Jurisdiction
oftheCourtrationetemporis .........................................................
..............
3. TheReparationsRegimeisnot withintheJurisdictionof the Court
rationetemporis.........................................................
...59............................
4. TheLegalSituationofProperty Confiscatedin Czechoslovakiabefore1980
is Excludedrationetemporis ...................................................0....
.............
5 .GermanCourtshave ConsistentlyHeld that they CannotJudgeuponthe
Lawfulnessof Czechoslovak Measuresof Confiscation ........................1.......
6 .TheCompleteInactivityof Liechtensteinbetween1945and 1995
Excludesthe Caserationetemporis ............................................6...........
...
7 .The Claimsof Liechtensteinal1Relateto LegalFactsand Situationsbefore1980 ..63
Section II.Liechtenstein's ClaimFsa11withintheDomesticJurisdiction
of theFederaIRepublicof Germany ...........................................6...........
..
CHAPTE II LIECHTENSTE CIL'S IM SRE INADMISSIB .L...............................
Section I.Liechtenstein'sClaimsarenotSuflcientlySubstantiated .......................
A .TheRequirementto Substantiatea Claim ......................................6.............
B .TheLackof Substantiationas a Consequenceofthe Choice
oftheWrongDefendant .......................................................
...................
C.No SubstantiationofGermany's Alleged Interferencewith LiechtensteinProperty .74
D.Distortionof the German CaseLawConcemingthe SettlementConvention ........6E .A FailingAttemptat DiplomaticProtection ...............................................................
80
1.No Indicationof theVictims ..........................................................
..............
2.No Indicationof theAssetsAllegedlyAffected ..................................8..............
F .No Violationof Liechtenstein'sNeutrality andSovereigntySubstantiated ...............
1. Liechtenstein'sNeutrality.......................................................87.
...................
2. Liechtenstein'sSovereignty .....................................................90..
...............
G .Conclusion .........................................................
..........9.....................
SectionII. Liechtenstein's ClaimsRequirtehe CourttoPassJudgment ontheRights
and Obligations of theCzechRepublic inItsAbsenceandwithoutIts Consent ......3
A .The CourtCannotExercise Jurisdiction OveranIndispensableThird Party
withoutthatParty'sConsent ...........................................................
..............
B .The CzechRepublicis anIndispensableThirdParty tothe Present Case ...........04
1.The CzechRepublicis anIndispensableThirdPartyRegardingtheUnlawfulness
of Seinire of LiechtensteinPropertyon CzechoslovakTemtory ...................0....
2 .The CzechRepublicis anIndispensableThirdPartyRegardinganyEnrichment
on thePartof Germany .........................................................0.
...................
3 .Conclusion:Inthe Absenceof CzechConsentthe CourtLacks Jurisdiction
overthe Case ..........................................................
........8.......................
C .The Questionof Czech Consent isofExclusivelyPreliminaryCharacter ..........1.9
D .Conclusion ..........................................................
..........0...................
Section III.Liechtenstein Nationals have Failed toExhaust
Available Local Remedies .......................................................1
..............
A.TheActionBroughtbyLiechtensteinas Exerciseof DiplomaticProtection ......111
B.TheAllegedViolationsofLiechtenstein'sNeutrality and SovereigntyDonot
Changethe Natureofthe Case .................................................11.....
.......C .The Applicabilityofthe LocalRemediesRule . A NegativeResult
with Respectto Germany ........................................................1.
................
D.TheApplicabilityofthe LocalRemediesRule . A PositiveResult with Regard
to Czechoslovakiaandthe Czech Republic ......................................12..........
1. ConsiderationsSupportingtheRequirement ....................................12.........
2. The Caseof theReigningPrince .................................................2.........
...
3. The Caseof the Other Victims ..................................................12.......
.......
E .Conclusion ............................................................
.......128.............................
PARTIV CONCLUSIONSANDSUBMISSIONS .......................... 12.....................1. Thepresent SubmissionsonPreliminaryObjectionscontainthe followingparts:
- In Part 1,Germanyexplainsthat it raises PreliminaryObjections against
the Applicationof the Principality of Liechtenstein.Germany refrains
fi-omcommentingonthe issuesrelated tothe merits of thecase.
-
In Part II, Germany sets out the factual background of the present
dispute, solely forthe purpose of demonstrating that the Court lacks
jurisdiction to adjudicateLiechtenstein's claimsand that these claims
areinadmissible.
- In Part Iii, Germany explains in detail the nature and scope of its
Preliminary Objections.
-
InPart N, Germanysetsout itsConclusionsand Submissions. PART 1
INTRODUCTION
2. The Principality of Liechtenstein (hereafter Liechtenstein) andthe Federal
Republic of Germany (hereafter Germany) are European States that have
maintained good and friendlyrelations for morethan fifty years. They are both
members of the Councilof Europe and parties to the European Conventionon
Human Rights. By virtue of the Statute of the Council of Europe and the
European Conventionon Human Rights theyare cornrnittedto the rule of law,
demo~raticprinciplesandthe protectionof fundamental rights.
3. At the end of World War IICzechoslovakia confiscated private property of
persons belonging, accordingto the applicableCzechoslovaklegislation,to the
"German people" irrespective of their nationality. Germany has always
considered these confiscations to be in violation of public international law.
Germany profoundly regrets that private propertyof Liechtensteincitizenswas
also confiscated inthat context. However, Germanyhas no detailed information
about the private propertyof Liechtensteincitizens affected by these measures
and Liechtensteinhas notprovidedsuchinformationin the present case.
4. For the very first time in 1999,to the great surprise of Germany,Liechtenstein
claimed compensation from Germany for the property confiscated by the
authorities of Czechoslovakiaat the end of World War II. On 30 May 2001
Liechtenstein lodged an Application with the Registry of the Court against
Germany.
5. Liechtensteinclaimsthat (a) Germany has failed to respect the sovereignty and neutralityof
Liechtensteinand has committedother breaches of international law,
and
(b) in consequenceof its acts, is liable to compensate Liechtensteinfor
the injuriesanddamagesuffered.
6. Liechtenstein filed its Memorial on 28 March 2002. In its Application and
Memorial, Liechtenstein alleges constantly,much to the surprise of the
Respondent, thatGermanyat some date "in the 1990s"'~a date that changeson
numerous occasionsin the course of the Memorial,took the decisionto change
its position to henceforth treat certain property of Liechtenstein nationalsas
having been "seized forthe purposeof reparation or restitution, oras a resultof
the state of war" without ensuring any compensation for the loss of that
property. Germanyhas nevertakensucha decision.
7. This surprisingfactual assertionof an alleged "change of position of Germany"
appearsin the Applicationof 30 May2001 no less than five times, in one form
or another.Inthe Memorialof 28 March 2002the samefactual allegation isthen
taken up again, repeated, restated, reformulated,elaborated, built upon and
repeated again more than 50 times. Consequently,it is rather obvious thatthe
factual assertion of an alleged "change of position" of Germany is the
centrepiece, indeed the onlybasisforLiechtenstein's Application andclaims.
'Applicationof the Principalityof Liechtenstein (her: A), para. 17; Memorialof the
PrincipalityofLiechtenstein(hereafter:LM),p. 54, para.3.2.8. Germany will show that the alleged "change of position" on its part never
occurredandis neitherbasedonnor supportedby any demonstrablefacts.Given
this completelack ofany supportiveevidence,it is clearthat the alleged "change
of position" is an artificialnstructpurposefullyinvented. With regard to the
purpose of such a dubious invention,one must assume that Liechtensteinis
apparentlyin desperateneed of some factualconductby Germany which might,
at least with a minimum degree ofplausibility,be presented and exploited as
conduct interferingwith Liechtenstein'srights. Furthermore,given the fact that
the European Convention forthe PeacefulSettlement of Disputes of 29 April
1957 enteredinto forcebetweenthe Applicantandthe Respondentonlyin 1980,
Liechtenstein is apparently equally in desperate need of an alleged factual
conduct by the Respondent which, in order to support Liechtenstein's claims,
must have occurred after 1980. But, needless to Say, even the systematic
repetitionof false allegationsannotturnthem intofactsand reality.
9. Germany will demonstrate that this dubiousapproach has the purpose of
constmcting the appearance of a factual basis for the Application of
Liechtenstein, with regard to jurisdiction, admissibility and the merits of that
Application. Accordingly,Germany availsitself of the opportunityprovided for
by Article 79, paragraphs 1 and 2, of the Rules of Court to contest the
jurisdiction of the Court and the admissibilityof the Application by raising
Preliminary Objections. Germany is of the view that these Preliminary
Objections must be decided upon first before the case can possibly be
adjudicatedon its merits.10. The present Submissions containthe Preliminary Objectionsof Germanyto the
Application of Liechtenstein.The Objections relate to the jurisdiction of the
Court as well asto the admissibilityof the case. They aresix in number. Their
subjectmatteris setout below:
1. The Court hasnojurisdiction toentertainthe case.
1. There exists no dispute between Liechtenstein and Germany.
Germany will show that the "dispute" as alleged by Liechtenstein is a
completely artificial invention. Liechtenstein's claimsdo not meet the
requirements for the existence of a dispute firmly established in the
jurisprudence of theInternationalCourtof Justice,accordingto whichit mustbe
shown thatthe claim ofone partyis positivelyopposedbythe other.The alleged
change of position by Germany never occurred and is not based on any
demonstrablefacts(PreliminaryObjectionNo.1).
2. The Court lacks jurisdiction ratione temporis. As the Liechtenstein
Memorial shows,al1relevantfacts that mightbe the real source of a dispute,a
disputethat would,however,be with the Czech Republic,date backto 1945and
the period imrnediatelythereafter. Therefore,the European Convention for the
Peaceful Settlement of Disputes of 29 April 1957, which entered into force
betweenthe partiesin 1980,cannotbe a basisforjurisdiction becauseit doesnot
apply to disputes relating to facts and legal situations prior to 1980
(PreliminaryObjectionNo.2).
3. Liechtenstein's claims fa11 within the domestic jurisdiction of
Germany. The LiechtensteinMemorialshowsthat Liechtensteindoes not evenallege that a rule of public international lawwas applicable to the dispute
brought before the German courts concerning the Pieter van Laer painting.
Consequently,that dispute fell exclusivelywithin Germandomesticjurisdiction.
This is also true for the dispute now brought beforethe International Courtof
Justice(PreliminaryObjection No.3).
II. Liechtenstein's claims are inadmissible:
1. Liechtenstein's claims are notsufficientlysubstantiated.Liechtenstein
has not fulfilled the obligation to substantiate its claims.n particular, it has
neither given anydetails on the affected Liechtenstein properties, nor hasit
identifiedthe allegedvictims (PreliminaryObjectionNo.4).
2. Liechtenstein'sclaims would require the Courtto givejudgment on
rights and obligationsof the CzechRepublic in its absence and without its
consent. The Czech Republic is thereforean indispensablethird party to the
present case. The sovereign acts of a third State, namely Czechoslovakia,the
predecessor State of the Czech Republic, would have to be judged by the
InternationalCourt of Justice if the Court decidedthe case on its merits. This,
however, would requirethe Czech Republicto give its consent tosuchajudicial
evaluation. The Court has no jurisdiction to decide upon sovereign acts of a
third State in a case brought by Liechtensteinagainst Germany (Preliminary
ObjectionNo. 5).
3. The alleged Liechtenstein victims have failed to exhaust local
remedies.By introducingits Applicationagainst Germany, Liechtensteinseeks
to exercisediplomaticprotection forthe benefit of its citizens.Therefore, localremedies available in Czechoslovakia should have been exhausted.
Liechtenstein has not proven that that requirement was met (Preliminary
Objection No. 6). PARTII
STATEMENTOF FACTS
Il. After the tragic history Czechoslovakiahad endured from 1938 onwards, the
BeneSDecreeswere adopted in1945.On the basis of these decrees,agicultural
properties, buildings etc.of persons belongingto the "Germanand Hungarian
people" were confiscated.
12. As correctly described in the Liechtenstein ~emorial', the relevant decrees
appliedto persons belongingto the "Germanand Hungarianpeople",regardless
of their nationality.This was laidown expresslyin DecreeNo. 12 of 21 June
1945~.Inits 5 2, thisDecreespecified:
"Those persons are considered to belong to the German or
Hungarian people who declaredon the occasion of every census
sincethe year 1929that they belonged tothe Gennan or Hungarian
people, or who have become members of national groups or
political parties made up of persons belonging to the German or
Hungarianpeople".
13. Liechtenstein claims that "substantial arable land and forests, nurnerous
buildings and their contents, factories etc." of "[albout 38 Liechtenstein
nationals113were affected by these measures of confiscation taken by the
'LM, p. 24, para.1.13.
*LM, Annex6, vol.1,p. 9.
3 LM,p. 8, para.2. authorities of ~zechoslovakia'. Liechtenstein States that the then Prince of
Liechtensteinandmembersofhis familywere particularlyaffectedas ownersof
large properties. According tothe Applicant, they were at no time German
nationals.
14. Germany has no information about the property concemed which is not
identified in the Liechtenstein Submissions, withthe exception of some details
conceming one paintingthat gaverise to a dispute under private law between
the Prince of Liechtensteinand the City of Cologne, where this painting was
exhibitedin 1991.
15. Liechtenstein explains that in 1945 its Governmentdrew up lists of families
affected by the confiscation measuresof the Czechoslovak authorities2.It also
points out that the competent judicial instance, the Bratislava Administrative
Court, held in a judgment dated 29 November 1951 that the confiscations
conceming the then Prince of Liechtenstein were lawful under the law of
~zechoslovakia~.
16. Liechtenstein does not explain whether any of the other property owners have
brought any cases before the Czechoslovak courts nor has Liechtenstein
explained to what extent the Govemment of Liechtenstein has exercised
diplomatic protection on behalf of Liechtenstein nationals since 1945. In
'Cf.LM,Annex8,vol. 1,p. 32.
LM,p. 27, para.1.19.
LM, pp. 28-29, para.1.22.For thejudgmentof theBratislava Administreourt,see LM,
Annex9,vol. 1,p34. particular,Liechtensteinhas notinformedGermanyabout any contacts withthe
Govemment of Czechoslovakiaor of the CzechRepublic after Czechoslovakia
and later the Czech Republic adopted aconstitutionalsystembased on the rule
of law'.
During the occupationof Germanyafier 1945 the Council of the Allied High
Commissionfor Germany statedin LawNo. 63 Clarifiing theStatus ofGerman
ExternalAssets and OtherProperîy Takenby Wayof Reparationor Restitution
of 31 August 195l2 that no claimor actionin connection with measures against
German foreign property was to be admissible in German courts. The same
stipulation was later included inthe Conventionon the Settlement ofMatters
Arising out of the War andthe Occupation(hereafter: Settlement on vent ion)^,
which entered into forceon 5 May 1955,on the same day as the Conventionon
Relations between the ThreePowers and the Federal Republic of Germanyof
26 May 1952 as amended on 23 October 1954.Article 1, paragraph 2, of the
latter Conventionstated: "The Federal Republicshall have accordinglythe full
authorityofa sovereign Stateover its intemalandexternalaffairs."
18. Article3 of ChapterSixofthe SettlementConvention provided:
'IntheMemorialonlythestepstakenbythePrince asto thefamilypropertyaredescribed;asto
the propertyof otherLiechtenstein nationaltshe Memorialonly refers tothe list ofs
concerned whichhadbeendrawnupbytheGovemmentof Liechtenstein,LM,pp.27-29,paras.
1.19-1.23.
2
Law No. 63 of the Councilof the Allied High CommissionClarifjing the Status of German
ExternalAssets and Other Property Takenby Wayof Reparation or Restitution of 31 August
1951;LM,Annex15,vol. 1,p. 94.
UnitedNations,TreatySeries,vol. 3p.219;LM,Annex16,vol. 1,p. 98. "1. The Federal Republic shall in the future raise no objections
against the measures which have been, or will be, carried out with
regard to Geman external assets or other property, seized for the
purpose of reparation or restitution, or as a result of the state of
war, or on the basis of agreements concluded, or to be concluded,
by the Three Powers with other Allied countries, neutral countries
or former allies of Germany.
2. The Federal Republic shall abide by such provisions regulating
German extemal assets in Austria as are set forth in any agreement
to which the Powers now in occupation of Austria are parties or as
maybe containedin the future StateTreatywith Austria.
3. No claim or action shall be admissible against persons who shall
have acquired or transferred title to property on the basis of the
measures referred to in paragraph 1and 2 of this Article, or against
international organizations, foreign govemments or persons who
have acted upon instructions of such organizations or
governments."
19. In connection with the conclusion of the Treaty on the Final Settlementwith
respect to Germany,signed in Moscow on 1 September 1990, which entered
into force on 15March 199 1l,an ExchangeofNotes betweenGermanyand the
three Western Allieswas effected according to which Article 3, paragraphs 1
and 3,of Chapter Six of the SettlementConvention remained in force2.
'LM, Annex 18,vol.II,p. 175.
LM, Annex 19,vol.II., 187.20. Germany has never recognized the confiscation of German foreign propertyas
lawful'. However, Germancourts have consistently held that they are barred by
the Settlement Convention of 1955 fiom evaluating the lawfulness of any
confiscation measures of that sort. Since the decisions rendered by the Federal
Court of Justice (Bundesgerichtshof),the highest court for civil matters, on 13
December 1956~and 11April 1960~it has been fully established that Article 3
of Chapter Six of the SettlementConventionappliesif a foreign Statehas seized
certain assets as German assets. It is the intention of the foreign State to
confiscate the assets as German which is decisive for the application of the
provision barringGermanjurisdiction.
21. Inits decision of 1960,the Federal CourtofJustice held:
"German courts are barred by the Convention ...fiom decidingon
the claims of the Plaintiff. It istrue that the Respondent does not
belong to the persons explicitly mentioned in Article 3, paragraph
3, of Chapter Six of the Settlement Convention. ...Nevertheless,
German courts have no jurisdiction. Even if the conditions of
Article 3,paragraph3, of Chapter Six of the Settlement Convention
are not fulfilled,German courts lackjurisdiction in a case in which
the Plaintiff is tryng to raise an objection against measures
'Cf. LM,p. 55,para. 3.4.
In this case, the so-calledAKUcase, the Federal Court of Justice held: "[Tlhe question as to
the admissibility of this actione., the confiscation] depends only on whether the holdings
which are the subject of theproceedings must be deemed to have been confiscatedby the
Netherlands Decree to theextent to which they are still claimed by the plaintiffs. Thisquestion
can be determinedonly bythe law of the confiscatingSt..."23 InternationalLawReports,p.
21, at 22-23, PreliminaryObjectionsof Gerrnany(hereafter:GPO), Annex2.
Federal Court of Justice, 32 Collectofdecisions (BGHZ), p. 170, cited in LM, pp. 64 ff;
para. 3.19, GPO, Annex3. mentioned in Article 3, paragraph 1, of Chapter Six of the
Settlement Convention.
Article 3 of Chapter Six of the Settlement Convention is not
inapplicable for the reason that the provision concems German
assets and the Plaintiff challengesthe seizure arguingthat the assets
were not German assets. For the application of this provision it is
sufficient that the assets were seized as German assets. Article 3,
paragraph 1,of Chapter Six of the Settlement Convention concems
those measures which were directed against German assets as
understood by the enemy-legislation of the State which seized the
assets; whether the assets seized accordingto this legislation were
in fact German or foreign assets is to be decided exclusivelyby the
Statewhich has seizedthe assets. ...If the foreign Plaintiff wants to
raise claims against the seizure, the only remedies available are
those which exist under the law of the State which has seized the
assets. The courts of the Federal Republic are not in a position to
render a judgment on the legality of the seizure or a judgrnent
intended to interfere with the decision of the foreign State
concerningthe legalityof the seizure."'
This case law was confirmed by the German court decisions in the case
concerning a painting which was brought fiom Bmo to Cologne and was
claimed by the Prince of Liechtenstein as his property (hereafter: Pieter van
Laer Painting case)2. The court procedures were brought by the Prince of
Liechtenstein against the City of Cologne when in 1991 the Wallraf-Richartz-
Museum, which is a museum of the City of Cologne, staged a largeexhibition of
1GPO, 32BGHZ,p. 172ff., translationby Counsel,GPO, Annex3.
LM,pp. 29-32,paras. 1.2- 1.29. Dutch painters of the 17th century. One of the exhibited paintings was the
"Szene um einen romischen Kalkofen" ("Scene set around a Roman luln"),
which, according to the plaintiff in that case, had been confiscated by
Czechoslovakia in or after 1945 in a castle belonging to his father, the then
reigning Prince of Liechtenstein.
On 10 October 1995 the Cologne Regional Court (Landgericht), following a
23.
hearing, declared the plaintiffs action inadmissible'. In the court'sview, Article
3 of Chapter Six of the Settlement Convention excluded German jurisdiction
regardingthe case. The Regional Court foundthat the confiscation constituteda
measure within the meaning of that provision. The Regional Court rejected in
particular the plaintiffs argument that this provision did not apply as it only
concemed measures carried out with regard to German extemal assets or other
property and his father had never been a German citizen. In this respect, the
Court, referring to the case law of the Federal Court of Justice, stated that the
view of the confiscating State was decisive. The aim and purpose of this
provision, namely to irnrnunize confiscation measures implemented abroad,
could only be achieved by excluding such measures from judicial review in
Germany.
