Volume VI - Annexes 121-140

INTERNATIONAL COURT OF JUSTICE
CERTAIN IRANIAN ASSETS
(ISLAMIC REPUBLIC OF IRAN v. UNITED STATES OF AMERICA)
COUNTER-MEMORIAL
SUBMITTED BY
THE UNITED STATES OF AMERICA
October 14, 2019
ANNEXES
VOLUME VI
Annexes 121 through 140

ANNEX 121

Annex 121
REPORTS OF INTERNATIONAL
ARBITRAL AW ARDS
RECUEIL DES SENTENCES
ARBITRALES
VOLUME XII
UNITED NATIONS - NATIONS UNIES
Annex 121
THE AMBATIELOS CLAIM
PARTIES: Greece, United Kingdom of Great Britain and Northern
Ireland.
COMPROMIS: Agreement of 24 February 1955.
ARBITRATORS: Commission of Arbitration: R. J. Alfaro; A. J. F.
Bagge; M. Bourquin; J. Spiropoulos; Gerald A.
Thesiger.
AWARD: 6 March, 1956.
ANNEXES: Various documents relating to the case.
State responsibility - Breach of contractual obligations - Undue delay in presenting
claim - Principle of extinctive prescription - Absence of rule of international
law laying down time limit - Right of claimant to change legal basis of action
in order to obtain settlement of dispute by arbiLration - Most-favoured-nation
clause - Nature and scope of - "Administration of justice " as allied to '' commerce
and navigation " - Interpretation of Treaty - Interpretation of expressions
"justice ", " ri~ht " and " equi1 y " by reference to municipal law - Interpretation
of expression " free access to the courts " - Non-exhaustion of legal
remedies - Burden of proof - Need to prove existence of remedies not used -
Ineffectivenes:s of local remedies - Failure to call available witness.
Responsabilite de I'Ecat - Inob~ervation des obligations conventionnelles
- Retard injuscifie pour presenter unr. reclamation - Principe de la prescription
extinctive - Absence d'une regle de droit international fixant la duree de la
prescription - Droit de la partie dcmanderesse de modifier la base juridique
de son action pour obtenir un reglement par arbitrage - Clause de la nation
la plus favorisee - Nature et portee - " Administration de la justice », consideree
comme comprise parmi les matieres concernant « le commerce et la navigation
» - Interpretation des traites-Interpretation des expressions« justice», <t droit ii
et << equite » en fonction du droit interne - Interpretation de ]'expression << libre
acces aux tribunaux » - Non-cpuisernent des voies de recours interne - Charge de
la preuve - Necessite pour l'Etat defendeur de prouver I 'existence, clans son systeme,
de droit interne, de recours non utilises - • Inefficacite des voies de recours - Noncitation
d 'un temoin.
Annex 121
BIBLIOGRAPHY
Texts <if the Compromis and Award:
Foreign Office, A ward of the Comm1ssior1 of Arbitration established by the Agreement
concluded on 24th February 1955 hetween the Government of the United Kingdom
of Creal Britair1 arid Northern Ireland a11d the Governmertt of Greer:e for the arbitration
of the Ambatielos Claim together with the Annexes to the Award, London.
International Law Reports, edited by H. Lauterpar.ht, 1956, p. 306 [English
text of the Award].
United Nations Trea[v Series, Vol. 209, p. 188 [English and French texts of the
Compromis J.
United KiTlgdom Treaty Series, No. 20 (1955) Cmd. 9425 [English text of the
Com pro mis J.
Commentaries:
American Journal <if ITllernational Law, vol. 50, 1956, p. 674.
Annuaire franfais de droil international, 1956, p. 402.
E. Hambro, "The Ambatidos Arbitral Award ", Anhiv des Volkerrechts,
1956-1957.
F. Honig, " Der Schiedsspruch im Ambatielos-Fall vom 6 Marz 1956",
<,eitschrift fur ausliindisches iiffe11tlich1·s Recht und Volkerrecht, 1956, p. 133
S. E. K. Hulme, '' The Ambatielos Case", 1\1elbourne University Law Review,
vol. I, 1957, p. 64.
D. H. N. Johnson, "The Ambatielos Case ", The Modem Law Review, vol. 19,
1956, p. 510.
K . Lipstein, "The Ambatielos Case. Last phase", The International and
Comparative Law Quarterly, vol. 6, 1957, pp. 643.
R. Pinto, " La sentence Ambatidos ", Journal du droit internaliorzal, 195 7,
p. 540.
Annex 121
AGREEMENT 1 BETWEEN THE GOVERNMENT OF THE UNITED
KINGDOM OF GREAT BRIT i\lN AND NOR THE RN IRELAND
AND THE GREEK GOVERNMENT REGARDING THE SUBMISSION
TO ARBITRATION OF THE AMBATIELOS CLAIM.
SIGNED AT LONDON, ON 24 FEBRUARY 1955
The Government of the United Kingdom of Great Britain and Northern
Ireland and the Royal Hellenic Government:
CONSIDERING
(I) That the International Court of Justice, acting in virtue of Article 29
of the Anglo-Greek Treaty of Commerce and Navigation of July 16, 1926,2
has decided by a Judgment delivered on May 19, 1953 3 that the Government
of the United Kingdom of Great Britain and Northern Ireland (hereinafter
called the United Kingdom Government) are under an obligation to submit
the arbitration in accordance with the Anglo-Greek Declaration of July 16,
I 926 (hereinafter called the 1926 Declaration) the difference as to the validity
under the Anglo-Greek Treaty of Commerce and Navigation of November 10,
1886 4 (hereinafter called the 1886 Treaty) of the claim presented by the Royal
Hellenic Government on behalf of Mr. Nicolas Eustache Ambatielos (hereinafter
called the Ambatielos claim) ;
(2) That the I 926 Declaration provides that any differences which may
arise between the two Governments as to the validity of claims on behalf of
private persons based on the provisions of the I 886 Treaty shall, at the request
of either Government, be referred to arbitration in accordance with the provisions
of the Protocol of November 10, 1886 (hereinafter called the 1886
Protocol) annexed to the 1886 Treaty: and
(3) That the 1886 Protocol provides that any controversies which may
arise respecting the interpretation or the execution of the 1886 Treaty, or the
consequences of any violation thereof, shall be submitted, when the means
of settling them directly by amicable agreement are exhausted, to the decisions
of Commissions of Arbitration, the result of such arbitration to be binding
upon both Governments, and also that the members of such Commissions shall
be selected by the two Governments by common consent:
Have decided to conclude an Agreement with a view to submitting the
Ambaticlos claim to arbitration in conformity with the above provisions and
for that purpose have appointed as their plenipotentiaries:
The United Kingdom Government:
Sir Ivone Kirkpatrick, G.C.M.G., K.C.B., Permanent Under-Secretary
of State for Foreign Affairs;
1 United Nations Treafv Series, vol. 209, p. 188.
2 League of Nations, Treafy Series, vol. LXI, p. 15; vol. LXIII, p. 428; vol.
LXXXIII, p. 4 I 7; vol. LXXXVIII, p. 3 j6; vol. XCVI, p. 192; vol. C, p. 222; vol.
·CXXVI p. 446; vol. CXLVII, p. 343, and vol. CXLVII, p. 333.
3 Ambatielos case (merits to arbitrate), Judgment of May 19th, 1953: I. C. J.
Report.r 1953, p. 10.
4 De Martens, Nouveau Recueil giniral dt Trniti.f, deuxieme ~erie, tome XIII, p. 518.
Annex 121
88 GREECE/ UNITED KINGDOM
The Royal Hellenic Government:
His Excellency Monsieur Basile Mostras, Ambassador Extraordinary
and Plenipotentiary of Greece in London;
Who, having exhibited their respective full powers, found in good and due
form,
Have agreed as follows:
Article I
(a) The Commission of Arbitration (hereinafter called the Commission)
shall be composed of:
Monsieur Ricardo J- Alfaro, Monsieur Algot J. F. Bagge, Monsieur
Maurice Bourquin, Monsieur John Spiropoulos, Gerald Thcsiger,
Esquire, Q.C.
(b) The President of the Commission shall be Monsieur Ricarrlo J. Alfaro.
(c) Should any Member of the Commission die or become unable to acl,
the vacancy shall be filled by a new Member appointed by the Government
which nominated the Member to be replaced or by agreement between the two
Governments, according to the manner of the original appointment.
Article 2
The Commission is requested to determine -
(a) The validity of the Ambatielos claim under the 1886 Treaty having
regard to:
(i) The question raised by the United Kingdom Government of undue
delay in the presentation of the claim on the basis of the Treaty;
(ii) The question raised by the United Kingdom Government of the nonexhaustion
of legal remedies in the English Courts in respect of the
acts alleged to constitute breaches of the Treaty;
(iii) The provisions of the Treaty;
(b) In the event of the Commission holding that the claim is valid, whether
the United Kingdom Government ought now in all the circumstances to pay
compensation to the Royal Hellenic Government; and if so, the amount of
such compensation.
Article 3
(a) The Commission shall, subject to the prov1S1ons of this Agreement,
determine its own procedure and all questions affecting the conduct of the
ar bi tra tion.
(h) In the absence of unanimity, the decisions of the Commission on all
questions, whether of substance or procedure, shall be given by a majority
vote of its Members, including all questions relating to the competence of the
Commission, the interpretation of this Agreement, and the determination of the
issues specified in Article 2 hereof.
Article 4
(a) The Parties shall, within fourteen days of the signature of the present
Agreement, each appoint an Agent for the purposes of the arbitration, and
shall communicate the name and addres~ of their respective Agents to each
other and to the Commission.
(b) Each Agent so appointed shall be entitled, as occasion may require and
for such period as he may specify, to nominate a Deputy to act for him, upon
making a similar communication of the Deputy's name and address.
Annex 121
AMDATIELOS CLAIM 89
Article 5
(a) The proceedings shall be written and oral.
(b) The written proceedings shall consist initially of a Case to be submitted
by the Royal Hellenic Government within 4 months of the signature of the
present Agreement and of a counter•case to be submitted by the United
Kingdom Government within 4 months of the submission of the Hellenic
Case.
(c) The Commission shall have power to extend the above time-limits at the
request of either Party.
(d) The oral hearing shall follow the written proceedings, and shall be
held in private at such place and time as the Commission, after consultation
with the two Agents, may determine.
(e) The Partie'> may be represenled at the oral hearing by their Agents and
by such Counsel and advisers as they may appoint.
Article 6
(a) The pleadings, written and oral, and the Commission's decisions, shall
be either in the French or the English language.
(b) The Commission shall arrange for such translations and interpretations
as may be requisit<>, and shall be entitled to engage all such technical, secretarial
and clerical staff, and to make all such arrangements in respect of accommodation
and the purchase or hire of equipment, as may be necessary.
1rticle 7
(a) The Commission shall deliver its decisions in writing, giving the reasons
therefor, and shall transmit one signed copy to each Agent.
(h) Any question of subsequent publication of the proceedings shall be
decided by agreement between the two contracting Governments.
Article 8
(a) The remuneration of Memben; of the Commission shall be borne
equally by the two contracting Governments.
(b) The general expenses of the arbitration shall be borne equally by the
two Governments, but each Government shall bear its own expense'> incurred
in or for the preparation and presentation of its case.
IN WITNESS WHEREOF the above-mentioned plenipotentiaries have signed
the present Agreement.
DONE in duplicate at London, in the English language, the 24th day of
February, 1955.
lvone K1RKPATRTCK
B. MosTRAs
Annex 121
AWARD OF THE COMMISSION OF ARBITRATION ESTABLISHED
BY THE AGREEMENT CONCLUDED ON 24th FEBRUARY 1955
BETWEEN THE GOVERNMENT OF THE UNITED KINGDOM
OF GREAT BRITAIN AND NORTHERN IRELAND AND THE
GOVERNMENT OF GREECE FOR THE ARBITRATION OF THE
AMBATIELOS CLAIM TOGETHER WITH THE ANNEXES TO
THE AWARD, 6 MARCH, 1951 1
The facts leading up to the present case are as follows:
On 17th July 1919, the Greek shipowner Nicholas Eustache Ambatielos
concluded with the United Kingdom Government represented by Sir Joseph
Maclay, the Shipping Controller, a contract for the purchase of nine steamships,
then building in the dockyards of Hong Kong and Shanghai, at a price of £40
per ton for vessels of 5,000 tons and of £36 per ton for vessels of 8,000 tons,
the total purchase price amounting to £2,275,000.
The negotiations resulting in this contract ,,,ere conducted on behalf of the
United Kingdom Ministry of Shipping by Major Bryan Laing and on behalf
of Mr. Ambatielos by his brother, Mr. G. E. Ambatielos.
Paragraphs 2, 3 and 7 of the contracl of 17th July, 1919, which is set out in
full in Annex 2 2 to this award, contain the following provisions:
2. The purchase money for the said ~learners and engines shall be paid as follows:
A deposit of ten per cent in cash payable as to £ l00,000 thereof upon signing
this Agreement an<l as to the balance of the said deposit within one month lhel'eafter
and the balance in cash in London in exchange for a Legal Bill of Sale or
Builders' certificate within 72 hours of written notice of the steamers' readiness for
delivery being given to the Purchaser or his Agent, such delivery to be given at
the Contractor's yard.
3. The steamers shall be deemed ready for delivery immediately after they have
been accepted by the Vendor from the Contractors.
7. If default be made by the Purchaser in the payment of Lhe purchase money
the deposil shall be forfeited am1 the sr:eamers may be re-sold by public or private
sale and al\ loss and expense arising from the re-sale be borne by the Purchaser,
who shall pay interest thereon at the rate of five pounds per cent per annum. If
default be made by the Vendor in the execution of Legal Bills of Sale or in the delivery
of the steamers in the manner and within the time agreed, the Vendor shall
return to the Purchaser the deposit paid with inlerest at the rate of five pounds per
cent per annum.
1 Foreign Office, Award of the Comm1ssio11 qf Arbitratwn established ~}' the Agreement
concluded 011 24th Febrnary 1.955 betwun lhe Government of the United Kingdom of Great
Brita£n and Northern Ireland and the Goverr:merit qf Greece.for the arbitration of the Ambatielos
Claim toxether with the Annexes to the Award, London.
2 See P- 138.
Annex 121
92 GREECE/ UNITED KINGDOM
The Greek Government claims that the words "within the time agreed "
indicate that definite delivery dates had been fixed, whereas the United
Kingdom Government claims that the contract is complete without any reference
to special delivery dates and denies on various grounds that any delivery
date had been agreed upon.
The Greek Government, in support of its claim concerning fixed dates for
delivery, has produced a letter of 3rd July, 1919, from Mr. N. Ambaticlos to his
brother in London giving him written instructions for the transaction with the
Ministry of Shipping, including fixed dates. In a telegram of 12th July, 191Y,
to the Shipping Controller, confirmed by a letter of the same date, Mr. Ambaticlos
stated that the only person authorized to act for him was his brother,
Mr. G. Ambatielos, who had written authority to buy seven B. type ships
" building in Hong Kong on certain conditions set out in the authority given
to him".
One of the B. type ships not being available, the written contract finally
signed was concerned with six B. type and three C. type ships, -without any
dates being inserted. When Mr. Nicholas Ambatidos found that the contract
did not contain specific dates he, according to his subsequent evidence, told
his brother that he was going to repudiate the contract. However, Major Laing
called on Mr. Ambatielos in Paris at the end of August, lYlY, and assured
Mr. Ambatidos that the ships would be delivered on dates certain which had
been written down on a buff slip of paper. This buff slip of paper, the existence
of which was never in dispute, contained dates certain. They were obtained by
a Mr. Bamber, an official of the Ministry, from his records which contained
reports from the dockyards. The Greek Government claims that the contract
refers to this buff slip of paper and that fixed dates were definitely agreed upon
as part of the contract. The United Kingdom Government claims that the
dates written down on the buff slip of paper were merely indications of the time
when the ships could be expected to be ready for delivery.
The Greek Government contends - quoting in support of their contention a
statutory declaration by Major Laing, sworn in 1934 (which is set out in Annex
7 1 to this award) - that Major Laing had induced Mr. Ambatielos to pay half
a million pounds more than the price then ruling for vessels of the same type
because he, Major Laing, had been able to give fixed dates. The United Kingdom
Government contends that the prices were nol unduly high for ships of
that kind and that the price could certainly be accountr.d for by the privilege
granted to Mr. Ambatielos for " free charter-parties " not subject to the regulations
of the United Kingdom Government, by Mr. Ambatielos's being able to
sail the ships under the Greek flag and by the favournble freight rates he would
be able to obtain, the ships being stationed in the Far East where freight rates
were very high.
By way off urther proof of fixed delivery dates the Greek Government relied
upon a teleg,·am sent on 31st October, 1919, in the name of Sir John Esplen,
,..-ho was Major Laing's superior in the Ministry of Shipping, to the Far Eastern
representative of the Ministry of Shipping, and which was in the following terms;
From Esp]en Shipminder, London -To Britannia, Hong Kong. Following for
Dodwell, War Trooper. As the steamer was sold to buyers for delivery not later
than November it is of the utmost importance that she should be completed by
that date stop Cable immediately progress of construction (Signed) M.J. Straker.
The existence of this telegram is not in dispute between the Parties, but the
Parties are not agreed as to the circumstances in which it was sent. It is, further-
1 Seep. 150.
Annex 121
AMBATIELOi, CLAIM 93
more, common ground between the Parties that the ships were delivered later
than had been anticipated. According to the Greek claim, the ship Cephalunia
should have been delivered on 31st August, 1919, the second ship, the Amhatidns,
on 30th September, 1919, and so on down to the last ship, the Afellon, of which
delivery had to be made at latest on l.Sth March, 1920. The two first-named
ships were delivered after a certain delay, and the others after delays of varying
length extending lo as much as eight months. Freight rates having fallen heavily
during that time, considerable loss was suffered by the purchaser.
In November, 1920, the purchaser, Mr. N. E. Ambaticlos, was indebted to
the United Kingdom Government in a large sum of money. For the purpose of
guaranteeing this debt he executed mortgage deeds and covenants on 4th
November, 1920, on seven ships. (See Annex 3 1 to this award.) The last two
ships, the Mellon and the Stathis, were never delivered to Mr. Ambatielos. The
contract for these two ships was not canceUed, and the ships were laid up from
the date when they should have been delivered until the date of Mr. Justice
Hill's judgment hereinafter referred to. During that time the cost of insurance
and other expenses were charged to Mr. Ambatielos. The Greek Government
now claims that it was wrong to cancel the contract as from the date of
judgment, instead of cancelling it as from 4th November, 1920, when the
mortgage deeds were signed. This i~ the claim contained in claim C.
In February, 1921, Mr. Ambatielus, through his brother, proposed that the
purchase of these two ships be cancelled (sec Annex 4 2 to this award), but his
offer was refused by the United Kingdom authorities.
According to the Greek case, Mr. Ambatielos wanted to go to London to
negotiate with the Ministry of Shipping in order to reach a compromise.
However, he was, so the Greek Government alleges, prevented from going to
London because the United Kingdom Government preferred a claim against
him for a sum of .£250,000 in respr.ct of non-payment of taxes which might
render him liable to imprisonment, and it was only after the United Kingdom
Government had withdrawn this claim as being unfounded that Mr. Ambatielos
was able to proceed to London to protect his interests. The United Kingdom
Government does not admit that any such claim was made or that any threat
was made to imprison Mr. Ambatidos.
Mr. Ambatielos went to London in May, 1921, and engaged in negotiations
with Sir Ernest Glover, representative of the Ministry of Shipping who,
according to Mr. Ambatielos, showed a conciliatory attitude. The Greek
Government contends that Sir Ernest Glover consented to reduce the agreed
price by £500,000 but the United Kingdom Government denies that any agreement
was concluded. Meanwhik, Mr. Ambatielos had claimed arbitration
under Clause 12 of thr contract of 17th July, 1919, and arbitrators had been
appointed.
The Hoard of Trade, as successors to the Ministry of Shipping, however,
instituted proceedings in the Court of Admiralty on the mortgage deeds, and
in consequence, by agreement between the parties, the claim of Mr. Ambatielos
was put forward by way of defence to these proceedings, instead of being
dealt with by arbitration. Mr.Justice Hill heard the case in November, I 922,
and on 15th January, 192J, gave judgment for the United Kingdom Government
for possession and sale of certain vessels which had been delivered, and for
principal and interest due under the mortgage deeds.
During those proceeding~ the United Kingdom Govr.rnment, in accordance
1 Seep. 140.
2 Seep. 147.
Annex 121
94 GREECE/UNITED KINGDOM
with the practice of Ministries, refused to produce certain inter-departmental
minutes. The Greek Government claims that this was an unwarranted abuse
of Crown privilege. Furthermore, letters exchanged in July, 1922, between the
former Controller of Shipping, Sir Joseph Maclay, and Major Laing, referring
to assurances said to have been given by the latter to Mr. Ambaticlos about
delivery dates, were not produced in court. These letters are set out in Annex 5 1
to this award. Major Laing and Sir Joseph Maclay were not heard as witnesses
although Major Laing is alleged to have been subpoenaed by the Ministry of
Shipping. The Greek Government claims that the withholding of this evidence
was also an abuse of right which amounted to a denial of justice.
The United Kingdom Government claims that this correspondence was
exempt from production in accordance with English law of procedure which
exempts from production any document prepared for the purpose of the
proceedings. Before the case was heard in the Court of Admiralty, l\,fajor
Laing had indicated to Mr. Ambatielos that these letters were in existence.
He did not, however, transmit copies of the correspondence to Mr. Ambatielos
before the trial.
Mr. Ambatielos appealed against the judgment of Mr. .Justice Hill and asked
the Court of Appeal for leave to call Major Laing as a witness. This, howevf'r,
was refused by the Court of Appeal, the Court holding that it was against
precedent to allow a party to call a witness in the Court of Appeal when that
party could have called the witness in the court of first instance. After the Court
of Appeal had given its judgment in I 923 Mr. Ambatielos did not proceed
with his general appeal, nor did he try to obtain a reversal of the decision of
the Court of Appeal hy appealing further to the House of Lords. When, later
that year, the Crown brought another claim against Mr. Ambatielos for an
account and possession of the Keramier, the Defendant did not appear; nor
wa-s he represented hy Counsel. The case which was heard on 20th July, 1923,
was in all respects similar to the case previously before Mr. Justice Hill. The
judgment of July, 1923, was not appealed against by Mr. Ambatielos. Thus
the proc~edings hefore the United Kingdom courts came to an end, and the
diplomatic phase of the case began. It began with a Note from the Greek
Legation in London to the Secretary of State for Foreign Affairs on 12th
September, 1925. The case was taken up again in a new Note from the Greek
Legation to the Secretary of State for Foreign Affairs on 7th February, 1933.
Further Notes were sent in 1934, I 936, 1939 and I 940. The case was then in
abeyance from 1940 until I Ith May, 1949. It was finally brought before: the
International Court of Justice on 9th April, I 95 I.
On 9th April, 1951, the Greek Minister in the Netherlands, duly authorised
by his Government, filed in the Registry of the International Court of Justice an
Application instituting proceedings before that Court.
The Greek Application referred to the Treaty of Commerce and Navigation
between Greece and Great Britain, signed in Athens on 10th November, 1886,
which is set out as Annex 1 2 to this award, and to the Treaty of Commerce and
Navigation between the same Contracting Parties signed in London on 16th
July, 1926, including a Declaration of the same date. The Declaration is set out
as Annex 6 s to this award. The Application reque~ted the Court:
To declare that it has jurisdiction:
To adjudge and declare ...
1 Seep. 148.
2 Seep. 132.
3 Seep. 150.
Annex 121
AMBATJELOS CLAIM 95
1. That the arbitral procedure referred to in the Final Protocol of the Treaty of
1886 must receive application in the present case;
2. That the Commission of Arbitration provided for in the said Protocol shall be
constituted within a reasonable period, to be fixed by the Court.
The Memorial of Lhe Greek Government contained the following Submissions:
... the Hellenic Government requests the Court to adjudge and declare:
( I) That the Uniled Kingdom Government is under an obligation to agree to
refer its present dispute with the Hellenic Government to arbitration, and to
carry out the .Judgment which will be delivered;
(2) that the arbitral procedure instituted by the Protocol of the Greco-British Treaty
of Commerce and Navigation of 1886, or alternatively, that of the Treaty
of Commerce of I 92G, must be applied in this case;
(3) that any refusal by the United Kingdom Government to accept the arbitration
provided for in those Trea1ies would constitute a denial of justice (AngloIranian
Oil Company case, Order of .July 5th, 1951: I. C . .J. Reports, 1951 ,
p. 89) ;
(4) that the Hellenic Government is entilled to seize the Court of the merits of
the dispute between the two Governments without even being bound to resort
beforehand to the arbitration mentioned under submissions I and 2 above;
(5) alternatively, that the United Kingdom Government 1s undC'r an obligation,
as a Member of the lJnited Na1ions. to ronform to the provisions of Article I,
paragraph l , of the Charter of the United Nations, one of whose principal
purposes is: "to bring about by peaceful means, and in conformity with the
principles of justice and international law, adjustment or settlement of international
disputes or situations", and to those of Article 36, paragraph 3, of the
Charter, according to which "legal disputes should, as a general rule, be referred
by the Parties to the International Court of.Justice". There is no doubt
that the dispute between the Hellenic Government and the United Kingdom
Government is a legal dispute i,usceptible of adjudication by the Court.
The Government of the United Kingdom fried a Counter-Memorial in which,
whilst setting out its arguments and submissions on the merits of the case, it
requested the Court to adjudge and declare that it had no jurisdiction:
(a) to entertain a request by the Hellenic Government that it should order the
United Kingdom Government to submit to arbitration a claim by tht: Hellenic
Government based on Article XV or any other Article or the Treaty of
1886. or
(b) itself to decide on the merits of such a claim,
and that, likewise, it has no jurisdiction:
(a) to entertain a request by the Hellenic Government that it should order the
United Kingdom Government to submit Lo arbitration a claim by the Hellenic
Government for denial of justice based on the general principles of international
law or for unjust enrichment, or
(b) itself to decide upon the merits of such a claim.
* * *
Annex 121
96 GREECE/ UNITED KINGDOM
On lsljuly, 1952, the International Court of Justice, by thirteen votes to two,
found " that it is without jurisdiction to d~cide on the merits of the Ambatielos
claim," and by ten votes to five, " that it has jurisdiction to decide whether the
United Kingdom is under an obligation to submit to arbitration, in accordance
with the Declaration of l 92G, the difference as to the validity of the Ambatielos
claim, in so far as this claim is based on the Treaty of 1886."
* * *
During the second stage of the proceedings before the International Court of
Justice subsequent to the above mentioned judgment the Greek Government
presented the following submissions:
May it please the Court:
I. To hold that the Ambatielos claim, based upon the provisions of the Treaty
of l 886, does not primafacie appear to be unconnected with those provisions.
2. As a consequence, to decide that the United Kingdom is under an obligation
to submit to arbitration, in accordance with the Declaration of I 926, the difference
as to the validity of the Ambatielos claim.
3. To declare that the Court will assume the functions of the arbitral tribunal
in this case in the event of the Parties accepting its jurisdiction in their final submissions.
4. To fix time-limits for the filing by the Parties of the Reply and Rejoinder upon
the merits of the dispute.
The United Kingdom G0vernment formulated the following submissions:
l. That the United Kingdom Government is under no obligation to submit to arbitration,
in accordance with the Declaration of 192G, the difference as to the validity
of the Ambaticlos claim, unless this claim is based on the Treaty of I 88G,
2. That the Hellenic Government's contention that the Ambatielos claim is based
on the Treaty of 1886, within the meaning of the Declaration of 1926, because it is
a claim formulated on the basis of the Treaty of 1886 and not obviously unrelated
to that Treaty, is ill-founded.