24. On 9 July 1996the Cologne Court of Appeal(Oberlandesgericht) dismissed the
plaintiffs appea12.The Court of Appeal confirmedthat the plaintiffs actionwas
'Originaltextand translatin:LM,Annex28, vol.II,p. 256.
Originaltextand translation:M,Annex29, vol.II,p. 289. inadmissible as Germanjurisdiction in respect of his claim was excluded under
Article 3, paragraph 1, in conjunction with paragraph 3, of Chapter Six of the
Settlement Convention. These provisions excluded German jurisdiction in
respect of claims and actions against persons who, as a consequence of
reparation measures, had directly or indirectly acquired title to Germanproperty
confiscated abroad. The Court of Appeal further considered that Article 3,
paragraph 3, of Chapter Six of the Settlement Convention applied in the
plaintiffs case. In the Court's view, this provision was the procedural
consequence of the idea that the legal relations resultingiom the liquidation of
German property abroad by foreign powers for the purpose of reparation were
"final and unchallengeable". Following the above mentioned case law of the
Federal Court of Justice, the Court of Appeal considered that the notion of
"German external assets" had to be interpreted in the light of the law of the
expropriating State. The confiscation in dispute was found to be in cornpliance
with the legislationof the expropriatingState since the competent Czechoslovak
administrative authorities as well as the Bratislava Administrative Court had
found that PresidentialDecreeNo. 12of 21 June 1945 applied to the confiscated
ProPertY.
25. On 29 January 1998 the Federal Constitutional Court, through a Chamber of
three judges, refused to entertain the plaintiffs constitutional cornplaint as it
offered no prospect of successl. The Federal Constitutional Court considered
'Original text andtranslationin: LM, Annex32, vol. II, p. 353. that theinterpretationof the terms"measuresagainstGermanexternal assets"as
comprisinganymeasures which, inthe intention of the expropriatingState,were
directed against Germanassets, could not be objected to under constitutional
law. The bar on litigation did not constitute an agreementto the detrimentof
Liechtenstein, as only the FederalRepublic of Germany and its courtswere
underthis treatyobligation.
26. After the German courtshad finallydecidedthe Pieter vanLaer Paintingcase,
Liechtensteinasked for consultationswith the German Government.Given the
friendly relationsbetween the two countries,Germany declared itselfready to
hold such consultations.Consequently,two rounds of talks took place on 10
July 1998 in Bonn and on 14 June 1999 in Vaduz. These talks had a purely
consultativecharacter.Sincethe GermanGovernmenthad not been involvedin
the legal proceedings beforethe Germancourts in thePieter van Laer Painting
case, the German side clarified that it was not its role to comment on the
substanceof thesedecisions.At the sametime,the Germanside emphasizedthat
it did not share Liechtenstein's viewaccording to which the decisions of the
Germancourts concemingthepaintinghadbeen contraryto internationallaw.
27. In an Aide-mémoireof 9 December 1999,Liechtenstein for thevery first time
expressed the expectation that the Government of the Federal Republicof
Germany would commencenegotiationsin the matter of Liechtenstein citizens affected, with the objective of reaching just compensation1. In a letter of 20
January 2000, the German Foreign Minister declared "that the German
Govemment does not share the legal opinion" expressed in the Aide-mémoire.
He continued: "Even upon renewed examination of the legal and factual
position, they[i.e., the German Govemment] do not see a possibility to make
compensation payments to the Principality of Liechtenstein for losses of
property suffered as a result of post-war expropriations in former
~zechoslovakia"~.
28. On 28 July 1998, the Prince of Liechtenstein brought an application before the
European Commission of Human Rights alleging a violation of the European
Convention on Human Rights by the decisions of the German courts concerning
the painting. The Prince invoked Article 6, paragraph 1, of the Convention
which guarantees effective access to court, and Article 1 of Protocol No. 1,
which guarantees the right to property.The European Court of HumanRights, in
a judgment of 12 July 20013, unanimously rejected the application and found
that no violation of the European Convention on Human Rights had taken place.
As to the alleged violation of Article 6, paragraph 1, of the Convention, the
Courtfound that
"the exclusion of Germanjurisdiction under Chapter 6, Article 3 of
the Settlement Convention is a consequence of the particular status
1LM,Annex44, vol. II,p.48cf.LM, pp.83ff,aras.3.5ff.
LM, p.84;textoftheletterinLM,Annex45, vol. III,p.503.
PrinceHuns-Adam IIofLiechtensteinv. Germany,Judgment,12July 2001, GPO,Annex1. of Germanyunderpublic internationallaw afier the SecondWorld
War. It was only as a result of the 1954 Paris Agreements with
regard to the Federal Republic of Germany andthe Treaty on the
Final Settlement with respectto Germanyof 1990that the Federal
Republic securedthe end of the Occupation Regimeand obtained
the authority of a sovereign State over its intemal and extemal
affairs for a united Germany.In these unique circumstances,the
limitation on access to a German court, as a consequence of the
SettlementConvention,had alegitimateobjective"'.
The exclusionofjurisdiction of Germancourtswas, therefore,compatiblewith
Article 6, paragraph 1, of the European Convention on Human Rights, which
guaranteesinprincipleaccessto the courtsin casesofthis sort.
29. As to the alleged violation of Article 1 of Protocol No. 1 to the European
Convention,the Courtunderlined thata violation could only beinvokedby the
applicant insofar as the decisions of the German courts related to his
"possessions" withinthe meaning of that provision.In this context the Court
recalledthat:
"according to the established case-law of the Conventionorgans,
'possessions' can be 'existing possession' or assets, including
claims, in respect of which the applicantcan argue that he has at
least a 'legitimateexpectation'of obtaining effectivenjoyment of a
property right. By way of contrast, the hope ofrecognition of the
survival of an old propertyright whichit has longbeen impossible
to exerciseeffectivelycannot be consideredas a 'possessionw ' ithin
the meaning of Article 1 of Protocol No. 1, nor can a conditional
'PrinceHans-AdamIIofLiechtensteinv. Gemany, para.59,GPO,Annex 1. claim which lapses as a result of the non-fulfilment of the
condition'".
After clarifjmg that the Court was not competent ratione temporis to examine
the measures taken in 1945,it continued:
"Subsequent to this measure, the applicant's father and the
applicant himself had not been able to exercise any owner'srights
in respect of the painting which was kept bythe Brno Historical
Monuments Officein the CzechRepublic.
In these circumstances, the applicantas his father's heircannot, for
the purposes of Article 1 of Protocol No. 1, be deemed to have
retained title to property nor a claim to restitution against the
Federal Republic of Germany amounting to a 'legitimate
expectation'in the senseof the Court's case-law.
This being so, the German court decisions and the subsequent
return of the painting to the Czech Republic cannot be considered
as an interference with the applicant's 'possession' withinthe
meaning of Article 1of ProtocolNo. 1 "2.
30. On 30 May2001, Liechtensteinlodgedits Applicationinstitutingproceedingsin
the name of the Principality of Liechtenstein against the Federal Republic of
Germanybeforethe InternationalCourt ofJustice.
31. In its Application as well as in its Memorial of 28 March 2002, Liechtenstein
alleges time and again that Germany at some unspecified date "in the 1990s"
took the decision to change its position and to henceforthtreat certain property
'PrinceHuns-AdamII ofLiechtensteinv. Germany,para.83, GPO,Annex 1,.
Prince Huns-AdamIIofLiechtensteinv.Germany,paras.85-86,GPO,Annex 1. of Liechtenstein nationals as having been "seized for the purpose of reparation
or restitution, or as a result of the state of war", without ensuring any
compensation for the loss of that property. More specifically, in Part 1of the
Liechtenstein Memorial dealing with the alleged "Factual Background" of the
case, the whole of ChapterII is devoted to the allegation of "Germany'sChange
of Position". Thus, Liechtenstein bases its claim on an alleged "change of
position" of Germany which is inferred fiom the decisionsof the German courts
in the Pieter van Laer Paintingcase and some statements of officials of the
German ~ovemment' .
32. Germany wishes to state explicitly that the alleged "change of position of
Germany" never occurred and is neither based on nor supported by any
demonstrable facts. Only by means of gross distortion can continued German
adherence to legal obligations under the Settlement Convention be presented as
a "change of position" concerning Liechtensteinproperty confiscated by a third
party, namely Czechoslovakia. With regard to this purposeful invention,
Germany submits that the Liechtenstein Memorial cannot be considered as
containing "a statement of the relevant facts" pursuant to Article 49, paragraph
1,of the Rules of Court.
1
See LM, p. 8, para. 3: "Beginning in 1995, Gennany has classified al1the Liechtenstein
property as having been 'seizedfor theose of reparation or restitution, or as a result of the
state of war', within themeaningof Article 3 of Chapter Six of the [SettlementConvention].It
has done so by a combination of decisions of its courts and statements by Ministers and
officials."33. Consequently, Germany submits that Liechtenstein'sclaims, unsupported by any
coherent facts, should be rejected a limine by the Court for the reasons
explained in the followingPreliminaryObjections. CHAPTER 1
THECOURTHASNOJURISDICTIONTO ENTERTAIN
LIECHTENSTEIN'S CASE
34. Germanysubmitsthat Liechtensteinhas notbeen able to establish a legal basis
for the jurisdiction of the International Court of Justice in the case brought
against Germanyon 30 May2001. First,Germanywill explainthat there exists
no "dispute"betweenLiechtenstein and Germanyin the senseof the case law of
the Court. Second,Germanywill show that al1aspects of the allegeddisputeare
outsidethe temporal jurisdictionof the Court.Third, Germanywill demonstrate
that Liechtenstein'sclaimsa11exclusively within the domesticjurisdiction of
Germany.
Section 1.
There ExistsNoDisputebetweenLiechtenstein andGermany
35. The existence ofa "dispute" constitutesthe most fundamental prerequisiteof the
jurisdiction of the Court in inter-Statelitigation. The condition that a "dispute"
must have arisen for the Court to exercise its functions in contentious
proceedings has not only found expressionin various provisions of the Statute
of the International Courtof Justice, including Article 38, paragraph 1, and
Article 40, but has also been emphasized time and again in the Court's
jurisprudence. For instance, in its Judgrnents in theclear Tests cases the
Courtstatedthat "the existence of a dispute is the primary condition for the Court to
exercise itsjudicial function."'
Thus, basing itself on the pertinent provisions of the Statute and the very idea of
the judicial function, the Court leaves no doubt that the existence of a dispute
must be identified before the Court enters into questions of jurisdiction and
admissibilityproper, not to mentionthe stageof the merits of a given case.
36. In its first Preliminary Objection, Germany therefore submits that, due to the
absence of a dispute between Liechtensteinand Germany, the Court cannot, and
should not, exerciseitsjudicial functioninthe present case.
37. Inpresenting this objection, Germanywillproceed as follows:
First, Germany will briefly restate the crucial elements of the concept of
"dispute" as developed in thejurisprudence of the Court (Aa,r).
Second, in the light of the special circumstances of the present case, Germany
will request the Court to decline abiniioorender a decision in instances like
the present one, in whichthe applicantarbitrarilyorts the facts and the law in
order to make an alleged "dispute" fit within the Court'sjurisdiction. Germany
will argue that in order to establish the existence of a "dispute" within the
meaning of the Court'sStatute, it is not sufficient for an applicant to somehow
constnict opposing views between two States, but that an application and the
'Nuclear Tests(Australiav. France),I.C.J.Reports 1974, p. 271, para.55(Newlear Tests
Zealand v. FranceC.J..eports 1974,p.476,para.58. claims contained therein must constitute a true reflection of legal problems
which exist in reality accordingto indisputablefactsnfrB a).
Third, Germany will demonstrate that, if looked at objectively, the "claims"
brought before this Court against theRespondentby Liechtenstein have nothing
to do with the real difficulties facedby Liechtenstein with respect to the seinire
of property of some of its citizens in former Czechoslovakia in the aftermath of
the Second World War. None of the claims raised in Liechtenstein's Application
constitute a disputewithin the meaning ofthe Court'sStatute (infra).
Fourth, and finally, Germany will argue that, in any event, it is the wrong
Respondent in the present case, the only conceivable dispute being one between
Liechtensteinand the CzechRepublic (infrD a).
A. THE COURT'SJURISPRUDENCE ON THE CONCEPT OF "DISPUTE"
38. The classical definition of the tenn "dispute" was coined by the Permanent
Court of International Justice in924in the Mavrommatic sase. The Permanent
Court stated:
"Adispute is a disagreement on a point of law or fact, a conflict of
legalviewsor of interestsbetweentwo persans."'
'Mavrommatis Palestine Concessions,1924, P.C.I.J., Series A No. 2, p. 11. The authoritative
French text reads as follows: "Undifférend estun désaccordsurun point de droit ou de fait, une
contradiction,une oppositionde thèsesjuridiques otsntre deuxpersonnes."39. Subject only to minor adjustments', thisdefinition has been constantly applied
by both the Permanent Court and its successor, the International Court of
~ustice.~The present Court then clarified that for it to have jurisdiction, a real
dispute must exist between the parties. In the words of the Judgrnent on
Preliminary Objectionsin the South WestAfrica cases:
"[Ilt is not sufficient for one party to a contentious case to assert
that a dispute exists with the other party. A mere assertion is not
sufficient to prove the existenceof a dispute any more than a mere
denial of the existence of the dispute proves its non-existence. Nor
is it adequate to show that the interests of the two parties to such a
case are in conflict. It must be shown that the claim of oneparv is
positively opposedby the~ther."~
40. Finally, the Court has emphasized that it is not bound by the determination of
the dispute as made by the applicant in a given case. Only recently, in the
Fisheries Jurisdictioncase, the Court reaffirmedthat
"[ilt is for the Court itself, while giving particular attention to the
formulation of the dispute chosenby the Applicant, to determineon
1
Such as the replacementof the expression "persons" by the moreaccurateformulation
"parties",ast Timor(Portugalv.Australia), Judgment,I.C.J. Reports 1995,p. 99,para.22.
* Land and Maritime Boundary between Cameroon and Nigeria (Cameroon v. Nigeria),
Preliminary Objections, Judgment, I.C.J. Reports 1998, pp. 314 f., para. 87; Questions of
InterpretationandApplication ofthe 1971Montreal Convention arisingfrom theAerial Incident
ut Lockerbie (Libyan Arab Jamahiriyav. United States of America), Preliminary Objections,
Judgment, I.C.J. Reports 1998,p. 122,para.21;Questionsof Interpretation andApplication of
the 1971 Montreal Convention arisingfrom the Aerial Incident at Lockerbie (Libyan Arab
Jamahiriya v. UnitedKingdom), Preliminary Objections,Judgment,I.C.J. Reports 1998,p. 17,
para.22.
3
South WestAfrica, Preliminary Objections,Judgment,I.C.J. Reports 1962,p. 328 (emphasis
added).See also Nuclear Tests (Australia. France), Judgment, I.C.J. Reports 1974. p. 260,
para.24; Nuclear Tests(New Zealand v. France), Judgment, I.C.J. Reports 1974,p. 463, para.
24. an objectivebasis the dispute dividingthe parties, by examiningthe
position of both parties"'.
41. Thus, the concept of "dispute" as it stands today comprises three essential
elements: There must exist (a) a disagreement on a point of law or fact, a
conflict of legal views or of interests between the parties, which (b) manifests
itself in claims of the parties positively opposing each other; these claims in turn
(c) serving as the point of departure for the Court itself to determine on an
objectivebasis the existenceof a disputebetween the parties.
42. According to this settled jurisprudence of the Court, in order to establish the
existence of a dispute it must therefore also be shownthat the claim of one party
is positively opposedby the othe?. Germanywill demonstrate that the "dispute"
alleged by Liechtenstein vanishes into thin air if these criteria are applied (see
infra,C).
43. Before doing so, however, Germany invites the Court to take the opportunity
presented by the instant case to further develop and specify the concept of
1Fisheries Jurisdiction (Spaiv.Canada),Jurisdiction of the Court, Judgment, I.C.J. Reports
1998, p.432, p. 448, para. 30, referringalso to Nuclear Tests (New Zealand v. France),
Judgment, I.C.J.Reports 1974,p. 466, para.30;Requestfor an Examination of the Situation in
Accordance with Paragraph 63 of the Court's Judgmentof 20 December 1974 in the Nuclear
Tests(New Zealandv. France)Case, Order of 22 September 1995, I.C.J. Reports 1995,p. 304,
para.55. See alsoEast Timor,I.C.J.Reports 1995,pp.99-100,para.22.
South West Africa, Preliminary Objections, Judgment,I.C.J. Reports 1962, p. 328. See also
Application for Revision and Interpretation of the Judgment of 24 February 1982 inthe Case
conceming the ContinentalShelf (TunisiaLibyanArab Jamahiriya)(Tunisia v. Libyan Arab
Jamahiriya),Judgment,I.C.J.Reports 1985, p. 217,para.46;Interpretation ofJudgmentsNos. 7
and 8 (Factoly ut Chorzc5w, 927,P.C.I.J.,SeriesA, No. II, p. 11. "dispute" in perfect harmony with the Court's already establishedjurisprudence
on the "objective"characterof this concept.
B. THE COURT SHOULD DECLINE TO ADJUDICATEARTIFICIALLY
CONSTRUCTED CASES
44. The jurisprudence of the Court leaves no doubt that the question of whether or
not a dispute exists cannot depend upon the subjective assertions of the parties
but is a matter for objective determination by the Court. It has never been
questioned that the fundamental principle according to which the Court is the
master of its own jurisdictionl also applies to such determination of the
existence of a dispute as "the primary condition for the Court to exercise its
judicialfunctionW2.
45. As a rule, the Court will decide whether or not, and to what extent, it is called
upon to exercise its judicial function on the basis of a comparative analysis of
the positions of both parties. Germany submits, however, that in certain cases
the objective determination of a disputecannot be limited to this exercise. What
Germany has in mind here are cases in which an applicant, by the way in which
he presents the facts and ensuing claims, attempts to divert the Courtfiom its
proper function, namely to decide real disputes. Such attempts affectthejudicial
integrity of the Court.
1
See ingreaterdetailonthisfundamentailssueShihata,ThePower of the International Court
to determine itsownJurisdiction:Compétencedela Compétence.
Nuclear Tests(Australiav.France),I.C.J.Reports 1974, p. 271, para.55;Nuclear Tests(New
Zealandv.France),I.C.J.Reports 1974,p.476, para.58.46. For the Court, the maintenance of its judicial integrity has always been the
ultimate test whether or not it will allow a case to proceed to the stage of the
ments. As the Court statedin the NorthernCameroonscase:
"There are inherent limitations on the exercise of the judicial
function which the Court, as a court of justice, can never ignore.
There may thus be an incompatibility between the desires of an
applicant, or, indeed,of both partiesto a case, on the one hand, and
on the other hand the duty of the Court to maintain its judicial
character. The Court itself, and not the parties, must be the
guardian ofthe Court'sjudicial integrity. ...
The Ijudicial] function is circumscribed by inherent limitations
which are none the less imperativebecause they may be difficult to
catalogue, and may not fiequently present themselves as a
conclusive bar to adjudicationin a concrete case. Nevertheless, it is
always a matter for the determination of the Court whether its
judicial functions are involved."'
\
47. The principles thus enunciated are of general validity: It is for the Court itself,
and not forthe parties, to safeguardthe Court'sjudicial integrity,and it is always
for the Court to determine whether itsjudicial functionsare involved.
48. Germany submits that in this regard there exists an inextricable nexus between
the concept of dispute on the one hand and thejudicial function of the Court on
the other. If an applicant were allowed to arbitrarily squeeze any kind of facts,
interests and claims into the fiame of a "dispute", the required objective
examination of the positions of both parties by the Court would become
'NorthernCameroons,Preliminav Objections,I.C.J.Reports 1963,pp.29-30. meaningless: In the last instance it would alwaysbe the applicant which would
have the power to determinethe existence and scope of an alleged "dispute".
49. The Court's role as the master of its own jurisdiction would be rendered
impossible if the decisionupon this "primarycondition for the Court to exercise
its judicial function" were to pass into the hands of the applicant. The Court
should therefore not allowthe parties to "invent" a dispute when it is obvious to
any observer looking at the matter in a sober and reasonable way that no such
dispute exists in reality. Germanysubmits that in order for a given subject-
matter to be considered a "dispute" within the meaning of the Statute of the
Court, there must be a reasonable relationship between the facts alleged to
constitute the true essence of the case and the claims brought before the Court.
Germany will show that Liechtenstein'scase does not meet this requirement
(infra,C).
50. Unlimited discretion on the part of an applicant as to the fiaming of its "dispute"
would encourage States to (mis-)use the Court for purposes not embracedby its
judicial function. If the parties were allowed to present the Court with an
arbitrary selection of facts, interests and legal relationships artificially, if not
forcibly, extracted fiom a complex and inseparable whole, the controversies
involved could not be definitivelysettledby ajudicial decision. On the contrary,
they might evenbe aggravated. C. THERE ISNO DISPUTE BETWEEN THE PARTIES SINCE IN REALITY
No POSITIVELYOPPOSEDCLAIMS EXIST
51. An impartial evaluation of the facts which underlie the present Application
cannot but come to the conclusion that what is in reality at the heart of the
present case is the seizure of certain Liechtenstein property under the Bene5
Decrees of 1945 in former Czechoslovakia.The very essence of Liechtenstein's
claims therefore relates to certain legal consequences arisingthis taking of
Liechtensteinproperty by a third State. Viewed in an unprejudiced and objective
way, what Liechtenstein really seeks in the present proceedings is an
"indemnisation" for the loss of certain property of its citizens through
confiscations effected by Czechoslovakia in the irnrnediate aftermath of World
War II. Thus, once the Applicant's claims are stripped of the distortions by
which Liechtenstein aimsto hide a few very simple facts behinasmokescreen
of unfounded assertions, it will become evident to any objective observer that
the real dispute, if any, is one between the confiscating State on the one hand
and the State claimingthe unlawfulness ofhese measures on the other. Indeed,
Liechtenstein openly admits that it could not bnng this "true" disputebefore the
Court. Since it cannot bring the "true" respondent before the Court, what
Liechtenstein tries to do is to set up in a wholly artificial way a number of
allegedly opposing views between itself and Germany that are, if at all, only
very remotelyand arbitrarilyinkedwith the "true" dispute.
52. Thus, without the need to touch in any way on questions belonging to the merits
of the case, it becomes obvious that the facts which are at the core of the
Application and the claims actuallyraised by Liechtenstein do not correspondto one another at all. Since adjudicatingpurposefully invented disputes is contrary
to the Court's judicial function, the Court should not accept Liechtenstein's
claims as establishing a "dispute" with Germany within the meaning of the
Court'sStatute, and shouldrejectthe Applicant'scase on this ground.
To recall once again: In its long-standingjurisprudence, the International Court
53.
of Justice has maintained an "objective"definition of what constitutes a dispute.
This definition penetrates to the real issues between the parties rather than
merely basing itself on the formulation advanced by an applicant. If one pursues
such an objective analysis,the only real legal controversy between the parties to
the present case concerns the exclusion of jurisdiction of German courts over
Liechtenstein assets (that is, assets owned by Liechtenstein citizens) seized by
former Czechoslovakia in the aftermath of Word War II,pursuant to Article 3 of
Chapter Six of the SettlementConvention.Germany fails to see what else could
be in dispute between Germany and Liechtenstein regarding the treatrnent of
Liechtenstein assetsby athird State, namely (former) Czechoslovakia.
54. In its brief section on "The dispute between Liechtenstein and Germany", the
Liechtenstein Memorial alleges that a change in the German legal position
towards the seizure of Liechtenstein property by Czechoslovakia occurred by
virtue of the pronouncements of Germancourts in the Pieter vanLaer Painting
case'. This allegation is wholly unfounded. Liechtenstein does not properly
1
LM, p. 12,para. 13.The finaljudgment of the Gennan Federal Constitutional Court of 28 Jan.
1998 concerning the painting has been reproduced in LM, Annex 32, vol. II, p. 353, along with
earlierjudgments of Germancourtson the matter, ibid.,pp. 256 ff. separate the issue of the lawfulness of the Czechoslovak expropriations and that
of the jurisdiction of German courts on this matter. On the former question,
Liechtenstein itself cites(then) Chancellor Kohl's 1997 statement to the effect
that the (then forthcoming) German-Czech Joint ~eclaration' would "leave[]
open legal questions in connection with expropriations in the then
~zechoslovakia"~.And, indeed, Point IV of the said Declaration reads, in the
translation provided by Liechtenstein:
"Both sides agree that the wrongs committed shall be a matter of
the past, and will therefore orient their relations towards the future
... while each side remains committed to its legal order and
respects that the otherside has a different legal position."
55. From this statement it is clear that Germany has steadfastly maintained its
position towards the BeneSDecrees and other legal issues between Germanyand
the Czech Republic. No change of position of Germany regarding these matters
has ever occurred. Germany has never recognized the validity of the relevant
Czechoslovak measures against Liechtenstein property, neither before nor after
1995. Liechtenstein expressly states that it always agreed with this German
position4.Accordingly,there existsno legal dispute on this matter at all.
'Declaration onMutualRelations and TheirFutureDevelopment,21 January1997,LM, Annex
37, vol.III,p. 467.
LM,Annex40, vol.III,p.479.
LM,Annex37, vol.III,p.467.
4LM,p. 12,para.12, p.29,para.1.23.56. Again no change of the German positionhas occurred conceming the exclusion
of Germanjurisdiction on the basis of Article 3 of Chapter Six of the Settlement
Convention, from early German court decisions irnrnediately following the
adoption of the Settlement convention' up to the more recent pronouncements
now assailed by Liechtenstein. The exclusion of Germanjurisdiction, however,
is not, and hasnever been, tantamountto a recognition of, or a change regarding
the recognition of, the seizure of Liechtenstein properîy by Czechoslovakia.
Germany maintains that it is under no obligation to lift that bar to jurisdiction.
On the contrary, since Article 3 of Chapter Six of the Settlement Convention
remains in force, it would not be pemissible for Germanyto liftthe exclusion of
jurisdiction unilaterally. Rather, Germanyis obliged to keep it in force byvirtue
of an obligation arising fiom a multilateral treaty, that is, the relevant provision
of the Settlement Convention, as upheld by the Exchangeof Notes concerning
theRelations Conventionand theSettlementConventionof 28 September 19902
in the wake of the conclusion of the Treatyon the FinalSettlementwith respect
to ~erman~~.
'AKU Case, Federal Courtof Justice,Judgmentof 13Dec. 1956,23 ILR,p. 21, GPO,Annex2;
FederalCourt of Justice, Judgment ofIl Apr. 1960,32 BGHZ,pp. 172-73,GPO,Annex3.
* Exchange of Notes concerningthe Relations Conventionand the Settlement Convention,
United Kingdom, Federal Republic ofGermany, France, United States, Bonn, 28 September
1990,UnitedNations, TreatySeries,No. 28492, vol. 1656,p. 29, LM,Annex 19,vol.II, p. 187.
Treaty on the Final Settlementwith respect to Germany ("Two-plus-Four-Treaty"), Federal
Republic of Germany, Gennan Democratic Republic, France, Union of Soviet Socialist
Republics, United Kingdom, United States, Moscow, 12 September 1990, United Nations,
TreawSeries,No. 29226,vol. 1696,p. 115,LM, Annex 18,vol. II, p. 175.57. Thus, as far as the first submission of Liechtenstein is concemed, Germany
cannot detect any disputebetweenthe parties. Germany has never changed its
"conduct"towards Liechtensteinor Liechtenstein property, neitherin 1995 nor
at anyother date.Germanycontinuestorespectthe sovereigntyand neutralityof
Liechtenstein,and it continuesto recognize the legal rightof Liechtensteinand
its nationalswithrespectto theirproperty.
58. The only disagreement that really exists between the parties concems the
interpretation of the exclusionof jurisdiction of German courts over property
"seized for the.purposeof reparationor restitution,or as a result of the stateof
war" by a third country, namely Czechoslovakia. In this regard, however,
Germany is legally obliged to conform tothe relevant provision of a treaty
validly concluded with other States, namely France,the United Kingdom and
the United States of Arnerica. The European Court of Human Rights has
accepted the respective interpretationof the Settlement Conventionby German
courts. Liechtensteinfailsto showhow continued German respect for and strict
adherenceto legal obligations containedin the SettlementConventioncan lead
to any conceivable negative consequencesin international law. Thus, there
exists no disputebetween the parties regarding Liechtenstein'sclaims as to its
sovereignty and neutrality as well as to its legal rights andthe rights of its
citizenswithrespecttothe Liechtensteinpropertyin the former Czechoslovakia. D. THEDISPUTE REGARDING EXPROPRIATION OF LIECHTENSTEIN
ASSETS INFORMERCZECHOSLOVAKI S IN REALITY A DISPUTE
BETWEEN LIECHTENSTEIN AND THE CZECHREPUBLIC
59. Regardingthe second Submissionadvanced byLiechtenstein,thereal grievance
concems the seizure of Liechtenstein property by a third State, namely
Czechoslovakia.What injury Liechtensteincould possibly have suffered "asa
result ofthechangeinermanytslegalposition"'remainsamystery.
60. The issue of compensation advancedby Liechtensteincan only aise if and to
theextentthat Liechtenstein is able tothat unlawfil conducton the part of
Germany has resulted in injury to Liechtenstein. In this regard, even if al1
statementson the factsmade by Liechtensteinwere held to be correct, they still
would notjustiQ a claimto compensationby Germany.In reality,again,what is
at issuehere is not thisor that German actrelatedto Czechoslovak confiscations
but the lawfilness of the Czechoslovak measures as such, and resulting
obligations of compensation on the part of the successor States to former
Czechoslovakia. Between Liechtenstein and Germany there exists no dispute
concerningthe lawfulnessof the Czechoslovak seizures. Rather,the dispute is
onebetweenLiechtenstein andthe successor(s)of former Czechoslovakia.
ILM,p. 14para.16.61. RegardingLiechtenstein's firstSubmission,there exists nolegaldisputebetween
the parties because Liechtenstein is not assailing the exclusion of German
jurisdiction as such. Germany has always recognized and respected the
sovereigntyand neutralityof Liechtenstein,and continuesto do so. In the same
sense it has always recognizedthe legalrights of Liechtensteinand its nationals
withrespectto their property.
62. As to Liechtenstein's secondSubmission concerning the compensationissue,
there exists no legal disputebetweenthe parties either. Issues ofcompensation
are to be decidedbetween theState confiscating foreign property and the State
victim of suchmeasures.Thus,if anydisputeconcerning compensationexists,it
could only be a dispute between Liechtensteinand the successor State(s) of
Czechoslovakia,not between Liechtenstein and Germany.
63. As to the third and fourth Submissionsby Liechtenstein (1 (c), 2), they both
presupposea dispute onthe issues just dealt with. However,sincethesematters
are undisputed,in reality,there exists nolegaldispute on Liechtenstein'sfurther
claims. SectionII.
TheCourtLacks Jurisdictionrationetemporis
64. Germany will now explain the limitation ratione temporis as interpretedby the
Court and then show that al1aspects of the dispute as alleged by Liechtenstein
are outside the temporaljurisdiction ofthe Court.
A. THEALLEGED BASIS FOR JURISDICTION IS NOT APPLICABLE
RATIONE TEMPORIS
65. Liechtenstein relies on Article 1 of the European Conventionfor the Peaceful
Settlement of Disputes of 29 April 1957 (hereafter the "Convention") as the
basis for the jurisdiction of the International Court of Justice. This Convention
entered into force between Germanyand Liechtenstein on 18 February 1980,
Germany having ratifiedthe Conventionon 2 March 1961and Liechtensteinon
18 February 1980. The Convention appliesto legal disputes between member
States. The Convention is, however,not applicable to the dispute asdescribed
by Liechtenstein,assumingarguendothat a legal disputeexists.
66. Article 27 of the Conventionprovidesthatthe Conventionshall not apply to:
"(a) disputes relating to facts or situationsor to the entry into
force ofthis Conventionas betweenthepartiesto the dispute.
(b) ....If
This provision excludesthe present case fromthe application of the Convention
and therefore from thejurisdictionofthe Court. According to the case law of the Court (see infra, 1)disputesrelating to facts or
legal situations prior to the entry into force of this Convention as between the
parties are those disputes whose "real source" or "real cause" are facts prior to
the entry into force of the Convention between the parties. That is the situation
here.
67. Clauses restrictingthe jurisdiction of the Court ratione temporis are principally
concerned with two sorts of dates: the date on which a dispute arose and the
dates on which facts and legal situationsdeveloped to which the dispute relates.
Frequentlyboth alternatives are combined. Where only the second alternative is
relevant, as in the Conventionof 1957,it has to be analyzedwhich facts or legal
situations are the real cause of the dispute. Germany will show thatal1facts and
legal situations which are the real cause of the alleged dispute are outside the
jurisdiction ofthe Court.
1. The CaseLaw of thePermanentCourt ConcerningRestrictionsratione
temporis Showsthat thePresent CaseisExcluded
68. The International Court of Justice as well as the Permanent Court of
International Justice have dealt in several cases with the interpretation of rules
excluding from their jurisdiction facts and legal situations pior to the act by
which thejurisdiction of the courts was established. These cases did not concern
the interpretation of treaties like the Convention but the interpretation of
declarations under the Optional Clause. As the Permanent Court of International Justice explained in the Phosphates in Morocco case1, the intention of
limitations rationetemporislike the one included in the European Conventionis
clear. They are inserted
"with the object of depriving the acceptance of the compulsory
jurisdiction of any retroactive effects, in order both to avoid, in
general, a revival of olddisputes, and to preclude the possibility of
the submission to the Court by means of an application of
situations or factsdating from aperiod when the State whose action
was impugned was not in a position to foresee the legal
proceedingsto whichthese facts and situations might giveriseW2.
69. The Court then added that the use of the two terms "situations" and "facts"
placed in conjunctionwith one another, so that the limitation rationetemporisis
common to them both, makes it clear that the employment of one term or of the
other could not havethe effect of extendingthe compulsoryjurisdiction. Rather,
as the Court stated,
"the situations andthe facts which formthe subjectof the limitation
rationetemporishave to be considered from the point of view both
of their date in relation to the date of ratification and of their
connection with the birth of the dispute. Situations or facts
subsequent to the ratification could serve to found the Court's
compulsoryjurisdiction only if it was with regard to them that the
dispute aroseU3.
'PhosphatesinMorocco,Preliminary Objections, JudgmentP, .C.I.J.,SeriesA/BNo. p.,10.
PhosphatesinMorocco,PreliminaiyObjections, Judgment,P.C.I.J.,SeriesA/BNo. 74,p.24.
PhosphatesinMorocco,Preliminary Objections, JudgmentP, .C.I.J.,SeriesA/BNo. 74,p.24.70. The Court underlined that in interpreting a clause of that sort it is necessary
alwaysto bear in mind the will ofthe State which only accepted the compulsory
jurisdiction within specifiedlimits, and consequentlyonly intended to submit to
that jurisdiction disputes having actually arisen from situations or facts
subsequentto its acceptance.The Court addedthe important sentence:
"But it would be impossible to admit the existence of such a
relationship between a dispute and subsequent factors which either
presume the existence or are merely the confirmation or
development of earlier situations or facts constituting the real
causes ofthe disputew'.
71. In the specific case the Court foundthat it had nojurisdiction conceming French
legislative acts which were seen as the basis for the dispute by the Italian
Government. The situation which the Italian Govemment denounced as
unlawful was a legal position resulting fromthe French legislationof 1920,prior
to the entry into force of the French declaration. According to the Court this
legal position could not be considered separatelyfrom the legislation of which it
was the result and therefore it was outsidethejurisdiction of the court2.
72. As shown by the extensive treatment of facts and legal situationsfalling into the
period between 1945 and around 1955, but always prior to 1980, in the
1
Phosphates inMorocco, Preliminary Objections,Judgrnent,P.C.I.J.,SeriesAi74,p.24.
*Phosphates in Morocco, Preliminary Objections, Judgment,P.C.I.J., Series AiB No. 74, pp.
25-26. Memorial of ~iechtenstein', the present dispute has its real cause in these facts
and situations and is therefore outsidethejurisdiction of the Court.
2. A Comparisonwith the CaseLawof theInternational Court ofJusticeShows
that thePresent Case isExcludedfrom theJurisdiction of the Courtratione
temporis
73. In the Right of passage2 case, decided by the International Court of Justice in
1960, the Court had to interpret a declaration by India, which had accepted the
jurisdiction of the Court "overal1disputes arising after February 5", 1930,with
regard to situations or facts subsequent to the same date". In this instance the
Court found that it hadjurisdiction. The Court explained in detail why this was
the case.
74. After clarikng the nature of the dispute and the time when that dispute arose,
the Court went into the question of whether the dispute was one with regard to
facts and situations pior to the date of the Indian declaration. Here the Court
relied on the interpretation developed by the Permanent Court in the Electricity
Company of Sofia and ~ul~aria~case and stated that the facts or situations to
which regard must be had in this connection are "those which must be
considered as being the source of the dispute", those which are its "real cause".
It explained that the Permanent Court, in this connection, was unwilling to
'LM,pp.33 ff.,para.2.1 ff.
Right of Passage overIndian Territory,Merits,Judgment,I.C.J.Repo1960, p. 6.
Electricity Companyof Sofia and Bulgaria,Preliminary Objections,Judgment, P.C.I.J., Series
A/B,No. 77,p. 64. regard as such real cause an earlier arbitral award which was the source of the
rights claimed by one of the Parties, but which had given nse to no difficulty
prior to the facts constituting the subject of the dispute. The Court explained,
therefore, that the Permanent Court had drawn a distinction between the
situationsor facts which constitutethesource of therightsclaimed by one ofthe
Parties and the situations or facts which are the source of the dispute.Only the
latter are to be taken into account for the purpose of applying the declaration
acceptingthe jurisdiction ofthe court'.
75. The Court then applied these principles to the situation in the Rightof Passage
case. It explained that the dispute submitted to the Court was one with regardto
a situation and, at the same time, with regard to certain facts: It stated that a
controversy arose only in 1954 and the dispute arising then related both to the
existence of a right of passage to go into the enclaved tenitories and to India's
failure to comply with obligations which, according to Portugal, were binding
upon it in this connection.The Court underlined that a finding that theCourt had
jurisdiction would not involve giving anyretroactive effect to India'sacceptance
of jurisdiction. The Court would only have to pass upon the existence of the
right claimed by Portugal as at July 1954, upon the alleged failure of India to
comply with its obligationsat that time andupon anyredress in respectof such a
'Electricity CompanyofSofia andBulgaria,Preliminary Objections,Judgment,P.C.I.J.,Series
A/B,No. 7.,p.82. failure. The Court had not been asked forany finding whatsoever with regard to
the past prior to 5 February 1930'.
76. The Right of Passage case shows that the crucial question is whether earlier
factscan be seen as the source of the rights which later become the central issue
of the dispute, or whether the dispute really concerns those earlier facts or legal
situationsas such. In the RightofPassagecase access to the enclaved territories
had existed for a long time and it was only after the establishment of the
jurisdictional link that India blocked the passage. It was this action which gave
rise to the dispute as to whether there reallyexisted a right for Portugal to have
access over Indian territory.
77. The differenceexisting between the Right ofPassagecase and the present one is
strilung.In the present case it is quite impossible to make a meaningful
distinction between the source of the rights alleged by Liechtenstein and the
source of the alleged dispute. The entirecase revolvesaroundthe confiscationof
Liechtenstein property by Czechoslovakia in 1945 and thereafter and possible
legal consequences of these confiscations. No factual or legal situation existed
in 1980 on which Liechtenstein could rely. Germany has never changed its
position or practice since the entry into force of the Settlement Convention in
1955. Therefore, the dispute as allegedby Liechtenstein relates entirely to facts
and legal situations dating back before 1980. The Court clearly would have to
give retroactive effect to the acceptanceofjurisdiction if decidingthe case.
'Right ofPassage overIndian Tewitory,Merits,Judgment,I.C.J. Reports 1960,pp.35-36. This shows that the attempt by Liechtenstein to invent facts which could be
brought within the jurisdiction of the International Court of Justice after the
coming into force of the Convention in 1980 is completely artificial. Al1the
Submissions by Liechtensteinrelate to facts and legal situationsexisting before
1980, namely the confiscation by Czechoslovakia, the reparation regime
including the way it was dealt with in the Settlement Convention of 1955, and
the legal consequences of these measures as far as movable property is
concerned which comeswithinthejurisdiction of Germany.
79. The "real source of the dispute" in the present case is not to be seen in acts or
decisions taken after 1980 but in the legal situation created in 1945 in the
aftermath of World War II. Of course, it is correct that a specific dispute arose
between the Prince of Liechtenstein and the City of Cologne concerning the
Pieter van Laer painting'. However, itis quite incorrect to seethis dispute as the
real source of the present case.
80. A cornparison between the Rightof Passagecase and the ElectricityCompany
ofSofiacase on the one hand and the present one on the other makes that clear.
In the first two cases just cited the legal situation existing between the two
countries concerned, although based on facts and legal situations prior to the
establishment of jurisdiction, was recognized by both sides. That was true for
the facts relevant forthe right ofpassage2as it was true for the binding character
'Cf.LM,pp. 63 ff.,paras.3.17ff.
RightofPassage overIndianTerritory,Merits, Judgment,I.C.J.Reports 1960,p. 34. of the awards of the MixedArbitral Tribunal in the Electricity CompanyofSofia
case1.
81. In the present case no similar legal situation had ever been recognized between
the two parties to the allegeddispute. Neither had Liechtenstein ever argued that
Germany was under a legal obligation to pay compensationto Liechtensteinnor
had Liechtenstein ever arguedthat Germanywas bound by mles of international
law on how to deal with movable property confiscated in Czechoslovakia in
1945when brought into German territory.