3. That, even if the above Hellenic contention be correct in law, the Court should
still not order arbitration in r~spect of the Arnbaticlos claim, because the Ambatielos
claim is in fact obviously unrelated to the Treaty of 1886.
4. That the Ambatielos claim is not a claim based on the Treaty of 1886, unless it
is a claim the substantive foundation of which lies in the Treaty of 1886.
5. That. having regard to (4) above, the Ambatielos claim is not a claim the substantive
foundation of which lies in the Treaty of 1886, for one or other or all of the
following reasons:
(a) the Ambatielos claim does not come within the scope of the Treaty;
(b) even if all the facts alleged by the Hellenic Government were true, no violation
of the Treaty would have occurred ;
(c) local remedies were not exhausted;
(d) the Ambatielos claim - in so far as it has any validity at all, which the United
Kingdom Government denies - is based on the general principles of international
law and these principles are not incorporated in the Treaty of 1886.
6. That if, contrary to ( 4) and ( 5) above, the Ambatielos claim be held to be
based on the Treaty of 1886, the United Kingdom Government is not obliged to
submit to arbitration the difference as to the validity of the claim for one or other
or all of the following reasons:
Annex 121
AMBATIELOS CLAIM 97
(a) non-exhaustion of local remedies;
(b) undue delay in preferring the claim on its present alleged basis;
(c) undue delay and abuse of the process of the Court in that, although reference
of the dispute to the compulsory jurisdiction of the Court has been continuously
possible since the 10th December, 1926, no such reference took place until the
9th April, I 951.
Accordingly, the United Kingdom Government prays the Court
To adjudge and declare
That the United Kingdom Government is not obliged to submit to arbitration,
in accordance with the Declaration of 1926, the difference as to the validity of the
Ambatielos claim.
On 19th May, 1953, the Court held by ten votes to four ' ' that the United
Kingdom is under an obligation to submit to arbitration, in accordance with
the Declaration of 1926, the difference as to the validity, under the Treaty of
1886, of the Ambatielos claim".
* * *
On 24th February, 1955, the Government of the United Kingdom of Great
Britain and Northern Ireland and the Government of Greece concluded an
Agreement regarding the Submission to Arbitration of the Ambatielos Claim.
Article l of this Agreement stated:
(a) The Commission of Arbitration (hereinafter called the Commission) shall be
composed of:
Monsieur Ricardo J. Alfaro
Monsieur AlgotJ. F. Bagge
Monsieur Maurice Bourquin
Monsieur John Spiropoulos
Gerald Thesiger, Q.C.
(b) The President of the Commission shall be Monsieur Ricardo J. Alfaro.
(c) Should any Member of the Commission die or become unable to act, the
vacancy shall be filled by a new Member appointed by the Government which
nominated the Member to be replaced or by agreement between the two
Governments, according to the manner of the original appointment.
According to ArticJe 2 the Commission was requested to determine;
(a) the validity of the Ambatielos claim under the 1886 Treaty having regard to:
(i) the question raised by the United Kingdom Government of undue
delay in the presentation of the claim on the basis of the Treaty;
(ii) the question raised by the United Kingdom Government of the nonexhaustion
of legal remedies in the English Courts in respect of the
acts alleged to constitute breaches of the Treaty;
(iii) the provisions of the Treaty;
(b) in the event of the Commission holding that the claim is valid, whether the
United Kingdom Government ought now in all the circumstances to pay compensation
to the Royal Hellenic Government; and if so, the amount of such
compensation.
* * *
The Greek Government appointed as its Agent Monsieur Georges Bensis,
Counsellor of the Royal Greek Embassy in London, and the United Kingdom
Annex 121
98 GREECE/UNITED KINGDOM
Government appointed as its Agent Mr. F. A. Vallat, C.M.G., Deputy Legal
Adviser of the Foreign Office.
Pursuant to Article 5 of the Agreement of 24th February, 1955, the written
proceedings consisted of a Case presented by the Greek Government on 17th
May, 1955, and a Counter-Case submitted by the United Kingdom Government
before the expiry of the time limit fixed for 17th September, 1955.
The Commission appointed as their Registrar: Dr. Edvard Hambro.
The hearings were opened in London on 25th January, 1956.
The Greek Agent was assisted by the following Counsel:
The Rt. Hon. Sir Frank Soskice, Q.C.
Professor Henri Rolin
Dr. C. John Colombos, Q.C., LLD.
Mr. Frank Gahan, Q.C.
Mr. Mervyn Heald
and the United Kingdom Agent was assisted by the following Counsel:
Sir Harry Hylton-Foster, Q.C., M.P. (Solicitor-General)
Mr. John Foster, Q.C., M.P.
Sir Gerald Fitzmaurice, K.C.M.G.
Mr. Alan Orr, C.B.E.
Mr. D. H. N. Johnson
The Commission held hearings on 25th, 26th, 27th, 30th and 31st January
and on 1st, 2nd, 3rd, 7th, 8th, 9th, 10th, 14th and lfith February.
During these 4earings the Commission heard arguments by Sir Frank Soskiee,
Q.C., Mr.John Colombos, Q.C., Professor Henri Rolin and Mr. Frank Gahan,
Q.C., on behalf of the Greek Government, and by Sir Harry Hylton-Foster,
Q.C., M.P., Mr. John Foster, Q.C., M.P., Sir Gerald Fitzmaurice, K .C.M.G.,
and Mr. F. A. Vallat, C.M.G., on behalf of the United Kingdom Government.
In the Greek Case the submissions of that Government are set out as follows:
The Greek Government's contentions on the three questions so submitted to the
Commission of Arbitration, as more particularly set out hereafter, are as follows:
(i) With regard to the question of undue delay raised by the United Kingdom
Government in the presentation of the Ambatielos claim, the facts are that
the first Note of the Greek Government asking the United Kingdom Government
"to cause a careful examination of the case" was presented to the Uritish
Foreign Offic:e in September, 1925, viz., approximately two-and-a-half
years from the date of the judgment of the English Court of Appeal, and
from 1933 onwards (apart from the war period) continuous requests for
international arbitration were being made to the United Kingdom Government
by the Greek Government. These requests were met by stubborn
refusals to negotiate in any way whatever;
(ii) On the question raised by the United Kingdom Government of no11-
exhaustion of the legal remedies by Mr. Ambatielos in the English Court, there
are two points, namely: (a) failure to appeal to the House of Lords against
the refusal of the Court of Appea1 to admit fresh evidence on appea1 from
the judgment of the English Court of Admiralty and (b) failure to prosecute
an appeal from the said judgment;
As to (a), the short answer is that in refusing Mr. Ambatielos's request for
the production of fresh evidence, the Court of Appeal was exercising its
discretion in a matter of practice and procedure and that an appeal to the
House of Lords had no prospects of success.
As to ( b), in the absence of the fresh evidence referred to in (a), the
Annex 121
AMBA TIE LOS CLAIM 99
prospect of success on appeal was so slight as to be ''ineffective" within the
meaning of international law;
(iii) On the question of the validity of the Ambatielos claim under the provisions
of the Treaty, the Greek Government contends that its national d,d not receive
at the hands of the United Kingdom the treatment to which Greek
nationals are entitled under the provisiom of the Treaty and geuerally under
the rules of international law, justice, right, and equity applicable thereto.
As argued by Sir Frank Soskice before the International Court ofjustice in
March, 1953: - "The plain, unvarnished truth here is that the Greek Gov•
ernment complain of the fact that one of their nationals paid £1,600,000
for nine ships, got no ships, got nothing for his money: £500,000 of that
£1 ,600,000 was specifically paid in order to ensure that the ships should be
delivered at a certain time; th<'y were not delivered at that time; the British
executive authorities then kept back evidence which prevented Mr. Ambatielos
getting relief from the British Courts. He got no relief but was ordered
to pay some £350,000 instead. ' '
At the end of the Case the actual claims are set out as follows:
The main claim A, consisting of £8,059,488 l ls. Od., as compensation for
breach of the contract of sale, an alternative claim B. based on unjust enrichment
amounting to £4,140,075, and another alternative claim C, in connection with
the cancelling date of the purchase of the A1ellon and the Stathis amounting
to £4,409,242.
At the end of the oral proceedings the Greek claims were put as follows :
A. Under the claim based on Article X of the Anglo-Greek Treaty of Commerce and
Navigation, 1886, read in conjunction with Article 16 of the Treaty of Peace and
Commerce between Great Britain and Denmark of 1660 (16GI); Anicle 24 of the
like treaty of 1670; Article I II of the Anglo-Spanish Treaty of 1667; Article 6 of
the Treaty of Peace and Commerce between Great Britain and Sweden, 166 I ;
Article 7 of the Anglo-Peruvian Treaty, 1830; Article 1 of the Anglo-Japanese Treaty,
191 l; and Article X of the Anglo-Bolivian Treaty, 1911.
1. British Government contracted in 1919 to sell to Mr. Ambatielos nine ships
to be delivc:red at or before definitely agreed dates.
2. British Government broke that contract by not delivering the ships within
those agreed dates.
:L As an incident of that contract, the contract price was boosted to the extent
of £500,000 because the dates of delivery were agn:ed.
4. Ry reason of delivery not having been made within the time agreed, Mr.
Ambatidos received nothing for that £500,000.
5. The breaches of the contract inevitably placed Mr. Ambatielos i11 a position
of acute financial embarrassment.
6. If Mr. Ambatielos had been able to come to London in 1920 he might have
saved the wreck of his fortune and so have avoided ruin by negotiating a
practicable settlement; but the British Government by an unfounded claim
for income tax (which claim involved the possibility of his imprisonment if
he came to the United Kingdom) prevented him from coming to London.
7. \Nhen in May, 1921 , Mr. Ambatidos was able without danger to come to
London, the claim for income tax: was abandoned and Mr. Ambatielos
arranged terms with Sir Ernest Glover reducing the price outstanding by
£.100,000 and submitting the matters in dispute to arbitration, but the
Annex 121
100 GREECE/UNITED KINGDOM
Board of Trade, arbitrarily and without any consideration as to the merits
and fairness of the case, frustrated those negotiations by insisting upon
resorting to action for the purpose of enforcing their mortgages.
8. In the circumstances obtaining, common equity and fairness required that the
British Government should have handed over to Mr. Ambatielos the Stathis
and the Mellon in order that Mr. Ambatielos could trade with them; but
the British Government (whether acting within or outside its strict legal
rights) refused to hand over those ships, thereby occasioning further serious
loss to Mr. Ambatielos and making his ruin certain.
9. If Mr. Ambatielos had been able to establish, by way of defence and counterclaim
in the action before Mr. Justice Hill, his claim to damages for lat<:>
delivery, he would have prevented the seizure and sale of the ships and, in
addition, he would have been awarded substantial compensation; but the
British Government, by its manoeuvres before and in the proceedings before
Mr. Justice Hill, procured a miscarriage of justice in that it procured Mr.
Justice Hill to reach an erroneous conclusion of fact, namely that there were
no agreed dates of delivery.
10. The manoeuvres mentioned in 9 consisted in:
(a) The Board of Trade abused the privileges available to it as a department
of the British Government in that the Board of Trade under cover of state
privilege withheld crucial and essential minutes and other departmental
documents, whereas a proper exercise of state privilege would haw required
that those documents should all have been placed before the court.
(b) The Board of Trade and those responsible for preparing its case in the
proceedings before Mr. Justice Hill failed to make available, either to the
court or to Mr. Ambatielos's advisers in reasonabk time before or at the
proceedings, the correspondence which had passed between Sir Joseph
Maclay and Major Laing in July, 1922.
(c) With knowledge that Major Laing could give vitally material evidence
in support of Mr. Ambatielos's case and that Mr. Ambatielos's advisers
were unlikely to have access to that evidence (since it related to Major
Laing's actions while a government servant), the Board of Trade and those
responsible for preparing its case nevertheless kept rhat evidence from the
court by:
(i) not calling Major Laing as a witness;
(ii) not informing Mr. Ambatielos or his advisers in good time before
or at the trial that the evidence was available and could be given
by Major Laing;
(iii) allowing their counsel to present before Mr. Justice Hill a version
of the facrs and an argument in respect of the Board of Trade's case
which was contrary to the documents which they had or must have
had in their possession (namely the July, 1922, correspondence, and
a proof or written statement of the evidence which Lord, formerly
Sir Joseph, Maclay and Major Laing were prepared to give) with
the result that Mr. Jusrice Hill was allowed t0 arrive at a decision
which amounted to a miscarriage of justice.
l l. When Mr. Ambatielos, through his advisers, applied to the Court of Appeal
for leave to call further evidence the Board of Trade ought to have consented
to and indeed ought to have assisted that application, but instead the
Board of Trade opposed it and persuaded the Court of Appeal to reject the
application.
Annex 121
AMBA TIELOS CLAIM
12. The totality of the facts above set out, or of such of them as the Commission
may find 10 have been established.
The Greek Government contends th;i.t:
1. The above facts constitute a breach of Article X of the 1886 Treaty under
which Greece and Greek subjecrs have the benefit of other treaties into which the
United Kingdom had en te,·ed in that:
(i) In breach of Article lG of the Anglo-Danish Treaty of Peace and Commerce,
1660 (1661) the British Government, having broken its contract with Mr.
Ambatielos and having put difficulties i11 his way, when his cause came
before Mr. Justice Hill, caused to be administered to Mr. Ambatielos not
justice and right, but injustice and wrong.
(ii) Likewise in breach of Article 24 of the Anglo-Da11ish Treaty of Peace
and Commerce, 1670, the British Government failed to cause justice and
equity to be done, and caused injustice to be done.
(iii) Likewise in breach of Article ] of the Anglo-Spanish Treaty of Paace and
Friendship, 1667, the British Government failed to abstain from force,
violence and wrong, and did injury to Mr. Ambalielos against common
right ; when justice was sought in the ordinary course of law it was not
followed, but justice was dt:ni,:d; and when the Greek Government asked
for justice, and for Commissioners to receive and hear the matter, the
British Government refused and delayed justice.
(iv) Likewise in breach of Article fi of the Anglo-Swedish Treaty of Peace and
Commerce, 1661, when Mr. Ambatielos stood in need of the Magistrate's
help it was nOl gramed to him readily and in friendly manner according
to the equity of his cause, and justice was nol administered to him but
injustice.
(v) Likewise in breach of Article 7 of the Anglo-Peruvian Treaty, 1830, Mr.
Ambatielos did not in England enjoy full and perfect protection of his
person and properly and did not have free and open access to the courts
of justice for the prosecution and dt'fence of his just rights. On the contrary
the British Government threatened his person by an unfounded income
tax claim; injured his property and procured the doing of injustice in the
proceedings before Mr.Justice Hill.
(vi) Likewise in breach of Article 1, paragraph 6, of the Anglo-Japanese Treaty,
191 I, ihe Bri1ish Government did not afford Mr. Ambatielos complete
security for his person and property, but endangered his person by an
unfounded income (ax claim, and denuded him of his property.
(vii) Likewise in breach of Anicle 10 of the Anglo-Bolivian Treaty, 1911, justice
was denied to Mr. Ambatielos, and the principles of imernational law were
violaccd in that Mr. Ambatielos was subjected to arbitrary and unfair
rreatment and an unjust court decision was procured against him.
The damage from these breaches is set out in Claim A in the Greek Case.
2. Alternatively if, contrary to the Greek Government's contention, the Commission
should hold that there was nol a conlract for delivery of the ships on or before
fixed dates, it is clear that Mr. Ambatielos paid an additional £500,000 because
of the most specific assurances about early deliveries. By reason of 1hese assurances
being broken, the British Government, in violation of the principles of international
law and in breach of Article IO of the Anglo-Bolivian Treaty, 1911, and ihe other
treaties mentioned at the outset of this chart as incorporated by Article X of the
Anglo-Greek Treaty of 1886, has been unjustly enriched.
Annex 121
102 GREECE/ UNITED KINGDOM
The damage lhereby suffered by Mr. Ambatielos is set out in Claim B in the
Greek Case.
3. Alternatively, if regard is had only to the proceedings before Mr. Justice
Hill and lo the British Government's manoeuvres in relation thereto (facts No. 9,
IO and 11 ), the British Government procured a denial of justice to Mr. Ambatielos
in breach of the above-cited Articles of Treaties between the United Kingdom and
Denmark, Spain, Sweden and Bolivia.
The damage thereby suffered is set out in Claim A in the Greek Case.
4. Alternatively to Contentions I and 3, equity and fair dealing required that
the sale of the Mellon and Stathis should have been treated as cancelled about
November, IY20, and not later than 3rd February, 1921 (see the penultimate
paragraph of Exhibit 4F to the Greek Case). The failure co do as equity and fair
dealing required and the aggravation of damage to Mr. Ambatielos was a breach
of the Treaty Articles cited.
The damage thereby suffered by Mr. Ambatidos is set out in Claim C in the
Greek Case.
B. Under the claim based on Article XV of the Anglo-Greek Treaty of Commerce
and Navigation, 1886.
1. The British Government put forward a case before Mr. Justice Hill contrary
to documents in their possession.
2. The British Government withheld those documents, thereby preventing
Mr. Ambatielos knowing that they were putting forward a case of that kind, namely
a case known to be false.
3. The British Government did so in circumstances in which they knew that
Mr. Ambatielos had no power to compel them to disclose those documents, they
having the righl lo refuse to disclose them.
The Greek submission was that these three alleged facts constituted denial of
free access to the Courts.
The United Kingdom submissions which were retained at the end of the oral
proceedings are as follows :
In the light of the facts, considerations and contentions set out in the present
Counter-Case, the United Kingdom Government asks the Commission to adjudge
and declare the Greek Claim to be invalid, because
(1) there has been undue delay in presenting the claim on the basis ofthe 1886
Treaty;
(2) the Claimant failed to exhaust his legal remedies in the English Courts;
(3) the Claim discloses no breach of the 1886 Treaty, direct or indirect.
* * *
The Commission will begin the determination of the issues submitted to it by
examining the question raised by the United Kingdom Government of undue
delay in the presentation of the claim on the basis of the 1886 Treaty.
The Commission thinks it desirable thereafter to determine the question of the
validity of the Ambatielos claim under the 1886 Treaty. Finally, the Commission
will determine the question whether the legal remedies in the English Courts
were exhausted by Mr. Ambatielos.
Annex 121
AMBATIELOS CLAIM
THE QUESTION OF UNDUE DELAY IN THE PRESENTATION OF THE CLAIM
ON THE BASIS OF THE TREATY OF 1886
103
The Government of the United Kingdom contends that the claim of the
Greek Government ought to be rejected by reason of the delay in its presentation.
It is generally admitted that the principle of extinctive prescription applies
to the right to bring an action before an international tribunal. International
tribunals have so held in numerous cases (Oppenheim - Lauterpacht - International
Law, 7th Edition, I, paragraph 155c; Ralston - The Law and Procedure
of /nternatio11al Tribunals, paragraphs 683-698, and Supplement, paragraphs
683 (a) and 68 7 (a) ). L' Ins ti tut de Droi t international expressed a view to this
effect at its session at The Hague in 1925.
There is no doubt that there is no rule of international law which lays down
a time limit with regard to prescription, except in the case of special agreements
to that effect, and accordingly, as L'lnstitut de Droit international pointed out
in its 1925 Resolutions, the determination of this question is "left to the
unfettered discretion of the international tribunal which, if it is to accept any
argument based on lapse of time, must be able to detect in the facts of the case
before it the existence of one of the grounds which are indispensable to cause
prescription to operate".
The Commission does not find in the circumstances of the present case any
reason which would justify the application of the principle of prescription to
the claim of the Greek Government.
The diplomatic correspondence produced by the Parties shows that the
Greek Government intervened from 1925 onwards in order to exercise its
diplomatic protection on behalf of Mr. Ambatielos, and that, since then, it has
made repeated representations at intervals which cannot be regarded as
abnormal in the particular circumstances of the case.
It should also be noted that the Government of the United Kingdom has not,
before the Commission, persisted in the argument which it put forward before
the International Court of Justice in support of its allegation of "undue delay ".
Before the International Court the Governmt:nt of the United Kingdom
contended that the Greek Government had been dilatory in taking up the
Ambatielos Claim initially, and in prosecuting it generally. Before the Commission
it abandoned this complaint. (United Kingdom Counter-Case, paragraphs
Hil::I and 169).
In the arguments addressed to the Commission, the undue delay imputed to
the Greek Government did not relate to the diplomatic representations made
and pursued by that Government, but to the use the latter made of the Treaty
of 1886 as being the basis of its action.
It is a fact that until 1939 the claim of the Greek Government seemed to be
based solely on general international law, and that it was in the Note of 21st
November, 1939, addressed by the Greek Legation in London to the Secretary
of State for Foreign affairs of the United Kingdom (International Court of
Justice, Ambaticlos Case, Pleadings pp. 96-98) that the Treaty of 1886 was
for the first time relied upon to support the claim.
The Government of the United Kingdom explains this change of attitude as
being due to the anxiety of the Grec·k Government to submit the dispute to
arbitration. So long as the dispute remained within the sphere of general
international law, there was no obligation on the United Kingdom to submit to
arbitration or judicial settlement. On the other hand, by linking the dispute with
the Treaty of 1886, the Greek Government could, by virtue of the Declaration
which the two Governments had signed on 16th July, 1926, rely upon the obliAnnex
121
104 GREECE/ UNITED KINGDOM
gation provided for in this Declaration, to the effect that " claims on behalf of
private persons based on the provisions of the Anglo-Greek Commercial Treaty
of 1886" were to be submitted to arbitration.
This explanation is a plausible one, but it is difficult to see what effect it can
have on prescription.
The Greek Government, by changing the legal basis of its action in order to
obtain a settlement of the dispute by arbitration, only exercised the right to
which it was entitled. If it did not adopt this attitude until 1939 when its initial
diplomatic intervention dates back to 1925, that fact cannot be held against it
in so far as concerns the operation of prescription, unless it brought about
results which, in themselves, would justify the operation of prescription - such,
for instance, as the difficulties of the United Kingdom in assembling the elements
of proof requisite for or useful to its defence.
Furthermore, it is not very clear from the United Kingdom Counter-Case
whether the allegation against the Greek Government is directed to that
Government's having waited until 1939 to decide upon the present legal basis
for its action, or whether it is not rather directed to the Greek Government's
having waited until 195 l to institute the legal proceedings which it was open to it
to " institute, compulsorily, as early as, at the latest, 1926 ". (Counter-Case,
paragraph 168.)
In the latter case the alleged delay would be concerned not with the fact that
reliance was placed on the Treaty of 1886, but that legal action was taken on the
basis of that Treaty.
The Government of the United Kingdom desires it to be understood that if
the Greek Government had acted earlier, the evaluation and appreciation of the
events in dispute would have been simpler and more certain. (Counter-Case,
paragraph 169). This 1.:ontention, however, does not find support in any specific
fact, and it would seem to be all the more difficult to accept because - even
though the legal basis of the claim has been changed during the diplomatic
exchanges - the facts which constitute its substance have remained the same
from the beginning, and from the point of view of difficulty of proof the-,e facts
are, above all, important.
The Commission is therefore of opinion that the objection of" undue delay "
raised by the Government of the United Kingdom is not well-founded, in so far
as it is intended to cause the claim of the Greek Government to be rejected.
But the Government of the Uni Led Kingdom would appear to draw a further
conclusion from the delay which it imputes to the Greek Government. It
contends, in fact, that as the Greek Government invoked the Treaty of 1886 as
the basis of its claim only belatedly, there would, for this reason, be a presumption
unfavourable to its case. (Counter-Case, paragraphs I 75 and 176.)
This consideration, however, is irrelevant to prescription, and could have a
bearing only on the requirements of proof.
THE VALIDITY OF THE AMBATIELOS CLAIM UNDER THE 1886 TREATY
As stated in the Greek Case (paragraph 6, iii) " the Greek Government
contends that its national (Mr. Ambatielos) did not receive at the hands of the
United Kingdom Government the treatment to which Greek nationals are
entitled under the provisions of the Treaty, and generally under the rules of
international law, justice, right and equity applicable thereto."
Further on, the part of the Case dealing specifically with the question of "the
validity of the Ambatielos claim under the provisions of the 1886 Treaty"
(paragraph 58), reads as follows: " The Greek Government contends that there
has been a breach by the U nitcd Kingdom of all nr mry of the foll awing pro vi fions
Annex 121
AMBA TIELOS CLAIM 105
of the Anglo-Greek Treaty of Commerce and Navigation of November 10, 1886,
to wit: ". Articles I, X, XII and XV of the Treaty are then quoted in full in
paragraphs 58, 59, 78 and 80 of the Case, respectively, and comments are made
on each of the aforesaid provisions, in support of the Greek contention, in paragraphs
58 to 90 of the Case.
The position of the Greek Government as outlined above and as it presented
itself when the oral hearing began, was subsequently changed. The Commission
requested Counsel for the Greek Gm,ernment at the end of the 6th meeting, held
on 1st February, to indicate at the conclusion of their arguments and zn a
precise manner:
(1) the facts which in the opinion of that Government resulted in the
international responsibility of the British Government;
(2) the Article or Articles of the Treaty of 1886 to which each of these facts,
according to the Greek Government, was referable.
In accordance with this request, Sir Frank Soskice, Chief Counsel for the
Greek Government, at the 8th meeting of the Commission, held on 3rd February,
made the following statement:
I accept that in order to succeed in this claim the Greek Government must be
able to establish that there was a breach of some provision, some Article of the 1886
Anglo-Greek Treaty. The only Articles which, in the submission of the Greek
Government, were brr.ached, were Article X and Article XV . . . It is not asserted
any longer that there was a breach of Article I.
Afler this statement Sir Frank Soskice set out the facts and claims which have
been enumerated above.
In paragraph 12 of those submissions Chief Counsel for the Greek Government,
Sir Frank Soskice, stated:
The totality of the facts above set out or of such of them as the Commission
may find co have been established . .... the Greek Government contends ...
constitute a breach of Article X of the 1886 Treaty.
Furthermore, Counsel for the Greek Government at the 6th meeting withdrew
the contents of paragraphs 70, 71 and 74 of the Greek Case; and at the 8th
meeting the previous allegation in respect of a breach of Article XII of the
Treaty of 1886 was also withdrawn.
These paragraphs and a Statement made on their withdrawal are set out in
Annex 8 1 to this award.
Furthermore, Counsel for the Greek Government asserted that Article XV of
the above-mention~d Treaty had been violated in the manner specified in the
three particulars set out at the very end of the final submissions, and which will
be the subject of consideration in connection with Article XV.
On the other hand, the Government of the United Kingdom, in paragraph 178
of the Counter-Case, maintains that ·' no breach of the Treaty could be established,
even if the Greek version of the facts were accepted as correct " .
It is apparent, therefore, that the essential task of the Commission is to
determine, in th~ light of such facts as it may consider duly established by the
Claimant Government on whom the burden of proof obviously lies whether or
not Articles X and XV of the Treary of 1886, or either of them, have been
violated by the Government of the United Kingdom.