82. Most recently, in the cases conceming the Legality of Use of orc ce t^e,
International Court of Justice also had to apply a temporal restriction to its
jurisdiction.These cases also prove that artificial constructions as to the time
factor relevant in these circumstances will not be accepted. In these cases the
Court decided that a dispute which had clearly arisen before the acceptance of
jurisdiction could not be brought within the jurisdiction by the repetition of
identical acts after the date relevant for the establishment of jurisdiction. The
Court held as follows:
"Whereasthe fact that the bombings have continued after 25 April
1999 and that the dispute concerning them has persisted since that
date is not such as to alter the date on which the dispute arose;
whereas each individual air attack could not have given rise to a
I
Electricity Companyof Sofia and Bulgaria,PreliminaryObjections,Judgment,P.C.I.J.,Series
A/B, No.77, p.82.
See, e.g., Legalityof Useof Force,Provisional Measures (Yugoslaviav.Belgium),Orderof 2
June 1999,I.C.J. Reports1999p.124. separate subsequent dispute; and whereas, at this stage of the
proceedings, Yugoslavia has not established that new disputes,
distinct from the initial one, have arisen between the Parties since
25 April 1999 in respect of subsequent situations or facts
attributableto [the~es~ondent."'
B. THE DISPUTE BETWEEN LIECHTENSTEIN AND GERMANY AS
ALLEGED BY LIECHTENSTEIN IS OUTSIDE THE TEMPORAL
JURISDICTION OF THE COURT
83. In its Application of 13May 2001 Liechtenstein argues that the dispute between
Liechtenstein and Gennany arose in 1998 on the basis of the decision of the
German Federal Constitutional Court of 28 January 1998*.In its Memorial
Liechtenstein argues that the dispute concems a decision by Germany to treat
certain property of Liechtenstein nationals as having been "seized for the
purpose of reparation or restitution or as a result of the state of war" by a
combination of decisions of its courts and statements by ministers andais
beginning in 19953.
1.NoNewFactsofRelevanceAroseafter 1980
84. Whatever may be taken as the date on which, in the view of Liechtenstein, a
dispute arose it is impossible to overlook that it relates to facts and legal
1
Legality of Use of Force, Provisional Measures (Yugoslavia v.Belgium), Order of 2 June
1999,Z.C.J.Reports 1999,pp. 134-135,para.29.
2LA,paras.17,21,22.
3
LM,p. 8,para.3. situations prior to the entry into force of the Convention which establishes the
jurisdiction, namelybefore 1980.
85. This becomes particularly clear when one analyzes the facts to which
Liechtenstein refers as occurring after 1995. These facts are German court
proceedings and related decisions concerning the Pieter van Laer painting'.
These German court decisions,however, had nothing to do with the present case
since they concerned the status under German private law of movable property
confiscatedby Czechoslovakiain 1945and thereafier.
86. Liechtenstein tries to argue that until 1995 or 1998 there had been a specific
German legal position which then changed with the proceedings concerningthat
movable proper$. However, Liechtenstein commits an important error when it
tries toconstmct a change of attitude by German authorities. No such change
has taken place, as is evidentf?omLiechtenstein'sallegations themselves.
87. As Liechtenstein correctly explains, German courts have always interpreted
Article 3 of Chapter Six of the Settlement Conventionas barring Germancourts
fiom looking into the lawfulness of any measures against property considered
German property by the confiscating State. Indeed, Liechtenstein correctly
refers to the decision of the Federal Court of Justice of 11 April 19603,
according to which it is the intention of the authority of the foreign country to
1LM, p. 12para.13.
LM, pp. 55ff.,paras.3.3 ff.
32 BGHZ,pp. 172ff., GPOAmex 3. confiscate property as German property which is decisive for the application of
this Article of the Settlement Convention. This case law has been applied
continually and consistently and has been confirmed by the Federal
Constitutional Court in the Pieter van Laer Painting case1.Therefore,the new
facts alleged by Liechtensteindo not exist.
2. The ConJiscationsby Czechoslovakiaare not withintheJurisdictionof the
Court rationetemporis
88. As is described in detail in the Memorial of Liechtenstein, the confiscationby a
sovereign third State, Czechoslovakia, in 1945-46, of certain property is the
origin of the case2. Leaving aside the problem of whether these acts could be
within thejurisdiction of the Court without the consent of the successorstate of
Czechoslovakia, the Czech Republic - a problem which will be dealt with
separatel$ -, the dispute could not be judicially solved without deciding upon
the lawfulness of these decisionstaken in 1945-46.
89. Indeed the Memorial of Liechtenstein continually refers to the unlawfulness of
the measures taken by Czechoslovakia at that time against Liechtenstein
property4. Since the alleged dispute could not be decided without judicially
1Cf.supra,paras.22 ff.
LM,pp 23 ff.
Cf.infrC ahapterII,SectionII,paras.151ff.
4
LM,pp.27 ff.,paras.1.17ff;pp.94 ff.,paras4.15 ff.etpassim. evaluating confiscations carried out in 1945-46 by Czechoslovakia, it relates to
factsprior to the entry into forceof the Conventionbetween the parties.
90. Liechtenstein tries to arguethat it is the change of the German position as to the
confiscation which can be seen as the real cause and the source of the alleged
dispute. However, this is contradictedby the Liechtenstein Memorial itself. The
Liechtenstein Memorial shows that Germany has never recognized the
confiscation measures as compatible with public international law'. German
cows have consistently held that they are barred by the Settlement Convention
£tominvestigatingthese issues2.This situation has not changed.
91. Apparently Liechtenstein implies that the German legal position as to the
lawfulness under public international law of these confiscations must have the
consequence that these measures are to be treated as a nullity in the German
legal order3. However, this view is completely mistaken. As is well known,
private international law rules in most, if not al1Statesdo not automaticallyrefer
to the lawfulness under public intemational law of confiscations as far as the
validity of title under private internationallaw is concemed. Germancourts have
held consistentlythat expropriations in violation of public internationallaw may
nevertheless be treated as conveyingtitle.
'LM,pp. 55ff.,paras.3.3 ff.
Cf.supra, paras.20 ff.
LM,pp. 119-120,paras.5.19-5.22.92. In its decision of 23 April 1991'concemingexpropriations in the former Soviet
zone of occupation and in the German Democratic Republic, the Federal
Constitutional Court explained the situation under German private international
law concerningexpropriations:
"According to German international expropriation law,
expropriations carried out by a foreign State, including
"confiscations"without compensation, are regarded in principle as
effective provided that the State in question has not exceeded the
limits of its power. According to this principle, an expropriation is
effective within the area of territorial sovereignty of a foreign State
and affects property which at the moment of the expropriation was
subject to the territorial sovereignty of the expropriating State
(territoriality principle). Acquiescenceto foreign expropriations is
restricted in this regard only by the exception for the benefit of
public policy (Article 30 of the Introductory Law to the German
Civil Code EGBGB(old version) taken in conjunctionwith Article
220(l)EGBGB (new version) and Article 6EGBGB (new version)).
This exception is only applicable, however, where and in so faras
there exists a sufficient domestic connection . . . The lack of
compensation for the expropriation or some other impropriety
according to domestic conceptions of justice is therefore not
sufficient of itself, in so far as the expropriation affects property
within the territory of the expropriating State to deprive it of its
effecti~eness."~
1
Federal Constitutionlourt,84 Collection of decisions (BVerfGE), p. 90, Englishtranslation
94 ILR, p. 44, GPOAnnex4.
94 ILR, p. 684 BVeflE, pp. 123-124,GPO, Annex 4, citationsornitted.93. According to the Liechtenstein Memorial, the alleged dispute concems
immovable property situated now in the Czech Republic and movable property
also situated in the Czech Republic.As far as immovable property is concemed,
it is clearly the position of German law that the legal status of such property is
govemed exclusivelyby Czechlaw.
94. As fax-as movable property is concerned,Liechtenstein seems to imply, without
expressly saying so, that there could be anobligation under public intemational
law on Germany to treat movable property confiscated in violation of public
intemational law by Czechoslovakia in 1945-46, and situated at that time in
Czechoslovakia, as property belonging to the former owner'. However, this
view is mistaken. There is no rule of public international law creating any
obligation for States to treat movableproperty confiscated in violation of public
international law as property of the former owner as soon as it enters the
jurisdiction of the forum State.It is well known that this issue has been decided
differently by courts in different countries and has been treated extensively in
the doctrine. There is broad agreement that no obligation exists under public
internationallaw to disregardthe transferof title in such cases2.
'Quite unclear in LM,p. 173,para. 6.73: "Liechtensteinhad, as a minimum,a legitimate claim".
The basis for that statement is not explained norit clear why the claim could be a claim of
"Liechtenstein"ratherthan of the "Priice of Liechtenstein".
Cf., inparticular, Oppenheim's International La,th ed., vol1,Peace (Sir Robert Jennings
and Sir Arthur Watts eds.,Harlow 1992),p. 363, at p. 376, where it is stated: "However, inview
of the practice oftatesas revealed by the actions of their courts, some of which have been
prepared to acknowledge legal effects of foreign acts in violation of international law, it
probably cannot be said that international lawforbids courts to give effect to such foreign act
when to do so is in accordance with their own national law." Cf. also Nguyen QuocDinhP.
DaillierIA.Pellet, DroitInternationalPublic (6th ed., 1999),pp. 1044ff.95. As regards property confiscatedin 1945-46 in connection with World War II,in
particular, it cannot be argued that this property must be considered as property
of the former owner when it comes into a State other than the State having
confiscated the property. This shows that the position taken by Liechtenstein
according to which the decisions by German courts conceming the Pieter van
Laer painting are proof of a change of the German attitude, is completely
erroneous. Even disregarding the Settlement Convention, Liechtenstein could
not rely on any rule of public international law obliging Germany to treat the
property concemed as Liechtensteinproperty.
3. TheReparationsRegimeis notwithintheJurisdictionoftheCourtratione
tempons
96. In 1945 Liechtenstein became aware of the Czechoslovak position that
Liechtenstein nationals were regarded as persons belonging to the "German
people"'. According to Liechtenstein, the inclusion of Liechtensteinproperty in
the confiscation of assets by Czechoslovakia in 1945 for the purpose of
reparations gave rise to a legal relationship between Liechtensteinand Germany
which continues until today. The case brought before the Court could not be
decided without judging upon the reparations regime established in 1945 and
thereafter. The alleged dispute, therefore, relates to facts and legal situations
prior to the entry into force ofthe Conventionbetweenthe partiesin 1980.
'LM, p.27, para.1.17. 4. TheLegal Situation ofPropertyConfiscatedin Czechoslovakiabefore1980is
Excludedrationetemporis
97. Even assuming that the German position as to the confiscation of Liechtenstein
property had in fact changed, which is not the case, the alleged dispute would
still relate to facts and legal situations before 1980. For in a judgrnent
conceming the alleged dispute the Court would have to judge upon the legal
effect which the Czechoslovak measures in 1945 had in and outside
Czechoslovakia. The Memorial of Liechtenstein states that Germany did not
recognizethe Czechoslovak confiscationmeasures but changed its position after
1990' or 1995*,or 1998~.To decide whether this alleged change had any legal
effect would require a finding on the legal situation created by the measures
taken in 1945 by Czechoslovalua. This also shows that the alleged dispute
relates to legal situationsrior to the entryinto force of the Convention between
theparties.
98. The Memorial of Liechtenstein argues that the alleged change of attitude of
Germanyin and after 1995 - as shownbefore, a purposeful invention - affected
the position of Liechtenstein property confiscated by Czechoslovakia in
Germany and in otherjurisdictions4. A finding on this issue would require that
the Court clari% what effect the confiscation had for or in other countries.
'LM,pp. 62 ff.,paras.3.15ff.
2LM,p. 8,para.3.
LA,para.21.
4LM,pp. 119ff.,para.5.19ff.;pp. 123 ff.,paras.5.26 ff. Indeed, the lengthy discussion in the Memorial of Liechtenstein of the Pieter
van Laer Painting case' showsthe problem arising here very clearly.A painting
confiscated in 1945 comes into Germany. Independently of the substantive
question of the existence of any rules of public international law applicable in
such a case2, a decision on the Submission of Liechtenstein would require a
clarification of the effects of confiscationmeasures by Czechoslovakia in 1945
on property being brought intoother countries. This could not be done without
establishing what were the legal consequences of the measures taken in 1945.
Therefore, these issues are outside the jurisdiction of the Court because they
relate to legal situations prior to the entry into force of the Convention as
between the parties in 1980.
5. German Courtshave ConsistentlyHeld that they CannotJudge upon the
Lawfulnessof CzechoslovakMeasuresof Confiscation
99. As Liechtenstein correctly states in its Memorial, the Settlement Convention
provides that no claim or action shall be admissible in German courts
conceming measures of confiscation which were taken for the purpose of
reparations3.It also correctlypoints out that the respective part of the Settlement
Convention was maintained after the entry into force of the Treaty on theFinal
Settlement with respect to ~errnan~~T . he Memorial furthermore mentions that
'LM,pp. 62-85,paras.3.15-3.59.
2Cf.supra, paras.91-95.
LM,pp.47 ff., paras.2.31ff.
LM,pp.49-52, paras.2.36-2.41. the Regional Court and the Court of Appealof Cologne, in the Pieter van Laer
Painting case, referredto the case law of the German Federal Court of Justice,
the highest court for civil matters, which had heldalready more than 40 years
ago that the provisions in the Settlement Convention apply to al1 property
''seizedas Germanassets"'.
100. German courts consistently interpreted the Settlement Convention concluded
with the three powers France, the United Kingdom and the United States as
protecting al1 acts taken by countries like Czechoslovakia in the context of
reparation measuresfiom any legal evaluation by German courts or authorities.
It isnot known that anyof the parties to this Conventiontook a differentview or
that Liechtenstein has approached any of those powers to argue its position.
However, what is decisive inthe present context is that this unchanged position
is based on a legal situation prevailing since the Settlement Convention came
into force on 5 May 1955,i.e., long before 1980,when Liechtensteinratifiedthe
European Conventionfor the PeacefulSettlement of Disputes, which could not
be the basis ofjurisdiction for disputesconceming prior legalsituations.
6. The CompleteInactivityofLiechtenstein between194.5and 199.5Excludesthe
Case rationetemporis
101. Assuming that the Court were competent to decide on the legal situation
prevailing between Liechtenstein andGermany as to the compensation issue
1LM,pp.64 ff.,paras.3.20ff., cf.supraparas.20 ff. brought before it, this would require an evaluation of the fact that Liechtenstein
never claimed compensation from Germany until afier 1998 for the assets
confiscated by Czechoslovakia. The Court would have to establish whether any
legal consequencesfollow fiom this inactivity.This shows that the dispute is not
within thejurisdiction of the Court because it relates to facts and legal situations
prior to the entryinto forceof the Convention as between the parties in 1980.
102. Germany has consistently taken the position that it is not for it to pay
compensation to Liechtenstein nationals for the measures taken by
Czechoslovak authorities in 1945. Indeed, this was clear to Liechtenstein since
the German legislation provided for compensation only to German nationals for
confiscations of German property in comparable situations1.Liechtenstein never
claimed compensation fiom Germany. To decide on the claim would require
judging a legal situation brought about by the Czechoslovak measures, the
Settlement Convention of 1955 and the German legislation, long before 1980.
Therefore, the Court has nojurisdiction forthis issue.
7. The ClaimsofLiechtensteinal1Relate toLegal FactsandSituationsbefore
1980
103. The alleged failure to respect Liechtenstein's neutrality and sovereign$ is
outside the jurisdiction of the Court because this allegation refers to
developments outside the jurisdiction of the Court that had run their full course
'LM,p. 65,para.3.21.
LM,pp. 86 ff.,para4.1ff. pnor to 1980'.A decision on these issues would require the Court to deal with
events from 1945 to 1955, prior to the entry into force of the European
Conventionfor the Peaceful Settlement of Disputes.
104. Liechtenstein'sclaim to compensationlikewiseconcernsthe interpretation of the
Settlement Convention, as rightly developed in its ~ernorial~. However, this
would require judging legal situations long prior to the entry into force of the
Convention concerningjurisdiction in 1980.
105. Liechtenstein'sclaim on the basis of unjust enrichment3likewiserelates to facts
between 1945 and 1955. ClariMng a possible claim of unjust enrichment as the
legal consequence of Czechoslovakconfiscationswhich Germanyhad no power
to hinder would require the analysis of the whole legal system of reparations
concerning Germany after World War II. It is submitted that this would amount
to judging a situation prier to the entry into force in 1980 of the Convention
concerning jurisdiction. Therefore, this claim is outside the jurisdiction of the
Court as well.
'LM,pp. 87 ff.paras.4.1 ff.;pp. 102ff.,paras.4.32 ff.
LM,pp. 109 ff.,paras.5.1 ff.
LM,pp. 140ff.,paras.6.1 ff. SectionIII.
Liechtenstein'sClaimsFa11within theDomesticJurisdictionof the Federal
Republicof Germany
106. Germany submits that the alleged dispute as described by Liechtenstein is a
dispute which by international law is solely within the domesticjurisdiction of
Germany.
107. According to Article 27 (b) of the European Convention for the Peaceful
Settlement ofDisputes the Conventionshall not applyto
"disputes conceming questions which by intemational law are
solelywithin the domesticjurisdiction of States".
108. As Liechtenstein argues, the decisions of German courts conceming the Pieter
van Laer painting are at the basis of the case now brought before the Court.
Liechtenstein also refers to "substantial arable land and forests, numerous
buildings and their contents, factories etc." without substantiating the different
items. The facts which are later described as basis for the decision to bring the
case before the International Court of Justice are limited to the German court
decisions conceming the Pieter van Laer painting and their interpretation by
German authorities.
109. Liechtenstein does not dispute that the painting, when in Cologne, was fully
under German territorialjurisdiction. Liechtenstein does not even allegethat any
rule of public international law exists which the German courts should have
applied. Liechtenstein seems to assume that there is an obligation for the forum
State to disregard title to property based on confiscation in violation of public international law. However, Liechtenstein neither develops the legal basis for
such a rule nor explains it in any detail. That means that Liechtenstein
recognizes that the decision was a decision solely within the domestic
jurisdiction of Germany, namely to apply the relevant rules of German private
international law, if the Settlement Convention had not barred the German
courts from deciding the case on its merits. Moreover it is evident, as Germany
has shown earlier', that arule of public international law which German courts
should have applied inthe case does not exist.
110. Of course, Germany recognizesthat rules of public international law had to be
respected in these decisions. The European Convention on Human Rights
applies to German court procedures. The European Court of Human Rights held
that the German court proceedingswere fully compatible with that convention2.
However, that has nothingto dowith the issueto be dealt with here.
111. Since Liechtenstein never explains its view why German courts, on the basis of
public international law, should have decided the case brought by the Prince of
Liechtenstein in his favour, Liechtenstein rather confirms that the alleged
dispute, as far as this matter is concerned, is solely within the domestic
jurisdiction of Germany.
I
Cf.supra, paras. 91-95.
Cf.supra, paras.28 f.112. Therefore, the European Conventionfor the Peaceful Settlement of Disputes
does not apply to the case, as its Article 27 (b) stipulates. This means that the
Intemational Courtof Justice has nojurisdiction.
113. As far as the non-substantiated itemsof immovable property situated within the
territory of the Czech Republic are concemed, their treatment under German
private intemational law, assuming that German courts could havejurisdiction,
is amatter solely within the domesticjurisdiction of Germanyexcept insofar as
the temtorial jurisdiction of the Czech Republic has of course to be fully
respectedby Germandecisions.
114. This shows that, as far asthe relationshipbetween Liechtensteinand Germanyis
concemed, the alleged dispute is outside the jurisdiction of the International
Court of Justice according to Article 27 (b) of the Convention. A dispute falls
within the domesticjurisdiction of a State when no rules of public international
law are applicable to it. This is the situation here since Liechtensteinitself does
not suggest any rule of public international law to be applied by the German
courts. CHAPTERII
LIECHTENSTEIN'S CLAIMSAREINADMISSIBLE
Section 1.
Liechtenstein's Claims are notSufficiently Substantiated
115. According to Article 40, paragraph 1, secondclause, of the Statute of the Court,
a written application by which proceedings are instituted before the Court shall
indicate "the subject of the dispute and the parties". This requirement is
particularized in Article 38, paragraph 2 of the Rules of Court. Pwsuant to this
provision,
"the application shall speci@ as far as possible the legal grounds
upon which thejurisdiction of the Court is said to be based; it shall
also speciQ the precise nature of the claim, together with a succinct
statementof the factsand grounds onwhich the claim is based."
If this requirement is not fulfilled, the action brought by the Applicant is
inadmissible.
116. In the case conceming Certain Phosphate Landsin aur ru he Court had an
opportunity to emphasize the importance of substantiation. It held that Article
40, paragraph 1, of the Statute of the Court and Article 38, paragraph 2, of the
1
Certain Phosphate Lands in Nauru (Nauruv. Australia), Preliminary Objections, I.C.J.
Reports 1992,p.240.Rules of Court are essential elements of a fair proceeding "from the point of
view of legal security and the good administration of justice"'. Indeed, if a
claimant State confines itself to making vague statements, the respondent State
is not in a position effectivelyto organize its defence. Germany finds itself in
such a dire situation. Liechtenstein has submitted its Application and has
expanded the reasoning contained therein in its Memorial. To date, however,
Germany is not aware of the precise substance of the violations it has allegedly
committed. Liechtenstein has made extensive submissions on abstract legal
principles, but has remained remarkably silent on the basic factsunderlying the
case. Germany is therefore compelled to conclude that Liechtenstein has not
fulfilled its duty to substantiate its claim. Such substantiation is a requirement
determiningthe admissibility of an actionintroduced before the Court.
In one previous case, the Court had already to deal with a challenge by the
respondent party to the claims brought by the applicant. In the case concerning
the Land andMaritimeBoundarybetween CameroonandNigeria,Nigeria had
raised the objection that the facts submittedby Cameroon provided no basis for
ajudicial determination that Nigeriabore international responsibility for alleged
frontier incursions. In its Judgrnent rejecting Nigeria's preliminary objections,
the Court noted that "succinct", the key word in Article 38, paragraph 2, of the
Rules of Court, was not tantamount to "complete", which meant that the
applicant was not preventedfrom later additions to the statementof the facts and
1
Certain Phosphate Lands in Nauru (Nauru v. Australia), Preliminary ObjectionI.C.J.
Reports 1992,p.267, para.69. grounds on which a claim is based.' The Court also recalled that it has become
an established practice for States submitting an application to the Court to
reserve the right to present additional facts and legalde ratio Gn^r.any
does not contest the necessity of some flexibility in this regard. But there exist
some minimum requirements. In the case conceming the Land and Maritime
Boundary between Cameroonand Nigeria, the Court came to the conclusion
that Cameroon's application containeda sufficiently precise statement of the
facts and grounds on which the applicant had brought its claim3. This is
certainlytme. The present case, however, is absolutely unique in the history of
adjudication in that the Applicantefrains fi-omproviding almost al1 of the
relevant factual data. Neither can Germany as the Respondent guess what is
really at stake, nor will the Court be able to grasp the essence of the case, in
particular its factual dimensions. Consequently, by virtue of Article 79,
paragraph 1,of the Rules of Court, the actionmust be declaredinadmissible.
B. THELACK OF SUBSTANTIATION AS A CONSEQUENCE OF THE
CHOICE OF THE WRONGDEFENDANT
118. The lack of specific claritycharacterizingLiechtenstein'sSubmissionsis not just
an accidental feature that could easily be remedied. It reflects the simple fact
'Land and Maritime Boundary between Cameroon and Nigeria, Preliminary Objections,
Judgment,.C.J.Reports 1998,p. 275, at318,para.98.
Land and Maritime Boundary between Cameroon and Nigeria, Preliminary Objections,
Judgment,.C.J.Reports 1p. 18,para.99.
Land and Maritime Boundary between Cameroon and Nigeria, Preliminary Objections,
Judgment,.C.J. Reports 1998,p. 319,para.100. that the tme respondent in the present dispute would have to be the Czech
Republic as one of the successor States of the former Czechoslovakia. This
elementary inference must be drawn on a first reading of Liechtenstein's
Application. Rightly, Liechtensteinstarts its account of the factual background
by pointing out that the dispute has its origin in measures taken by the
Czechoslovak State in 1945 after the Second World ~ar'. For reasons which
remain unexplained in Liechtenstein'sSubmissions, Czechoslovakia "treatedthe
nationals of Liechtenstein as German nationalsU2.It is well known that on that
occasion, by virtue of the BeneSDecrees, Czechoslovakia deprived al1persons
of German or Hungarian origin or ethnicity of their assets, without ever
providing any kind of reparation. Liechtensteincitizens were also subjected to
that discnminatory regime of confiscation. Germany takes note of the
conclusions presentedby Liechtensteininthe followingterms:
"The applicationof the BeneSdecrees to the Liechtensteinproperty
remained an unresolved issue between Liechtenstein and
Czecholosvakia until the dissolution of the latter, and it continues
to be an unresolved issue as between Liechtenstein and the Czech
~e~ublic"~.
119. It is obvious, therefore, that the pecuniary losses suffered by Liechtenstein are
attributable not to Germany, but to a deliberate policy of the former
Czechoslovak State. The damage caused to Liechtenstein lies more than half a
'LA, para5.
LA, para5.
LA, para5.centuryback inthe past. The European Court of Human Rights, therefore, when
it had to adjudicate the application of Prince Hans-Adam II against Germany,
came to the conclusion that long before the proceedings concerning the Pieter
van Laerpainting,Liechtensteinhad lost its title to property. It held:
"83. The Court recalls that, accordingto the established case-law
of the Convention organs, 'possessions' can be 'existing
possessions' or assets, including claims, in respect of which the
applicant can argue that he has at least a 'legitimate expectation'of
obtaining effective enjoyment of a property right. By way of
contrast, the hope of recognition of the survival of an old property
right which it has long been impossible to exercise effectively
cannot be considered as a 'possession'within the meaning of
Article 1 of Protocol No. 1, nor can a conditional claim which
lapses as a result of the non-hlfilment of the condition (see the
recapitulation of the relevant principles in the above-mentioned
Malhous decision, with further references, in particular to the
Commission'scase-law).
84. In the present case, the applicant brought proceedings
before the Germancourts claimingownershipof the painting which
had once belonged to his father. He challenged the validity of the
expropriation canied out by authorities of former Czechoslovalua,
his main argument being that the measure had allegedly been
effected contrary to the terms of the BeneSDecree No. 12 and to
the rules of public international law.
85. As regards this preliminary issue, the Court observes that
the expropriation had been carried out by authorities of former
Czechoslovakia in 1946, as confirmed by the Bratislava
Administrative Court in 1951,that is before 3 September 1953,the
entry into force of the Convention, and before 18 May 1954, the
entry into force of Protocol No. 1. Accordingly, the Court is not
competent ratione temporis to examine the circumstances of the expropriation or the continuing effects producedby it up to the
present date (see Malhous v. the Czech Republic (dec.), cited
above, and the Commission's case-law,for example, Mayer and
Othersv. Germany,applicationsno.1889019 1, 1904819 1, 19342192
and 19549192,Commission decision of 4 March 1996, Decisions
and Reports 85,pp.5-20).
The Court would add that in these circumstances there is no
question of a continuing violationof the Convention which could
be imputableto the FederalRepublicof Germany and which could
have effectsasto the temporallimitationsof the competenceof the
Court (see, a contrario, the Loizidouv. Turkeyjudgment (merits),
quotedabove,p. 2230, 5 41)."'
It is remarkable that this judgment, which was handed down long before
Liechtensteinhadto submit its Memorial, ismentionedonlyin onesingleline of
the Applicant'ssubmissions2.Liechtensteinhas also refiained fromprovidingit
to the Court as an annex. It stands to reason that the assessrnent of the
Strasbourgjudges destroys theargumentthat the injurythat was inflictedupon
Liechtenstein couldin any manner whatsoeverbe attributedto Germany.Quite
obviously, having failedto enforceits reparation claim against Czechoslovakia
and its two successor States, Liechtensteinhas now started a last attempt to
recoverat leastsomeof its lossesfiom athirdpartywhichis somehowrelatedto
the implementationof a large-scaleconfiscationpolicyby Czechoslovakia tothe
detrimentof a smallStatewith limited meansof enforcingitsrights.
1
PrinceHans-Adam IIof LiechtensteinGermany,Judgrnentof12July2001, GPO,Annex 1.
LM, pp. 13-14,para15. C. No SUBSTANTIATIO NF GERMANY'S ALLEGEDINTERFERENCE
WITH LIECHTENSTEIN PROPERTY
121. The central issueof the dispute is constituted by the allegation thatGermany
breached its duty under international law to respect Liechtenstein's financial
interests.Butneitherfkoma look at theApplication nor from acarefùlperusal of
the Memorial does it emergein what way,by which measure, Germany might
have interfered with the Liechtenstein property which until the end of the
Second World War was located in the territory of the Czecholovak State.
Liechtenstein rnakes the most desperate efforts to demonstrate that indeed
Germany may be blamed forthe adrnittedlydeplorable financial losses of its
citizens. But it is not able to substantiate that Germany took measurs hich
mightbe characterizedasinterferencewithLiechtensteinassets.
122. In the NuclearTestscases',the Court pointedout that the application "mustbe
the point ofreference for the considerati...of the nature and existenceof the
dispute brought before However,Liechtenstein's Applicationprovidesonly
a meagrerecord whichdoes not enablea readerto grasp what is reallyin issue.
It starts out by saying3that "in and afier 1998"the case law of German courts
started treating "certain propertyof Liechtenstein nationals as German assets
having been 'seized forthe purposesof reparationor restitution,or as a resultof
' Nuclear Tests (Australiav. France), Judgrnent,I.C.J.Reports 1974, p. 253; Nuclear Tests
(New ZealandvFrance),JudgmentI.C.JReport1974, p457.
Nuclear Tests (Australiav. France),p. 260, para.24;Nuc(New Zealandv.France),
Judgrnent,I.C.J.Reports 1974,p.463, para.24.
LA,para.1.the state of war"'.This is a rather enigmatic formula, whichdoes not become
much clearerby the additional explanationin para. 19 of the Applicationwhere
it is stated that "Germanynow adheres to the position thatthe Liechtenstein
assets as a wholewere'seized for thepurposeof reparationor restitution,or as a
result ofthe stateof war"'.
It has alreadybeen pointed out inthe accountof the relevant factsin PartII of
the present PreliminaryObjections thatthe thrustof thejurisprudence referredto
by Liechtenstein isvery simple:In the Pieter vanLaer Paintingcase, no more
was determinedby the OberlandesgerichtKoln (Cologne Courtof Appeal)and
the Federal Constitutional Courtthan that the German judiciary was placed
under a prohibition to entertainthe merits of the casewith which theyhad been
seized.Theyderivedthis prohibitionfromArticle3, paragraph3, of Chapter Six
of the Settlement Convention, the raisond'êtreof which has already been
explained. In other words, theGerman courts in the Pieter vanLaer Painting
case did not look into the substanceof the matter. Theymade no determination
on ownership,they did not rule on the permissibilityunder international lawof
the confiscatory measures canied out by Czechoslovakia in 1945 and 1946.
Indeed,the Cologne Courtof Appeal statedexplicitlythat it "refrains fromany
evaluation of the confiscation effectedat that time"'. Likewise, the Federal
Constitutional Court, which had to pronounce on a constitutional complaint
'LM, Annex 29, vol. II, p. 289, at 306. The translationprovided by Liechtensteinis mistaken as
far as it refers to theor of the judgment. Erroneously, the translator speaks of the "Federal
Court's Division", whereas the reference is to the Chamber of the Cologne Court of Appeal
whichrendered thejudgment on9 July 1996. lodgedby Prince Hans-Adam IIof Liechtensteinin the same case, stressedthat
the civil courtsin dealingwith thematterhad not ruledon the lawfulnessof the
confiscation carried out byechoslovakia'.Therefore, in its decision of 28
January 1998 it confined itself to reviewing the lawfulness of the denial of
judicial remedies imposed on Germany by the conventional obligation
enunciated in the Settlement Convention, concluding that no violation of
German constitutionallaw couldbe found. No word wassaid by the German
courts on the substantive issue of ownership. Therefore, in good faith no
conclusionscan be drawn from the jurisprudence with regard to Germany's
position regarding the confiscatory measuresied out to the detriment of
Liechtensteinproperty onthebasisofthe BeneSDecrees.
124. The approachtakenby the Germancourtsto the claim broughtby PrinceHans-
Adam II von Liechtensteinwas explicitly approved by theEuropean Court of
Human Rights. As pointed out, it denied the existence of any kind of
interferenceby Germanywith the Prince's property,given the factthathis claim
had longsinceceasedto constituteaneffectivelegal position.
D. DISTORTION OF THE GERMAN CASELAWCONCERNING THE
SETTLEMEN CONVENTION
125. Liechtensteinseeks to distort the plain meaning of the proceedingswhich its
ruling Princehad initiatedin Germanyto recoverthe PietervanLaerpaintingby
1
SeLM, Annex32,vol.I,.353at355. al1means at its disposal. The first one of these misleading statementscan be
found on page 13 of the ~emorial', where Liechtenstein points out that the
Federal Constitutional Courtheld that by virtue of the SettlementConvention
the German courts had "to treat the painting as the propertyof the Historic
MonumentsOffice"in the Czech city of Brno. Anyonereading the decisionof
the Federal Constitutional Courtof 28 January 1998will easilyfind out that the
reasons of that decision do not even mention Czechoslovakia or the relevant
Czech institution, theHistoricMonumentsOffice in Brno, whichtoday claims
to be the legitimateowner ofthe painting.Explicitly, theFederalConstitutional
Court statesin a disclaimer thatthe issueof expropriation is notbefore it2.
126. On page 14 of its Memorial,Liechtensteingoes one step furtherby saying that
Germany "claimsthat it is entitledto treatthe Liechtensteinpropertyas property
'seized for thepurpose of reparationor restitution, oras a result of the state of
warftt3.Progressively, the Memorial changes the plain meaning of the
propositionsderived in the case law from the Settlement Convention,tryng to
suggest that there was indeed some kind of interference. At page 88 of the
~emorial", it is contended that Germanydeclared "Liechtensteinproperty tobe
Germanproperty" - somethingwhich theauthorsof the Memorial areof course
not able to sustain by a properdocumentary source. The lineof distortion is
'LM,para.13.
*SectionII 1ofthe Judgment, M,Annex27, vol.II,p. 250.
LM,p. 14,para.16,emphasis added.
4
LM,para.4.1. driven to a first extreme at page 89l where, without any hesitation, it is
submitted that Germany pretended to be entitled "to use neutral property (such
as Liechtenstein property) to meet its duty of reparations". Indeed, this
unfounded allegation comes to its culmination at page go2,where Liechtenstein
contends that Germany includedLiechtenstein property in its reparations regime
and that it treated Liechtensteinnationalsasnationalsof a belligerent State.
These baseless assertions are continued in the following. They constitute the
leitmotif of Liechtenstein's line of argument. Again, at page 110 of the
~emorial~, the reader is confronted with the incorrect statement that Germany
declared the property of Liechtenstein nationals "to be German property which
could be used for reparation purposes". The Mernorial even goes so far as to
contend that the position takenby the German courts "entailed a final loss of the
title to property being subject to reparation measures", and the concluding
phrase "so far as Germanyis concemed" does not make things much better. By
al1means at its disposa1Liechtenstein seeks to hide the basic fact that in 1945-
46, by a sovereign act of the Czechoslovak State, its citizens were deprived of
their assets and that this stateof affairshas continued ever since.
128. It is even more amazing to note that Liechtenstein extends the consequences
which it draws from the PietervanLaer Paintingcase to al1the property held at
'LM,para.4.4.
* LM,para.4.6.
LM,para.5.1. the endof the SecondWorldWar by Liechtensteincitizensin thetenitory ofthe
former Czechoslovakia. Again, this is a pure invention of the authors of the
Applicationand the Memorial. However,the Memorial defendsthis positionas
fiom its very outset.At page 8', it is stated that Germany hasclassified"al1the
Liechtenstein property" as having been seized for purposes of reparation or
restitution,andthe sameisrepeated,forinstance, atpage 1002.
129. This bold assertionis not supported byany piece of evidence.It istrue that if a
dispute concerningthelandformerly ownedby Liechtensteincitizens evercame
before a German court that court would have to declinejurisdiction to rule on
the merits of the case. Butnot a singledispute of that kindhas effectivelybeen
brought to Germany for adjudication,and it is difficult to see how German
courts could be competentfor ruling on ownership of real estate in a foreign
country.It isjust by chancethat the Pietervon Laer paintingwas encounteredin
Germany in 1991, where it was shown within the framework of an art
exhibition. Germanyhas no actual relationship withal1the other assets which
aretodaylocatedin theCzechRepublicor in Slovakia.
130. In sum, Germanyconcludesthat Liechtensteinhas tmly inventedaninterference
whichin facthasneveroccurred.Sucha productof fantasycannotbe deemedto
meet the requirements of substantiation as they are enshrined in Article 40,
paragraph1,of the StatuteandArticle38,paragraph2, ofthe Rulesof Court.
'LM,para.3.
LM,para.4.24.131. Essentially, Liechtenstein's claim must beclassified as exercise of diplomatic
protectionin favourof itsnationals allegedlyinjuredby Germany. Liechtenstein
seeks to obtain financialreparationfor the losses sufferedby the victims of the
confiscatorymeasurescamed out by the formerCzechoslovakiaandmaintained
by the Czech Republic.Therefore, it should be crystal clearwho the personsare
who sustained injuryat the hands ofthe CzechoslovakState.As far as Germany
is concerned,Liechtensteinwould atleasthave to indicatethe persons included
in the adverselyaffected group. In this regard,the Applicationevinces a total
lackof precision.Even theMemorial doesnotbring aboutthenecessaryclarity.
1.No Indicationof the Victims
132. The Applicationrefers tothe identityof thevictims in the mostcavalierfashion.
It limits itself totatingl that "thepropertyof the then Prince of Liechtenstein
and of his family as well as of other Liechtensteinationals"was seized.Hardly
could this pointbe dealtwith more negligently.On the basisof the Application,
one knows no more than that the Prince and his family lost some of their
property, al1that was located in thetenitory of the former Czechoslovakia.
Obviously, sucha blanket statement is notenoughas substantiationof the claim
raised. On the basis of the Application alone, Germanywould not have had
enough elements for itsdefence.In instancesof diplomatic protection, itis the
1LA,para.5. individualperson who counts.Claims cannotbe brought on an aggregate basis,
without anyidentificationof thealleged individualvictims.
133. Nor does the Liechtenstein Memorial make any great effort to enlighten
Germany on who allegedlywas hurt by the confiscatory measures taken by
Czechoslovakiaat theendof WorldWar II. The first indicationcanbe found at
page 8'. Liechtensteincontendsthat "about 38"of its nationalswere adversely
affected as ownersof property,"includingthe then Prince of Liechtensteinand
members of his family".At page27, first of al1a fairlyvague reference ismade
to "a number of Liechtensteinfamilies" which "had lived in Bohemia and
Moravia for severalcenturiesv2T. hereaderis denied precise informationevenin
the next paragraphin which Liechtenstein explainsthat in 1945it drewup "a list
of families affected by the confiscation measuresof the then Czechoslovak
govemment". This list3, Germany mustassume, is a list of persons of whom
most, if not all, aredeadby now. There is certainly no need to emphasizethat
1995 is at a distance in time of 50 years fiom 1945. Thus, the Applicant has
failedto speciQ forwhomLiechtensteinwishesto exercisea rightof diplomatic
protection.
134. A number of conclusionsmaybe drawnfromthe list providedby Liechtenstein,
al1of which confirmthattheactionis inadmissible.
ILM, para.2.
*LM,para.1.18.
LM, Annex8, vol.1p. 32. First of all, the listmakesclearonceagainthat the onlyactual interference with
the Liechtenstein property, whichundoubtedly took place, was effected by
Czechoslovakiain 1945. Annex 8 of the Memorial is intended to identifi the
victims of loss of property, and indeed the list may accurately reflect the
situation as it existed in 1945fter the Czechoslovak Govemmenthad decided
to equate Liechtenstein nationals with German nationals. Quite obviously,
Liechtensteinis of the view that the damage was caused in 1945. Thesimple
fact that it did notink of revising thelist of 1945makes abundantlyclear that
essentiallyitdoesnot reallybelievethatin 1995Germany'sso-called"changeof
position"causedanynew injury.Therefore, rightly,it did not botherto findout
who might have been affected in 1995. For Liechtenstein itself, 1995 is an
absolutelyirrelevantdate.In any event,to date Germanyhasno clueswho,apart
fiom the rulingPrincehimself,in 1995believed to have property claimsagainst
the Czech Republic which, allegedly, were brought to extinction by the
jurisprudence ofthe Germancourts.
136. Germany has noted, furthermore,that the 1945 list contains names which are
well known to the Court. Itcontainsthe name of "Nottebohrn"twice. Harriet
Nottebohm and Hermann Nottebohmare said to be among the victims of the
confiscation measures carried out by the Czechoslovak authorities in 1945.It
would have been necessaryfor Liechtenstein to substantiatein detail that it is
entitled to rely on the nationality of those two persons, for the purpose of
diplomatic protection, given the factthat almost half a century ago theCourt formally denied it the right to do so with respect to another member of this very
familY1.
137. In sum, Liechtenstein has failed to demonstrate that the right to diplornatic
protection which it invokes does in fact exist. Not only has it failed to provide
the evidence which would be necessary for that purpose, it has furthermore not
even hished the tiniest shred of evidence that, apart from the family of the
Prince himself, there are Liechtenstein individuals who have suffered injury at
the hands of German authoritiesin 1995.
2.NoIndicationoftheAssetsAllegedlyAffected
138. The same kind of negligence can be observed conceming the assets which
allegedly were damagedby Germany's"changeof position". In order to bring its
claim in line with the obligations laid down in Article 40, paragraph 1, of the
Statute and Article 38, paragraph 2, of the Rules of Court, the Applicant would
have had to give an account ofthe property which, in the view of Liechtenstein,
can be deemed to form the subject-matterof the present dispute. However, again
the most complete lack of precision obtains. Liechtenstein confines itself to a
limited number of vague assertions conceming the assets which were held by its
citizens in the territory of the former Czechoslovakia in 1945.