* *
1 Seep. 152.
Annex 121
106 GREEGE/ UNITED KINGDOM
THE INTERPRETATION OF ARTICLE X OF THE TREATY OF 1886
Article X of the Treaty of 10th November, 1886, reads as follows:
The Contracting Parties agree that, in all matters relating to commerce and navigation,
any privilege, favour, or immunity whatever which eilher Conlracting Party
has actually granted or may hereafter grant to the subjects or citizens of any other
State shall be extended immediately and unconditionally to the subjects or ci1 izens
of the other Contracting Party; it being their inlention that the trade and navig.ttion
of each country shall be placed, in all respects, by the other on the footing or the
most favoured nation_
* * *
The Greek Government claims that by virtue of the most-favoured-natio 1
clause contained in this Article, it is entitled to claim for its nationals treatmer, t
in accordance with" justice "," right "," equity "and the•· principles of inter•
national law", such treatment having been assured by t.hc United Kingdom to
the nationals of other States, by virtue of the Treaties concluded by that country
with Denmark, Spain, Sweden, Peru, Costa Rica, Japan and Bolivia_ (Greek
Case, paragraphs 60-63, and International Court of Justice, Ambatielos Case,
Pleadings, PP- 509-515 )
* * *
The United Kingdom Government disputes that this is so_ It puts forward
the following:
(a) that a most-favoured-nation clause can, in principle, only attract treatment
accorded to other countries or their nationals as a privilege, favour,
or immunity, and not treatment accorded as a right (irrespective of any
conventional basis), such as treatment in accordance with the principles
of international law;
(b) that a most-favoured-nation clause can only attract matters belon~ing
to the same category of subject as the clause itself relates to ;
(c) that the most-favoured-nation clause in Article X of the 1886 Treaty
only relates to commerce and navigation and not to the administraLio11
of justice;
(d) that even were Article X of the 1886 Treaty so worded as Lo attract a
right to treatment in accordance with the general rules of international
law, justice, right and equity, relative to the administration of justice,
no such right is in fact conferred by the provisions of the other Treaties
cited by the Greek Government_ (United Kingdom Counter-Case, paragraphs
237-249.)
* * *
The Cummission does not deem it necessary to express a view on the general
question as to whether the most-favuured-nation clause can never have the
effect of assuring to its beneficiaries treatment in accordance with the general
rules of international law, because in the present case the effect of the clause
is expressly limited to "any privilege, favour or immunity which either Contracting
Party has actually granted or may hereafter grant to the subjects or
Annex 121
AMBATIELOS CLAIM 107
citizens of any other State", which would obviously not be the case if the sole
object of those provisions were to guarantee to them treatment in accordance
with the general rules of internalional law.
* * *
On the other hand, the Commission holds that the most-favoured-nation
clause can only attract matters belonging to the same category of subject as
that to which the clause itself relates.
The Commission is, however, of opinion that in the present case the application
of this rule can lead to conclusions different from those put forward by the
United Kingdom Government.
In the Treaty of 1886 the field of application of the most-favoured-nation
clause is defined as including" all malters relating to commerce and navigation ".
It would seem that this expression has not, in itself, a strictly defined meaning.
The variety of provisions contained in Treaties of commerce and navigation
proves that, in practice, the meaning given to it is fairly flexible. For example,
it should be noted that most of these Treaties contain provisions concerning the
administration of justice. That is the case, in particular, in the Treaty of 1886
itself, Article XV, paragraph 3, of which guarantees to the subjects of the two
Contracting Parties " free access to the Courts of Justice for the prosecution
and defence of their rights ". That i~ also the case as regards the other Treaties
referred to by the Greek Government in connection with the application of the
most-favoured-nation clause.
It is true that" the administration of justice", when viewed in isolation, is a
subject-matter other than "commerce and navigation", but this is not necessarily
so when it is viewed in connection with the protection of the rights
of traders. Protection of the rights of traders naturally finds a place among
the matters dealt with by Treaties of commerce and navigation.
Therefore it cannot be said that the administration of justice, in so far as it is
concerned with the protection of these rights, must necessarily be excluded
from the field of application of the most-favoured-nation clause, when the
latter includes " all matters relating to commerce and navigation ". The question
can only be determined in accordance with the intention of the Contracting
Parties as deduced from a reasonable interpretation of the Treaty.
Although the wording of Article X docs not provide a clear and decisive
indication in this respect, the Commission is of opinion that it is difficult to
reconcile the narrow interpretation submitted by the Government of the United
Kingdom wiLh the indications given in the text, in particular in the last part
of the sentence: "it being their (the Contracting Parties') intention that the
trade and navigation of each country shall be placed, in all re5pec Ls, by the other
on the footing of the most favoured nation".
* * *
Having thus determined the meaning of the most-favoured-nation clause
contained in Article X of the Treaty of 1886, the next question is whether this
clause effectively brings about the results which the Greek Government believes
it does, by relying on the various Treaties concluded by the United Kingdom
with other States.
Annex 121
108 GREECE/ UNITED KINGDOM
One of these results, it is contended, would be to incorporate in the Treaty
of 1886 the " principles of international law ". To justify this argument, the
Greek Government relies exclusively on Article 10 of the Treaty of Commerce
concluded on 1st August, 1911, between the United Kingdom and Bolivia,
which reads as follows :
The High Contracting Parties agree that during the period of existence of this
treaty they mutually abstain from diplomatic intervention in cases of claims or
complaints on the part of private individuals affecting civil or criminal matters in
respect of which legal remedies are provided.
They reserve, however, the right to exercise such intervention in any case in which
there may be evidence of delay in legal or judicial proceedings, denial of justice,
failure to give effect to a sentence obtained in his favour by one of their nationals
or violation of the principles of international law. (International Court of Justice,
Arnbatielos Case, Pleadings, p. 515.)
The Commission cannot agree that a provision such as this has the effect of
incorporatinR the principles of international law in the Anglo-Greek Treaty
of 1886 by virtue of the most-favoured-nation clause.
As stated above, the most-favoured-nation clause contained in the Treaty of
1886 applies only to privileges, favours and immunities granted to other countries,
and therefore cannot incorporate the principles of international law in the
said Treaty. If need be, this observation would suffice to reject the conclusion
which the Greek Government considers itself entitled to draw from Article
10 of the Anglo-Bolivian Treaty. There is another decisive reason, however,
which corroborates the preceding one: It is the fact that it is in no way the object
of this provision to guarantee to the nationals of the Contracting States the principles
of international law. Its object is to provide in a special manner, as between
Contracting States, for the exercise of diplomatic protection. According
to the first paragraph of the Article the Contracting Parties undertake to
abstain from any intervention of this kin<l in respect of claims by private individuals
for which local remedies are provided. The second paragraph provides
for certain exceptions to this rule, one of which reserves the right to exercise
such intervention in case of violation of the principles of international law.
T t is with regard to this exception that the Article refers to the principles of
international law. However, it refers to these principles solely for the purpose
of laying down the candztion which governs this exception, and not for the purpose
of guaranteeing the benefit of these principles to the nationals of the Contracting
States.
Whichever way the matter is envisaged, it is impossible to accept the proposition
that Article IO of the Anglo-Bolivian Treaty has the effect, by virtue of the
most-favoured-nation clause, of incorporating the principles of international
law in the Treaty of 1886.
* * *
The provisions of other treaties on which the Greek Government relics are
concerned with the admiriistration of justict:. Several of them date back to the
seventeenth century (the Treaties of 13th February, 1660-1661, and of 11th
July, 1670, with Denmark; a Treaty of 23rd May, 1667, with Spain; Treaties
of 11th April, 1657, and of 21st October, 1661, with Sweden). Naturally, their
wording was influenced by the customs of the period, and they must obviously
be interpreted in the light of this fact. It is only in these Treaties of the seventeenth
century that certain references appear to "justice ", " right " and
" equity " on which the Greek Government relies in support of its claim that
Annex 121
AMBATIELOS CLAIM 109
these concepts have been incorporated as such in the Anglo-Greek Treaty of
1886.
The Commission takes the view that to attribute such significance to these
provisions would be to strain their meaning. "Justice ", " right " and " equity "
are not guaranteed hy these provisions as rights independent of and superior to
positive law, but simply within the framework of the municipal law of the
Contracting States. It was not an ideal system of "justice ", " right " and
" equity" which the signatory Governments intended to assure to their
respective nationals; it was the application of their national laws concerning
the administration of justice.
Furthermore, the Treaties concluded with Denmark provide an indication in
this respect which leaves no room for doubt; Article 46 of the Treaty of 1660-
1661 specifics, " acwrdmg to the laws tmd statutes of each country ", and Article 24 of
the Treaty of 1670, '' according to the laws and statutes of either country".
The same idea is expressed in different fashion in the Treaty of 1667 with
Spain; " until such time as Justice is sought and followed in the ordinary course
of Law "; " to the end that all such differences be compounded in friendship, or
according to Law ".
It is true that the Treaties of 1654 and 1661 with Sweden do not expressly
mention municipal law, but there is nothing which permits us to ascribe a
different meaning to them. The provision that " in case the people and subjects
on either part ... shall stand in need of the Magistrate's help, the same shall
he readily and according to the equity of their cause in friendly manner granted
to them and justice shall be administered to them without long ... delays "
must refer to help and equity and justice according to municipal law. Moreover,
these Treaties were contemporary with those concluded with Denmark and
Spain, to which reference has just been made, and it is difficult to believe that,
notwithstanding some discrepancies in wording, the intention of the Contracting
Parties was not the same in each case.
The Commission cannot, therefore, accept the argument that the Treaties
concluded by the United Kingdom in the seventeenth century with Denmark,
Spain and Sweden give the Greek Government the right to claim for Mr.
Ambaticlos treatment in accordance with" justice"," right "and" equity" in
the ideal sense of those words and independently of the rules of English law.
As for the Treaties which were concluded after the seventeenth century and to
which reference is made by the Greek Government, they obviously cannot be
rclierl upon to support this argument because they are limited to guaranteeing
equality of treatment with the signatories' own nationals in the matter of the
administration of justice.
* * *
To sum up, the Commission is of opinion:
(l) that the Treaty concluded on 1st August, 1911, by the United Kingdom
with Bolivia cannot have the effect of incorporating in the Anglo-Greek Treaty
of 1886 the " principles of international law ", by the application of the mostfavoured-
nation clause;
(2) that the effects of the most-favoured-nation clause contained in Article X
of the said Treaty of 1886 can be extended to the system of the administration of
justice in so far as concerns the protection by the courts of the rights of persons
engaged in trade and navigation;
(3) that none of the provisions concerning the administration of justice which
are contained in the Treaties relied upon by the Greek Government can he
Annex 121
110 GREECE/ UNITED KINGDOM
interpreted as assuring to the beneficiaries of the most-favoured-nation clause a
system of " justice " , " right " and " equity " different from that for which the
municipal law of the State concerned provides;
( 4) that the object of these provisions corresponds with that of Article XV of
the Anglo-Greek Treaty of 1886, and that the only question which arises i5,
accordingly, whether they include more exlensive ' ' privileges"," favours" and
" immunities " than those resulting from the said Article XV;
(5) that it follows from the decision summarised in (3) above that Article X
of the Treaty does not give to its beneficiaries any remedy based on " unjust
enrichment " different from that for which the municipal law of the State
provides.
As will be shown below, the Commission is of opinion that " free access to the
Courts " , which is vouchsafed to Greek nationals in the United Kingdom by
Article XV of the Treaty of 1886 includes the right to use the Courts fully and
to avail themselves of any procedural remedies or guarantees provided by the
law of the land in order that justice may he administered on a footing of equality
with nationals of the country.
The Commission is therefore of opinion that the provisions contained in
other Treaties relied upon by the Greek Government do not provide for any
•· privileges, favours or immunities " more extensive than those resulting from
the said Article XV, and that accordingly the most-favoured-nation clause
contained in Article X has no bearing on the present dispute. In view of this
decision as to the proper interpretation of Article X the Commission finds it
unnecessary to consider expressly whether any of the 11 allegations of fact which,
in their totality, are alleged to constitute a breach of Article X. have been
established. Some of the allegations are however disposed of, when relevant,
m other parts of this award.
THE INTERPRETATION OF ARTICLE xv OF THE TREATY OF 1886
The submissions relative to breaches of Article XV of the Anglo-Greek Treaty
of 188G will now he examined.
Article XV provides as follows:
The dwelling:;, manufactorics, warehouses and shops of the subjects of each of
the Contracting Parties in the dominions and possessions of the other, and all
premises appertainin,:::- thereto destined for purposes of residence or commerce shall
be respected.
It shall not b~ allowable to proceed to make a search of, or a domiciliary visit
to, such dwellings and premises, or to examine and inspect books, papers, or accounts,
except under the conditions and with the form prescribed by the laws for subjects
of the country.
The subjects of each of the two Contracting Parties in the dominions and possessions
of the other shall have free access to the Courts of Justice for the prosecution
and defence of their rights, without other conditions, restrictions, or taxes beyond
those imposed on native subjects, and shall, like them, be at liberty to employ, in
all causes, their advocates, attorneys or agents, from among the persons admitted
to the exercise of those professions according to the laws of the country.
For the purposes of this arbitration the Commission is solely concerned with
the third paragraph of this Article and its decision must necessarily hinge upon
the interpretation to be given to the phrase " free access to the [English] Courts
of Justice", which is used by the Parties to the Treaty.
The Greek Government contends (paragraph 81, Greek Case), that " access
to the Courts for the prosecution and defence of their rights is not limited to
Annex 121
AMBA TIELOS CLAIM l l I
allowing a foreign national to go to Court and plead his cause but includes the
obligation to make it possible for him to avail himself of all the documents
necessary for the defence of his rights. Construed in its natural meaning, the
term does not apply only to a material access to the Court, but an acce~s ensuring
all rights of defence ".
The United Kingdom Government, on the other hand, maintains (paragraph
223, United Kingdom Counter-Case) that " even if the third paragraph of
Article XV were given the extended meaning contended for by the Greek
Government there would still be no breach of this provision because in fact
the claimant had all the facilities necessary ... "
In the submission at the end of the oral proceedings referred to above, as
formulated by Counsel for the Greek Government at the 8th meeting of the
Commission, the following concrete facts were asserted as constituting violations
of Article XV of the Treaty of 1886:
I. The British Governmen t put forward a case before Mr. Justice Hill conLrary
Lo documents in their possession.
2. The British Government withheld those documents, Lhereby preventing
Mr. Ambat1elos knowing that they were putting forward a case of thal kind, namely
a case known to be false.
3. The British Government did so in circumstances in which they knew that Mr.
Ambatielos had no power to compel them to disclose those documents, the)' having
the right to refuse to disclose them.
The submission therefore is that Mr. Ambatielos was denied " access to the
English Courts " by reason of the three facts stated above. Before entering into
a separate analysis of the charges implied in the three facts asserted by the
Greek Government, the Commission deems it advisable to state its views on the
meaning of the term" free access", as used in the Treaty of 1886.
The modern concept of " free access to the Courts " represents a reaction
against the practice of obstructing and hindering the appearance of foreigners
in Court, a practice which existed in former times and in cerLain countries, and
which constituted an unjust discrimination against foreigners. Hence, the
essence of" free access " is adherence to and effectiveness of the principle of nondiscrimination
against foreigners who are in need of seeking justice before the
courts of the land for the protection and defence of their rights. Thus, when
"free access to the Courts" is covenanted by a State in favour of the subjer.ts or
citizens of another State, the covenant is that the foreigner shall enjoy full
freedom to appear before the courts for the protection or defence of his rights,
whether as plaintiff or defendant; to bring any action provided or authorised
by law; to deliver any pleading by way of defence, set off or counterclaim; to
engage Counsel; to adduce evidence, whether documentary or oral or of any
other kind; to apply for bail; to lod_E{e appeals and, in short, to use the Courts
fully and to avail himself of any procedural remedies or guarantees provided
by the law of the land in order that justice may be administered on a footing
of equality with nationals of the country.
The Commission is of opinion that this is what was agreed upon in paragraph 3
of Article XV of the Anglo-Greek Treaty of 1886. This clause in effect provides,
for the benefit of Greek subjects in the United Kingdom, that they" shall have
free access to the Courts of Justice for the prosecution and defence of their
rights, without other conditions, restriclions or taxes beyorid those imposed on native subjects
and shall be at liberty lo employ, in all causes, their advocates, attorneys or agents ... "
Therefore, there would be a breach of this clause in the present case if it
could be proved that when an action was brought against Mr. Ambatielos by
Annex 121
112 OREECE/ UNITED KINGDOM
the Board of Trade he was prevented from exercising any procedural right or
remedy; or that in some way he was not treated in accordance with English
law and practice; or that he was not permitted to employ advocates, attorneys
or agents; or that conditions, restrictions or taxes beyond those imposed on
British subjects were imposed on him; or that he was in some other way denied
access to the English Courts.
In order to determine the existence or non-existence of the facts referred to
above, the Commission will examine separately each of the charges preferred
by the Greek Government against the United Kingdom Government in the
submissions of the former at the end of the hearin~. The first is that:
The British Gouemment put forward a cau before Mr. Justice Hill contrary to documents
in their possession.
In the first place the Commission must determine what is meant by the phrase
a case contrary lo documents zn the possession of the United Kingdom Government.
The" case ", of course, is the" case "put forward by the Board of Trade
in a series of actions tried before Mr. Justice Hill in November, 1922, in the
Admiralty Division of the High Court of Justice. In this arbitration these
actions are generally referred to as " the proceedings before Mr. J usticc Hill ".
These proceedings were brought by the Board of Trade, as successors to the
Shipping Controller as Mortgagees under mortgages dated 4th November, 1920,
and placed on seven ships purchased by Mr. Nicholas E. Ambatielos, to secure
the payment of moneys due on the purchase price. The Board of Trade claimed
possession of the ships under the mortgage deed,- and under the terms of a
certain Indenture or Deed of Covenant executed on the same date.
The action was resisted by the Defendant on several grounds, the principal
ground being that the Shipping Controller had agreed to deliver the ships
which had been sold, on certain fixed dates, that the ships had not been delivered
on these dates and that by reason of the delay the Defendant had suffered
damage. The Defence in the Cephalonia case (Annex lA, United Kingdom
Counter-Case) alleges the following:
4. In addition to the written terms embodied in the said contract, it was verbally
agreed at or about the time at which the said contract was entered into, that the
said steamships should be delivered to the Defendant on dates certain. The said verbal
agreement was made between Major Bryan Laing on behalf of the Shipping Controller
and Mr. C. E. Ambatielos on behalf of the Defendant. The said verbal term
of the contract was subsequently confirmed in writing by letters of the 2nd May,
I 921 , from the Defendant to the said Major Bryan Laing and of the l l th May, 1921,
from the said Major Laing to the Defendant.
The essence of the controversy which has led to this arbitration - as the
arguments, both written and oral, fully show - is whether the United Kingdom
Government, represented by the Shipping Controller, agreed with Mr. Ambatielos
to deliver on dates certain the ships which had been sold to him,
and the basis of the claim for damages is that the contract was broken by a
failure to deliver the ships on the dates alleged to have been agreed upon. The
Commission, therefore, must assume that by documents contrary to the claim
which was put forward by the United Kingdom Government, the Greek
Government means documents which show that fixed dates were agreed upon
between the Government and Mr. Ambatielos for the delivery of the ships.
In the opinion of the Commission it cannot be contended successfully that
documents known to the advisers of Mr. Ambatielos at the time of the proceedings
in 1922 and produced to Mr. Justice Hill were sufficient in themselves to
Annex 121
AMBA TIELOS CLAIM 113
show so clearly that fixed dates were agreed upon as to establish that the United
Kingdom Government was putting forward a case contrary to documents in its
possession.
According to the evidence before the Commission, the documents in the
possession of the United Kingdom Government at the time when the action was
before Mr. Justice Hill (apa,t from those which were shown to the advisers of Mr.
Ambatzelos or produad before Mr. Justice Hill) must be divided into two categories,
namely:
(a) Documents, the existence of which is assumed, but the contents of which
are unknown to the Commission such as the minutes, jackets, interdepartmental
communications, files, etc., which are supposed to have
been produced in or received by the Ministry of Shipping in connection
with the purchase of the ships by Mr. Ambatielos or in connection with
his subsequent claim; and
(b) Documents which were in existence when the trial of 1922 was proceeding
and which were made known subsequently and are contained in the
Exhibits or Annexes filed with the Greek Case and the United Kingdom
Counter-Case.
With regard to documents in the first category, it is obvious that they do not
constitute evidence on which the Commission can base a decision, inasmuch as
they are not specified or identified and inasmuch as their contents are purely
hypothetical. The Greek Government assumes that these unknown documents
contain evidence of its main allegation that fixed dates for the delivery of the
5hips were agreed upon between the Ministry of Shipping and :Mr. Ambatielos.
As stated above, however, this Commission cannot possibly determine whether
or not documents the contents of which are unknown are contrary to proceedings
instituted on the basis of documents that arc known. In other words, the
Commission is unable to reach the conclusion that documents which it has not
seen are contrary to the case put forward by the United Kingdom Government
against Mr. Ambatielos.
With regard to documents belonging to the second category, it is necessary to
examine their contents and determine whether the United Kingdom Government
and its legal advisers must have realised that in fact they were contrary to
the case put forward by the United Kingdom Government, i.e., whether they
were documents showing clearly that that Government, represented by the
Shipping Controller, did in fact agree 'Aith Mr. Ambaticlos to deliver on dates
certain the ships which it has sold to him.
The Commission does not find among the documents in the second category
and reproduced in the Exhibits and Annexes filed by the Parties to this arbitration
any document of a date prior to 2·hh November, 1922, ¼hich would furnish
positive evidence that the United Kingdom Government entered into a binding
agreement which provided for fixed delivery dates. Only such evidence would
enable the Commission to hold that the United Kingdom Government or its
advisers put forward a case which they knew to be contrary to documents in
their possession.
The rontract of sale of 17th July, 1919, does not, in any of its clauses, expressly
provide for fixed dates. Article 7 thereof refers to delivery " within the time
agreed". Article 3 stipulates that " the steamers shall be deemed ready for
ddivery immediately after they have been accepted by the Vendor from the
Contractors.'' Finally, article 9 contemplates the case of default in delivery
as between the Contractors (i.e. the builders of the ships) and the Vendor
(i.e. the Shipping Controller).
The phrase " within the time agreed,. in article 7 of the contract leads to the
Annex 121
114 GREECE/ UNITED KINGDOM
inference that a time certain was agreed upon somewhere, in some manner, by
the Contracting Parties. The Commission, however, does not find in the
evidence before it any document distinct from the written contract which
contains proof of the verbal agreement said to have been made with regard to
fixed delivery dates, and which would thus prove that the United Kingdom
Government put forward a case contrary to documents in its possession. As
the pleadings of Mr. Ambatielos in the proceedings before Mr. Justice Hill,
paragraph 4 of which is set out above, show, his defence was that in addition
to the written terms of the contract, " it was verbally agreed . . . that the said
steamships should be delivered to the Defendant on dates certain," and that
"the said verbal agreement was made between Major Bryan Laing on behalf
of the Shipping Controller and Mr. G. E. Ambatielos on behalf of the Defenant."
It was further alleged in the Defence that " the said verbal agreement
was subsequently confirmed in writing by letters of the 2nd May, 1921, from
the Defendant to the said Major Laing and of the 11th May, I 921, from the
said Major Laing to the Defendant." These letters read as follows:
Dear Major Laing,
2nd May, 192 I.
You may remember calling on me in Paris about the end of August 1919 regarding
the purchase of nine boats, negotiated by my brother from the Ministry of Shipping.
In the course of conversation we had, I remember emphasizing to you that I attached
the utmost importance to the dates of delivery which you had given to my brother
and which appear in my letter to him of the 3rd July, and those dates you assured
me you were satisfied could be relied upon.
You explained to me that I was justified in paying the apparently high figures
I had paid because you were selling and I was buying the then position, deliveries
and freights in connection with the steamers rather than the steamers alone.
I should be much obliged if you would let me know whether your recolkction of
our interview coincides with mine.
Yours very truly, (Signed) N. E.' AMBATIELOS
Dear Mr. Ambatielos,
73, St. James's Street,
London, S.W.
11th May, l 921.
I am in receipt of your letter of the 2nd May. I understand you have been away
for some little time, otherwise I would have replied earlier.
I have read your letter through very carefully and so far as I can recollect your
letter states what took place at the interview to which you refer.
Yours faithfully,
Nicolas Ambatielos, Esq.
(Signed) Bryan LAING
18, Cavendish Square, London, W.
The Commission is of opinion that these two letters fail to constitute evidence
confirming the alleged verbal agreement, inasmuch as the statement made by
Mr. Ambatielos was: " . . . those dates you assured me could be relied upon."
And Major Laing in his reply agreed to the statement, saying: " so far as I can
recollect ". The language of the two letters expresses an expectation, not an
agreement.
The principal document, the contents of which are known to the Commission
and which was in the possession of the Government at the time when the
proceedings were before Mr. Justice Hill, and which dealt with the question of
fixed delivery dates and which was not disclosed to the advisers of Mr. Ambatie·
Annex 121
AMBATIELOS CLAIM 115
los or produced to Mr. Justice Hill, was the letter addressed by Major Laing to
Sir Joseph Maclay, the former Shipping Controller, on 20th July, 1922.
This letter was written in reply to one in which Sir Joseph Maclay had asked
Major Laing for information concerning the sale of ships to Mr. Ambatielos, and
Sir Joseph wrote in this connection:
At the time the sale was being negohated you will remember you were in constant
touch with me, but so far as I remember, nothing was ever said about guaranteeing
dates of delivery, which, of course, ii was impossible to do. I presume you told
purchaser that the Ministry would do anything it could to hasten delivery and hopedfor
dates might be mentioned, but nothing beyond this.
The pertinent paragraphs of the answer by Major Laing were the following:
I was of the opinion that it was most essential to dispose of the ships building at
Hong Kong, and I had cables sent to our agents who were responsible for the building
and completion, and they cabled back dates which they considered quite safe, and
it was on this information that I was enabled to put forward a proposition to you.
The Eastern freight market at that time being very high, I came to the conclusion,
and laid my deduction before yourselfand the Committee of the Ministry of Shipping,
that, provided these ships could be de-livered at the times stated by our agents on
behalf of the builders, they were worth, with their position, owing to the freight
they could earn, another £500,000, and this I added to what I considered an outside
price for the ships. It was only by this argument that I INDUCED Mr. Ambatzelos to
purchase the ships.
It will be seen that this letter was not sufficiently concrete and to the point
to constitute evidence strong enough to convince the United Kingdom Government
and its advisers of the fact that a legally binding agreement obliging the
Government to adhere to fixed delivery dates was concluded by Major Laing,
on behalf of the Government, with l\fr. Ambatielos. It is worthy of note that
Major Laing in his letter does not refer to an agreement with Mr. Ambatielos
or even to a promise made to him, but an "argument" by means of which he
INDUCED him to purchase the ships. The overall context of the letter and
especially the two paragraphs quoted above are evidence of Major Laing's
primary purpose, viz. to " reduce the liability against the Ministry of Shipping
as rapidly as possible " and to secure a purchaser for the ships then building at
Hong Kong. In furtherance of thi~ purpose, by emphasising the economic
advantages of the location of the ships and of a " free charter-party ", and
evidently convincing Mr. G. Ambatielos that the delivery dates given by the
builders could be depended upon, l\fajor Laing, as the letter states, INDUCED
him to purchase the ships on behalf of his brother.
The letter has to be considered in connection with the evidence, chiefly the
testimony of Mr. G. Ambatielos, that Major Laing invariably refused to insert
fixed dates in the written contract. The Commission is of opinion that this
attitude of Major Laing could be regarded by the United Kingdom Government
as corroborating its case that there was no binding agreement for fixed dates.
The Commission is unable to understand why the two parties, having agreed
on a transaction which was to take the form of a written contract, should have
made a vital and essential condition of that transaction the subject of a verbal
agreement operating concurrently with the written contract.