139. The Application provides an account of the assets concemed in a way which
remains unspecific, even nebulous. Paragraph 5 speaks of "substantial arable
1
SeeNottebohm,SecondPhase,Judgment,I.C.J.Reports 1955,p. 4. land and forests, numerous castles and their contents, factories etc.". No more
details can be gleaned from this first piece of the pleadings. In the following,
Liechtensteinjust focuses on the Pieter van Laer painting1.Although it stresses
in paragraph 20 that the dispute "exists generally with respect to the
Liechtenstein property" and "is not limited to the van-Laer painting", not a
single word is lost on the specification of, for instance, the "castles" allegedly
owned by the 38 persons. No hint as to the location of these castles can be
found. No names are given. The phrase reproduced at the beginning of the
present paragraph remains the only hint that real estate of scale may be in issue.
But: no clear inferences can be drawn, the Respondent can do no more than
guess.
140. One might have expected that Liechtensteinwould use the opportunity provided
by Article 45 of the Rules of Court to complement its pleadings by a memorial,
to explain its argument in more detail. Even a cursory glance at the Memorial
shows, however, that Liechtenstein has not remedied the flaws of the
Application. The Memorial is of the same superficiality concemingthe financial
damage which Liechtenstein alleges to have suffered. Again, no details are
given. By perusing the Memorial, the reader learns nothing about the extent of
the injury which Liechtenstein suffered directly by the Czechoslovak measures
and claims to have suffered "par ricochet" through Germany's "change of
position".
'LM,pp. 14 ff., paras. 17ff.141. At page 8 of the ~emorial', Liechtenstein simply repeats the formula that the
property in question included "substantial arable land and forests, numerous
buildings and their contents, factories etc.". The only remarkable modification
of the earlier statement of facts is that the castles have disappeared and have
been replaced by "buildings". At page 272, another blanket statement is made.
Liechtenstein contends that the victims of the confiscation measures by
Czechoslovakia owned "extensive agricultural and forestry property, houses,
livestock and equipment used in agriculture,persona1fumiture and fittings and
other valuables, as well as interests in agricultural and industrial business". At
page 283the castles make a fresh entry.Liechtenstein submits that the family of
the Prince of Liechtenstein owned not only "large forests and agricultural
lands", but also "several castles which were home to an important art
collection". Even the most eager studyof the Memorial is unable to unearth any
further details. Only indirectly is it possible to lem something more about the
losses of the then Reigning Prince of Liechtenstein, Franz Josef II.The
judgrnent of the Administrative Court in Bratislavaof 21November 1951gives
a short list of agricultural property confiscated in a number of districts of the
Czechoslovak territ~r~.~Even this list of names of districts is fundamentally
lacking in precision. And it remains that as far as the other persons on the "list
of 38"are concerned,the balance sheet of informationcan be describedas zero.
'LM,para.2.
LM,para.1.18.
LM,para.1.20.
4LM, Annex9, vol. 1,p. 34.142. It stands to reason that an action whichclaimsreparation for financials,but
which totally refrains from substantiatingthese losses cannot prosper. It is true
that Germany raises Preliminary Objections in the present Memorial with the
aim of having the Court abstain from going intothedetails of the merits of the
case. If Germany had not done so, however, it would not have been able to
respond to the allegatians made in an adequate fashion. In instances of
diplomatic protection, the person who has allegedly suffered injury and the
assets which have allegedlybeen affected play the central role. Neither one of
these two elements, however, has been dulyidentified by the Applicant. As far
as the merits of the case are concerned, Germany is simplyunable to provide
any comments that would clariQ the matter. The allegations put forward by
Liechtensteinare so vague and lack precisionto such a great extent that the duty
of substantiation must be deemed not to have been fùlfilled. The Application is
therefore inadmissible.
F. NO VIOLATION OF LIECHTENSTEIN'N SEUTRALITY AND
SOVEREIGNTY SUBSTANTIATED
143. In order to give its claim a better basis than it actually has, Liechtenstein
contends additionally that it was not only damaged in an indirect fashion by
Germany in the person of its (unidentified)nationals, but that it also suffered
direct damage through the conduct of Germanauthorities, primarily its courts. It
claims that Germany violated its sovereignty as an independent third State as
well as its status of neutralitying the Second World War. Both allegations
are again pure figrnents of imagination, for which Liechtenstein has not been
able to produce any kind of substantiation. Al1that the reader can find in the Application and the Memorial are blanket allegations, unsupported by any
coherent statement of facts. As such, these allegations lack the necessary
specificity, too. They do not meet the standards laid down in Article 40,
paragraph 1,of the Statuteand of Article38,paragraph 2, of the Rules of Court.
1.Liechtenstein's Neutrality
144. In the Application, no trace can be found of the argument that Germany
breached Liechtenstein's neutrality.This argumentcornes up for the first time in
the Memorial. In the opening paragraphof Chapter 4', Liechtenstein assertsthat
"by declaring Liechtenstein propertyto be German property, Germany failed to
respect Liechtenstein's acknowledged status as a neutral State duringWorld War
II, as well as infiinging [sic!]its sovereignty". On the following pages, one can
find many abstract explanations on the law of ne~trality.~ Germany
acknowledges that this exposition as such accurately reflects positive
international law. However, Liechtensteinhas nothing of relevance to Sayabout
"Germany's violation of the law of neutralityU3.It rightly points out that a
reparations regime cannotbe extendedto the assets of a neutral country, neither
by the victorious powers nor by the defeated nation. But instead of concluding
that, hence, Czechoslovakia breached its obligations under international law,
Liechtenstein submits that there was a breach by Germany of Liechtenstein's
neutrality.
1LM, p. 88, para.4.1.
LM, pp. 91-97,paras.4.9-4.28.
LM, pp. 98-101,paras.4.19-4.28.145. In attempting to discover the factual basis of that bold thesis, the reader is again
referred to the decision of the Federal Constitutional Court of 28 January 1998',
which is interpreted as a denial of the "Liechtenstein nationality of these
[unidentified] persons" and as an attempt to regard them "as German nationals
for thepurposes of the reparationsregimeH2I .n other words, Liechtenstein is not
able to identify a single act which might be able to be taken as actual
interference with Liechtenstein property.As shown, the decision of the Federal
ConstitutionalCourt explicitlyrefiained fiom making a ruling on the lawfùlness
of the confiscation strategypursued by Czechoslovakiato the detriment not only
of persons of German or Hungarian ethnicity,but also of Liechtenstein citizens.
It confined itself to stating that German constitutional law did not stand in the
way of the prohibition, laiddown in Article 3, paragraph 3,of Chapter Sixofthe
Settlement Convention,to entertain claims seeking to challengemeasures taken
after World War IIfor the purpose of reparation or restitution.No more than this
purely procedural point was determined by the Federal Constitutional Court,
which thus confirmed the stancetaken earlierby the ordinary courts in Cologne
which Prince Hans Adam II of Liechtenstein had seized. Neither the German
courts nor the German executive branch have ever taken the position that
Liechtenstein property was German property. In other words, the allegation as
presented by Liechtenstein constitutes a most serious distortion of the facts. To
sum up, there is no shred of evidence susceptible of sustaining the contention
1LM,Annex32, vol. II,p. 353.
2LM, pp. 100ff., par4.28. that Germany included Liechtensteinproperty in a reparations regime which in
1995 simply did not exist. The violation of Liechtenstein's neutrality remains
therefore a lawyers'construct, a thesis which has no foundation. An allegation
which lacks any inherent logic and thus constitutes a mere product of
imagination is not only ill-founded,it must be dismissed as being inadmissible.
146. Given this totally erroneous premise, it is clear from the very outset that the
legal inference drawn therefrom must also be wrong. But Liechtenstein's
argument is also wrong on legal grounds. Neutrality governs relations between
States in times of armed conflict. According to the words of a renowned
authority in the field, the late Swiss lawyer Rudolf Bindschedler, who himself
put into practice neutrality as legal advisor of his country , the term "neutrality"
"designates the legal status of a State which does not participate in a war being
waged by other tat tes" I.is clear from the submissions of Liechtenstein itself
that during World War II Germany never acted contrary to its obligation to
respect the status of neutrality which Liechtensteinhad chosen. Accordingto the
submissions of the Applicant,the dispute came into being in 1995,that is to Say
50 years after the end of World War II. The parties are in agreement - and it is
fairly obvious - that in 1995 no situation of armed conflict existed in the
relations between any one of the States involved - Liechtenstein as the
Applicant, Germany as the Respondent, the Czech Republic as one of the
successor States of Czechoslovakia, the State which in 1945 deprived
' R. Bindschedler, Weutrality, Concept and General Rules', in: III Encyclopedia of Public
International Law(R. Bernhardt ed., Amsterdamet 1997),p. 549. Liechtenstein citizens of their property, and the Three Western Powers, which
through the Settlement Convention imposed on Germany the obligation not to
accept as admissible claims seeking to challenge any measures of reparation or
restitution. Disputes arising between States who peacefully coexist with one
another have nothing to do with the special rules on neutrality. These rules are
needed to cope with the suspension as between the wamng parties of many of
the common rules which govem relationships between States in times of peace.
Almost inevitably, in an indirect fashion, third States are also affected by an
armed conflict between two or more other States. For that reason, it was
necessary to bring into being a special body of rules, the law of neutrality. For
events and occurrences in times of peace, however, the rules on neutrality
provide no answers. Any issues can be resolved by the common rules of
international law.Inthat regard, it is clear, above all, that no Statehas a right to
violate the rights of third States under any pretext whatsoever. Germany
unreservediy agrees with Liechtenstein that war and measures taken after an
armed conflict to settlethe financial consequencesresulting therefiom should in
no way affect the rights of States that have remained neutral. This is a rule
inherent in the principle of sovereign equality.But the fact is that Germany has
not engaged in any conduct which might reasonably be interpreted as violating
the rights of Liechtenstein.
2.Liechtenstein'sSovereign~
147. The preceding considerations have already answered the allegation that
Germany violated the sovereignty of Liechtenstein. Once again Germany fully
agrees with Liechtenstein conceming the point of departure. Al1 States are entitled to see their sovereigntyrespected, nomatter how large or small they are.
For a small State like Liechtenstein sovereignequality is even more important
than for a big State which may rely on its factual strength to defend its rights
and interests. And yet, the application of this legal premise to the facts in the
instant case lacks again any reasonablefoundation.Liechtenstein cornesback to
its interpretation of the decision of the Federal Constitutional Court of 28
January 1998' as constituting the act from which originated the damage
complainedof.
148. The very core of Liechtenstein's complaint is as simple as it is hard to
understand. Without hesitation, Liechtensteinsubmits that through its "change
of position" Germany treated Liechtensteinnationals "like its own nationalsn2.
Liechtenstein even goes as far as stating that "this equal treatrnent amounts to a
de facto involuntary conferment of nationality without any reasonable
relationship of the Liechtensteinnationals to ~ermany"~.In fact, this allegation
is not just a slip of the tongue. Liechtenstein insists that the effects of the
position taken by Germany in and after 1995 "are comparable, pro tanto, to
those of a forced imposition ofnationalityn4.
149. Germany not only rejects this allegation in the most resolute manner, but
submits that again Liechtenstein has come to its conclusions by deliberately
ILM, Annex 32,vol.IIp. 353.
LM, p. 103,para.4.34.
LM,p. 104,para.4.35.
LM,p. 106,para.4.40. distorting the meaning of the jurisprudence of the German courts seized with
adjudicating the claim brought by Prince Hans-Adam II in the Pieter van Laer
Painting case. By no stretch of the imagination can it be derived fiom the
decisions ofthese courts that Germany,by a sovereign act, forcibly imposed its
nationality on a given number of Liechtenstein citizens. It is particularly
interesting to note in this connection that Liechtenstein has not been able to
indicate who the "victims" of that hidden naturalization policy could be. As
already shown, there exists the most absolute mystery conceming the persons
who might have been affected by an indirect conferment of German nationality.
In any event, Germany is not aware of any act of almost annexionist
connotation, and it has not been able to detect the bases supporting such a harsh
indictment in Liechtenstein's Mernorial.
150. Al1 in all, Liechtenstein acted with the utmost carelessness in formulating its
allegations, not refiaining even fiom purposehl distortions of the facts which
constitute the basis of the present case. Not a single one of the relevant
allegations brought is supported by specific substantiation. Again and again,
Liechtenstein invokes the decisions rendered by the German judiciary in the
Pieter van Laer Paintingcase by attributing to them a meaning which they do
not have and have never had. On the other hand, it withholds fiom the Court
important information, namely the judgrnent of the European Court of Human
Rights which found thatGermany'sconduct inthe Pieter van Laer Paintingcase
was unobjectionablefiom the viewpoint ofthe European Convention on Human
Rights. Consequently, Germany holds that the Application brought by Liechtensteinshould notbe examinedby the Court as to its merits,but mustbe
dismissed a limine A.n actionthe legalfoundationsof whicheventhe Applicant
himself isunableto substantiateshouldnot unnecessarilyobstmct the agendaof
the Court.
Section II.
Liechtenstein'sClaims RequiretheCourt toPass Judgmenton theRights
and ObligationsoftheCzech Republicin Its Absence and withoutIts
Consent
151. Germany'sfifth preliminary objection concems the absence of the successor
States of Czechoslovakia,in particular the Czech Republic from the present
proceedings. As Gerrnany has maintained above', there exists no dispute
between the parties conceming the issues broughtby Liechtensteinbefore this
Court. Butevenif the Court reached theconclusion thatinregardto theseissues
there was a dispute between Liechtensteinand Germany,the Court couldnot
exercisejurisdiction dueto the so-calledindispensablethirdpartyrule.
152. According to the principle of consent which constitutes the very foundation of
thejurisdictionofthe Court,the Courtcannotsit injudgment over thebehaviour
of a State which has not given such consent. In the present case, the Court
cannot make a legaldeterminationofthe behaviour of Germanywithout,at the
same time, judging thebehaviour of the Czech Republic, first, concemingthe
1See supra, Chapt1,Section1,paras. 35ff. existence vel nonof any claims for reparationsbetween Germany and the Czech
Republic, and second, as to the lawfulness of the conduct of its predecessor
State, Czechoslovakia, regarding the seizure of property belonging to
Liechtenstein and its nationals. The Czech Republic thus being an indispensable
third party to this case, the Court needs the consent of the Czech Republic to
proceed with it. But the Czech Republic has neither made a declaration
according to the Optional Clause accepting the compulsoryjurisdiction of the
Court, nor is it a party to theuropean Conventionfor thePeaceful Settlement
of Disputes of 29 Apnl 1957, nor has it given its consent to the present
proceedings on an ad hoc basis. Thus, in the absence of the Czech Republic, the
Court lacksjurisdiction.
153. In the following, Germanywill showthat
(1) the principle of consensualjurisdiction requires the sovereign consent of an
indispensable third party, that is, a party whose conduct is the very subject-
matter of a casebeforethe Court,
(2) the Czech Republicis an indispensablethird party in the present case, both
(a) regarding the lawfulness vel non of the seizures of Liechtenstein
propertyin the formerCzechoslovakia,and
(b) regardingthe existence of an enrichment of any kind of Germany, as
claimed byLiechtenstein.
Thus, Germanyconcludes
(3) that the Czech Republic is an indispensable third party in the present
proceedings, in whose absencethe Court lacksjurisdiction over the case, (4) that this matter is exclusively preliminary in character and should therefore
be decided in the phase of the proceedings dealing with Germany'sPreliminary
Objections.
Therefore, Germany asks the Court to decline to decide on the merits of the
present case.
A. THECOURT CANNOTEXERCISEJURISDICTIONOVER AN
INDISPENSABLE THIRDPARTY WITHOUT THAT PARTY'SCONSENT
154. In the statutory regime of the jurisdiction of the Court, the most fundamental
principleis that of consent. To recallicle 36 of the Statute:
"Thejurisdiction of the Court comprises al1cases which the parties
refer to it and al1matters specially provided for in the Charter of
the UnitedNations or in treaties and conventions in force."
155. Both in regard to cases referred to the Court by special agreement of the parties
and in those arising under a convention or treaty, States have established the
jurisdiction of the Court on a strictly consensual basis.The system of the
Optional Clause embodied in Article 36, paragraph 2, of the Statute confirms
this principle. Thus, in the case of the MonetaryGoldRemovedFromRome in
1943, it was emphasized that "the Court can only exercise jurisdiction over a
Statewith its consent."' This basisof the rule of the "indispensablethird party"
1Monetaly GoldRemovedfrom Rome in1943,Judgment,I.C.J.Reports 1p.32. should be kept in mind when dealing with the question of jurisdiction of the
Court in the present instance.
156. As is well known, the Court applied the principle of the indispensable third
party first in the Monetary Goldcasejust referred to. It was brought before the
Court by an Application of Italy againstFrance, the United Kingdom and the
United States. Italy requested the Court to decide certain legal questions
concerning a quantity of monetarygold removed from Rome by the Germansin
1943, recovered in Germanybut which belonged to Albania. Both Italy and the
United Kingdom claimed to be entitledto the gold ascompensationfor breaches
of international law on the part of Albania. The Government of Albania,
however, had not consented to the jurisdiction of the Court in the matter. In
order to decide which Statewas entitledto claim the gold, the Court neededfirst
to determine whether Italyhad a claimto compensation vis-à-vis Albania.Inthe
absence of Albania'sconsent, however, the Court declined to do so. Due to the
pertinence of this case, the reasoningof the Court in Monetary Golddeserves to
be cited at length:
"In order ...to determine whether Italy is entitled to receive the
gold, it is necessary to determine whether Albania has cornmitted
any international wrong against Italy, and whether she is under an
obligation to pay compensationto her; and, if so, to determine also
the amount of compensation.In order to decide such questions, it is
necessary to determine whether the Albanian law of January 13th,
1945, was contrary to international law. In the determination of
these questions - questions which relate to the lawful or unlawful
character of certain actions of Albania vis-à-vis Italy - only two
States, Italy and Albania, are directly interested. To go into the merits of suchquestionswould be to decide a dispute between Italy
and Albania.
The Court cannot decide such a dispute without the consent of
Albania. But it is not contended by any Party that Albania has
givenher consent inthis case either expresslyor by implication. To
adjudicate upon the international responsibility of Albania without
her consent would run counter to a well-established principle of
international law embodied in the Court's Statute, namely, that the
Court can only exercisejurisdiction over a Statewith its consent."
And fùrther:
"In the present case, Albania's legalinterests would not only be
affected by a decision, but would form the very subject-matter of
the decision. In such a case, the Statute cannot be regarded, by
implication, as authorizing proceedings to be continued in the
absence of ~lbania."'
157. The similarity of the position of the three States involved in MonetaryGold to
that of Liechtenstein, Germany andthe CzechRepublic in the present instance is
stnking, indeed this position almost completelycoincides. One would onlyhave
to change some words in the passages from MonetaryGoldjust quoted to render
this apparent. Thus, if, for the sake of illustration, we apply the reasoning in
MonetaryGoldto the present case, it would go as follows:
158. In order to determine whether Liechtenstein isentitled to receive reparation for
the damage it has suffered, it is necessaryto determinewhether Czechoslovakia
1Monetary GoldRemovedfrom Romein 1943,Judgment,I.C.J.Reports 1954,p. 32. has committed any international wrong against Liechtenstein. In order to decide
such questions, it is necessaryto determine whether the so-calledBene5Decrees
were contrary to international law. In the determination of these questions -
questions which relate to the lawful or unlawful character of certain actions of
Czechoslovakia vis-à-vis Liechtenstein - only two States, Liechtenstein and
Czechoslovakia, are directly interested. To go into the merits of such questions
would be to decide a dispute between Liechtenstein and Czechoslovakia.The
Court cannot decide such a disputewithoutthe consent of the successorStateto
Czechoslovakia, the Czech Republic. But it is not contended by any Partythat
the Czech Republic has given its consent in this case either expressly or by
implication. To adjudicate upon the international responsibility of the Czech
Republic without its consent would run counter to a well-established principle of
international law embodied in the Court's Statute, namely, that the Court cm
only exercise jurisdiction over a State with its consent. In the present case, the
Czech Republic's legal interests wouldnot only be affected by a decision, but
would form the very subject-matter of the decision. In such a case, the Statute
cannot be regarded, by implication, as authorizing proceedings to be continued
in the absence of the Czech Republic.
159. So far Germany'sdemonstration of what could almost be called an identity of
the position of the States involved inMonetaryGoldand in the present case, and
thus ofthe indispensabilityof the CzechRepublic forthe present proceedings.160. In its jurisprudence, the Court has frequently referred to the Monetary Gold
precedent ever since. Of the range of cases', only two require furtheranalysis as
to their incidence on the present litigation:the first one as an examplewhere the
Court has refused to apply the mle: the case concerning Certain Phosphate
Lands in aur ru *n,d the second one as the prime example of the continuing
validity of therule: the case concemingEast ~irnor~.