The lack of evidential value of the Laing letter is corroborated by the affidavit
of Mr. N. E. Ambatielos read in the Court of Appeal on 5th March, 1923,
wherein he said:
Before the trial of this action I had a conversation with Major Laing concerning
matters in question in this action .... Major Laing meni:ioned the existence of
Annex 121
116 GREECE/UNITED KINGDOM
certain confidential letters . ... Mr. Laing read me a part of the contents of the
letters, but refused to show me the letters or to give me copies thereof . . . . I did not
receive from the extracts read to me or from the conversation which l held with
Major Laing a correct impression as to the meaning of the letters. 111 particular,
I did not understand that they confirmed my case ns to the delway of the i-essels on dates certain.
A similar statement was made in another affidavit read on the same occasion
viz. an affidavit by Mr. F. P. D. Gaspar, a member of the law firm of William
A. Crump & Son, solicitors for Mr. Nicholas E. Ambatielos. In paragraph 3
of his affidavit Mr. Gaspar said:
The defendant contended that in addition lo the written terms embodied in the
said contract it was verbally agreed by the said Major Laing at the time at which the
said contract was entered into, that the said steamships should be delivered to the defendant
on dates certain.
Then in the final paragraph the deponent declares: " l\,fajor Laing refused
to give me any statement or proof at any time either before or during the
trial."
Why Major Laing refused to make clear his position prior to the proceedings
before Mr. Justice Hill, with the result that he awakened fear or suspicion as lo
what he would say in evidence, particularly in cross-examination, and consequently
was not called as a witness by Mr. Ambatielos, is something which, in
the opinion of the Commission, can easily be explained. He would have found
it very difficult to tell the Court why he had refused to put dates into the written
contract (as testified by Mr. G. Ambatielos and other witnesses) and had at the
same time said that he was binding the United Kingdom Government Lo deliver
ships on fixed dates. He also would have found it very difficult to explain why
he had pretended (as l\1r. Nicholas Ambatielos testified) to make an agreement
on behalf of the Ministry of Shipping in August, 1919, about sharing losses on
freights.
Another document in the possession of the United Kingdom Government and
one to which the Greek Government allached great weighl is Lhe cablegram
relative to the S.S. War Trooper, renamed Ambatielos, referred to as having
been sent by Sir John Esplen, a member of the Committee of the Ministry
of Shipping on 31st October, 1919. According to the Greek Case this ship was
to be delivered on or before 30th September, 1919. (Greek Case, paragraph 24.)
The cablegram reads as follows:
From Esplcn, Shipmindcr to Britannia, Hong Kong. Following for Dodwell,
War Trooper. As the steamer was sold to buyers for delivery not later than November
it is of utmost importance that she should be completed by that date stop Cable
immediately progress of construction.
(Signed) M. J. STRAKE R.
In the Statutory Declaration made by Major Laing on 19th January, 1934, he
said with regard to this telegram:
This was sent because the Committee was becoming worried at the continual
delay and they foresaw either cancellation of the contract or a claim being made
against them.
The story of how that cable message was produced is told in a different manner
by Mr. G. E. Ambatielos in his evidence before Mr. Justice Hill. His
version was that the cablegram was not sent by order of either Sir John Esplcn
or the Committee, but on the personal instructions of Major Laing. Here is
the relevant part of the evidence:
Annex 121
A.MBA TIELOS CLAIM 117
Q. Were you there when he gave the instructions?
A. Yes; I was there when the instructions were given; but I was not there when
the telegram was sent.
Q. What instructions did he give? Did he call in a clerk?
A. He called this Miss Straker, who was acting as his secretary as well as the
secretary to Sir John Esplen.
Q . What did he say to her?
A. He said: "You must immediately wire that definite date has been agreed
in respect to the steamer War Trooper, and that steamer must be delivered
by that date", and he turned round to me and said: "I cannot make it any
stronger", and he left.
In conformity with the facts and considerations set forth above, the Commission
finds that none of the documents ¼hich are known to have been in the
possession of the United Kingdom Government at the time of the 1922 proceedings
and which were not shown to the advisers of Mr. Ambatielos or produced to
Mr.Justice Hill (i.e. documents in category ( b)) was necessarily inconsistent with
the case put forward by the United Kingdom Government. It is the view of the
Commission that none of the said documents constituted evidence strong
enough to satisfy the Cnited Kingdom Government and its legal advisers that a
binding oral agreement had been entered into guaranteeing fixed dates for the
delivery of the vessels and supplementing the written contract of 17th] uly, 1919.
After this finding of fact the Commission will consider the point of law
involved in the first submission of the Greek Government herein before examined,
to wit: whether a Government which institutes an action contrary to documents
in its possession docs thereby deny " free access to the Courts " to an alien
defendant. The Commission is of opinion that " free access " is something
entirely different from the question whether cases put forward in Courts by
Governments are right or wrong, and that denial of" free access " can only be
established by proving concrete fac1s which constitute a violation of that right
as understood and defined in this award. The Commission finds, therefore, that
in putting forward the case herein referred to, the United Kingdom Government
did not deprive Mr. Nicholas E. Ambaticlos of his right of free access
to the Courts afforded to him by Article XV of the Treaty of 1886.
The s~cond submission is that:
The British Govemment withheld tlwu documents, thereby preventing Mr. Ambatielos
knowing that they were putting forward a wse of that kind, namely, a case krwwn to be false.
The line of reasoning developed in connection with the first submission is
applicable to the second. The notion of" free access to the Courts " does not
comprise an obligation on the part of Governments to disclose to an opponent in
litigation, before or during the trial, all documents in its possession. If it were
hel<l, as intimated at the hearing, that c.onsiderations of equity and fairness
impose upon the State an obligation to make known to an alien opponent all
documents that have or may have a bearing on the case, even if they are favourable
to the alien, such considerations would be of no avail in the present
c.ontroversy, which can only be decided on legal grounds. No provision in
Article XV of the Treaty of 1886 imposes such an obligation on the Contracting
Parties. The non-disdosure here alleged would c.onstitute a denial of " free
access " if it could be shown that the act of non-disclosure does not conform
with English law or that that law giw-s to British subjects, and not to foreigners,
a right to discovery, thereby establishing a discrimination between nationals and
foreigners. No evidence to that effect has been produced in the present case.
Annex 121
118 GREECE/ UNITED KING-DOM
Accordingly, the Commission finds that the withholding of certain documents
in the action brought against Mr. Nicholas E. Ambatielos by the United
Kingdom Government did not prevent the defendant from exercising his right
of free access to the Courts guaranteed to him by Article XV of the Treaty
of 1886.
The third submission is that;
1he British Government did so in circumstances in which they knew that Mr. Ambalielos
had no power to compel them to disclose those documents, they having the right to refuse to disclose
them.
This submission, as set out, virtually decides by itself the question raised.
Once it is recognised that the Government had a right to refuse to disclose the
documents, and hence, that the non-disclosure was in conformity with English
law and practice, the fact stated above does not constitute a violation of the
right of free access to the Courts. Moreover, if the Government knew that Mr.
Ambatielos had no power to compel it to disdose the documents because the
Government was entitled to refuse discovery, such a knowledge was a natural
consequence of the exercise of the right to refuse, and not a wrongful act. The
Commission, therefore, finds that the fact set out in the third submission was not
a violation of the right of Mr. Nicholas E. Ambatielos to have free access to the
English Courts as defendant in the action brought against him by the Government
of the United Kingdom. The Commission thinks it right to add that the
reason for the words " they having the right to refuse to disclose them ", which
are used by the Greek Government in the third submission quoted above, was
that the Maclay-Laing letters clearly fell within the class of documents privileged
from disclosure or production in English law as documents coming into existence
solely for the purpose of enabling legal advisers to prepare a case for trial. The
departmental minutes and files fall within a class of documents which, if and
when expressly called for in the appropriate manner, may, under English law,
be withheld on the ground that the production of that class of document is
contrary to the public interest.
If any contention that any documents were withheld contrary to English law,
had been made and persisted in, which was not the case, the Commission would
have had to consider the effect of that circumstance on the application of the
rule of non-exhaustion of legal remedies.
NON-EXHAUSTION OF LOCAL REMEDlES
In countering the claim of the Greek Government the Government of the
United Kingdom relies on the non-exhaustion by Mr. Ambatielos of the legal
remedies which English law put at his disposal.
One of the questions which the Commission is requested to determine is
" The question raised by the United Kingdom Government of the non-exhaustion
of legal remedies in the English Courts in respect of the acts alleged to
constitute breaches of the Treaty." The Commission notes that the question
raised by the United Kingdom Government covers all the acts alleged to constitute
breaches of the Treaty.
The Commission will therefore examine the validity of the United Kingdom
objection independently of the conclusions it has reached concerning the validity
of the Ambatielos claim under the Treaty of 1886.
The rule thus invoked by the United Kingdom Government is well established
in international law. Nor is its existence contested by the Greek Government.
It means that the State against which an international a ction is brought for
injuries suffered by private individuals has the right to resist such an action if
Annex 121
AMBJ\ TIE LOS CLAIM 119
the persons alleged to have been injured have not first exhausted all the remedies
available to them under the municipal law of that State. The defendant State
has the right to demand that full advantage shall have been taken of all local
remedies before the matters in dispute are taken up on the international level
by the State of which the persons alleged to have been injured are nationals.
In order to contend successfully that international proceedings are inadmissible,
the defendant State must prove the existence, in its system of internal
law, of remedies which have not been used. The views expressed Ly writers
and in judicial precedents, however, coincide in that the existence of remedies
which are obviously ineffective is held not to be sufficient to justify the application
of the rule. Remedies which could not rectify the situation cannot be
relied upon by the defendant State as precluding an international action.
The Greek Government contcnc..ls that in the present case the remedies which
English law offered to Mr. Ambatielos were ineffective and that, accordingly,
the rule is not applicable.
The ineflectiveness of local remedies may result clearly from the municipal
law itself. That is the case, for example, when a Court of Appeal is not competent
to reconsider the judgment given by a Court of first instance on matters
of fact, and when, failing such reconsideration, no redress can be obtained. In
such a case there is no doubt that local remedies are ineffective.
Furthermore, however, it is generally considered that the ineffectiveness of
available remedies, without being legally certain, may also result from circumstances
which do not permit any hope of redress to be placed in the use of those
remedies. But in a case of that kind it is essential that such remedies, if they had
been resorted to, would have proved to be obviously futile.
Here a question of considerable practical importance arises.
If the rule of exhaustion of local remedies is relied upon against the action of
the claimant State, what is the test to be applied by an international tribunal for
the purpose of determining the applicability of the rule?
As lht> arbitrator ruled in the Finnish Vessels Case of 9 Lh May, 1934, the only
possible test is to assume the truth of the facts on which the claimant State
bases its claim. As will be shown below, any departure from this assumption
would lead to inadmissible results.
In the Finnish Vessels Case the i:ssue wa:s whether a means of appeal which had
not been used by the claimants ought to be regarded as ineffective.
In the Ambatielos Case, failure to use certain means of appeal is likewise
relied upon by the United Kingdom Government, but reliance is also placed on
the failure of Mr. Ambatielos to adduce before Mr. Justice Hill evidence which
it is no,v said would have been essential to establish his claims. There is no
doubt that the exhaustion of local remedies requires the use of the means of
procedure which are essential to redress the situation complained of by the
person who is alleged to have been injured.
In paragraph 109 of its Counter-Case, the United Kingdom Government says
the following concerning this point:
The "local remedies" rule ... finds its principal field of application in the two
requirements (a) that the complainant should have availed himself of any right given
him bv the local law to take legal proceedings in the local courts; and (b) that having
done so, he should have exhausted the possibilities of appealing to a higher court
against any adverse decision of a lower one. The application of the rule is not,
hO'rvever, confined to these two cases. It also requires that during the progress, and
for the purposes of any particular proceedings in one of the local courts, the complainant
should have availed himself of all such procedural facilities in the way of
calling witnesses, procuring documentation, etc., as the local system provides.
Annex 121
no GREECE/ UNITED KINGDOM
The Commission shares this view in principle. At the same time it feels that iL
must add some clarifications and reservations to it. Although this question has
hardly been studied by writers and although it does not seem, hitherto, to have
been the subject of judicial decisions, it is hardly possible to limit the scope of
the rule of prior exhaustion of local remedies to recourse to local courts.
The rule requires that " local remedies " shall have been exhausted before an
international action can be brought. These " local remedies " include not only
reference to the courts and tribunals, but also the use of the procedural facilities
which municipal law makes available to liligants before such courts and
tribunals. It is the whole system of legal protection, as provided by municipal
law, which must have been put to the test before a State, as the protector of its
nationals, can prosecute the claim on the international plane. In this sense
the statement in paragraph 109 of the Counter-Case seems to be sound.
It is clear, however, that it cannot be strained too far. Taken literally, it
would imply that the fact of having neglected to make use of some means of
procedure - even one which is not important to the defence of the action -
would suffice to allow a defendant State to claim that local remedies have not
been exhausted, and that, therefore, an international action cannot be brought.
This would confer on the rule of the prior exhaustion of local remedies a scope
which is unacceptable.
In the view of the Commission the non-utilisation of certain means of
procedure can be accepted as constituting a gap in the exhaustion of local
remedies only if the use of these means of procedure were essential to establish
the claimant's case before the municipal courts.
It is on the assumption that the statements of the claimant Government are
correct that the international tribunal will be able to say whether the nonutilisation
of this or that method of procedure makes it possible to raise against
a claim a plea of inadmissibility on the ground of non-exhaustion of local
remedies.
Have the local remedies been exhausted with regard lo Claim A?
Claim A is a claim for compensation for breach of the contract of sale by the
United Kingdom Government. The breach alleged is that the vessels which
:Mr. Ambatielos bought at an agreed price and on condition that they were to be
delivered to him on certain fixed dates, which had been agreed upon between
the Partie5, were not in fact delivered on those dates. Compensation is claimed
for the damage caused to Mr. Ambaticlos as a result of this breach of contract.
The United Kingdom Government has raised the question of the nonexhaustion
of local remedies in the English Courts in so far as concerns the acts
which are alleged to constitute breaches of the Treaty of 1886.
The principal act which is alleged by the Greek Government to constitutt> a
breach of that Treaty is the alleged breach of contract aforesaid.
As regards Claim A, the questions of the non-exhaustion of local remedies
thus raised are:
( I) In the 1922 proceedings Mr. Am batielos failed to call ( as he could have
done) the witnesses who, as he now says, were essential to establish his case.
With regard to Major Laing, the Greek Government has primarily contended
that Mr. Ambatielos was prevented from calling Major Laing as a witncs~
before Mr. Justice Hill because Major Laing - though not heard - had been
Annex 121
AMBA TIELOS CLAIM 121
subpoenaed lo appear as a witness for the Crown. In the course of the proceedings
before the Commission, however, the Parties agreed that the fact that
Major Laing had been subpoenaed by the Crown would not, under English
law, have precluded i\1r. Ambaticlos from calling Major Laing as a witness
before Mr. Justice Hill.
The Greek Government further rnntends that if Mr. Ambatielos had called
Major Laing as a witness, the decision of Mr. Justice Hill would have been
favourable to him; this is a contention which is disputed by the United Kingdom
Government.
It is not possible for the Commission to decide on the evidence before it the
question whether the case would have been decided in favour oflvfr. Ambatielos
if Major Laing had been heard as a witness. The Commission has not heard the
witnesses called before Mr. Justice Hill and cannot solely on the documentary
evidence put before the Commission form an opinion whether the testimony of
Major Laing would have been successful in establishing the claim of Mr.
Ambatielos before Mr. Justice Hill. The Commission cannot put itself in the
position of Mr. Justice Hill in lhis respect.
The test as regards the question whether the testimony of l\.fajor Laing was
essential must therefore be what the claimant Government in this respect has
contended, viz. that the testimony of Major Laing would have had the effect
of establishing the claim put forward by Mr. Ambatielos before Mr. Juslice
Hill.
Under English law Mr. Ambatielos was not precluded from calling Major
Laing as a witness.
In so far as concerns Claim A, the failure of Mr. Ambatielos to call Major
Laing as a witness at the hearing before Mr.Justice Hill must therefore be held
to amount to non-exhaustion of the local remedy available to him in the proceedings
before Mr. Justice Hill.
It may be that the decision of Mr. Ambatielos not to call Major Laing as a
witness, with the result that he did not exhaust local remedies, was dictated by
reasons of expediency - quite understandable in themselves - in putting his
case before Mr. J usticf'. Hill. This, however, is not the question to be determined.
The Commission is not concerned with the question as to whether he
was right or wrong in acting as he did. He took his decision at his own risk.
The testimony of Major Laing must be assumed to have been essential for the
success of the action of Mr. Ambatielos before Mr. Justice Hill. It could have
been adduced by Mr. Ambatielos but was not in fact adduced. Mr. Ambatielos
has therefore not exhausted the local reme<lics available to him in the proceedings
before Mr. Justice Hill.
The Commission, having accepted the contention of the Greek Government
that the evidence adduced by Major Laing if he had been heard as a witness
would have resulLed in a decision of Mr.Justice Hill favourable to Mr. Ambatielos,
the question whether Mr. Ambatielos was prevented by the Unilcd Kingdom
Government from adducing other evidence which might have led to the
same result does not seem to l>c relevant to the question whether the failure of
Mr. Ambatielos to call Major Laing as a witness must be considered as amounting
to a non-exhaustion of the local remedy available to him in the first instance.
If a man can secure help by taking course A or course B and is prevented from
taking course A, he fails to exhaust his remedies if he refrains from taking
course B.
(2) The st:cond question as to non-,~xhaustion raised by tht: United Kingdom
Government is the failure of Mr. Arnba1 ielos to make use of or exhaust his appellate
rights.
Annex 121
122 GREECE/ UNITED KINGDOM
As the Commission has assumed, for the purposes of the test which it has
accepted, that the testimony of Major Laing was essential to establish the
claim of Mr. Ambatielos before Mr. Justice Hill, and as it has decided that the
omission to produce that evidence constituted a failure to exhaust the remedy
available to Mr. Ambatielos in the proceedings before Mr. Justice Hill, it
might seem superfluous to consider the second question which has been
raised.
Nevertheless it may be pertinent to state that the failure of Mr. Ambaticlos to
prosecute the general appeal which he had lodged against the decision of
Mr. Justice Hill would ordinarily be considered a failure to exhaust local
remedies. Such failure requires some excuse or explanation.
The refusal of the Court of Appeal to give leave to adduce the evidence of
Major Laing did not, of course, in itself prevent this general appeal from
being proceeded with.
The Greek Govt'.rnment argues by way of explanation that to proceed with
the general appeal once the decision of the Court of Appeal not to admit the
Laing evidence had been given would have been futile because the Laing
evidence was essential to enable the Court to arrive at a decision favourable to
Mr. Ambatielos.
The reason why Mr. Ambatielos was not allowed to call Major Laing in the
Court of Appeal was, in the words of Lord Justice Scrutton, that " One of the
principal rules which this Court adopts is that it will not give leave to adduce
further evidence which might have been adduced with reasonable care at the
trial of the action " .
Accordingly, the failure of Mr. Ambatielos to exhaust the local remedy before
Mr. Justice Hill, by not calling Major Laing as a witness, is the reason why
it was futile for him to prosecute his appeal.
It would be wrong to hold that a party who, by failing to exhaust his opportunities
in the Court of first instance, has caused an appeal to become futile
should be allowed to rely on this fact in order to rid himself of the rule of
exhaustion of local remedies.
It may be added that Mr. Ambatielos did not submit to the Court of Appeal
any argument suggesting, or any evidence to show, that any illegal or improper
manoeuvres by his opponents had prevented him from calling Major Laing
or producing any documents.
In so far as concerns the appeal to the House of Lords, it is of course unlikely
that that Court would have differed from the decision of the Court of Appeal,
ref using to allow Major Laing to be called as a witness in the latter Court. lf
it is held that such an appeal would not have been obviously futile, the failure
of !vlr. Ambatielos to appeal to the House of Lords must be regarded as a
failure to exhaust local remedies. If, on the other hand, it is held that an
appeal to the House of Lords would have been obviously futile, Mr. Ambatielos
must likewise be held tu have lost his hope of a successful appeal, by reason of
his failure to call Major Laing.
Haz•e the local remedies been exhausted with ref?.ard to Claim B !
It it were to be held that, contrary to the contention of the Greek Government,
the contract did not contain any provision binding the United Kingdom
Government regarding agreed dates for the delive-ry of the ships which had
been sold to Mr. Ambatielos, the Greek Government claims in the alternative
the return of £500,000 which, according to the contention of the Greek Government,
was paid by Mr. Ambatielos in consideration of agreed dates of delivery.
Annex 121
AMBA TIELOS CLAIM 123
The Greek Government claims this sum on the ground of" unjust enrichment ",
together with all damages, interest and costs resulting therefrom.
This claim has not been before an English Court.
The Greek Government contends that it would have been futile to submit
such a claim to an English Court, on the ground that English law does not
recognise unjust enrichment as a valid basis for a claim.
The Commission is of opinion that it must first examine whether the claim
as defined by the Greek Government can be said to constitute a claim for
unjust enrichment.
The Commission finds that this is not the case. Claim Bis not, as the Greek
Government contends, a " quasi contractual " claim. The claimed sum of
£500,000 was only part of the price which Mr. Ambatielos was to pay for the
ships (together with advantages of position and " free charter-parties ") in
accordance with the contract. Furthermore the full purchase price was not
received by the United Kingdom Government. If however Claim B had been
based on unjust enrichment, and had thus been independent of and alternative
to claim A, the Commission is of opinion that Claim B would have failed, in
so far as remedies were available in English law, on the ground that such
remedies had not been tried - much less exhausted. The Commission has
already decided that the Treaty of 1886 did not secure, for Greek subjects,
remedies not available in English la\\.
Were the local remedies exhau:,ted as regards Claim C?
Claim C refers to the position of Mr. Ambatielos on 4th November, 1920
(the date of the signature of the Mortgage Deeds), and rests on the argument that
the sale of the Mellon and the Stathis should have been cancelled on that
date, and not on the date of Mr.Justice Hill's judgment, viz. on 15th January,
1923.
According to the Greek Government this claim is an alternative claim to
Claim A.
The claim was not before Mr.Justice Hill. The claim before Mr. J ustiee Hill
concerning the Mell011 and the Stathis was a claim by Mr. Ambaticlos for
damages for non-delivery o[ these two ships. Claim C is a claim for damages
based on the contention that the United Kingdom Government, by not cancelling
the sale of the Mellon and the Stathis on the date of the Mortgage Deeds, 4th November,
1920, but only at the trial of the action before Mr. Justice Hill, has
caused Mr. Ambatielos damage in the amount stated in Claim C. It is the
converse of the claim put forward before Mr. Justice Hill.
The Greek Government has never contended that there was any obstacle to a
recourse to local remedies in regard 10 this claim. But no claim was ever put
forward before the English Courts. The Commission, therefore, finds that there
ha~ been, in regard to this claim, a non-exhaustion of local remedies.
For these reasons,
THE COMMISSION
rejects the United Kingdom contention that there has been undue delay in the
presentation of the Greek claim on tht basis of the Treaty of 1886; finds that the
claim is not valid having regard to the question raised by the United Kingdom
Government of the non-exhaustion of legal remedies in the English Courts in
respect of the acts alleged to constitute breaches of the Treaty; finds that the
claim is not valid having regard to the provisions of the Treaty of 1886.
DoNF. in London this sixth day of March, nineteen hundred and fifty six in
three copies one of which is transmitted to each of the Governments of Greece
Annex 121
124 GREECE/UNITED KINGDOM
and the United Kingdom of Great Britain and Northern Ireland and a third to
the Archives of thF. Permanent Court of Arbitration at The Hague.
(Signed) Ricardo J. A1...-AR0
President
(Signed) Algot J. F. BAGGE
(Signed) Maurice BOURQUIN (Signed)]. SPIROPOULm
( Signed) Gerald A. THESIGER
* * *
(Signed) E. HAMBRO
Regist,ar
President Alfaro did not concur in the part of the a ward which deals with the
question of non-exhaustion of legal remf'.dies with regard to Claim A, and ha5
appended to the award his; individual opinion.
Professor J. Spiropoulos who is unable to concur in the a ward has appended
to the award his dissenting opinion.
( Initialled) R. J. :\.
E. H.
* * *
INDIVIDUAL OPINION OF DR. RICARDO J. ALFARO
The Commission has found, in relation to Claim A put forward by the Greek
Government, that the claimant failed to exhaust the local remedies because Major
Bryan Laing was not called by Mr. Nicholas E. Ambaticlos to testify in the proceedings
before :Mr. Justice Hill. I regret that I am unable to agree with this finding
for the reasons hereafter set forth.
l. The judgment of the Commission, with r~gard to the rule of exhaustion of
local remedies, contains the following statement in which I concur:
"The rule requires that 'local remedies' shall have been exhausted bcfo1 c an
international action can be brought. These 'local remedies' include not only
reference to the courts and tribunals, but also the use of the procedural facilities
which municipal law makes available to litigants before such courts and tribunals.
It is the whole system of legal protection, as provided by municipal law, which
must have been put to the test before a State, as the protector of its nationals.
can prosecute the claim on the international plane .. .
"It is clear, however, that it cannot be strained too far. Taken literally, it
would imply that the fact of having neglected to make use of some means of
procedure - even one which is not important to the defence of the action -
would suffice to allow a defendant State to claim that local remedies have not
been exhausted, and that, therefore, an international action cannot be brought.
This would confer on the rule of the prior exhaustion of local remedies a scope
which is unacceptable."
2. The "local remedies" rule, as enunciated in the preceding- lines, means in my
opinion that when a claimant appears before municipal courts, either as plaintiff
or defendant, he must exhaust the procedural remedies made available to him hy
the law of the land before each of the several courts in which the case may be tried.
The concept of procedural remedies must be taken in its general sense. Thus, a claimant
may be held not to have exhausted the procedural remedies at his disposal, if he
failed, for instance, to adduce evidence despite his necessity to prove the facts or
Annex 121
AMBATIELOS CLAIM 125
Lhe case, or if he failed to appear in Court to argue his case at the stage of the trial
in which he had to argue.
3. But the rule cannot be carried so far as to interfrre with the actual or concrete
use of a given procedural remedy. Thus, a claimant who availed himself of the
procedural remedy of adducing evidence, should not be held by an international
tribunal to have failed to exhaust local remedies because he did not produce a
cenain exhibit, or because he did not call a certain witness. Likewise, it would be
unfair to apply the sanction of non-exhaustion to a claimant in the international
plane, on the ground that his line of reasoning m the argument was not the proper
one. This, in the language of the award, "would confer on the rule of the prior
exhaustion ofloca.l remedies a scope which is unacceptable."
4. For the reason stated in the preceding paragraph, I consider that the claimant
in this case should not be held to have failed to exhaust local remedies because
Major Bryan Laing was not called by Mr. Ambatielos as a witness during the
proceedings before Mr.Justice Hill.
5. 'A'hether Mr. Ambatielos or his advisers were righL or wrong in not calling
Major Laing to testify, J believe is immaterial. Mr. Ambatielos, represented by his
advisers, made use of the procedural remedy of adducing evidence in Court. He
adduced such evidence as he thoughL might prove his case. Whether he was clever
or made a mistake, whether or not he lost because of an error in handling the
instrumentality of evidence, are questions with which an international tribunal
cannot concern itself in dealing wiLh the issue of exhaustion or non-exhaustion
of local remedies. Such tribunal should not be called upon to pass judgment on the
manner in which procedural remedies were used but on the fact that they were
used.
6. lt is stated in the award that in applying the test adopted by the Commission
for the determination of the issue of non-exhaustion, it has been assumed that the
Greek Government was right in LOnsidering the testimony of Major Laing essential
to win the case, and that consequently, Mr. Ambatielos failed to exhaust the
procedural remedies, by abstaiping from calling a witness whose testimony was
essential for the success of his defence.
7. Such an assumption, adopted by the Commission for the determination of
the issue, is however contrary to the realities or the case. The evidence before the
Commission does abundantly prove that if Major Laing had been called to the
witness box, it was extremely doubtful that his testimony, particularly after crossexamination,
would have resulted favourably Lo Mr. Ambatielos. Hence it can
hardly be called essential.
8. It is a fact proven by affidavits read in the Court of Appeal on 5th March,
Jg23, by Mr. Nicholas E. Ambat1elos and by his solicitor Mr. F. P. D. Gaspar, as
well as by other evidence, that Major Laing was not called to testify because both
Mr. Ambatielos and his advisers were not sure that such testimony would be
favourable to their cause, chiefly for the reason that at the time of thF- proceedings
before Mr. Justice Hill, Major Laing had refused to make known to them the
full contents of his correspondence with Sir Joseph Maclay and had also refused, as
l\fr. Gaspar said, to give him "any statement or proof at any time either before or
during the trial."
9. It seems evident, therefore, that sound considerations of prudence and regard
for the interest of their client led the advisers of Mr. Ambatielos while in Court to
refrain from calling a witness whose ho~tile or favourable attitude was decidedly
doubtful.
IO. lt was after a decision was rendered by Mr. Justice Hill that Major Laing
made known to Mr. Ambatielos the contents of his correspondence with Sir Joseph
Annex 121
126 GREECE/ UNITED KINGDOM
Maclay. It was then that Mr. Ambatielos and his advisers considered the testimony
of Major Laing essential Lo prove his case. It was then that Mr. i\mbatielos applied
in vain to the Court of Appeal for authority to have the testimony of Major Lain~
admitted as evidence. Finally, it was after all these events that the Greek Government,
in its diplomatic intervention and in subsequent actions before the International
Court of Justice and before this Commission contended or affirmed that the
testimony of Major Laing was essentiaL
11. In view of the above stated facts, it seems difficult to maintain that not
calling a witness in 1922 because at that time his testimony was not deemed essential,
and on the contrary was considered dangerous or at least doubtful, constituted
failure to exhaust local remedies because in 1923 the same testimony was considered
essential_ Non-exhaustion of local remedies must necessarily take place at the time
when the local remedy can be resorted to, but not afterwards.
12. It is further declared in the award that Mr. i\mbatielos failed also to exhaust
the local remedies by not prosecuting the general appeal he had lodged againsi
rhc decision of Mr. Justice Hill. With regard to this point it is my view that according
co the evidence before the Commission, particularly the expert opinion of Lord
Porter, it would have been clearly futile for the claimant to prosecute his general
appeal.
13. The award states that the failure of Mr. Ambatielos to exhaust the local
remedy before Mr. Justice Hill by not calling Major Laing as a witness made it
futile for him to prosecute his appeal and that for this reason he could not rid
himself of the rule of exhaustion oflocal remedies.
14. My view regarding this situation is that once it has been established that
recourse to appeal is obviously futile, the claimant is exonerated from the responsibility
of non-exhaustion of that remedy, without entering into considerations as
to the cause of the futility. The two things are separate and distinct. Moreover, if
Mr. Ambatielos cannot be held to have failed to exhaust local remedies by not
calling Major Laing as a witness, he cannot be held responsible for non-exhaustion
on the ground that his decision not to call that witness made the appeal futile.
(Signed) R.J. ALFARO
* * *
DISSENTING OPINION OF PROFESSOR SPIROPOULOS
Commissioner John Spiropoulos, being unable to accept all the views expressed
in the award, desires to make the following statement.
EXHAUSTION OF LOCAL REMEUIES
1. The Agreement between the United Kingdom Government and the Greek
Government requests the Commission to determine the validity of the Ambaticlos
claim under the Anglo-Greek Treaty of 1886 having regard to:
(ii) The question raised by the United Kingdom Government of the nonexhaustion
of legal remedies in the English Courts in respect of the acts
alleged to constitute breaches of the Treaty (of 1886).
According to my interpretation of the above terms of reference, the Commission
would have to examine the question of the exhaustion of local remedies on£}' with
regard to acts which, if established, would in fact constitute a breach of the Treaty
of 1886, and not with regard to any other acts alleged by the Greek Government
as constituting a breach of the said Treaty.
Annex 121
AMBA TlELOS CLAIM 127
It seems to me beyond doubt that, when a plea of non-exhaustion oflocal remedies
is put forward by a party before an international tribunal the latter must begin by
considering the law to be applied (general international law or Treaty), and then
examine whether the person concerned (the plaintiff) has exhausted the local
remedies with regard to the act alleged to be contrary to that law. It does not seem
logical to me to go as far as to enquire whether the person concerned (the plaintiff)
has exhausted local remedies with regard to an act alleged to be contrary to a system
oflaw alleged to be applicable.
As the Commission has come to the conclusion that the non-disclosure of the
documents by the Crown is the only act which, if proved to be contrary to the
English law of procedure, would constitute a breach of the Treaty of 1886, the
Commission ought to have confined itsdf to an examination of the question whether
Mr. Ambatielos exhausted all remedies available, according to English law, at the
trial before Mr. Justice Hill, for the purpose of having the documents put before
Mr. Justice Hill. The Commission omitted to examine this question which, in my
submission, is the only one it should have examined with regard to the question
of exhaustion oflocal remedies.
Having found that "general international law" is not incorporated in the Treaty
of 1886 by virtue of the most-favoured-nation clause, the Commission should not,
according to its terms of reference, have examined the question whether local
remedies were also exhausted with regard to acts which, if established, would have
constituted a violation of general international law, but not of the Treaty of 1886.
Only if it had found that general international law was incorporated in the
Treaty of 1886 (by virtue of the most-favoured-nation clause), could the Commission
have examined the question whether Mr. Ambatielos exhausted the local remedies
with regard to acts alleged to constitute a violation of general international law
and, accordingly, also of the Treaty of 1886. Thus, to give an example, if the nondelivery
of the ships on guaranteed dates had been held to be a violation of general
international law by the United Kingdom authorities (and accordingly also of the
Treaty of 1886), Mr. Ambatielos would have been under a duty to exhaust all local
remedies provided by English law before his claim could have been brought before
an international tribunal. In that case the fact whether or not Major Laing was
called as a witness might ultimately have been relevant for the determination of
the question as to whether or not Mr. Ambatielos had exhausted local remedies.
However, in view of the fact that the Commission has held that general international
law is not included in Article X of the Treaty of 1886, the question of
exhaustion of local remedies cannot, in my submission, refer to facts which, if established,
would constitute a breach of rhe Treaty of 1886 by a violation of general
international law.
2. Let us suppose, however, that general international law is applicable to the
present case. On this assumption the question of whether or not Major Laing could
have been called might ullimately be relevant to determine whether the local
remedies were exhausted by Mr. Ambaticlos.
For Lhe following reasons I am unable to follow the Commission in the way in
which it applies the rule of non-exhaustion of local remedies to the present case:
Writers on international law deal with the question of non-exhaustion of local
remedies from the point of view of the legal means of recourse from a lower to a
higher court. As far as I know, the question relevant in the present case, i.e., exhaustion
of existing remedies within one and the same court, has never been considered
by writers or international tribunals.
Now, with regard to the application of the rule of non-exhaustion, the test
generally accepted in practice is the "existence" and "effectiveness" of local remedies.
Annex 121
128 GREECE/ UNITED KINGDOM
The question of non-exhauslion which confronts the Commission in the present
case is specific inasmuch as it is concerned with a case of non-exhaustion (that is
the omission to call Major Laing as a witness) within one and the same court.
Although writers on international law have hitherto approached the rule of
non-exhaustion only from the point of view of possible recourse from a lower to a
higher court, I agree with the Commission that the same rule must also apply to the
exhaustion of local remedies within one and the same court. Wheri;as, however,
in the case of recourse from a lower to a higher court the test to be applied, i.e. the
existence and effectiveness, or otherwise, of recourse, is an objective oni-, practical
considerations must soften the rigidity of the rule in a case where one and the same
court is concerned. The rule then becomes one of determining, having regard to the
particuhr circumstances of the case, what Counsel would have done in the interests
of his client. Moreover, the remedy must be such as to affect the course of the
proceedings; in other words, it must be an essential remedy. But these are, of course,
questions which can only be decided by having due regard to the merits of each
individual case.
To adopt a more rigid rule would be tantamount to making the rule of exhaustion
of local remedies a bar to any international claim, because it is possible, in almost
every case. to find some local remedy which has not been used by the claimant.
Having thus established the general principle which, in my opinion, should be
applied, I have to enquire whether the fact that Major Laing was not called as a
witness can be regarded as a non-exhaustion of the remedies provided by the
English law of procedure.
Major Laing was present at the trial before Mr. Justice Hill and he could have
been called as a witness, both by the Crown and by Mr. Ambatielos. Without
examining whether it was also up to the Crown lo call Major Laing as a witness -
he was the competent officer of the Ministry of Shipping who had given the delivery
dates to Mr. G. Ambatielos - I will assume that it was only up to Mr. Ambaticlos
to call Major Laing 1f he wished to avail himself of his evidence in order to prov~
that dates certain had been promised.
As appears from the affidavit of the solicitors of Mr. Ambatielos, however,
Major Laing had been approached by the solicitors, before as well as during the
trial before Mr. Justice Hill, and had been asked whether he was willing to make
a statement favourable to the case of Mr. Ambatielos. He had, howeoer, refused to
do .rn.
According lo English practice, Counsel are rarely prepared, in ordinary circumstances,
to call a witness who has refused to give a statement to the solicitor. Whatever
the reasons which prompted rvfajor Laing to refuse to make a statement -
it may be that as a former officer of the Ministry (at the time of the trial he had
left the Ministry of Shipping) he may have thought he was bound by an undertaking
not to disclose what had occurred in relation to this matter -- the fact remains that
the solicitors of Mr. Ambatielos were in the dark as to what he mil-{ht say if called
as a witness. As Mr. Ambatielos had called three other witnesses, and as he was
relying in particular on the documents which the Crown might have in its possession,
it is very difficult to accept the proposition that in the special circumstances of the
case the deliberate omission of Mr. Ambatielos's solicitors to call a witness whose
testimony was unknown, who had refused to give a statement and whose evidence
might ultimately have been detrimental to the interests of Mr. Ambatielos, can
be regarded as a failure to exhaust local remedies.
ARTICLE X OF THE TREATY OF 1886
I am of the opinion that as the Commission has rejected Claim A, "justice" and
"equity" might have been held to be a suitable basis for Claim B, by applying
Article 24 of the Treaty of 1670 with Denmark which the Commission holds to be
Annex 121
AMBATIELOS CLAIM 129
incorporated in Article X of the Treaty of 1886, and which, in my submission,
allows one to complement the rules of domestic law by considerations of equity.
The principle to be applied would be that of "unjust enrichment,'' which forms
part of the general principles of law applicable in international relations.
The Commission would then, of course, have to examine the extent to which
the Crown was enriched by the £500,000 paid by Mr. Ambatielos over and above
the price payable for the ships purchased by him. In so far as concerns interest, the
Commission would have to examine for how long Mr. Ambatielos is entitled to
interest, because, though lapse of time has, in principle, no bearing on the right to
put forward a claim under international law, claims for interest cannot be run on
for indefinite periods.
ARTICLE XV OF THE TREATY OF 1886
I. The main complaint of the Greek Government under Article XV of the
Treaty of 1886 was, firstly, that "vital evidence" necessary for the determination
of the dates of delivery of the ships was withheld by the Crown, and secondly, that
Mr. Justice Hill was guilty of a denial of justice by accepting the claim of privilege
without any further enquiry as to whether it could be justified in accordance with
English practice.
At the oral hearing on 1st February, Counsel for Greece withdrew the complaint
concerning "denial of justice" on the part of the Court of Admiralty, i.e. denial
of justice by Mr. Justice Hill, with the result that the only complaint now before
the Commission concerns the withholding of documents by the United Kingdom
authorities.
Notwithstanding that this complaint, in view of the interpretation adopted by
the Commission with regard to Articles X and XV, is now the only complaint on
which the Greek Government can base its claim, the award devotes to this question
a relatively limited space, thus failing to do full justice to its importance.
Furthermore, it must be emphasised that Counsel for the Greek Government,
at the oral hearing on 14th February, expressly acknowledged that according to
English law the Crown was not under a duty to produce minutes and interdepartmental
documents, such documents being covered by Crown privileges. Counsel
for the Greek Government confined himself to the contention that there must have
been some other documents in the hands of the United Kingdom authorities which
prove that dates certain had been promised by the Crown.
As a result, the award, as stated above, contains only a rather short passage
dealing with this basic question of the Ambatielos claim. The Commission has
placed on record the agreement of the Parties on this question of English law. It
felt that, as an international tribunal, it was not called upon to deal with this problem
of municipal law in greater detail. I am inclined to think that the Commission
should not have confined itself merely to placing on record the statements of Counsel
for the United Kingdom and Greece as to the law to be applied, but that it should
have examined, ex officio, the question as to the law which is applicable. With
regard to this latter question, I would like to make the following comment:
Counsel for the United Kingdom refi~rred to the decision of the House of Lords
in the case of Duncan v. Gammell Laird and Cu. Ltd. (1942) A. C. 624, in order to
establish that the Crown is not under a duty to produce the minutes or interdepartmental
documents before an English court. This decision was referred to as stating
English law on this matter.
I have serious doubts whether this is the right view to take.
According to Viscount Simon, Lord Chancellor, the principle to be applied in
the case of Crown privilege is that documents otherwise relevant and liable to
production must not be produced if the public interest requires that they should
be withheld. This requirement, according to Viscount Simon, may be held to be
Annex 121
130 GREECE/ UNITED KINGDOM
satisfied where a document is withheld from production, having regard either
(a) to its contents, or (b) to the fact that it belongs to a class which, on grounds of
public interest, must at all costs be withheld from production.
With regard to the criteria to be adopted in deciding whether a document must
or must not be produced, Viscount Simon said:
"It is not a sufficient ground that the documents are 'State documents,' or
'official' or are marked 'confidential.' It would not be a good ground that, if
they were produced, the consequences might involve the department or the
government in parliamentary discussion or in public criticism, or might necessitate
the attendance as witnesses or otherwise of officials who have pressing duties
elsewhere. Neither would it be a good ground that production might tend to
expose a want of efficiency in the administration or tend to lay the department
open to claims for compensation. In a word, it is not enough that the minister of
the department does not want to have the documents produced. The minister,
in deciding whether it is his duty to object, should bear these considerations in
mind, for he ought not to take the responsibility of withholding production
except in cases where the public interest would otherwise be damnified, for
example, where disclosure would be injurious to national defence or to good
diplomatic relations, or where the practice of keeping a class of documents secret is
necessary for the proper functioning of the public service."
The distinguished judge, in support of the view expressed by him, refers to certain
principles enunciated in other cases.
With regard to the case here referred to, I should like to make the following
comment:
(a) First of all, the opinion of Viscount Simon has been subjected to considerable
criticism, not because the documents concerned were not clearly excluded
from evidence, but because, as a matter of principle, the judge ought to look
at the documents before giving his decision on the objection, and ought not
to abrogate his function in favour of the executive. (See 16 (1942) 58L.Q.R.
436; 59 (1943) L.Q.R. 102, quoting 20 (1942) Can. Bar Rev. 805).
(b) An analysis of the "Cammell Laird" case leads to the conclusion that its
importance docs not lie in the general conclusions of his Lordship, because
on the facts of the case there was little doubt that the documents were privileged.
They were concerned with constructional details of a submarine
(the Thetis ), and any disclosure of their contents might therefore have been
of value to the enemy. (The case was decided during the last war.)
(c) All the other cases cited by Viscount Simon in support of his views were
concerned only with facts where a real public interest was involved. Not one
of these cases was concerned with an ordinary commercial transaction.
(d ) Finally, some of the cases mentioned by Viscount Simon expressly state that
the Crown must do its utmost to give a defendant full discovery.
Thus, in the case of Deare v. Attorney General (1835), I Y. and C. (Ex.) 197, 208,
and similarly in Attorney General v. Newcastle-upon-Tyne Corporation (1897) 2 Q. B.
384, Rigby, L. J. said: "The law is that the Crown is entitled to full discovery,
and that the subject as against the Crown is not. That is a prerogative of the Crown,
part of the law of England, and we must administer it as we find it . . ... Now
I know that there has always been the utmost care to give to a defendant that discovery which the
Crown would have been compelled to give if in the position of a subject, unless there be some
plain overruling principle of public interest concerned which cannot be disregarded.
Where the Crown is a party to a suit, therefore, discovery of documents cannot
Annex 121
AMBA TIELOS CLAIM 131
be demanded from it as a right, though in practice, for reasons of fairness and in the
interests of justice, all proper disclosure and production would be made."
Moreover, it is important to emphasise again that the privilege of the Crown has
never been claimed in any commercial transaction.
Although the significance of the case of Duncan v. Gammell Laird and Co. Ltd. cannot
be denied, I do not think that it contains anything contrary to the view taken by
the Greek Government that in cases of commercial transaction the privilege of the
Crown ought to be waived.
The question as to whether the Cro\-vn failed to produce documents in its possession
at the trial before Mr. Justice Hill must be determined in accordance with the
practice prevailing at the time, and not in accordance with rules of law enunciated
in cases decided many years later. This point is of decisive importance. I should like to
make the following comment with regard to this:
In order to ascertain what the pra,:tice was at the time of the trial before Mr.
Justice Hill, reliance should not be placed on the case of Duncan v. Gammell Laird
and Co. Ltd., which was decided in 1942, but on the case of Robinson v. State of South
Australia ( 1931 ) A.G. 704, which was decided by the Privy Council in 1931 and
must be regarded as the leading case [or the period prior to that year.
In that case, the appellant (Robimon) had brought an action in the Supreme
Court of South Australia against the respondent State claiming damages for alleged
negligence in the care of wheat placed in the control of the State under the Wheat
Harvest Acts, 1915-17. Upon an order for discovery, the respondent State, by an
affidavit made by a civil servant, claimed privilege in respect of 1882 documents
comprising communications between officers administering the department concerned;
there was exhibited to the affidavit a minute by the responsible minister
stating (inter alia) that disclosure of the documents would be contrary to the
interests of the State and the public.
The Privy Council said that it must not be assumed from certain observations of
Lord Justice Turner that documents relating to the trading, commercial or contractual
activities of a State can never be claimed as being protected under this head of
privilege. It is conceivable that even in connection with the production of such documents
there may be " some plain ovenuli11g principle of public interest concerned
which cannot be disregarded." But cases in which this is so, must, in view of the
sole object of the privilege, and especi:tlly in time of peace, be rare indeed, and the
distinction drawn by the Lord Justice remains instructive and illuminating.
The Privy Council referred Lo the case of Queensland Pine Co. v. the Commonwealth
of Australia which was decided in I 920. The following passage appears in that case:
" ... notwithstanding a certificate from the Minister of State of the Commonwealth
claiming prote-ction for documents on this occasion in terms direct and
unambiguous, the learned Judge at the trial inspected them, and having done
so, expressed the opinion that the facts discoverable by inspection would not be
detrimental or prejudicial to the public welfare, and he ordered that inspection
of all the documents should be given to the Plaintiff."
The Privy Council, in its judgment in the case of Robinson v. State of South Australia,
then advised His Majesty to discharge the order appealed from and to remit the
case to the Supreme Court of South Australia with a direction that it was one proper
for the exercise of the Court's power of inspecting the documents for which privilege was claimed,
in order to determine whether the facts discoverable by their production would
be prejudicial or detrimental to the public welfare in any justifiable sense.
2. In so far as concerns the question of exhaustion of local remedies, I am of
opinion that the re1evant passage at pages 94-95 of the transcript of the proceedings
before Mr. Justice Hill does not leave much room for doubt that Mr. Ambatielos
Annex 121
132 GREECE/ UNITED KINGDOM
mus1 be held IO have exhausted the local remedies in a reasonable manner, in
connection with the failure of the Crown to produce the documents.
3. A passage in a Note of the Foreign Office, dated 7th November, 1934, would
not have been without relevance to the decision of the Commission. This Note was
a reply to a Note of the Greek Governmenl of 3rd August, 1933, which accused
the Crown of not having given to Mr. Ambatielos the same treatment that would
have been accorded to a British National. The Greek Note says:
"Again it was admitted at the trial that files were kept at the Ministry of
Shipping in which particulars of the contracts discussed by the Shipping Control
Committee were entered, but when Mr. Ambatielos called for these files the
privilege of the Crown was claimed and they were not produced." The Foreign
0 ffice replied as follows:
"Such complaint could only properly be made if lhe Greek Government
were in a position to show that there is an obligation on Governments when
engaged in litigation before their own Courts to produce the minutes written
in the Government Department concerned, and in particular that such is the
regular practice of the Greek Government itself.''
The above correspondence shows an admission by the United Kingdom Government
that the United Kingdom authorities were under a duty to produce, at the
trial before Mr. Justice Hill, the documents which the Ministry of Shipping had in
its possession.
4. The Commission has not, of course, any means of knowing (a) whether the
Crown had any documents relating to the verbal agreement between Mr. G.
Ambatielos (who acted on behalf of his brother, Mr. N. Ambatielos) and Major
Laing, and (b) whether these documents would have established satisfactorily that
the Ministry of Shipping was bound by fixed delivery dates.
In these circumstances I think that the Commission ought to have examined the
question whether the award should not be based on the assumption that fixed delivery
dates had been agreed. The leading case justifying such an assumption is the
well-known case of Armory and Delamirie which is referred to in Smith's Leading
Cases, 13th Edition, and which lays down the rule: Omnia praesumuntur contra spoliatorem.
This rule is to the effect that if a man, by his own tortious act, had withheld
the evidence to prove the nature of his case, all presumptions will be against him.
5. The Commission having held that the non-production of the documents by
the Crown does not constitute a breach of Article XV of the Treaty of 1886, I may confine
myself to the above comments, without going more fully into the substance of the
matter which involves a great deal of responsibility, since my conclusion on the
issue of production of documents would not be of any practical purpose.
(Signed) J. SPlROPOULOS
ANNEX I
TREATY OF COMMERCE AND NAVIGATION BETWEEN GREAT
BRITAIN AND GREECE OF NOVEMBER 10th, 1886
Her Majesty the Queen of the United Kingdom of Great BriLain and Ireland,
Empress of India, and His Majesty the King of the Hellenes, being desirous to
extend and facilitate the relations of commerce between their respective subjects
and dominions, have determined to conclude a new treaty with this object, and
they have appointed their respective Plenipotentiaries, that is to say:
Annex 121
AMBATIELOS CLAIM 133
Her Majesty che Queen of the United Kingdom of Great Britain and Ireland,
Empress of India, Sir Horace Rumbold, A Baronet of Great Britain, Knight
Commander of the Most Distinguished Order of Saint Michael and Saint George,
and Her Envoy Extraordinary and Minisler Plenipotentiary to His Majesty the
King of the Hellenes;
And His Majesty the King of the Hellenes, M. Stephen Uragoumi, Minister
for Foreign Affairs;
Who, afler having communicated to each other their respective full powers,
found in good and due form, have agreed upon the following articles;
Article I
There shall be between the dominions and possessions of the two High Contractmg
Parties reciprocal freedom of commerce and navigation. The subjects of each of the
two parties shall have liberty freely to come, with their ships and cargoes, to all
places, ports and rivers in the dominions and possessions of the other to which
native subjects generally are or may be permitted to come, and shall enjoy respectively
the same rights, privileges, liberties. favours, immunities and exemptions in
matters of commerce and navigation which are or may be enjoyed by native subjects
without having to pay any tax or impost greater than those paid by the same, and
they shall be subject to the laws and regulations in force.
Article II
No other or higher duti~s shall be imposed on the importation into the dominions
and possessions of Her Britannic Majesty of any article, the produce or manufacture
of the dominions and possessions of His Majesty the King of the Hellenes, from
whatever place arriving, and no other or higher duties shall be imposed on the
importation into the dominions and possessions of His Majesty the King of the
Hellenes of any article, the produce or manufacture of Her Britannic Majesty's
dominions and possessions, from whatever place arriving, than on articles produced
and manufactured in any other foreign country; nor shall any prohibition be
maintained or imposed on the importation of any article, the produce or manufacture
of the dominions and possessions of either of the Contracting Parties, into
the dominions and possessions of the other, from whatever place arriving, which
shall not equally extend to the importation of the like articles being the produce or
manufacture of any other country. This last provision is not applicable to the
sanitary and other prohibitions occasioned by the necessity of protecting the safety
of persons or of cattle, or of plants useful to agriculture.
Article Ill
No other or higher duties or charges shall be imposed in the dominions and
possessions of either of the Contracting Parties on the exportation of any article to
the dominions and possessions of the other than such as are or may be payable on
the exportation of the like article to any other foreign country; nor shall any prohibition
be imposed on the exportation of any article from the dominions and possessions
of eiLher of the two Contracting Parties to the dominions and possessions
of the other which shall not equally extend to the exportation of the like article to
any other country.
ATlicle IV
The subjects of each of the Contracting Parties shall enjoy, in the dominions
and possessions of the other, exemption from all transit duties, and a perfect equality
of treatment with native subjects in all that relates to warehousing, bounties, facilities,
and drawbacks.
Annex 121
134 GREECE/UNITED KINGDOM
Article V
All articles which are or may be legally imported into the ports of the dominions
and possessions of Her Britannic Majesty in British vessels may likewise be imported
into those ports in Hellenic vessels, without being liable to any other or higher
duties or charges of whatever denomination than if such articles were imported in
British vessels; and reciprocally all articles which are or may be legally imported
into the ports of the dominions and possessions of His Majesty the King of the
Hellenes in Hellenic vessels may likewise be imported into those ports in British
vessels, without being liable to any other or higher duties or charges of whatever
denomination than if such articles were imported in Hellenic vessels. Such reciprocal
equality of treatment shall take effect without distinction whether such articles
come directly from the place of origin or from any other place.
In the same manner, there shall be perfect equality of treatment in regard to
exportation, so that the same export duties shall be paid, and the same bounties
and drnwbacks allowed, in th<:: <lominiuns and possessions of either of the Contracting
Paries on the exportation of any article which is or may be legally exported therefrom,
whether exportation shall take place in Hellenic or in British vessels, and
whatever may be the place of destination, whether a port of either of the Contracting
Parties or of any third Power.
Article VI
No duties of tonnage, harbour, pilotage, lighthouse, quarantine, or other similar
or corresponding duties of whatever nature, or under whatever denomination,
levied in the name or for the profit of the Government, public functionaries, private
individuals, corporations, or establishments of any kind, shall be imposed in the
ports of the dominions and possessions of either country which shall not equally
and under the same conditions be imposed in the like cases on national vessels in
general. Such equality of treatment shall apply reciprocally to the respective
vessels, from whatever port or place they may arrive, and whatever may be their
place of destination.
Article VII
In all that regards the coasting trade, the stationing, loading and unloading of
the vessels in the ports, basins, docks, roadsteads, harbours or rivers of the dominions
and possessions of the two countries, no privilege shall be granted to national
vessels which shall not be equally granted to vessels of the other country; the
intention of the Contracting Parties being that in these respects also the respective
vessels shall be treated on the footing of perfect equality.