161. In the Naurucase, the Court was faced with a situation related to, but - on one
decisive point - differing from the MonetaryGoldprecedent. The respondent in
this case, Australia, had argued that both the United Kingdom andNew Zealand
were indispensable third parties because they had been part ofthe Adrninistering
Authority over Nauru as well and thus were in the same position as Australia.
The Court used the opportunityboth to confirm the Monetary Goldrationale and
to limit its scope to cases in which the interests of the third State were the very
subject-matter of the dispute between the parties before it. First, the Court
confirmed the consensual nature of its jurisdiction and thus the rationale of
MonetaryGold:
1
See, e.g., Continental Shelf (Libyan Arab Jamahiriya/Malta), Application by Italy for
Permission to Intervene, Judgment,Z.C.J.Reports 1984, p. 25, -para. 40; Military and
Paramilitary Activities in and against Nicaragua (Nicaragua v. United States of America),
JurisdictionandAdmissibility,Judgment,Z.C.J.Reports 1984, p. 430, para.88;Land, Islandand
Maritime Frontier Dispute(ElSalvador/Honduras).Application to Intervene, Judgment,I.C.J.
Reports 1990,pp. 116,122,paras.56,73.
2
Certain PhosphateLands inNauru (Nauru v.Australia), Preliminary Objections,Judgment,
Z.C.J.Reports 1992,p. 240.
3East Timor(Portugal v.Australia),Judgment,I.C.J.Reports 1995,p.90. "National courts, for their part, have more often than not the
necessary power to orderproprio motuthe joinder of third parties
who may be affected by the decision to be rendered ... .But on the
international plane the Court has no such power. Its jurisdiction
depends onthe consentof tat tes"'.
The absenceof interventionby a third State,however, did not preclude
"the Court from adjudicating upon the claims submitted to it,
provided that the legal interests of the third State which may
possibly be affected do not form the very subject-matter of the
decisionthat is appliedfor."2
162. In the Nauru proceedings this was not the case. The Court thus distinguished
Nauru fiom the Monetary Gold rationale by differentiating between the case in
which the legal determination of the behaviour of third States is a prerequisite
for a judgrnent of the Court and the case where it is a mere incidental
implication. Inthe latter case, a third party is protected by the limitation of the
binding force of the Court'sdecisions to the parties (Article 59of the Statute);in
the former case,thethird party is indispensable.In the words ofthe Court:
"[Tlhe determination of Albania's responsibility [in Monetary
Gold] was a prerequisite for a decision to be taken on Italy's
claims. ... In the present case Daum], the determination of
responsibility of New Zealand or the United Kingdom is not a
prerequisite for the determination of the responsibilityof Australia,
the only object of Nauru's claim. ... [A] finding by the Court
l Certain Phosphate Landsin Nauru (Nauru v.Australia),Preliminary Objections,Judgment,
I.C.J.Reports1992,p. 260,para.53.
CertainPhosphateLands inNauru,p. 261,para.54. regarding the existence or the content of the responsibility
attributed to Australia by Nauru might well have implications for
the legal situation of the two other Statesconcemed, but no finding
in respect of that legal situation will be needed as a basis for the
Court'sdecision on Nauru'sclaims against Australia. Accordingly,
the Court cannot declineto exerciseits jurisdiction."'
Therefore, the decisive point is whether the third party's interest is the very
subject-matter of the dispute, that is, whether itneeds to be decided upon as a
prerequisitefor the decisionon the casebrought bythe Applicant.
163. In the case of Liechtenstein, the result of this inquiry is obvious, as Germany
willexplain further in the followingchapter: In order to be able to determine (1)
the unlawfulness of the alleged German recognition of the Czechoslovak
seizures, and (2) the existencevel non of any enrichment by Germany,the Court
needs in the first place to legallyqualifj the conduct of a sovereign third State,
namely Czechoslovakia, respectively itssuccessorStates, in particularthe Czech
Republic. Only following such a decision on the lawfülness of Czechoslovak
conduct would the Court be able to decide on Liechtenstein's claims against
Germany. Hence, the condition that a party is indispensable if a decision on its
conduct is a prerequisite to the decision of the case before the Court, and thus
concems the very subject-matter ofthe dispute, is fulfilled in the present case.
ICertain PhosphateLands in Nauru (Nauruv. Australia), Preliminary Objections,Judgment,
I.C.J.Reports 1992,pp.261-62,para.55 (Emphasiadded).164. In the other leading case on the indispensabilityof a third party,East Timort, he
Court again recalled the principle of consensual jurisdiction.' The case
concerned the permissibility of Australiaconcluding a treaty with Indonesia on
the continental shelf resources of East Timor. And again, the Court emphasized
that, if it is impossibleto separatethe behaviour of the applicant and that ofthe
third State, the third Stateis an indispensable third party. In the words of the
Court:
"The Court has carefully considered the argument advanced by
Portugal which seeks to separateAustralia's behaviourfkomthat of
Indonesia.However, in the view of the Court, Australia's behaviour
cannot be assessed without first entering into the question why it is
that Indonesia could not lawfullyhave concluded the 1989 Treaty,
while Portugal allegedly could have done so; the very subject-
matter of the Court'sdecisionwould necessarily be a determination
whether, having regard to the circumstances in which Indonesia
entered and remained in East Timor, it could or could not have
acquired the power to enter into treaties on behalf of East Timor
relating to the resources of its continental shelf. The Court could
not make such a determination in the absence of the consent of
Ind~nesia."~
And the Court further observed:
"[Tlhe effectsof the judgrnent requestedby Portugal would arnount
to a determination that Indonesia's entry into and continued
'East Timor(Portugalv.Australia),I.C.J.Reports 1995, p. 100,para.26.
East Timor(Portugalv. Australia),I.C.J. Reports 1995, p. 10128. Seealso ibid., para.
29, ibid.,p. 104,para.33;ibid.,p. 105,para.34. presence in East Timor are unlawful and that, as a consequence, it
does not have the treaty-making power in matters relating to the
continental shelf resources of East Timor. Indonesia's rights and
obligations would thus constitute the very subject-matter of such a
judgment made in the absence of that State's consent. Such a
judgment would run directly counter to the 'well-established
principle of international law embodied in the Court's Statute,
namely, that the Court can only exercisejurisdiction over a State
with its consent' (Monetary Gold Removedfrom Rome in 1943,
Judgment,I.C.J.Reports 1954, p. 32)".'
165. Following this line of argument in the present case, the Court cannot pronounce
upon the question of compensation for the seizure of Liechtenstein property by
Czechoslovakia without qualifjmg the Czechoslovak acts as lawfùl or unlawful.
166. The jurisprudence of the Court concemingthe indispensability of third parties is
crystal clear: If the legal interests of a third State constitute the "very subject-
matter" of a dispute brought to the Court and the third State is absent fkomthe
proceedings, the Court cannot exercisejurisdiction on the matter. Legal interests
of a third State do constitute the very subject-matter of a dispute if the Court
cannot decide on the claims before it without prior determination as to the rights
or obligations of the third State.
'East Timor(Portugalv.Australia),I.C.J.Reports 199p.105,para.34. B. THECZECHREPUBLIC IS AN INDISPENSABLE THIRDPARTY TO THE
PRESENTCASE
167. The Czech Republic is an indispensable thirdparty to the present case in two
respects:
(1) The CzechRepublicisan indispensablethird party conceming thequestion
of the lawfulnessof the Bene5Decrees.The Court simplycannotdecideon
any claims of unlawful recognition of foreign confiscations orunjust
enrichrnent on the part of Germany without passing judgment on the
Czechoslovak seizuresofLiechtensteinproperty.
(2) Germany couldonly be enriched by anyaction taken after 1980 if it were
under an obligationto payreparationsto the Czech Republicas a successor
State of Czechoslovakia.But again, this matter cannot be decided upon
without the presence ofthe alleged holder of the rights to reparationsor
compensationagainst Germany,namely the CzechRepublic.
1. The CzechRepublicis anIndispensable ThirdParty Regarding the
Unlawfulnessof Seizure ofLiechtensteinProperv on CzechoslovakTerritory
168. Liechtenstein cannot deny that a legal assessment by the Court of the
Czechoslovak seimres of Liechtenstein property is a prerequisite of any
decision on the merits of Liechtenstein'sclaims. It is strikingthat Liechtenstein
itself apparentlyregards a determinationby the Court as to the unlawfulness
under intemational law of the Bene5Decreesto be such a prerequisite.As the
Liechtensteinemorialasserts: "[Ulntil the mid 1990s, Germany had consistently regarded the
'BeneS Decrees' as contrary to international law. Under this
situation, there was no question of Germany's enrichment:the
Respondent State rightly considered that the Liechtenstein
nationals'assets were not part of the reparations regime and could
not, therefore,be deductedfromthe debt it owedto Czechoslovakia
on this account."'
169. Hence, even according to Liechtenstein'sown view, the question of German
enrichment as allegedcould not be decidedupon without prior determination of
the lawfulness vel non of the conduct of a sovereign, but absent third State.
Germany neither profited from unlawful acts of Czechoslovakia, nor can it be
made responsibleforunlawful actsof a third State.
170. Liechtenstein goes on to claim that Germany has changed its position, and
alleges that Germany now regards the application of the BeneS Decrees to
Liechtensteinpropertyas being in conformitywith internationallaw:
"The picture changed completely when Germany contended,
followingthe Pieter-van-Laercase, that the Liechtensteinnationals'
assets confiscated by Czechoslovakia had been rightly treated as
German assets,as definedby thereparationsregime."2
In yet another repetition of the purposeful invention of an alleged "changeof
position", this descriptionagain distorts any possible reading of the Pieter van
Laer Painting case beyond recognition.As Germanyhas repeatedlyemphasized,
ILM, p. 156,para. 6.41, emphasis added.
LM, p. 156,para. 6.41. the Pieter van Laer Painting case concemed the question of jurisdiction of
German courts, and nothing else. In no way can it be taken as any substantive
recognition of the lawfulness of the seizure of property of Liechtenstein
nationals. Liechtenstein persistently fails to properly distinguish between the
question of jurisdiction of domestic courts and the question of the merits of a
legal claimbrought beforethem.
171. In the context of the indispensablethird party rule, however, Liechtenstein'sline
of argument is relevant: A finding as to the unlawfulness of the alleged German
recognition of the Czechoslovaktakingspresupposes a findingon the lawfulness
of these very measures - a finding which can only be made in the presence of a
sovereignthird State, namely the CzechRepublic as the relevant successorState
of Czechoslovakia.
172. Al1of Liechtenstein'sother charges - the allegeddisregardfor the propertyof its
nationals and the allegedly ensuingviolations of its sovereignty and neutrality -
likewise depend on a finding upon sovereign acts of a third State, namely the
seizures of Liechtenstein property by Czechoslovalua - again, a decision which
cannot be made in the absence of Czechoslovakia, respectively its successor
States.
173. Liechtensteinapparentlytries to avoid this conclusionby changingthe emphasis
fiom the issue of the lawfulness of the Bene5 Decrees as such to that of a
German recognition of their effects. That is why it constructs - or, rather,
invents - the "change of position" which would, in the face of al1the facts
ranging from the statement of the then Federal Chancellor Helmut Kohl to the
German-Czech 1997 Declaration, transform this case fi-om one between Liechtenstein and the Czech Republic to one solely between Liechtenstein and
Germany. But even if the question is thus put in "subjective" terms, the Court
cannot avoid a prior - objective - determination of the conduct of a sovereign
but absent third State. Thus, according to the Monetaly Gold/East Timor
doctrine, the Court cannot exercisejurisdiction in the present case.
2.The CzechRepublicisanIndispensable ThirdPar&Regarding any
Enrichmenton thePart of Germany
174. In addition, Liechtenstein bases its claims to compensation and reparation
against Germany on thetheory that Germanyis still subject to reparation claims
of a third party,namely ~zechoslovalua' and, apparently,the Czech Republic as
its successor State (again, the lack of precision in the Mernorial is glaring -
Liechtenstein simply glosses over possible effects of the succession issue, the
State of Czechoslovakia having ceasedto exist on 31December 1992). Without
introducing any evidence on the matter, Liechtenstein asserts: "Germany was
subject to a strictobligation of reparations .. . This is a continuing obligationw2.
But the Court could notdecide on any compensationdue for unlawfùl seizureof
Liechtenstein property by Czechoslovakia without first determining the legal
relationships between Germany and a third sovereign State, narnely the Czech
Republic.
I LM,p. 156,para.6.38.
LM,p. 156,para.6.38, emphasisadded.175. Even if, for the sake of argument, one accepted Liechtenstein'scontention that
Germany had somehow changed its position towards the lawfulness of the
Bene5 Decrees in the 1990s, there is no way to avoid a determination of
hypothetical claims of reparations betweenthe Czech Republic and Germany.If
no reparations are due, why should Germany be enriched by an alleged change
of position in 1995?However, the Court cannotproceed to such a determination
in the absence of the successorStatesof Czechoslovakia.
176. Under these circumstances, the obvious conclusion must be that a judgrnent of
the Court on the substance of Liechtenstein'sclaim would presuppose a decision
on claims to reparations of a third party which is not present in the instant case.
Germany suggeststo the Court that it decline to deal with an issue between the
Respondent in the instant case and a third party which is not present before it.
Both the analysis of alleged "unjust enrichrnent" of Germany and the alleged
detriment of Liechtenstein by an alleged "change of position" of Germany
depend on a prior legal pronouncement of the Court on the existence of
reparation claims between Germany and the Czech Republic. Therefore, the
Czech Republic is an indispensable third party in the present proceedings.
Hence,the Court cannotexercisejurisdiction.
3. Conclusion:In theAbsence of CzechConsenttheCourtLacksJurisdiction
over the Case
177. A decision of the Court on an alleged German recognition of the seizure of
Liechtenstein property in Czechoslovakia,the question of reparations allegedly
owed by Germany to the Czech Republic, and the question of German
enrichrnentthrough recognition of Czechoslovak seimes, requires the consent of the Czech Republic to the exercise of jurisdiction by the Court. However,
such consent has not been given. In the absence of the consent of the Czech
Republic,the Court cannot exercisejurisdiction in the present case.
178. According to Article 79, paragraph 7, of the Rules of Court, the Court may
declare that an objection does not possess an exclusively preliminary character.
In the case concerning the Land and Maritime Boundary between Cameroon
and Nigeria, the Court used this prerogative to refer a preliminary objection as
to the indispensabilityof a third party to the merits. However, in that case, the
Court had come to the conclusionthat in deciding on the indispensabilityclaim,
"the Court would of necessity have to deal with the merits of Cameroon's
requestW'.
179. But in the present case, in order to decide on the indispensability of the
participation of the Czech Republic, it is not at al1necessary that the Courtdeal
with the merits of Liechtenstein's request:The Court does not have to deal with
the question of an alleged changeof position on the part of Germany.It does not
have to approach the issue of unjust enrichment as between Liechtenstein and
Germany. It does not have to deal with the question whether Germany has in
any way disregarded Liechtenstein'ssovereignty and neutrality. It does not have
1
Land and Maritime Boundary between Cameroon andNigeria, Preliminary Objections,
Judgment,I.C.J.Reports 1998, 324,para.116. to deal with the legalityof the BeneSDecrees, etc. Before any of these questions
can be approached, the Court first has to deal with the necessarypresence of the
CzechRepublic in these proceedings.
180. As a result of this inquiry, Germany asks the Court to declare Liechtenstein's
Application inadmissible because the Court cannot rule on the case in the
absence of the Czech Republic. In particular, the Czech Republic is an
indispensable third party regarding the alleged inhngements of the rights of
Liechtenstein's citizens by Czechoslovakia. It is an indispensable third party
regarding any claim of compensation or reparation by Liechtenstein or its
citizens. And it is an indispensable third party regarding Liechtenstein'sclaims
of unjust enrichment of Germany and of injury to Liechtenstein by the alleged
changeof position on the part ofGermany. SectionIII.
Liechtenstein Nationalshave FailedtoExhaust Available LocalRemedies
181. It has already been pointed outthat accordingto Article 40, paragraph 1,of the
Statute, which has been elaborated upon in the case law of the Court, the
Application defines the subject of the dispute. In the Nuclear Testscases, the
Court stressed that the Application "must be the point of reference for the
consideration by the Court of the nature and existence of the dispute brought
before it"'. Proceeding from this premise, there can be no doubt that the
proceedings instituted by Liechtenstein against Germany must be classified as
an attempt to exercise diplornatic protection for the benefit of a number of
Liechtenstein nationals who were deprivedof their properties through the large-
scale confiscation measures camed out by Czechoslovakia during a period
immediately after World War II.
182. The claims presented in paragraph 25 of the Application leave no doubt as
regards the true nature of the legal relationship which in the view of
Liechtenstein exists between it and Germany. Liechtenstein states quite
unequivocally that it seeks reparation for the loss of property it has suffered. Al1
1
Nuclear Tests (Australiv.France),Judgment,I.C.J.Reports 1974,p. 260, para24;Nuclear
Tests(New Zealand v.France),Judgment,I.C.J.Reports1974, p.463, para24. the property in issue is property of Liechtensteincitizens. Not even accordingto
the submissions of Liechtenstein were sovereign rights of the State of
Liechtenstein, or propertyheld directly by it, affected. Textually, Liechtenstein
contends that "by its conduct with respectto the Liechtenstein property, in and
since 1998,Germany failedto respect the rights of Liechtensteinwith respectto
that property"'.The conclusionsto be drawn from this first claim are confirmed
by a second claim accordingto which Germany is alleged to be in breach of the
rules of international law "by its failure to make compensation for losses
suffered by Liechtensteinandlor its nationalslt2.In this phrase, the reference to
losses sustained by Liechtenstein itself can only be understood as indirect
damage inflicted upon Liechtensteinon account of the measures of confiscation
applied to its citizens. Indeed, nowhere in the Application or in the Memorial
does one find even the slightest hint that State property of Liechtenstein was
also taken awayby Czechoslovakia.
183. Germany observes for the sake of claritythat persona1property of the Reigning
Prince and property of the State of Liechtenstein must be distinguished. Two
propositions should be borne in mind. In the first place, the Reigning Prince is
not the owner of al1public property of Liechtensteinwhich the Stateholds in its
own territoryor elsewhere.Second,the persona1property of the Prince is private
property tout court,without any reservationor modification, in anyevent for the
purposes of internationallaw. Consequently,if the State of Liechtenstein seeks
'LA,para.25,claim(a).
LA,para.25, clair(b). to assert claims with respectto property formerly owned by its ruling Prince, or
in any event owned by him until 1945, it proceeds according to the rules on
diplomatic protection.uch a claim cannot be classified as a claim for the
reparation of direct damage.
B. THEALLEGED VIOLATIONS OF LIECHTENSTEIN'N SEUTRALITY
AND SOVEREIGNTY DO NOT CHANGE THE NATURE OF THE CASE
184. In its Memonal, Liechtenstein expands its requests and considerably modifies
the causes of action invoked by it. Thesole conclusionof the Application is now
shifted to the second position.he first place, Liechtenstein wishes the Court
to declare that by its conduct "Germanyhas failed to respect the sovereigntyand
neutrality and the legal rights of Liechtenstein and its nationals with respect to
theproperty"'. In other words, Liechtensteinnow contends that this is notjust a
case of diplomatic protection, but a case theect-matter of which is direct
violations of Liechtenstein's sovereignrights. However, just by changing the
wording of its submissions Liechtenstein cannot change the true nature of the
case.
185. Itis not the first time in the history of the Court that a State appearing as a party
in an adversarial proceeding contends that a claim brought by it, although
essentially based on the allegation that its citizens werely deprived of
their assets, cannot simplybe classified asercise of diplomatic protection.
'LM,p. 187. In the Interhandelcase1, Switzerland argued that there was no requirement to
exhaust the remedies availablein the United States since the injury in issue had
been directly caused to it through the breach of an international treaty. The
Court did not accept that argument. Considering that the injury suffered by
Switzerland was of an ancillary nature, it rightly held that the proceedings
essentially remained a case for the vindication of the rights of Interhandel, a
corporation under Swiss law. In fact, each and every case of alleged unlawful
taking of property of aliens could easily be blown up to the dimensions of a
genuine inter-State dispute rooted in direct injury to the victim State concerned.
One would only have to interpret unlawful measures of expropriation as
implying lack of respect for the sovereignrights of the Stateof nationality of the
persons concerned. Such classificationof property disputes, however, would, in
practical terms, do away with the requirement of prior exhaustion of local
remedies. It could not be reconciled with the traditional procedural fi-amework
the pivot of which is for good reasons constituted by the requirement of prior
exhaustion of local remedies.
186. Likewise, in the ELSI case2 the Court emphasized that a claim seeking
reparation for an alleged injury to a private person, a national of the applicant,
still comes within the purview of diplomatic protection even if the applicant
invokes at the same time the violation of international treaty obligations by the
respondent. It said that the matter which "coloursand pervades the United States
'Interhandel,PreliminaryObjections,Judgment,I.C.J.Reports 195p.6.
ElettronicaSiculaS.P.A.(ELSI),Judgment,I.C.J.Reports 1989,p. 15. claim as a whole" was the alleged damage to the corporation that had been
driven into insolvency; consequently,there was no part of the claim which could
be "severed so as to render the local remedies rule inapplicable to that part"1.