Article VIII
Any ship of war or merchant-vessel of either of the Contracting Parties which
may be compelled by stress of weather, or by accident, to take shelter in a port of
the other, shall be at liberty to refit therein, to procure all necessary stores and to
put to sea again, without paying any dues other than such as would be payable
in a similar case by a national vessel. In case, however, lhe master of a merchantvessel
should be under the necessity of disposing of a part of his merchandise in
order to defray his expenses, he shall be bound to conform to the regulations and
tariff of the place to which he may have come.
If any ship of war or merchant-vessel of one of the Contracting Parties should
run aground or be wrecked upon the coasts of the other, such ship or vessel, and
all parts thereof, and all furniture and appurtenances thereunto, and all goods
and merchandise saved therefrom, including any which may have bet:n cast into
Annex 121
AMBATIELOS CLAIM 135
the sea, or the proceeds thereof if sold, as well as all papers found on board such
stranded or wrecked ship or vessel, shall be given up to the owners when claimed
by them. If there are no such owners or their agents on the spot, then the same shall
be delivered to the British or Hellenic Consul-General, Consul, Vice-Consul, or
Consular Agent in whose district the wreck or stranding may have taken place
upon being claimed by him within rhe period fixed by the laws of the coumry;
and such Consuls, owners, or agents shall pay only the expenses incurred in the
preservation of the property, together with the salvage or other expenses which
would have been payable in the like case of a wreck of a national vessel.
The goods and merchandise saved from the wreck shall be exempt from all
duties of Customs, unless cleared for consumption, in which case they shall pay
the same rate of duty as if they had been imported in a national vessel.
In the case either of a vessel being driven in by stress of weather, run aground,
or wrecked, the respective Consuls-General, Consuls, Vice-Consuls, and Consular
Agents, shall, if the owner or master or other agent of the owner is not present,
or is present and requires it, be authorized to interpose in order to afford the
necessary assistance to their fellow-countrymen.
Artu:le IX
All vessels which, according to British law, are to be deemed British vessels,
and all vessels which, according to Hellenic law, are to be deemed Hellenic vessels,
shall for the purposes of this Treaty, be deemed British and Hellenic vessels respectively.
Article X
The Contracting Parties agree that, in all matters relating to commerce and
navigation, any privilege, favour, or immunity whatever which either Contracting
Party has actually granted or may hereafter grant to the subjects or citizens of any
other State shall be extended immediately and unconditionally to the subjects or
citizens of the other Contracting Party; it being their intention that the trade and
navigation of each country shall be placed, in all respects, by the other on the footing
of the most-favoured-nation.
Article XI
It shall be free to each of the Contracting Parties to appoint Consuls-Gc::neral,
Consuls, Vice-Consuls, and Consular Agents to reside in the towns and ports of
the dominions and possessions of the other. Such Consuls-General, Consuls, ViceConsuls
and Consular Agents, however, shall not enter upon their functions until
after they shall have been approved and admitted in the usual form by the government
to which they are sent. They shall enjoy all the facilities, privileges, exemptions
and immunities of every kind which are or shall be granted to Consuls of the
most favoured nation.
Article XII
The subjects of each of the Contracting Parties who shall conform themselves
to the laws of the country:
I. Shall have full liberty, with their families, to enter, travel or reside in any
part of the dominions or possessions of the Contracting Party.
2. They shall be permitted to hire or possess the houses, manufactories, warehouses,
shops and premises which may be necessary for them.
3. They may carry on their commerce either in person or by any agents they
may think fit (o employ.
Annex 121
136 GREECE/ UNITED KINGDOM
4. They shall not be subject in respect of their persons or property, or in respect
of passports, nor in respect of their commerce or industry, to any taxes, whether
general or local, or to imposts or obligations of any kind whatsoever other or greater
than those which are or may be imposed upon native subjects.
Article XJ/I
The subjects of each of the Contracting Parties in the dominions and possessions
of the other shall be exempted from all compulsory military service whatever,
whether in the army, navy, or national guard or militia. They shall be equally
exempted from all judicial and municipal functions whatever other than those
imposed by the laws relating to juries, as well as from all contributions, whether
pecuniary or in kind, imposed as a compensation for personal service, and finally
from every species of function or military requisition, as well as from forced loans
and other charges which may be imposed for purposes of war, or as a result of other
extraordinary circumstances. The duties and charges connected with the ownership
or leasing of lands and other real property are, however, excepted, as well as all
exactions or military requisitions to which all subjects of the country may be liabltas
owners or lessees of real property.
Article XIV
The subjects of each of the Contracting Parties in the dominions and possessions
of the other shall be at full liberty to exercise civil rights, and therefore to acquire,
possess, and dispose of every description of property, movable and immovable.
They may acquire and transmit the same to others whether by purchase, sale,
donation, exchange, marriage, testament, succession ab intestato, and in any other
manner, under the same conditions as national subjects. Their heirs may succeed
to and take possession of it, either in person or by procurators, in the same manner
and in the same legal forms as subjects of the country; and in the case of subjects
of either of the Contracting Parties dying intestate, their property shall be administered
to by their respective Consuls or Vice-Consuls as far as is consistent with the
laws of both countries.
In none of these respects shall they pay upon the value of such property any
other or higher impost, duty or charge than is payable by subjects of the country.
In every case the subjects of the Contracting Parties shall be permitted to export
their property, or the proceeds thereof if sold, on the same conditions as subjects
of the country.
Article XV
The dwellings, manufactories, warehouses and shops of the subjects of each of
the Contracting Parties in the dominions and possessions of the oth~r, and all
premises appertaining thereto destined for purposes of residence or commerce shall
be respected.
It shall not be allowable to proceed to make a search of, or a domiciliary visit
to, such dwellings and premises, or to examine and inspect books, papers, or accounts,
except under the conditions and with the form prescribed by the laws for
subjects of the country.
The subjects of each of the two Contracting Parties in the dominions and possessions
of the other shall have free access to the Courts of Justice for the prosecution and
defence of their rights, without other conditions, restrictions, or taxes beyond
those imposed on native subjects, and shall, like them, be at liberty to employ, in all
causes, their advocates, attorneys or agents, from among the persons admitted to
the exercise of those professions according to the laws of the country.
Annex 121
AMBATIELOS CLAIM 137
Article XVI
The Consuls-General, Consuls, Vice-Consuls, and Consular Agents of each of
the Contracting Parties, residing in che dominions and possessions of the other,
shall receive from the local authoritif's such assistance as can by law be given to
them for the recovery of deserters from the vessels of their respective countries.
Article XVII
The stipulations of the present Treaty shall be applicable, as far as the laws permit,
to all the colonies and foreign possessions of Her Britannic Majesty, excepting to
those hereinafter named, that is to say, except to:
India, The Dominion of Canada, Newfoundland, The Cape, New South Wales,
Natal, Victoria, Queensland, Tasmania, South Australia, Western Australia,
New Zealand.
Provided always that che stipulations of the present Treaty shall be made applicable
to any of the above-named colonies or foreign possessions on whose behalf
notice to that effecc shall have been given by Her Britannic Majesty's Representative
at the Court of Greece to the Hellenic Minister for Foreign Affairs, within one year
from the date of the exchange of the ratifications of the present Treaty.
Article XVIII
The present Treaty shall apply to any countries or territories which may hereafter
unite in a Customs union one or other of the High Contracting Parties.
Article XIX
The present Treaty shall come into force on the exchange of the ratifications,
and shall remain in force for ten years, and thereafter until the expiration of a
year from the day in which one or other of the Contracting Parties shall have
repudiated it.
Each of the Contracting Parties reserves, however, the right of causing it to
terminate upon 12 months notice being given p1·eviously.
It is understood that the Treaty of Commerce and Navigation concluded between
Great Britain and Greece on the 4th October, 1837, is abrogated by the present
Treaty.
Article XX
The present Treaty shall be ratified by the two Contracting Parties, and the
ratifications thereof shall be exchanged at Athens as soon as possible.
IN FAITH WHEREOF the Plenipotentiaries of the Contracting Parties have signed the
present Treaty in duplicate, in the English and Greek languages, and thereto
affixed their respective seals.
DoNE in Athens this 10th day of November, in the year 1886.
PROTOCOL
[L.S.] Horace RUMBOLD
[L.S.] S. DRAGOUMI
At the moment of proceeding this day to the signature of the Treaty of Commerce
and Navigation between Great Britain and Greece, the Plenipotentiaries of the
two High Contracting Parties have declared as follows:
Any controversies which may arise respecting the interpretation or the execution
of the present Treaty, or the consequences of any violation thereof, shall be subAnnex
121
138 GREECE/ UNITED KINGDOM
mitted, when the means of settling them directly by amicable agreement are exhausted,
to the decision of Commissions of Arbitration, and the result of such
arbitration shall be binding upon bolh Governmenls.
The members of such Commissions shall be selected by the two Governments
by common consent, failing which each of the Parties shall nominate an Arbitrator,
or an equal number of Arbitrators, and the Arbitrators thus appointed shall selecL
an Umpire.
The procedure of the Arbitra1ion shall in each case be determined by the Contracting
Parties, failin~ which the Commission of Arbitration shall be itself entitled
to determine it beforehand.
The undersigned Plenipotentiaries have agreed that this ProLocol shall be submilted
to the two High Contracting Parties at the same time as the Treaty, and
that when the Treaty is ratified, the agreements contained in the Protocol shall
also equally be considered as approved, without the necessity of a further formal ratification.
IN FAITH WHEREOF, the two Plenipotentiaries have signed the present Protocol, and
thereto affixed their respt:ctive seals.
DONE at Athens, this 10th day of November, in the year 1886.
ANNEX 2
[L.S.] Horace RUMBOLD
[L.S.] s. DRAGOUMI
CONTRACT OF JULY 17, 1919, BETWEEN THE MINISTRY
OF SHIPPING AND MR. N. E. AMBATIELOS
AN AGREEMENT made the 17th July, 1919, between THE SHIPPING CONTROLLER
un behalf of His Majesty the King (thereinafter called "the Vendor") of the one
part, and Nicholas E. AMBATIELos, of Argostoli, Cephalonia, Greece (thereinafler
cal led '' the Purchaser''), of the other part.
I. The Vendor agrees to sell and the Purchaser agrees to purchase for the total
sum of £2,275,000 the nine steamers more particularly described in the schedule
hereto now being built for the Vendor by rhe Contractors whose names are set
out in the said schedule and numbered in the shipbuilding yard of the Contractors
as also set out in the said schedule.
2. The purchase money for the said steamers and engines shall be paid as follows:
A deposit of ten per cent in cash payable as to £100,000 thereof upon signing
this Agreement and as to the balance of the said deposit within one monlh
thereafter and the balance in cash in London in exchange for a Legal Bill of
Sale or Builders' certificate within 72 hours of written notice of the steamer's
readiness for delivery being given to the Purchaser or his Agent, such delivery
to be given at the Contractor's yard.
3. The steamers shall be deemed ready for delivery immediately afrer they have
been accepted by the Vendor from the Contractors.
4. The Purchaser or any person appointed by him and approved by the Vendor
shall have access Lo the premises of the Contractor.; at all times during business
hours, and shall have all proper facilities afforded with a view to making inspections,
The Purchaser shall have no power of rejecting work or material but may make
representations in respect thereof to the Vendor, who shall thereupon decide whether
the same is or is not in accordance with the terms of the Contract between the
Vendor and the Contractor and shall approve or reject the same accordingly.
Annex 121
AMBATIELOS CLAIM 139
5. All classifications, anchor and chain certificates relating to the steamers shall
be handed to the Purchaser on delivery of the steamers and also copies of the type
specifications and plan.
All the spare gear boa Ls and outfit, provided for in the specifications of the sreamers
and engines and deliveries by the Contractors to the Vendor, shall be delivered to
the Purchaser on delivery of the steamers. The guns fitting and ammunition on
board lhe said steamers are not included in this contract and shall be removed
by the \ 'end or before deli very.
6. On payment of the balance of the purchase money as aforesaid a legal
bill of sale free from incumbrance for the whole of the shares in each of the steamers
or the Builder's certificates for each of rhe steamers shall be handed to the Purchaser
aL the Vendor's expense and the steamers shall thereafter be at the expense and
risk of the Purchaser.
The steamers with their spare gear and outfit shall be taken with all faults and
errors of description without any allowance or abatement.
7. If dt'.fault be made by the Purchaser in the payment of the purchase money
the deposit shall be forfeited and the steamers may be re-sold by public or private
sale and all loss and expense arising from the re-sale be borne by the Purchaser,
who shall pay interest thereon at the rate of five pounds per cent per annum. If
default be made by the Vendor in the exec;ution of Legal [lills of Sale or in the
delivery of the steamers in the mannc1· and "within the time agreed," the Vendor
shall return to rhe Purchaser the deposit paid wirh interest at the rate of five pounds
per cent per annum.
8. If any of the steamers became an actual or constructive total loss before they
are at the risk of the Purchaser, this Agreement shall be null and void as to such
steamer and the deposit paid in respect thereof shall be returned by the Vendor
IO the Purchaser but without interest.
9. If default be made by the Contractors in the delivery of any of the steamers
to the Vendor then the Vendor may at his option either cancel this Agreement
in respect of such steamer or steamers and return the deposit paid in respect thereof
to the Purchaser, or may substitute for the steamer or steamers hereby agreed to
be purchased another steamer or steamers of the same type and expected to be
ready at or about the same date, and this Agreement shall apply mutatis mutand1s
to the purchase of the new steamer or steamers.
JO. The steamers shall not be subject to any trading restrictions whatsoever.
11 . The wireless apparatuses are not the property of the Vendor, and are not
included in this contract, and the Purchaser undertakes to make his own arrangements
wilh the Marconi Company in connection therewirh and in default of such
arrangements being made shall indemnify the Vendor in respect of any claim by
the Marconi Company against the Vendor.
12. Any dispuce arising under this Agreement shall be referred under the provisions
of the Arbitration Act 1889 to the Arbitration of two persons in London,
one to be nominated by the Vendor and one by the Purchaser, and in the event of
their being unable to agree, to an umpire to be appointed by them whose decision
shall be final and binding upon both parties hereto.
13. A Commission of one and one-half pounds per cent upon the purchase price
shall be paid by the Vendor to Messrs. Fergusson & Law upon delivery of the steamers
to the Purchaser provided that in the e~ent of this Agreement becoming void or
being cancelled no commission shall be payable.
14. The Vendor undertakes to obtain the consent of the Board of Trade to the
transfer of the said steamers or any steamer or steamers substituted therefor to the
Annex 121
140 GREECE/UNITED KINGDOM
Greek flag upon delivery and at the expense of the Purchaser to do all that may
be necessary on his part to enable the steamers to be so transferred.
This schedule above referred to:
Conlrador1
Taikoo Dockyard Hong Kong
Taikoo Dockyard Hong Kong
Taikoo Dockyard Hong Kong
Hongkong and Wampoa Dock
Hongkong and Wampoa Dock
Hongkong and Wampoa Dock
Shanghai Dock and Engineering Co.
Shanghai Dock and Engineering Co.
Shanghai Dock and Engineering Co.
Tard .No. p,,-u
[, s. d,
180 289,166 13 4
177 289,166 13 4
181 289,166 13 4
564 289,166 13 4
565 289,166 13 4
570 289,166 13 4
1505 180,000 0 0
1506 180,000 0 0
1507 180,000 0 0
£2,275,000 0 0
For and on behalf of Nfrholas E. Ambatielos:
( Signed) FERGUSSON & LAW
As Agents
17th July, 1919.
CERTIFIED that this is a true copy of the original contract retained in the possession
of the Ministry of Shipping.
(Signed) J- O'BYRNE
For Accountant General Ministry of Shipping
ANNEX 3
MORTGAGE DEED AND COVENANT DATED NOVEMBER 4, 1920,
BETWEEN MR. N. E. AMBATIELOS AND THE SHIPPING
CONTROLLER
THIS INDF.NTURE made the fourth day of November one thousand nine hundred
and twenty between Nicholas Eustace AMBATIELOS, of Argostoli, Cephalonia, in the
Kingdom of Greece, but temporarily residing at 56, rue de Varenne, Paris, in the
Republic of France, Shipowner (hereinafter called the Mortgagor, which expression
shall include his executors, administrators and assigns where the context so admits)
of the one part and His MAJESTY THE KING, represented by the Shipping Controller
(who and whose successor or successors in office are hereinafter called the Controller)
of the other part.
WHEREAS the Mortgagor is the owner of 100/lO0th shares of and in all the
steamships or vessels more particularly described in the Schedule hereto.
AND WHERF.AS the said vessels are sailing under Greek flag but have noc been
registered yet at their declared port of registry.
AND WHEREAS the said declared port of registry is the port of Argostoli, Cephalonia,
in the aforesaid Kingdom of Greece.
A,-.n WHEREAS the Mortgagor has by a mortgage in the statutory form (hereinafter
called "the statutory mortgage") bear.ing even date herewith transferred
100/l00th shares of and in the steamship (hereinafter called "the said steamship")
to the Controller to secure an account current with the Controller and all and
every sum or sums of money now due or which shall from time to time hereafter
become due to the said Con'troller for the payment of the balance of the purchase
Annex 121
AMBATIELOS CLAIM 141
price of the steamship Keramies and the steamship Tarmis (being two of the steamers
mentioned in the Schedule hereto) and of the steamers Stathis and Mellon which
said steamers have been purchased by the Mortgagor from the Controller of Shipping
and of every sum now due or hereaflcr to become due from the Mortgagor to the
Controller on any account whatsoever whether from the Mortgagor solely or from
the Mortgagor jointly with any other person or persons or companies or from any
firms in which the Mortgagor may be interested or any other sum which may be
owing on account under or by virtue of the terms of this indenture (but not exceeding
in the aggregate the sum of £1,000,000) or any part thereof that may at any time
be owing with interest thereon at the rate hereinafter provided.
AND WHEREAS by way of further security the Mortgagor has agreed to execute
these presents and concurrently therewith stacutory mortgage and deeds of covenants
in the same form as the statutory mortgage and these presents in respect of all the
other vessels named in the Schedule hereto (which said statutory mortgage and
deeds of covenants are hereafter together sometimes referred to as the "Concurrent
Mortages").
Now THIS INDENTURE WITNESSETH that in pursuance of the said agreement and
for the consideration aforesaid the Mortgagor hereby covenants and agrees with
the Controller as follows:
l. All and every sum or sums of money which are now or which shall from
time to time hereafter become due or owing to the Controller from the Mortgagor
on any account whatsoever whether from him solely or jointly with any other person
or persons, company or firms for notes or bills discounted or paid or other loans,
credits or advances made to the Mortgagor or for his accommodation or at his
request whether solely or jointly as aforesaid or for any money for which he may
be liable as surety or for which the Controller may have become liable as surety
or guarantor for him in any other way whatsoever together with all interest, commissions,
discounts and all other proper legal charges to be repayable in the manner
hereinafter mentioned together with interest at the rate of 2 per cent per annum
above the Bank rate from time to time ruling, such interest being calculated from
the I st day of August, 1920, and shall be payable half-yearly on the first day of
I•'ebruary and on the first day of August of each year. In consideration of the
granting of credit and of the continuing of such current account the Mortgagor
hereby covenants and declares that at the date of signing of this indenture and of
the statutory mortgage there are no maritime or other liens, charges or incumbrances
on the said steamships and that he has full power to mortgage. If the Mortgagor
shall pay the interest hereinbefore covenanted to be paid within 14 days after the
day on which the same shall fall due and shall perform and observe all the covenants
and stipulations therein contained and on his part to be performed and observed,
then the Controller will not take any steps whatsoever for enforcing payment of
the principal sum due to the Controller from the Mortgagor at the date hereof or
any part thereof for a period of two years from the date hereof. All other sums
due from the Mortgagor to the Controller under these presents shall be repayable
on demand.
2. The Mortgagor agrees and undertakes to keep the said steamships insured
during the continuance of the mortgage against all risks, including war risks, at
her full declared value and at least in the sum of ... by policies, certificates and
entries subject to the reasonable approval of the Controller both as to the underwriters
and as to the risk, terms and extent of the insurance and also to have the
said steamship fully entered in a Protection and Indemnity Association approved
by the Controller and immediately on receipt of same to hand such policies and
all cover notes and other documems relating to the insurance to the Controller
Annex 121
142 GREEt'E/UNJTED KINGDOM
or at the Mortgagor's option a letter of undertaking by approved insurance brokers
to hold lhe policies on behalf of and to the order of the Controller, subject to the
broker's hen thereon for unpaid premiums and also to take out any renewals of
the same which may be necessary during the continuance of the said mortgages
and shall effect the said insurances eilher in the name of the Controller or in such
manner by giving proper notices to the insurers or underwriters as shall create
a legal right title and interest in and a right to sue upon the said policies, cover
notes and other documents in lhe Controller.
3. In the event of the Mortgagor failing to effect or keep in force during the
continuance of the said mortgage and the said insurance or any of them or to hand
over the policies or the said undertaking to the Controller or failing to take any
other steps necessary to vest in the Controller the legal rights, title and interest
therein, it shall be lawful for but not obligatory upon the Controller lo effect and
keep in force policies of insurance or insurances up to the amount aforesaid.
4. In the event of default by the Mortgagor in efTecting any insurance as hereinbefore
provided and in handing over the policies or the said undertaking as aforesaid
and in the event of the Controller in pursuance of the power herein before contained
himself effecting any such insurances, then the Mortgagor shall forthwith pay to
the Controller in cash on demand every sum disbursed by him to effect every such
policy of insurance and if any sum so disbursed shall not be paid on demand, the
amount thereof shall be added to and held secured by the statutory mortgage and
these presents but not so as to make the total amount secured thereby exceed the
said aggregate sum of £1,000,000 and shall bear interest at the rate of 10 per cent
per annum until repaid.
5. If any claim shall arise under any policy however effected, the Controller
shall be entitled if he shall so desire to collect the same from the underwriters or
other parties by whom the same shall be payable and shall be entitled lo apply
the same in the repair of any damages sustained by the said steamship or otherwise
and shall be entitled to charge and recover from the Mortgagor the usual broker's
commission upon the gross amount of all moneys so collected by him.
6. It is expressly agreed that no provisions in this Indenture relating to the rights
or remedies of the Controller shall in any way restrict or limit or deprive him of
any rights or privileges he would otherwise be entitled to in law or equity as Mortgagee
or by virtue of the statutory mortgage, but such provisions in this Indenture
shall be interpreted if necessary in the interests of the Controller as giving the
Controller extended rights and privileges.
7. The Mortgagor hereby expressly covenants with the Controller as follows:
(a) That upon the request from the Controller and subject and without prejudice
to the provisions of any then existing charter-parties but so nevenhel~ss as
to strictly comply with the law of Greece, he will cause the said steamship to
proceed to her declared port of registry and there at his own cost complele
all necessary formalities in connection with the registration of the said steamship
under Greek flag and also at his own cost register or cause to be registered
the statutory mortgage and this Indenture in the Mortgage Register at the
declared port of registry and produce to the Controller a formal certificate
from the Registrar of Shipping or other duly constituted officer at such
declared port of registry certifying that the mortgage is the first in date and
priority and that no other mortgage or charge has been registered prior to
or on the same day or attachment made or sale effected to a third parl y.
(b) Not to execute or register any mortgage or charge on the said steamship on
the same day in priority to the statutory mortgage or further to mortgage
the said steamship (except with the consent of the Controller in writing first
Annex 121
AMBATIELOS CLAIM 143
had and obtained) or without such consent sell or otherwise dispose of the
said steamship or any shares therein nor do or permit any act neglect or
default whereby the said steamship shall or may lose her character as a Greek
ship. Provided that the Mortgagor shall be at liberty to sell the said steamship
on giving 4 days notice written to that effect to the Controller, provided the
purchase money is made payable to the Controller and provided that same
or the sum of ... whichever be the larger is paid over to the Controller in
respect of such sale to be applied in reduction cf the amount due to the
Controller under the statutory mortgage or these presents anrl such sale shall
not constitute a breach of this sub-clause.
(c) That during any voyage the said steamship shall not make any deviation
not allowed by any policy and/or charter-party and that nothing shall at
any time be done or omitted whereby any insurance shall become void or
voidable in whole or in part.
(d) At all times upon the request to give the Controller full information regarding
the said steamship, her employment, position and engagements and copies
of charter-parties with names of charterers and if requested so to do on the
completion of every voyage to send to the Controller certified copies of the
ships' and engineers' log-books covering the period of such voyage.
(e) That the Mortgagor undertakes that all freights or hires earned in respect of
the said steamship will immediately upon receipt be paid to the London
County Westminster and Parr's Bank Limited, Lombard Street, London E.C.,
to the credit of the Controller or his duly nominated agents, less the ordinary
steamship disbursements, commissions and necessaries, and will if the charterers
fail or refuse to give a letter undertaking to pay such freights or hire
moneys to the said bank on request execute all such assignments, instruments,
aces and things as shall be necessary for effecting this purpose or for further
assurance. Provided that as freights and hire moneys are placed to the credit
of the Controller under these presents so much thereof as shall be required
for the purpose shall be applied in payment of all commission, disbursements,
repairs, accounts for necessaries and insurance premiums due and owing by the
Mortgagor in connection with the employment and insurance of the said
steamship and the balance thereof shall be applied in reduction of the amount
due from the Mortgagor to the Controller under or by virtue of the statutory
mortgage and these presents.
(f) The Mortagor undertakes to reduce the amount ::>wing to the Shipping
Controller by at least the sum of £75.000 each six. months.
8. IT 1s HEREBY AGREED notwithstanding anything to the contrary herein contained
that the Controller shall be entitled to take immediate possession of and
to sell the said steamship without the necessity of applying to the Court on che
happening of any or either of the following events, viz.:
(a) If any amount to the said Conrrolkr by the Mortgagor on any account
whatever shall not be repaid at the times and in the manner provided herein.
(b) If the said steamship and her machinery shall not be kepc in a seaworthy
and seagoing condition and her classification maintained.
(c) If the said steamship shall be arrested by or under any order of any court or
tribunal in Great Britain or Ireland or any other country and shall not be
freed from arrest within 21 days from the date of such arrest.
(d) If the Mortgagor at any time upon request by the Controller shall fail to
satisfy the Controller within a reasonable time that the masters, officers and
crew of the said steamship have no claim or claims for wages in respect of a
period exceeding three months.
Annex 121
144 GREi!:CE/ UNITi!:D KINGDOM
(e) If the Mortgagor neglects to insure or protect the said steamship by insurance
as hcreinbefore provided or neglects to pay the premiums or calls when due
or fails to hand over the policies, cover notes or broker's undertaking to the
Controller as aforesaid or to give proper notice or to make such assignment
as or omit any other act that may be necessary to vest in the Controller the
legal interest in the said policies or any of them.
(f) If the said steamship be sold and the net proceeds of sale or sum of£ . .. whichever
shall be the larger be not paid to the Controller as aforesaid, or transft:rred
to any new management without the consent in writing of the Controller.
(g) If the Mortgagor or the captain for the time being of the said steamship
shall enter into or execute any bottomry bond or respondentia or if the
said steamship shall become subject to any maritime or other lien charge or
incumbrance (of which notice shall be immediately given to the Controller)
and is not freed thereon by the Mortgagor within 21 days from the time
the said lien is enforced.
(h) If the Mortgagor shall become insolvent or a bankruptcy notice or a bankruptcy
petition be presented against him or equivalent proceedings be taken
in any foreign country or if he shall enter into any deed of arrangement or
composition with his creditors or any distress or execution shall be levied
against his goods.
(i) If the Mortgagor shall commit any breach of or make any default in the
observance or performance of any of the stipulations set out in this Indenture,
including those in this clause otherwise than a breach which shall have been
made good before the exercise of any such power by the Controller.
(J) If the aforesaid Mortgagor shall employ or permit the said steamship to be
employed in any manner in carrying contraband goods or other goods that
shall be declared to be contraband of war.
(k) If the Mortgagor shall let the said steamship upon time charter whereby
more than on a calendar month's hire shall be payable in advance to the
Mortgagor and such moneys so paid in advance shall not be paid into the
said bank to the credit of the Controller or if he shall create any charge or
lien upon such hire money other than for usual ship's disbursements and
necessaries.
(l) If the said steamship shall be lost or destroyed or captured and the policy
moneys shall not be paid to the Controller.
(m) If the said steamship shall be allowed to remain idle in any foreign port for
more than 25 days, except when under repair or through stress of weather
or in the reasonable course of her employment or through strikes or lock-outs.
(n) If the Mortgagor shall allow the said steamship to proceed to her declared
port of registry without first giving the Controller 21 days notice of such
intention. Provided that if under the provisions of any charter-party of the
said steamship to proceed to Greece such direction shall not constitute a breach
of this sub-clause unless the statutory mortgage shall not be registered concurrently
with the registration of the said steamship. The Mortgagor shall
give immediate notice to the Controller in writing of such direction.
(o) If the Mortgagor shall create any other mortgage or charge on the said
steamship capable of being registered at the declared port of registry prior
to or contemporaneously with the statutory mortgage to the Controller.
(p) If the Mortgagor shall make default under or commit a breach of any of the
covenants, stipulations and conditions of all or any of the concurrent mortgages.
(q) If any freight or hire money in respect of the said steamships shall not be
Annex 121
AMBATIELOS CLAIM 145
provided by Clause 7(2) hereof be forthwith paid to the account of the
Controller at the London County Westminster and Parr's Bank Ltd., Lombard
St., London, E.C.
9. If the Mortgagor shall make any default in any payment hereunder or commit
any breach (other than a breach or default which has been made good by the
MorLgagor before the exercise of any power given to the Controller by the proceeding
clause) of any of the covenants, condilions or stipulations herein contained or
upon the happening of any of the events mentioned in paragraph 8 hereof, the
Controller shall be at liberty to take possession of the said steamship in any part
of the world and to trade with her in such trade or trades as he may elect and at
the current market rates or in his opinion at such rates as after taking all the circumstances
connected with the said trading into consideration he may consider equivalent
to current market rates and to charge a reasonable management fee therefor
(the Controller not being liable for any acts or omissions as manager nor for the
negligence of his servants or agents) or lO lay her up and in either event for a period
or periods as to him may seem expedient, giving credit for all profits and debiting
all losses to the Mortgagor in their net amount and accordingly deducting or
adding same from or to the moneys already owing to the intent that the whole
be secured by the said statutory mortgage, or he may take possession of the said
steamship in the United Kingdom or elsewhere in any part of the world and in
his discretion sell her without applying to the Court for an order for sale by public
auction or private contract, and in c~e of a sale they shall be entitled to charge
or pay £ l per centum brokerage and all other usual and proper sale charges and
expenses which may be incurred and also to satisfy any liens or claims, maritime
or otherwise, which may be proved to be outstanding against the said steamship
and all moneys expended by the Controller and all proper brokerage and outgoings
and all losses (if any) sustained by him in or about the proper exercise of any of the
powers herein contained or vested in him by virtue of the statutory mortgage or
otherwise by operation of law shall be paid to him by the Mortgagor on demand
and shall be deemed to be secured by the said statutory mortgage.
IO. ft is hereby agreed and declared that any neglect, delay or forbearance of
the Controller to require or enforce payment of any money hereby secured or
any other covenants, conditions or stipulations of this Indenture and any time
which may be given to the Mortgagor ;;hall not amount to a waiver of any of the
powers vested in the Controller b}' virtue of the statutory mortgage of these presents
or by operation of law and shall not in any way whatsoever prejudice or affect the
right of the Controller to afterwards act strictly in accordance with the powers
conferred upon the Controller by this Indenture.
11. Notwithstanding anything to the contrary herein contained, the statutory
mortgage and these presents shall be construed according to English law and the
Mortgagor agrees that the Controller shall be at liberty to take any proceedings
in the English courts to protect or enforce the security provided by the statutory
mortgage or to enforce any of the provisions of these presents or lo recover payment
of any sums due. For the purpose of any proceedings in the English courts the
mortgagor shall be considered as ordinarily resident or carrying on his business at
the offices at 46, St. Mary Axe in the City of London of Mr. G. E. Ambatielos,
and if such offices shall be closed then at the office of his solicitors, Messrs. William
A. Crump & Son, wherever they may he situated and the Mortgagor agrees that
service of any writ issued against him by delivering the same to some person at the
said office shall be deemed good service and no objection shall be taken by or
on behalf of the Mortgagor to such service and for the purpose of any proceedings
the statutory mortgage and these presents shall be construed and enforced according
to English law. The Mortgagor further agrees that if the said steamship is at any
Annex 121
146 GREECE/UNITED KINGDOM
time in any port or place in England or Wales the said steamship may be arrested
in any action instituted in the Probate Divorce and Admiralty Division of the
High Court of Justice to enforce the statutory mortgage or these presents or protect
the security, and no objection shall be taken by or on behalf of the Mortgagor
to set aside or prevent the enforcement of any judgment in such action on the
ground that the Court had no jurisdiction. For the purpose of any such action the
Mortgagor hereby agrees that he shall be deemed to have entered unconditional
appearance and consented to the jurisdiction of the Probate Divorce and Admiralty
Division of the High Court ofjuslice.
12. The Mortgagor for the purpose of giving effect to the carrying out of the
provisions of this Indenture hereby constitutes and appoints the Controller to be
his true lawful and irrevocable attorney for him and in his name to ask, demand,
receive, sue for and recover all insurance freight passage and other moneys of the
said steamship which may become due and owing under the security of the statutory
mortgage and these presents and to do all such acts and things in the name of the
Mortgagor or otherwise as may be necessary for the due enforcement of the said
security and on receipt of any such moneys to give proper receipts and discharges
for the same and whatever the said attorney shall do in the premises the Mortgagor
hereby ra1ifies and confirms.
13. As the amount due to the Controller is from time to time reduced by the
amounts hereinafter mentioned, the Controller will absolutely release from the
statutory mortgage relating thereto and accompanying deed of covenant the
steamships hereinafter named, viz.:
When the amount due is reduced by £150,000, the S.S. Panagis.
When the amount due is reduced by a further £150,000, the S.S. Nicolis.
When the amount due is reduced by £130,000, the S.S. Trialos.
When the amount due is reduced by £130,000, the S.S. Cephalonia.
When the amount due is reduced by £130,000, the S.S. Ambatielos.
When the amount due is reduced by £85,000, the S.S. Yannis.
When the balance is repaid, the S.S. Keramies.
14. The Mortgagor undertakes to pay the reasonable and proper costs, charges
and expenses of the Controller and of his solicitors in and about the preparation
and execution of this Indenture and of the statutory mortgage.
IN WITNESS WHEREOF the Mortgagor hath hereunto set his hand and seal and
the Controller has caused the Common Seal to be hereunto affixed the day and
year first above written.
The schedule hereinbefore referred to :
Nam,
S.S. Keramies
S.S. Trialos
S.S. Nicolis
S.S. Ambatielos
S.S. Cephalonia
S.S. Panagis .
S.S. Yannis
Former Nam,
S.S. War Coronet
S.S. War Sceptre
S.S. War Bugler .
S.S. War Trooper
S.S. War Miner .
S.S. War Diadem
S.S. War Tiara
Signed, sealed and delivered by the said
Nicholas Eustace Ambatielos in the
presence of:
(Signature of Greek Consul in Paris)
D,adw,ighl
8,250 tons
8,250 tons
8,250 tons
8,250 tons
8,250 tons
5,150 tons
S, 150 tons
(Signed) N. E. AMBATIELOs
Annex 121
AMBATIELOS CLAIM 147
ANNEX 4
LETTER OF FEBRUARY 3, 1921, FROM MR. G. E. AMBJ\TIELOS
TO THE SHIPPING CONTROLLER
GEA/ECM
By hand
The Shipping Controller,
Ministry of Shipping,
St.James's Park, S. W. l
Sir,
February 3, 1921
IMPORTANT
Re N. E. Ambatielos of Paris
Whilst apologising for troubling you with this letter we ask for your indulgence
while we place clearly before you 1hc position we find ourselves in re the above,
in 1he hope that you may give it sympa1he1ic and favourable consideration.
In 1919 we bought l l steamers from the Ministry involving a sum - including
extras - of over three millions sterling.
From the very fact that this transaction involved, as it did, the cash provision of
£2,200,000 - and left only a relatively small balance of £800,000 - to be found,
we ask you to believe, that it was entered upon only after most careful calculation
based on business experience, and was not hastily or rashly undertaken.
Our Bankers, both verbally and in writing, informed us that we could rely upon
certain advances which would fully cover our requirements to complete this transaction
and we implicity relied upon this assurance. Much to our dismay, however,
when the time came for this accommodation to be provided, they refused to grant
us a loan on the grounds that things had considerably changed, that they had m the
meantime advancr.d considerable sums of money to assist shipping, and that they
were obliged 10 meet demands from other customers, not connected wi1h shipping.
We immediaiely bought the matter 10 the knowledge of the competent gentleman
a1 the Ministry, but still continued our efforts to procure a loan through other
Bankers, namely, Messrs. Cox & Co., with whom we negotiated over a long period,
but unfortunately they also turned the business down. These efforts were known
to Mr. J. O'Byrne, who, we must admit has all along done his utmost to assist us
in trying to meet the situation thai has arisen.
We chartered the following vessels, as under, with first-class American and
English firms:
S.S .Nicolis, chartered 30th April 1920, at the rate of $21.50 per ton, for as
many consecutive voyages as steamer can make up to 1he 30th June 1921 , from
Hampton Roads to West Italy.
S.S. Panagis, chartered on the 29th April 1920, for as many consecutive
voyages as steamer can perform up to 1st April 1921, from Hampton Roads to
French Atlantic, at the rate of $20.00 per ton.
S.S. Ambatielos, chartered 22nd April I 920, at the rate of $21.50 per ton, for
six consecutive voyages from Hampton Roads 10 West Italy.
S.S. Cephalonia, chartered 29th May 1920, at the rate of $19.50 per ton, for
as many voyages as steamer can perform up w the 3lstjuly 1921, from Hampton
Roads to West Italy.
S.S. Keramies, chartered 25th March 1920, for six consecutive voyages, from
Calcutta to Alexandria, at the rate of 120/- per ton.
S.S. Trialos, chartered 28th April 1920, for as many consecutive voyages as
steamer can perform up to the 1st April 1921, from Hampton Roads to Antwerp
or Rotterdam, at the rate of $19.
Annex 121
148 GREECE/UNITED KINGDOM
We had every reason to reckon that these charters would yield to lhe owner in
a year's time a minimum net profit of £900,000. However most unfortunately,
we have had all these charter-parties, one after another, cancelled, for no earrhly
reason or excuse whatever, and we are now suing the charterers for damages.
Shipping, as you are well aware, Sir, is going through a most abnormal crisis,
but it is to be hoped that things cannot possibly remain as they are because business
at large, and trade in general is thereby paralysed and almost at a standstill. Nevertheless,
one must face the actual fact, that ships can no longer pay their expenses
and are being rapidly laid up.
All this has been worrying us more than it is possible for you to realise, and
nolwithstanding the fact that we have spared no efforts to make satisfactory arrangements
with a view to meeting our obligations we can s~e no immediate prospect of
doing so.
As above stated, Sir, this very considerable transaction was not entered upon in
the spirit of speculation. Had that been so, we would certainly not deserve, or
appeal for any indulgence. It was a thoroughly well thought out business proposition,
in which personal prop~rty was sunk of over two millions sterling, and for
which we respectfully submit, no normal foresight could have anticipated any such
difficulties as have arisen.
How can we possibly deal with the present sirnation effectively and satisfactorily
unless we receive some indulgence at your hands.
Having regard to the" impasse "we are faced with, we would ask you to consider
whether you could release us from purchasing at least the ss. Stathis and the ss.
Mellon. In that event, together with the proceeds of a ship we have just sold, the
outstanding balance would be reduced to proportions that we could handle and
thus save ourselves from utter ruin.
We beg to offer you, Sir, in anticipation of a favourable solution, our most
grateful thanks and appreciation, and remain.
Yours respectfully,
( Signed) G. E. AMBATIELOS
ANNEX 5
CORRESPONDENCE BETWEEN SIR JOSEPH MACLAY
AND MAJOR LAING, JULY, 1922
Strictly private and confidential.
Dear Major Laing,
Station Hotel, Domoch
12th July 1922
I am still acting as Advisor in connection with winding up the affairs of the old
Ministry of Shipping, and when in London recently the question came up of the
vessels which were sold to Mr. Ambatidos.
At the time the sale was being negotiated you will remember you were in constant
touch with me, but so far as I remember nothing was ever said about guaranteeing
dates of delivery, which, of course, it was impossible to do. I presume you told
purchaser that the Ministry would do anything it could to hasten delivery, and
hoped-for daces might be mentioned , but nothing beyond this.
Will you kindly let me have a line to Duchal, Kilmalcolm, Renfrewshire. I am
Nonh having a few days holiday.
I trust all goes well with you and with kind remembrances.
Yours sincerely,
(Signed) J. MAC LA v
Annex 121
Strictly private and confidential.
Dear Sir Joseph,
AMBA TIELOS CLAIM 149
20th July, 1922
I was delighted to get your letter and to hear you were at last taking a holiday.
Please accept my apologies for not writing sooner. It is due to my being away.
With regard to the sale of the ships to Ambatielos, I have, as far as I can, with the
help of my secretary, refreshed my memory as to what actually took place prior to
the sale of the steamers then building in Hong Kong, etc.
As you will remember, I was a pessimist as to the future of shipping, and my one
idea was to reduce the liability agamst the Ministry of Shipping as rapidly as
possible.
I was of the opinion that it was most essential to dispose of the ships building at
Hong Kong, and I had cables sent to our agents who were responsible for the building
and completion, and they cabled back dates which they considered quite safe,
anrl it was on this information that I was enabled to put forward a proposition ro you.
The Eastern freight market at that time being very high, I came to the conclusion,
and laid my deductions before yourself and the Committee of the Ministry of
Shipping, that, provided these ships could be delivered at the times stated by our
agents on behalf of the builders, they were worth, with their position, owing to the
freight they could earn, another £500,000, and this I added to what I considered
an outside pnce for the ships. It was only by this argument that I induced Ambatielos
to purchase the ships. This figure worked out at £36 per ton D.W. for 8,000
tonners and over £40 per ton for 5,000 tonners.
The Ministry of Shipping got a VC'ry large sum of money on account, and in
adrlition were relieved of the expense of ,;ending officers and engineers out to Hong
Kong.
I think I am right in saying that, in the case of all ships building and not taken
by Lord Inchcape, a date of rlelivery was given, and in the case of the " N " boats
building at Chepstow, which were sold and purchased by Farina on behalf of the
Italian Government at £29 per ton, considerable difficulty arose over the late
delivery. These boats were disposed of at the same time as those to Ambatielos, and
full particulars as to delivery was obtained by Mr. Farina from the Shipbuilding
Co. Had these boats not been sold at that time to Mr. Ambatielos, I doubt very
much if the vessels would have realized an average of £25 per ton, owing to the
break in the Eastern freight market, and the dislike to foreign-built ships.
Just prior to the sale of these Hong Kong ships, the contract with Lord Inchcaμi:
amounting to about £14,000,000 had been entered into on the basis of £25 per ton
less depreciation and overhaul, which meant a net of about £21 per ton, and the
ships building in Canada were cancelled or taken over by the builders at a heavy
loss to the Ministry, so that I considered the sale to Ambatielos, on the information
given me a.s to the delivery by our own people, an extremely advantageous one.
Yours sincerely,
(Signed) Bryan LAING
21, Bothwell Street, Glasgow
Strictly private and confidential.
Dear Major Laing,
Thanks for your letter.
I arrived home on Thursday after a very goorl holiday, and feel much the better
for it.
Annex 121
150 GRf:ECF./ UNlTED KINGDOM
Your letter reached me on Friday.
I will probably be in London next week, and will therefore not take up any
details meantime.
With kind remembrances.
Yours sincerely,
(Signed)]. MACLAY
ANNEX 6
DECLARATION ACCOMPANYING THE TREATY OF COMMERCE
AND NAVIGATlON BETWEEN GREAT BRITAIN AND GREECE
OF JULY 16, 1926
It is well underst<X1d that the Treaty of Commerce and Navigation between
Great Britain and Greece of to-day's date does not prejudice claims on behalf of
private persons based on the provisions of the Anglo-Greek Commercial Treaty of
1886, and that any differences which may arise between our two Governments as
to the validity of such claims shall, at the request of either Government, be referred
to arbitration in accordance with the provisions of the protocol of November l 0th,
1886, annexed to the said Treaty.
ANNEX 7
STATUTORY DECLARATION OF MAJOR LAING
OF JANUARY 19, 1934
I, Bryan LAING, of 73, St. Stephen's House, Westminster, m the County of
London, uo soLt:MNL v and SINCEREL v DECLARE as follows:
I. On the 1st April 1919, I was appointed_Assistant Director of Ships Purchases
and Sales at His Majesty's Ministry of Shipping. The Minister of Shipping at that
time was Sir Joseph Maclay and the Director of Purchases and Sales was Sir John
Esplen.
2. During the time when I was negotiating the purchase and sale of ships for the
Ministry, that is, from the 1st April 191~ until October 1920, although Sir Joseph
Esplen was nominal head of the Department during that time, I sold on behalf of
His Majesty's Government over one hundred million pounds worth of ship~ and
in no single instance was any exception taken or alteration made to the terms which
I had agreed with the purchasers on behalf of the Shipping Controller. It was my
habit to report the deal which I had made and the Contract would be signed in that
form e-mbodying the terms which I alone had agreed with the purchasers. In fact
on more than one occasion when other persons in the Department had negotiated
for the sale of ships, including the Minister himself, I had objected pointing out that
there could not be two persons who had charge of negotiations for the sale of ships
and in the cases referred to the negotiations which had been made by persons other
th~n myself were cancelled and I subsequently re-sold the same boats at an enhanced
price.
3. At the same time as I was at the Ministry of Shipping, I was also appointed
on the Lord Lytton Committee of the Admiralty where my powers were of a similar
nature and similar occasions arose where sales had been tentatively entered into
by pe-rsons other than myself and where I objected and where they were annulled
and later the same ships were sold by myself at an enhanced price.
Annex 121
AMBA TlELOS CLAIM 151
4. I was also at this time largely consulted by the Chartering Department of
the Ministry of Shipping and I was in this way able to know the position of freights
in the world market because these would naturally be governed by what ships were
in the district for the purpose of carrying goods which had to be moved.
5. It was while I was in this position that I first made the acquaintance of
Mr. G. E. Ambatielos who approached me on behalf of his brother Mr. N. E.
Ambatielos concerning the purchase or tonnage, and I offered to sell him nine ships
then building to the order of His Majesty's Government at Hong Konf{ and Shanghai
and I recommended that he should purchase these ships because I knew that at
that time the Eastern freight market was very high and the owner of these ships would
be able to make a very substantial profit provided a free charter-party could be
obtained (which I arranged) instead of Blue Book rates. It was also advantageous
if the right price could be obtained for His Ma:_icsty's Government to sell these ships
for the reason that it would have been necessary to send out crews and stores to
bring them home and I estimated that those would have cost at least £100,000. I
therefore bargained on behalf of His Majesty's Government with Mr. G. E. Ambatielos
and later confirmed the matter ¼'ith his brother Mr. N. E. Ambatielos for the
sale to them of these ships at an average price of £36 Os. Od. per ton dead weight.
I was able to do this because I first al>certained and arranged that a free charterparty
should be given and also caused cablegrams to be sent to His Majesty's
representatives in Hong Kong and Shanghai and asked them to cable definite dates
on which deliveries could be promised; and it was because I was able to offer to
Mr. Ambatielos firstly the free charter-party and secondly the position then obtaining
in the Eastern freight market, which position was made certain by my
being able to offer him definite dates for delivery of the ships, that I induced him
to sign the Contract daled the 17th July 1919. In my position at the Ministry of
Shipping I was not able to contract with 1\1r. Ambatielos in such a way as would
have bound him to share with His Maje~ty's Government the profit which I expected
he would have been able to make owing to this combination of free charcer-party
and certain delivery dates. I estimated that the profit which he was likely to make
would be about one million pounds over and above Blue Book rates and I informed
him that I considered that he ought to pay to His Majesty'~ Government for the
privilege of the open charter-party and the freights obtainable at that period which
was made possible by the certain delivery dates one half of that expected profit,
namely £500,000, and so I added that amount to the purchase price of the ships. I
was able to assure him from Messrs. David Pinkney & Co. whom he had telephoned
whilst he was al the Ministry of Shipping that these high freights would be obtainable
if the ves~els were delivered by the dates agreed.
6 . The Ministry of Shipping's ordinary Form of Contract was therefore prepared
providing for the sale to Mr. Ambatielos of the nine vessels therein mentioned.
Prior co this Contract being signed on the 17th July, 1919, I had given to Mr.
G. E. Ambatielos a piece of buff paper on which I had copied the agreed delivery
dates which were the same dates as those which had been cabled to me as reliable
dates from Hong Kong and Shanghai. When therefore Mr. Ambat1elos on the
signing of the Contract pointed out to me that in the written Contract these specific
dates were not mentioned I informed him that if he would look at Clause 7 of the
Contract he would see that delivery would have to be made " within the time
agreed " and that those words meant the dates which I had already given to him
and which were written on the buff slip of paper.
7. In confirmation of the fact that there were fixed delivery dates a telegram was
sent, signed Straker, Secretary to Sir John Esplen, who was on the Committee of the
Ministry of Shipping, which telegram was sent on his instructions after a meeting
of the Committee, reading as follows:
Annex 121
152 GREECE/UNITED KINGDOM
" From Esplen, Shipminder, London,
"To Britannia Hongkong.
"Following for Dodwell, War Trooper.
" As the steamer was sold to buyers for delivery not later than November il
is of utmost importance that she should be completed by that date stop Cable
immediately progress of construction. ( Signed) M. J, STRAKER. "
This was sent because the Committee were becoming worried at the continual delay
and they foresaw either cancellation of the Contract or a claim being made against
them.
8. Prior to the case coming on in Court Sir Joseph Maclay wrote to me on the
12th July, 1922, asking in so many words whether or not I had agreed to give
guarantee dates for delivery thus confirming the powers that I had for the disposal
of His Majesty's ships and which I have enumerated in the preceding paragraphs.
On the 20th July, 1922, I wrote back to Sir Joseph explaining the position as I have
set out in the preceding paragraphs hereof, namely, that I was able to get l\1r.
Arnbatielos to pay an extra £500,000 because I was able to get him to share the
profit which he was to make with the Ministry of Shipping owing to the high
Eastern freights then ruling and to the fact that guaranteed delivery dates could
be assured, and on the 24th July, 1922, Sir Joseph acknowledged my letter without
comment. I take it that it was because of this that I was not asked to give evidence
on behalf of His Majesty's Government at the trial, although I was subpoenaed by
them and could not therefore be approached by Mr. Ambatielos.
9. This is the evidence which I would have given to the Court at the time had
I been called.
And I make this solemn Declaration conscientiously believing the same to be
true and by virtue of the provisions of the Statutory Declarations Act, 1835.
DECLARED at Palace Chamber~, Westminster, in the County of London, this
19th day of January, 1934.
( Signed) Bryan LAING
Before me;
( Signed) [ Illegible]
A Commissioner for Oaths.
ANNEX 8
PARAGRAPHS 70 AND 71 OF THE GREEK CASE AND EXTRACT
FROM SIR FRANK SOSKICE'S SPEECH ON FEBRUARY l, 1956
70. The second flaw in the proceedings was commitltd by Mr. Justice Hill
who allowed the Crown the privilege of not disclosing the files of this, a plainly
commercial transaction. He accepted this claim of privilege without further inquiry,
to which he was entitled, in order to ascertain that it was justified, more particularly
as the Crown was a party to the 1itigation. See HenneJsy v. Wright (1888) 21 Q.B.D.
509; In re JoJeph Hargreaves Ltd. ( 1900) I Ch. 34 7 and Robinson v. State of South
Australia (1931) A.C. 704.
71. It is difficult to understand this claim of privilege as the contract of July 17,
I 919, was entirely and exclusively a commercial contract and no reason for the
withholding of these documems existed. As held by the Court of Appeal in the
Asiatic Petroleum Co Ltd, v. Anglo-Persian Oil Co. Ltd. ( I 916) I K. 8. 822; " the foundation
of the rule of the protection of documents from discovery 1s that the informaAnnex
121
AMBA TIELOS CLAIM 153
tion cannot be disclosed without injury to the public interest and not that the
documents arc confidential or official, which alone is no reason for their non-pro•
duction."
May I say perfectly frankly to the Commission with regard to those two paragraphs
that they contain an error, and that the Greek Government does noc rely
on those two paragraphs; and I wish to correct che error and m withdraw the two
paragraphs, 70 and 71. The error consists in the assertion in that paragraph that
there was a flaw in che proceedings on the part of Mr. Justice Hill because he did
not further enquire into the rightness or wrongness of the claim of privilege. The
Commission will see that English case Hennes~y v. Wright is cited in support of that
proposition. Hennessy v. Wright, and the doctrine that the judge could enquire once
privilege were claimed, claimed in proper form, if necessary by an affidavit, that
doctrine was specifically overruled by Lord Simon in his speech in the House of
Lords in the case of Gammell Laird which I have previously cited, that case being
reported as che Commission may remember, in 1942 Appeal Cases at page 638.
The House of Lords in thac case recognised specifically that once privilege has been
claimed the court cannot go behind that privilege and ask whether the privilege is
properly claimed or not. The Minister who claims the privilege takes the responsibility
upon himself of claiming the privilege and using it properly. If he has misused
the privilege there is no power in the C•)urt whatever to correct his misuse, to correct
his abuse. If he chooses to claim the privilege il is final. The court can say - " We
would like on affidavit a statemem from you that you claim the privilege " - but
what is said on the affidavit cannot be questioned. The Minister's statement is final,
and no court can go behind it, and therefore i:he statement in these cwo paragraphs
that Mr. Justice Hill made an error in not investigai:ing whether i:he privilege was
properly claimed, that statement cannoc be supponed and is contrary to che law
of England. Therefore, Mr. President and Members of the Commission, I formally
withdraw paragraphs 70 and 71 of the Greek case.

ANNEX 122

Annex 122
THE LAW AND PROCEDURE
OF THE
INTERNATIONAL COURT OF JUSTICE
Annex 122
THE LAW AND PROCEDURE
OFTHE
INTERNATIONAL COURT OF JUSTICE
Department of State
by the late AUG 15 1986
SIR GERALD FITZMAU ")~!C:r
G.C.M.G., Q.C.