Hence, the present case must be considered as a coherent whole. It cannot be
split up into different parts some of which would be subject to the requirement
of exhaustion of local remedies, while others would remain exempt from that
requirement.
187. In his second report on diplomatic protection, submitted in 20012, the ILC's
SpecialRapporteur onthe topic, John Dugard, has devoted careful consideration
to the distinction between direct and indirect damage, which defines the
borderline between instances where irnmediate recourse to international
adjudication is open and such other instances where the victim must wait until
al1remedies promising reasonable prospectsof success have proven to be of no
avail in the circumstances.On the basis, in particular, of theInterhandelandthe
ELSIcases, which he rightly sees as founded on the test of "preponderance"and
the "but for" test3,he suggeststhe following rule (Article 11)not as progressive
developmentof the law,but ascodificationof the law as it stands:
"Local remedies shall beexhaustedwhere an internationalclaim,or
request for a declaratoryjudgement related to the claim, is brought
preponderantly on the basis of an injury to a national and wherethe
'ElettronicaSicuIaS.p.A. (ELSI),JudgmenC.JR.eports 1989,p. 43, para. 52.
*J. Dugard, 'SecondReport onDiplornaticProtection',28 February2001, UN doc.AJCN.41514.
Dugard, 'Second Repor, 11,para. 21. legal proceedings in question would not have been brought but for
the injury to the national. [In deciding on this matter, regard shall
be had to such factors as the remedy claimed, the nature of the
claim and the subjectof the dispute.]"'
188. The application of these two tests yields very clear results. As can be seen fiom
the requests formulated in the Application,Liechtenstein is primarily interested
in obtaining financial compensationfor the losses its nationals suffered through
Czechoslovakia's policy of confiscation. Only at a later stage, during the
drafting of the Memorial,did it occur to the LiechtensteinGovemment and their
counsel that it might be useful to complementthe original requests by additional
submissions based on the premise that Germany's "change of position"
amounted also to a direct violation of Liechtenstein'srights. However, a close
look at Liechtenstein's pleadingsreveals that in concrete terms al1that formsthe
subject-matter of the present case is the loss of propertythat occurred in 1945 at
the hands of Czechoslovakia, a conglomerate of actions by Czechoslovak
authorities over which Germancourts do not holdjurisdiction, as authoritatively
confirmed once more by the Federal Constitutional Court in its decision of 28
January 1998.~Although the Memorial puts into first place the alleged violation
of Liechtenstein's sovereignty and neutralig, it is quite clear that the case
contains not a single element outside the property issue which might give it a
tinge that would remove it fromthe area of diplornaticprotection.
'Dugard,'SecondReport'., . 10.
*LM,Annex32, vol.II,p. 353.
LM,p. 187.189. Given this factual configuration, there can be no doubt that the property issue
constitutes the centrepiece of the dispute. It has absolute preponderance.
Likewise, the "but for" test leadsto thesame result. Liechtenstein had no other
reason to institute proceedings againstGermany "but for" its desire to seize the
last chance it saw to be compensated for the damage caused to its nationals by
Czechoslovakia in 1945.It certainlywould never have brought an action against
Germanyif it had not been for the pecuniary aspectsof the lamentable economic
consequences of Czechoslovakia'spolicies, ernbodiedin the BeneSDecrees. It is
clear, therefore, that the requirement of exhaustion of local remedies applies to
the instant case. The alleged victimshad to rnake a reasonable effort to exhaust
such remedies before Liechtenstein could commence legal action before the
Court.
190. Liechtensteinrefrains from specifjmg what happened in al1the other cases apart
from the Pieter van Laer Paintingcase. That dispute is described almost
affectionately in every little detail, with one important exception, however,
which should again be emphasized: Liechtenstein abstains from informing the
Court about the reasons for which the European Court of Human Rights
dismissed the application filed by Prince Hans Adam TI under the European
Convention on Human Rights as being ill-founded.' It is clear, therefore, that in
the painting dispute localremedies, which include also the application under the
European Convention on Human Rights, have indeed been exhausted. But there
1PrinceHuns-AdamIIofLiechtensteinv. Germany,Judgment of 12July2001, GPO,Annex1. exists an absolute lack of information conceming efforts relating to the real
estate located in the Czech Republic and in Slovakia which until the end of
World War II was allegedly owned by the persons accounted for in the "list of
38"'.
C. THEAPPLICABILITY OF THE LOCALREMEDIESRULE - A
NEGATIVERESULT WITH RESPECT TO GERMANY
191. Notwithstanding the inference alreadydrawn that the requirement of exhaustion
of local remedies applies to the facts submitted to the Court by Liechtenstein,
Germany has great difficulties in specifjmg what legal remedies the alleged
victims should have taken. This lack of certainty does not so much flow fiom
the fact that decisions of the Federal ConstitutionalCourt cannot be challenged
any more within the German legal system: Decisions of the highest German
judicial body can only be brought to judicial review by lodging an application
with the StrasbourgCourt of Human Rights. Rather, it is the absolute lack of an
identifiable act of interference which would embarras a German lawyer in
pointing to a specific remedy. Germanyhas provided itself with a system which
enables everyoneto defend hisher rights in the widest possible way. Article 19,
paragraph 4, of the Basic Law, the GermanConstitution, provides that judicial
review shall be granted to everyone claiming that hisher rights have been
violated by an act of govemmental authority. But anysuch alleged violation
must be identified. For that purpose, it is necessary precisely to state which act
1LM,Annex8,vol.1,p.32. or omission has allegedly brought about the interference complained of. In the
absence even of an allegationof interference,a remedy will not be granted.
192. In this regard, two factors must be noted. First of all, as already explained in
Chapter III Section 1 of the present Preliminary Objections, Germany has no
knowledge whatsoever regarding the Liechtenstein property adversely affected
by Czechoslovakia's confiscation measures. The Federal Govemment must
openly admit that it has never had official information about the extent of the
damage suffered by the 38 Liechtenstein nationals, and, as the Court itself will
be able to perceive, this information gap has not been cured by Liechtenstein's
pleadings in that neither the Application nor the Memorial have bothered to
provide the relevant data.
193. In fact, Germany is amazed to note that according to Liechtenstein's allegations
it should have interferedwith property the existence of which is unknown to it
and which is located in a foreign country over which Germany does not enjoy
jurisdiction. It is difficult to imagine that Germany, under these circumstances,
should have made some kind of conscious decision with regard to this property
consisting of "arable land and forests, numerous buildings and their contents,
factories etc."'. The "change of position", which Liechtenstein believes to
perceive in the case law of the German courts that have consistently respected
the Settlement Convention since 1955,has nothing to do with al1that real estate
located in the Czech Republic and in Slovakia. Issues concerning the different
ILM, p. 8, para.2. component elements of that immovable property have never come before
German courts, and they will never come before thern inasmuch as in
accordance with general rules of private international law, as they are also
reflected in Article 23 of the German Code of civil procedure, only the local
judiciary is competent to rule on issues connected with the ownership of real
estate. There was never any interference by Germany with the property
Liechtenstein citizens owned in Czechoslovakiaat the end of World Ware
adoption of a certain interpretation of the Settlement Convention regarding
proceedings instituted before German civil courts can by no stretch of
imagination be construedasuch interference.
194. Germany therefore comes to the conclusion that, although in principle the case
must be classified as exercise of diplomatic protection, the requirement of the
exhaustionof local remedies does not apply,for the simple reason that there was
no act of interferencethat couldhave beenchallengedbefore German courts.
D. THE APPLICABILITY OF THE LOCALREMEDIESRULE - A POSITIVE
RESULT WITH REGARD TO CZECHOSLOVAKIA AND THE CZECH
REPUBLIC
1. ConsiderationsSupporting theRequirement
195. However, Germany is of the view that the Liechtenstein victims of the
Czechoslovak confiscation policy should have contested before the courts of the
former Czechoslovakia the confiscation measures taken to their detriment. They
should at least have attempted to avert the losses which Czechoslovakiainflicted
upon them by depriving them of their possessions. In fact, the Czechoslovak measures were the proximate cause of the damage which constitutes the heart of
the present dispute. Liechtenstein itself confines itself to contending that
Germany brought intobeing a secondcause, a remote cause, forthat damage.
196. The thesis defended by Germanymay seem odd at first glance. There is a broad
consensus in the case law of the court' as well as in legal doctrine2to the effect
that the requirement of exhaustion oflocal remedies is designed to provide the
alleged wrong-doing State with an opportunity to make good any incorrect
action it may have taken before the case will be dealt with at the international
level by a body outside the domestic sphere. Here, the Respondent is Germany.
Consequently, under normal circumstances only judicial remedies available in
Germany would have to be taken into account. In any other case of diplomatic
protection, in fact, Germany would just have submitted that the persons the
claims of which the Applicant had espoused should have made use of the wide
array of legal remediesprovidedbythe Germanlegal system.
197. This is, however, no normal case. Liechtenstein charges Germany with causing
damage to its nationals by invoking a circumstance which is remote from the
actual damage - the existence of which is of course not denied - and which is
not connectedby any link of causalitywith that damage. The interference which
matters in fact is the strategy of confiscation pursued by Czechoslovakia in
1945-46. Even according to Liechtenstein's pleadings, Germany is at most
1
SeeInterhandel,Preliminary Objectio, udgment,I.C.J.Reports 1959,p. 27.
See, for instance, C.E.Amerasinghe,Local Remedies in InternationalLaw (Grotius, Oxford,
1990),pp. 68-69. second in the chain of events, or rather the third actor, inasmuch as the
stipulation in Article 3, paragraph 3, of Chapter Six of the Settlement
Convention goes back to a specific demandof the Three Western Powers which
made the abolition of the occupationregime dependent on Gerrnany'sconsentto
a clause which would make al1the measures taken with a view to enforcing
reparations or restitution immune fiom scrutiny by German courts. In this
special and absolutely extraordinary configuration the last actor in a chain of
three cannot be denied the benefit of invoking the failure of the Claimant's
nationals to contest the primary cause of the calamity that befell them, namely
the Czechoslovakmeasuresof confiscation.
2. TheCaseof the ReigningPrince
198. It emerges fiom Liechtenstein's~emorial' that the then Reigning Prince, Franz
Josef II, filed appeals against the confiscation of his persona1 assets and the
assets of his family.Apparently,al1of these appeals wererejected. Liechtenstein
has fùmished the Court with a copy and an English translation of the judgrnent
rendered by the Administrative Court in Bratislava on 21 November 19512
wherein the Court declared that the appeal lodged by the Prince "had to be
dismissed for being unreasonableM3B . ut nothing is known about any measures
of defence taken by the other victims. Since Liechtensteinremains silent in this
'LM, p. 28, para. 1.22.
LM, Annex9, vol.1,p. 34.
It would appearthat the word"unreasonable"is a wrongtranslationof the originalCzechword.
Probably, the rightwordwouldhave been "ill-founded". respect, it is to be assumed that no steps were taken with a view to submitting
the dispute to the courtsof Czechoslovakia. Thus, during the decisivefirst stage,
where the damage could possibly have been averted, the victims failed to
exhaustthejudicial remediesattheir disposal.
199. Liechtenstein has providedno proof evidencingthat the AdministrativeCourt in
Bratislava was the last instance in the dispute conceming the Czechoslovak
confiscation measures. Assuming, however, that this can be proven in
Liechtenstein's response to these Preliminary Objections, the fact remains that
the other alleged victims have abstained from defending their rights before the
courts of Czechoslovakia. The argument that judicial remedies offered no
reasonable prospects of success would not be a pertinent defence, as will be
shown in the following.
3. TheCaseofthe Other Victims
200. It is true that Czechoslovakia'sDecreeNo. 12of 21June 1945,"conceming the
confiscation and accelerated allocation of agricultural property owned by
Germans, Hungariansand also by people who have committed treason andacted
as enemies of the Czech and Slovakpeople"'provides in a rigid manner that the
confiscation policy decidedby the govemment of the country should comprise
the property of "al1persons belonging to the German and Hungarian people,
regardless of their nationality" (Article 1,paragraph 1,lit. (a)). Deliberately,as
1LM, Annex6, vol. 1p.9. the text evinces,the Governmentchoseto ignore the criterion of nationality.But
this does not mean that for a Liechtenstein citizen any challenge of a
confiscation decree was without any reasonable prospects of success fiom the
very outset. When applying the Decree, the courts had in any event to find out
whether a person belonged to "the Germanpeople". It is well known that before
World War II important minorities of ethnic Germans lived in almost al1
countries of Eastern Europe, outside Czechoslovakia also in Hungary,
Yugoslavia and Poland, for instance, countries which were close neighbours of
Czechoslovakia. One may with good reason assume that the clause determining
the scope of applicationrationepersonae of Decree No. 12was primarilymeant
to include in the confiscation regime al1 the ethnic Germans having the
nationality of one of these countries.
201. It is a differenttter altogetherto interpretthe relevant clause as includingalso
nationals of third countrieswho in a wide culturalsense, because of their mother
tongue, may be classified as Germans. Not only nationals of Liechtenstein, but
also nationals of Switzerland or Luxembourg could be covered by such a wide
notion of the German people. Nothing is known, however, about confiscatory
measures taken by Czechoslovakia against Swiss or Luxembourg nationals.
Consequently, the victims could with a high degree of persuasiveness argue that
they did notcomewithin the purview of application of DecreeNo. 12. The fact that the appeals lodged bythe then reigning Prince, FranzJosef II,were
dismissed, could not be taken as a final and unchallengeable determinationthat
al1 Liechtenstein nationals were members of "the German people". The main
argument relied upon by the Administrative Court of ~ratislava' was a very
simple and succinct one. It argued that the capacity of Franz Josef II as a
member of the German people was "of public knowledge". No further details
were given. The Court did not hold that indeed Liechtenstein nationality was
negligible and that therefore Liechtenstein citizens could be lumped together
with other ethnic Germans as elements of "the German people". Rather, the
decision focused on the specific persona1 characteristics of the Appellant,
concluding that in his casethe requirements ofthe law were fulfilled.
It may be true that other Liechtenstein victims of the Czechoslovak measures
203.
felt discouraged by the course the proceedings instituted by their Prince before
the competent courts took. But on the basis of the available evidenceit is by no
means sure that an appeal lodged by another Liechtenstein national would also
have been dismissed. There is no need, in this connection, to embark on a
discussion of the different tests which have been suggested as constituting the
appropriate method of defining the exemption fi-omthe burden of exhausting
local remedies where in the circumstances doubts may have arisen as to the
effectiveness of contesting a detimental governmental act. Inhis third report on
'LM, Annex9, vol.1p. 34,at37. diplomatic protection', ILC Special Rapporteur John Dugard has carefully
examined the three tests competing for general recognition. None of the three
tests - obvious futility, lack of reasonable prospect of success, lack of
reasonable possibility of an effective remedy - would have dispensed the other
victims from resorting to litigation before the Czechoslovak courts to defend
their rights.
204. In the first place, thejudgment of the Administrative Court in Bratislava limits
its findings to the actual case of the Reigning Prince it had to adjudicate.
Second, during the time when the confiscatory measures were carried out in
Czechoslovakia, it can be assumed that the judiciary was aware of
Czechoslovakia's obligationsunder international law. Therefore the ambiguous
formula of Decree No. 12 ("the German people") could without any difficulty
have been construed as not including the population of a third State that had
maintained its neutrality during the entire duration of the armed conflict £tom
1939to 1945.
205. Germanyfeels also compelled to invokethe failure of the affected Liechtenstein
nationalsto try again, after Czechoslovakiahad liberated itself fiom Communist
rule, to recover the property of which they had been unlawfully depnved. By
acceding to the European Convention on Human Rights, Czechoslovalua
manifested its will to return to the Europe predicated on the rule of law. It
signed the Convention on 21 February 1991, depositing its instrument of
'J. Dugard, 'ThirdReport onDiplornaticProtection',7 2002, UN doc.AlCN.41523. ratification on 18March 1992.The two successor Stateshave held on to that act
of faith by continuing their membership in the Council of Europe and the
European Convention on Human Rights. At that time, there was an appropriate
moment to attempt again at least to obtain financial compensation for the losses
suffered. Once again, Germany must express its amazement that Liechtenstein,
instead of imrnediately tuming to Czechoslovakia and later to the Czech
Republic and Slovakia to assert its compensation claims, seized none of these
opportunities afforded by the demise of the Communist regime, but instituted
the present proceedings against Germany under the pretext of a fundamental
"changeof position" in the German case lawconceming the interpretation of the
Settlement Convention.
206. In hindsight, it might be argued that neither in 1945 nor after the fa11of the
Communist regime in Prague, were there remedies that had the slightest
prospect of success, so that there could be no requirement to undertakejudicial
steps for the recovery of the confiscatedproperty. Indeed, the position taken by
the Czech Govermnent in proceedings under the First Optional Protocol to the
International Covenant on Civil and Political Rights may be taken as an
indication that the Czech Republic is intent on blocking any revision of the
confiscation policy carried out in 1945.' But the prospects of an available
remedy must be evaluated ex ante, focusing on the time when the remedy in
issue could have been filed. It may now be clear that the Czech Republic is not
1SeeKarel des Fours Walderodv.CzechRepublic,2 Nov. 2001,UN doc.CCPR/C/73/D/747/
1997,GPOAnnex5. willing to review and correct unlawfùl actions which earlier govemments took
in the past. But in 1945as well asafter the restoration of most of civil liberties
during the period fiom 1989to 1993,it could by no means be taken for granted
that the Czech Republic would rigidly stick to the policies conceived of and
implementedby its formerPresident,Mr. BeneS.
207. Summing up this section of its Submissions on the admissibility of the
proceedings instituted by the Czech Republic, Germany concludes that the
action must be declared inadmissible also on the ground that, apart £rom the
Pieter van Laer Painting case and possibly the case conceming the real estate
inherited by the present reigning Prince, the victims failed to exhaust the
available local remedies.
208. Shouldthe Court not sharethe view that the non-exhaustionof local remedies in
Czechoslovakia and the Czech Republic qualifiesas a preliminary objection that
can be raised by Germany, Germany woulddevelop the argument more fùlly in
itswritten pleadings on the merits - in case the dispute should ever reach that
stage. In any event, that failure would have to be taken into account as
contributory negligence.If the victims abstained fiom fighting for their rights in
the appropriate fora, they cannot expect that the losses confirmed by their
passivity will be assumed by a third party which neither had any duty of
diligence with regard to the property concemed, nor had the power to stop the
unlawful actions committedby the Czechoslovak Govemment. PART IV
CONCLUSIONSANDSUBMISSIONS
209. On the basis of the preceding Submissions, Germany summarizes its
Preliminary Objections as follows:
1) The case is outsidethejurisdiction ofthe Court since
there exists no dispute as between Liechtenstein and Germany in the
(a)
sense required by the Statute of the Court and Article 27 of the
European Conventionfor the Peaceful Settlement of Disputes of 29
April1957;
al1 the relevant facts occurred before the entry into force of the
(b)
EuropeanConventionas betweenthe Parties;
(c) the occurrences on which Liechtenstein bases its claims fa11within
the domesticjurisdiction of Germany.
Liechtenstein's Applicationis furthermoreinadmissible since
2)
(a) Liechtenstein's claimshavenot been sufficientlysubstantiated;
(b) adjudicationof Liechtenstein's claims would require the Court to pass
judgrnent on rights and obligations of the successor States of former
Czechoslovakia, in particular the Czech Republic, in their absence
and withouttheir consent; (c) the alleged Liechtenstein victims of the measures of confiscation
carried out by Czechoslovakia have failed to exhaust the available
local remedies.
210. For the reasons advanced, Germany requests the Court to adjudge and declare
that:
- it lacks jurisdiction over the claims brought against Germany by the
Principality of Liechtenstein, referred to it by the Application of
Liechtensteinof 30 May2001,
and/or that
- the claims brought against Germany bythe Principality of Liechtenstein are
inadmissible to the extent specifiedin the present PreliminaryObjections.
27 June 2002 Dr. GerhardWestdickenberg
Agent of the FederalRepublic of Germany LISTOFANNEXES
(containedinVolumeII)
Annex1: Prince Huns-AdamII ofLiechtensteinv. Germany,
EuropeanCourt ofHumanRights, Applicationno. 42527198,
Judgrnentof 12July001.
Annex2: AKUCase,JudgrnentoftheGermanFederalCourtof Justice
(Bundesgerichtshoj)of 13December 1956,(1957)Neue
Juristischeochenschrif0, p. 217;Translation:23ILR,p.
21.
Annex3: Judgmentofthe GermanFederalCourtof Justice
(Bundesgerichtshofiof 11April 1960,32 Entscheidungen
desBundesgerichtshofsinSivilsachen(BGHZ),p. 172.
Annex4: Judgmentof the GermanFederalConstitutionalCourtof 23 April
1991,84EntscheidungendesBundesvevfassungsgerichts
(BVerfGE),p. 90;Translation:94ILR,p. 44.
Annex5: Karel desFours Walderodev. CzechRepublic,HumanRights
Committee, CommunicationNo. 74711997,2 November 2001,
(UN.Doc.CCPR/C/73/Dl747/1997).
Preliminary Objections of the Federal Republic of Germany