HONORARY FELLOW OF GONVILLE AND CAIUS COLLEGE, CAMBRIDGE
BENCHER OF GRAY'S INN
FORMERLY LEGAL ADVISER OF THE FOREIGN OFFICE
JUDGE OF THE INTERNATIONAL COURT OF JUSTICE
AND JUDGE OF THE EUROPEAN COURT OF HUMAN RIGHTS
VOLUME TWO
CAMBRIDGE
GROTIUS PUBLICATIONS LIMITED
1986
Annex 122
686 HERSCH LAUTERPACHT-THE SCHOLAR AS JUDGE. I
§ IO. PARTICULAR POINTS OF INTERNATIONAL LAW!
(I) THE EXHAUSTION OF LOCAL REMEDIES RULE
( 1) Statement of the main issues
(a) In General. It could be said that virtually all the difficulties-and to
this day they remain such- that are attendant upon the subject of the
exhaustion of local remedies revolve round three or four points. The ruleknown
for short as the local remedies rule-is accepted as one of the best
established and, in principle, least questioned rules of international law:
yet its precise scope and application can be highly controversial. The
rule requires that in every case ( or in certain kinds of cases-but that is
part of the controversy) in which (a breach of international law involving
the responsibility of the State being alleged) the local law of the State impugned
affords ( or if resorted to would have afforded) remedies, 1 these
must be exhausted by the claimant party-either as a condition precedent
to there being a possible infraction of international law at all, or as a condition
of the formulation of a receivable international claim in respect of the
alleged infraction. Somewhat less compressed, the last point means one of
two things. There may, in the final analysis, be no breach of international
law at all until all legal remedies have been exhausted- the breach consisting
in the very failure to afford a remedy, provided it be an improper
failure. In that case, no question of any breach can arise until all such
rerr:iedies have been exhausted. In the second category of case, the breach
can be established ( or at any rate alleged) independently of the action of the
local tribunals; but in that event, a bar to · the admissibility of any international
claim in respect of the breach continues so long as any remedies
afforded by the local law in respect of it have not been exhausted. These
two aspects might be called respectively the substantive and the procedural
aspects of the local remedies rule. In its substantive aspect, the rule
operates, not so much as a preliminary objection, but rather as a direct plea
to the merits, i.e. if local remedies have not been exhausted, there is not,
or there is not yet, any substantive breach of international law at all, and the
trib1Jnal must find in favour of the defendant State on the merits. In its
procedural aspect, the rule operates as a preliminary objection pro tempore
to the admissibility of the claim; and if upheld by the tribunal, will rule out
any decision on the merits2-i.e. there may or may not be a breach of
international law, but an international claim will not lie, and cannot be
examined by an international tribunal-until local remedies have been
exhausted.
1 Assuming, of course, that the claimant, plaintiff or appellant, is in the right. This point is
considered below, and is of the first importance.
z Theoretically, ajoinder of the issue to the merits would be possible, but inappropriate unless
(which would not here be the case) the breach lay in the very failure (improperly) to afford a
remedy.
Annex 122
THE LOCAL REMEDIES RULE 687
Parallel with all this is the question of what constitutes a 'remedy' for
the purposes of the application of the rule; and there is also one further,
highly preliminary, issue to be mentioned presently.
The main questions that arise might therefore be formulated as follows:
I. Does the local remedies rule apply in every case in which a breach of
international law or treaty is alleged, and the local law of the defendant
State in principle affords remedies (if its courts recognize the existence
of the breach) or could do so if invoked; or are there cases, or classes of
cases, to which the rule has no application, even if the local law could afford
a remedy if resorted to ? Here three possible situations may be postulated:
(a) the claim arises exclusively out of a wrong alleged to have been done to
a national of the claimant State; (b) the claim has a double aspect involving
an alleged wrong to the national, but additionally and independently
a wrong to his State;1 (c) the alleged wrong is exclusively to the State.2
2. In what cases does the rule operate as a bar to admissibility and in
what as a plea to the merits (see above, p. 686)? This question is related to
the first, but has independent aspects.
3. What constitutes a 'remedy' for the purposes of the application of the
rule; must every actual or .apparent remedy be invoked and, in general,
what is the kind of remedy non-resort to which will bring the objection into
play?
4. Where does the burden of proof lie of establishing, as the case may
be (a) that local remedies existed, but have either (i) not been resorted to
at all, or (ii) have been resorted to, but have not been fully exhausted;
(b) that although such remedies existed, they were not of the kind to which
the rule relates, or otherwise that non-resort to them is no bar to the claim?
(2) The Case of an alleged breach of State rights
The most controversial of the questions arising under the first of the
above heads is whether the local remedies rule applies, not only where the
claim is made on behalf of a private person or entity, but also where it is
made, either in whole or in part, in respect of an alleged direct breach of
international law as between State and State. This matter, which has
several aspects, cannot be gone into here, but some indication of what
might in general have been Lauterpacht's judicial attitude towards it is
1 e.g. an alleged breach of, say, a commercial treaty; or interference with a ship on the high
seas, involving damage or loss by delay to the shipowner, but also ' flag prejudice' to the State of
registration.
2 Of course, all wrongs to an individual involving breaches of international law are, or are also,
wrongs to his State; and might even, on one view, be said tc be wrongs exclusively to the State,
the national being merely the corpus vilis of the claim. But the above rough and ready classification
will do for present purposes.
Annex 122
692 HERSCH LAUTERPACHT-THE SCHOLAR AS JUDGE. I
i.e. where the breach arises directly out of the judicial act itself and would
not otherwise exist; for instance where there is a denial of justice as above
described. In such a case, according to well-established principles, no
international wrong arises at all unless either the highest courts of appeal of
the country concerned fail to reverse the decision of a lower court constituting
a denial of justice, or themselves independently perpetrate such
a denial. If these means of recourse are not resorted to therefore, there can,
in the final analysis, be no breach of international law. Consequently, a plea
of non-exhaustion in such cases is essentially a contention that the defendant
State has committed no such breach, and is legally blameless: it is
essentially a preliminary objection on the merits, not going to jurisdiction
or competence.
( 6) Limitation to the local remedies rule: no obligation to exhaust local
remedies that are not at least potentially effective
(a) Statement of the problem. It has for long been accepted that the local
remedies rule only applies if means of recourse under the local law not
merely exist, but also appear to be such as would be capable of affording
a remedy, if the claimant's case is good in law-in short the remedy must
be, potentially, an 'effective' one. In the Norwegian Loans case (J.C.J.
Reports, 1957, p. 39), Lauterpacht said:
'. . . the requirement of exhaustion of local remedies is not a purely technical or
rigid rule. It is a rule which international tribunals have applied with a considerable
degree of elasticity. In particular, they have refused to act on it in cases in which there
are, in fact-, no effective remedies available owing to the law of the State concerned or
the conditions prevailing in it.'
Thus to take the last few words, it has been suggested that in a dispute
between the government of a State and a foreigner, in a country where the
judiciary is notoriously under the influence of the executive, appeal to the
courts, though possible, would be futile a priori, and that in consequence no
effective remedy exists.1 Nevertheless, in many cases it may be a matter of
no small difficulty, in the face of a theoretically possible means of recourse,
to determine whether such means is ineffective in the sense necessary to
displace the local remedies rule for the purposes of an international claim.
Will it, for instance, suffice that, although the recourse might succeed, it is
highly unlikely to do so in fact? It has even been seriously urged in international
proceedings2 that because a claim is almost certainly unmeritorious
1 Even so, such a plea is unlikely to succeed in practice except in proceedings taken long
after the event and relating to a former admitted period of general disorder and misrule in the
defendant State subsequently brought to an end by the act of the State itself. It is in these kinds
of circumstances that such a plea has succeeded before claims commissions.
2 Ambatielos case (Greece v. The United Kingdom), third phase-seen. 1 on p. 690 above. Some
Annex 122
LIMITATION TO THE LOCAL REMEDIES RULE 693
under the local law (whatever its merits internationally), the claimant
is thereby absolved from exercising a right of appeal given him by the
local law against a decision of a lower court adverse to his claim. To regard
such cases as covered by the exception of ineffectiveness would go far to
nullify the whole local remedies rule in practice; and it has to be insisted on
that a remedy is always an effective one for the purposes of this rule if,
provided the claimant is right, it can and will afford him due relief or compensation.
A remedy cannot be -ineffective merely because, if the claimant is
in the wrong, it will not be obtainable.
Difficulties of this type were well exemplified in the Norwegian Loans
case. The argument of the French Government was that, as the Norwegian
courts were bound to apply Norwegian legislation, and as it was this very
legislation which deprived the French bondholders of their alleged right
to payment at gold value rates, recourse to the Norwegian courts would be
futile, since the latter would not be in a position to afford any effective
remedy. Lauterpacht, while not sharing this view, indicated that he felt
a good deal of sympathy for it. The 'position of the French Government',
he said (loc. cit.), was 'not altogether without merit', and he added (ibid.)
that he could 'appreciate the contention of the French Government that
there are no effective remedies to be exhausted' even if he must hold that
'however contingent and theoretical these remedies may be, an attempt
ought to have been made to exhaust them'.
(b) The test of 'reasonable poss-ibility'. Lauterpacht in fact went pretty far
in this case in the direction of holding that wherever a possible remedy
exists, recourse must be had to it, even if this is in fact highly unlikely to be
successful; and he in effect therefore endorsed the view that the question of
the probability or otherwise of success is quite different in principle from
the question of effectiveness, and that to substitute the one test for the
other, as the criterion for displacing the local remedies rule, would be incorrect,
and would also drastically alter the incidence of this rule. After
referring to the grounds on which it might well be doubted whether the
Norwegian courts could afford any effective remedy he continued (ibid.):
'However these doubts do not seem strong enough to render inoperative the requirement
of previous exhaustion of local remedies. The legal position on the subject cannot
be regarded as so abundantly clear as to rule out as a matter of reasonable possibility
a)l effective remedy before the Norwegian courts.'
Here Lauterpacht propounded the criterion of there being a 'reasonable
possibility' that a remedy would be afforded, as being the test of effectiveness--
or in other words he suggested that no means of recourse can be
regarded as futile from the effectiveness standpoint unless there does not
material on the point can be found in the pleadings in the second phase before the International
Court.
ANNEX 123

Annex 123
Denial of Justice in
International Law
Jan Paulsson
BCAMBRIDGE
• UNIVERSITY PRESS
Annex 123
CAMBRIDGE UNIVERSITY PRESS
Cambridge, New York, Melbourne, Madrid, Cape Town, Singapore,
Sao Paulo, Delhi, Dubai, Tokyo, Mexico City
Cambridge University Press
The Edinburgh Building, Cambridge CB2 8Ru, UK
Published in the United States of America by Cambridge University Press, New York
www.cambridge.org
Information on chis tide: www.cambridge.org/978o52u72912
© Jan Paulsson 2005
This publication is in copyright. Subject to statutory exception
and to the provisions of relevam coJlective licensing agreements,
no reproduction of any pan may take place without the written
permission of Cambridge University Press.
First published 2005
Fourth printing 2007
First paperback edition 2010
A catalogue record for this publication is available from the British Library
ISBN 978-0-521-85118-3 Hardback
ISBN 978-0-521-17291-2 Paperback
Cambridge University Press has no responsibility for the persistence or
accuracy ofURLs for external or third-party internee websites referred to in
chis publication, and does not guarantee chat any content on such websites is,
or will remain, accurate or appropriate.
Annex 123
5
Exhaustion of local remedies and denial
of justi~e
The case for exhaustion
In Loewen, where the documentation put before the arbitral tribunal was
particularly exhaustive, the final award noted that:
No instance has been drawn to our attention in which an international tribunal
has held a State responsible for a breach of international law constituted by a
lower court decision when there was available an effective and adequate appeal
within the State's legal system. 1
The absence of such instances is unsurprising. International law
attaches state responsibility for judicial action only if it is shown that
there was no reasonably available national mechanism to correct the
challenged action. In the case of denial of justice, finality is thus a
substantive ele;ment of the international delict. States are held to an
obligation to provide a fair and efficient ,v,stem of justice, not to an undertaking
that there will never be an instance of judicial misconduct. Writing
as rapporteur to the International Law Commission, James Crawford
put it this way:
an aberrant decision by an official lower in the hierarchy, which is capable of
· being reconsidered, does not of itself amount to an unlawful act. 2
1 Loewen, 26June 2003, at para. 154. The proposition articulated in the quoted paragraph
should be understood as limited by the context of the claim of denial of justice. As a
general statement of international responsibility, it is likely too wide.
2 International Law Commission (Crawford), Second Report on State Responsibility,
UN Doc. A/CN.4/498 (1999) at para. 75. Commenting on the ILC Draft Articles in
I 998, the UK expressed itself as follows: 'Corruption in an inferior court would not
100
Annex 123
Exhaustion oflocal remedies and denial of justice
The correctness of this proposition is not open to -'doubt. Freeman
traced it back to the medieval regime of reprisals, which were considered
lawful when there was, as da Legnaqo wrote in 1360, 3 'a failure of remedy
(propter defectum remedii) arising from the neglect of those who govern'. It
followed that the injured alien could look to external force (including his
own, with the permission of his prince) only if he was unable to obtain
reparation from the local sovereign. By the twentieth century, Freeman
wrote, this had been transformed into 'the rule that local remedies must
first be exhausted'.4 He cited numerous precedents5 and made the following
sensible observation:
Ample protection against arbitrary viol~tions of the local law will normally be
afforded within the State itself by the conventional means of appeal to a superior
court. Ruling improperly on evidence, erroneously charging a jury, exceeding
the decorous limits of judicial restraint with prejudicial effects for one of the
parties (such as openly insulting the claimant's attorney before the jury), emotionally
addressing the jurymen with the aim of kindling their hostility, and the
like will usually find rectification in the wisdom of the reviewing bench. 6
Against this background, Freeman gave the following reasons for the
perpetuation of the rule 7
:
• the outcome of national appeals may make international action
unnecessary;
• facts that emerge in the course of such appeals may deter interna..:
tional action on behalf of the aliens;
• 'the presumption of uniformity between national institutions and the
requirements of international law' is overcome only 'by a denial of
justice against which there is no effective appeal';
• inter-state friction .is lessened;
viola~e (the duty to provide a fair and efficient system of justice] 'if redress were speedily
available in a higher court', International Law Commission, Draft Articles on State
Responsibility, Comments and Obseivations Received from Governments, UN Doc.
A/CN.4/488 (1998)atp. 69. See also the Green, Bum, The Ada, Smi!h ~d Blumhardt cases
rendered by Umpire Thornton in US v. Mexico cases, Moore Arbitratwnr at p. 3139 ~d
following as well as The Mechanic (Corwin v. Venezuela), ibid. at p. 3210. The Jennings,
Laughlmui & Co. award ( US v. Mexico), ibid. 3135, at p. 3136 de~ed: 'The 1:Tmpire does
not conceive that any government can thus be made responsible for ~e ~~nduct of
an inferior judicial officer when no attempt has been made to obtam Justice from a
higher court.' .
3 Tractatus de Bello, de R.epraesafu.s et de Duello, ch. CXXIII, quoted in Freeman at J:>· 55.
4 Freeman at p. 56. 5 Ibid. at p. 403 et seq. 6 Ibid. at pp. 291-292 (notes ormrted).
1 Ibid. atpp.416-417.
101
Annex 123
Denial of] ustice in International Law
• 'the gravity and exceptional character of international responsibility' is
respected by limiting claims to those 'really worthy of consideration'.
Moreover, as Nsongurua Udombana, a Nigerian scholar, has more
recently pointed out:
local remedies are normally quicker, cheaper, and more effective than international
ones. They can be more effective in the sense that an appellate court can reverse
the deciswn of a rower co.urt) whereas the decision of an mtmzational organ does not h®e th.at effect,
although it will engage the international responsibility of the state concerned. 8
All of these reasons, however, militate 1n favour of the exhaustion rule
with respect to all claims of state responsibility, not only in connection
with claims of denial of justice. Indeed, the exhaustion requirement has
long been established as a general principle of international law.9 As such,
it is applicable to claims presented by diplomatic protection under a treaty
even 1'f .1 t 1. s not expressI y mentl.o ned the rem. . IO
Loewen and the problem of waiver
A problem then arises by reason of the fact that waivers of the exhaustion
requirement have been made in many treaties. International arbitrations
8 Nsongurua Udombana, 'So Far, So Fair: The Local Remedies Rule in the
Jurisprudence of the African Commission on Human and Peoples' Rights', (2003) 97
AJIL 1, at p. 9 (emphasis added). W. Michael Reisman was able to encompass all of
these considerations in a single sentence: 'The domestic remedy rule is founded on
principles of economy, loqi.lization of delict and remedy, and go0d faith', in Nullity and
Revision: The Review and Eriforcement ef lntemational]udgments and Awards (New Haven, CT:
Yale University Press, 1971), at p. 364. .
9 Panevezys-Saldutiski.s Rai.l:wqy (Estoniav. Lithuania), (1939) PCU, Series A/B, No. 76, 3; see
generally the Separate Opinion of Judge Sir Hersch Lauterpacht in Certain Norwegian
Loans (France v. Norway), 1957 ICJ Reports 9, at pp. 34-66, A.A. Can~do Trindade,
The Application efthe .&le of Exhaustion of Local Remedies in International Law: Its Rationale in the
International Protection ef Indwidual Rights (Cambridge University Press, 1983). (The
application of the principle to deny admissibility in Panevezys-Saldutiskis Railway is,
however, open to considerable doubt; Judge Erich's analysis in his dissent, at
pp. 52-53, seems a far more realistic assessment, consistent with the approach of
international tribunals before and since, from Robert E. Brown to ~I; accord.,
Reisman, Nullity, at p. 369.)
10
'If there is a positive utility to the exhaustion rule -and it is submitted that there is-an
argument for automatic waiver other than through an express compromise is not
pei:suasive', _Reisman, NullitJ, at p. 365, n. 18. This doctrinal view was given
Junsprudential confirmation in Elettronica Sicula SpA (ELSI) (US v. Italy), 1989 IC]
Ref!orl: 15, at para. 50: 'the Chamber finds itself unable to accept that an important
P1:111c1ple of customary international law should be held to have been tacitly dispensed
With, m the absence of any words making clear an intention to do so'.
102

ANNEX 124

Annex 124
OPPENHEIM'S
INTERNATIONAL
LAW
NINTH EDITION
Volume I
PEACE
INTRODUCTION AND PART 1
Edited by
SIR ROBERT JENNINGS QC
President of the International Court of Justice;
Sometime Whewell Professor of International Law in the University of Cambridge;
Hon. Bencher of Lincoln's Inn; Former President, Institute of International Law
and
SIR ARTHUR w A TIS KCMG QC
Sometime Legal Adviser to the Foreign and Commonwealth Office; of Gray's Inn,
Barrister-at-Law; Associate Member, Insti.tute of International Law
LONGMAN
Annex 124
Longman Group UK Limited,
Longman House, Burnt Mill,
Harlow, Essex CM20 2JE, England
and Associated Compan~s throughout the world.
Ninth Edition© Longman Group UK Limited and Mrs Tomoko Hudson, 1992
All rights reserved; no pan of this publication may be
reproduced, stored in a retrieval system, or transmitted
in any form or by any means, electronic, mechanical,
photocopying, recording, or otherwise without either the
prior written permission of the Publishers or a licence
permitting restricted copying in the United Kingdom issued
by the Copyright Licensing Agency Ltd,
90 Tottenham Court Road, London WlP 9HE.
First published 1905
Ninth edition published 1992
Second impression 1993
ISBN 0 582 50108 3
British Library Cataloguing-in-Publication Data
A catalogue record for this book is
available from the British Library
Printed in Great Britain by Bookcraft (Bath) Ltd
Annex 124
OPPENHEIM'S INTERNATIONAL LAW
Annex 124
522 Responsibility of states
Irrespective of the position in strict law as to a state's.right to present claims on
behalf of companies with a substantially foreign shareholdin~ it may, in deciding
whether or not to exercise its right of protection over a company, have regard
to the degree of real connection between the company and the state, in particular
the extent to which shares in the company are held by its nationals. The states
representing the various interests affected may also act together in pursuing
claims 4I respect of damage suffered by a company.
Agreements for settling international claims often include provisions whereby
a company, in order to be regarded as a 'national' of the claimant state, must not
only be established under its laws but also have a significant proportion of its
shareholding held by nationals of that state, or in some other way be effectively
controlled from that state. 25 It is debatable to what extent such provisions,
particularly in view of their diversity, can be regarded as providing evidence of a
rule of customary international law, or as simply reflecting what the .negotiating
states considered appropriate in the particular circumstances with which they
were dealing. ·
§ 153 Exhaustion of local remedies It is a recognised rule that, where a state
has treated an alien1 in its territory2 inconsistently with its international obliga-
25 Seen 21. See also eg Art 3 of the Convention establishing the UK-Mexico Claims Commission
(TS No 11 (1928)), covering claims against Mexico for damage suffered by 'any partnership,
company or association in which British subjects or persons under British protection have or
have had an interest exceeding 50% of the total capital'. The USA-Yugoslavia Claims Agreement
1948 required that claimant US companies be incorporated in the USA and have at least 20 per
cent US ownership of shares in the company (on which see Cisatlantic Claim, ILR, 21 (1954), p
293; and, for the interpretation of the 20 per cent requirement in the sense that it referred to
beneficial ownership, see Westhold Corpn Claim, ILR, 20 (1953), p 226). The USA- Hungary
Claims Agreement 1973 required claimant US companies to be both incorporated in the USA
and have at least 50 per cent of their outstanding capital stock or other beneficial interest owned
directly or indirectly by natural persons who are US nationals; but Hungarian companies need
only be incorporated or constituted u~der Hungarian law: ILM, 12 (1973), pp 407, 409.
The Algiers Declaration 1981 providing for the settlement of US-Iran claims (ILM, 20 (1981),
p 230) defines a US national, in relation to companies, as a company organised under US law and
in which US citizens hold, directly or indirectly, an interest equivalent to at least 50 per cent of its
capital stock: Art VII.1. For application of this provision, see egHarza Engineering Company v
Islamic Republic of Iran (1982), ILR, 70, pl 18;Flexi-Van Le~sing Incv Islamic Republic of Iran
(1982), ibid, p 497 (an important decision, as to evidentiary requirements for establishing the
nationality of stock ownership); Ultrasystems Inc v Islamic Republic of Iran (1983), ILR, 71, p
663; RayGo Wagner Equipment Company v Iran Express Terminal Corpn (1983), ibid, p 688.
For treaty provisions which deal with the position of companies solely by reference to the
place of incorporation, see eg Art 78. 9( a) of the Treaty of Peace with Italy 194 7; Art 3(1 )(ii) of the
UK-Bulgarian Agreement 1955 (fS No 79(1955)).
See also § 3ao, n 12, for other treaty definitions of national companies.
1 The rule is essentially concerned with injuries suffered by private persons, whether natural or
legal. Where a private company is financed by public capital, or even where a company with a
predominantly public character engages in activities iure gestionis, it would not seem that the rule
is excluded: YBILC (1977), ii, pt 2, p 46, para (45).
2 As to the possible irrelevance of the local remedies rule if a state causes injury outside its territory
to an alien, see Jennings, Hag R, 121 (1967), ii, pp 485-6; Parry, Hag R, 90 (1956), ii, p 688;
Meron, BY, 35 (1959), p 98. The ILC in Art 22 of pt I of its Draft Articles on State Responsibility,
provisionally refrained from excluding from the scope of the rule injuries occurring outside the
state'~ territory: YBILC (1977), ii, pt 2, pp 43-4, paras (38)-(40).
Annex 124
On state responsibility in general 523
tions but could nevertheless by subsequent action still secure for the alien the
treatment ( or its equivalent) required by its obligations, an international tribunal
will not entertain a claim.put forward on behalf of that person3 unless he has
exhausted the legal remedies av~able to him in the state concerned. 4 So long as
3 The requirement to exhaust local remedies applies to those cases which involve the protection by
a state of its nationals. The rule does not apply where a state causes direct injury to another state,
irrespective of whether a local remedy might in fact be available in such circumstances. Even
where the substance of the complaint concerns damage to an alien, local remedies probably do
not have to be exhausted where the· damage has been suffered as the result of conduct by the
defendant state which, while not being in breach of its internal law, is directly in breach of its
international obligations to another state, whether arising by treaty or customary international .
law. See Fawcett, BY, 31 (1954), pp 452, 454ff.
A claim which is essentially about the interpretation and application of a treaty, even though
arising out of circumstances affecting a private person, does not attract the operation of the local
remedies rule. Swiss Confederation v German Federal Republic (No 1), ILR, 25 (1958-1), pp 33,
42-50 (and see comment by Johnson, BY, 34 (195,8), pp 363-8); Greece v United Kingdom, ibid,
pp 168, 170; USA-France Air Services Arbitration (1978), ILR, 54, pp 304, 322-5; Ireland v
United Kingdom (1978), ILR, 58, pp 190, 263. It is a question of appreciation in each particular
case whether the claim is essentially one in which the claimant state is adopting the cause of its
national: in the Interhandel case, the ICJ held that Switzerland's claim was of that kind, and so
attracted the local remedies rule (ICJ Rep (1959), pp 28-9). See also the Elettronica Sicula Case,
ICJ Rep (1989), pp 42-3, as to the difficulty for a state sometimes to establish a direct breach of an
international obligation which is distinct from, and independent of, a dispute arising out of an
injury suffered by one of its nationals.
It may be that where a state, in a contract with an alien, provides for disputes relating to that
contract to be settled exclusively by arbitration, there is no need for the alien to exhaust other
remedies: see Schwebel and.Wetter, AJ, 60 (1966), pp 484-501.
4 Borchard, §§ 381-3; Ralston, §§ 1'29-33; Bases of Discussion, iii, pp 136- 39; Eagleton, The
Responsibility of States in International Law (1928), pp 95-124, and RI, 3rd series, 11 (1930), pp
643-59, and ibid, 16 (1935), pp 504-26; Dunn, The Protection of Nationals (1932), pp 156-59;
Witenberg, La Procedure et la sentence internationales (1937), pp 153-55, and Hag R, 41 (1932),
iii, pp 50-6; Freeman, The International Responsibility of States for Denial of Just.ice (1938), pp
403-55; Borchard, ZoV, 1 (1929), pp 233-42; Borchard, Annuaire, 35, (2) (1931), pp 424-35,
and AJ, 28 (1934), pp 729- 33; Fachiri, BY, 12 (1931), pp 95-106, and ibid, 17 (1936), pp 19-36;
Friedmann, RI, 3rd series, 14 (1933), pp 318-27; Tenekides, ibid, pp 514-35; Ago inArchivio di
. diritto publico (vol iii, 2, 1938) pp 181-249. See also the dispute b~tween Persia and Great Britain
in 1932 and 1933 concerning the Anglo-Persian Oil Company's Concession in Persia; Toynbee,
Survey, 1934, pp 224-47; Verzijl and others, Annuaire, 45 (1954), i, pp 5ff, and 46 (1956), i, pp
tff; Fawcett, BY, 31 (1954), pp 452-8; Briggs, AJ, 50 (1956), pp 921-7; Bagge, BY, 34 (1958), pp
162, 165-9; Garcia Amador, Hag R, 94 (1958), ii, pp 445-61; Meron, BY, 35 (1959), pp 83- 101;
Simpson and Fox, International Arbitration (1959), pp 111-17; Law, The Local Remedies Rule
in International Law (1961); Fitzmaurice, BY, 37 (1961 ), pp 53-64; Harvard Draft (1961), Art
19; Amerasinghe, ICLQ, 12 (1_963), pp 1285-132?, ZoV, 25 (1965), pp 445-77, State Responsibility
for Injuries toAliens(1967), pp 169-269, ZoV, 36 (1976), pp 727-59 and Local Remedies in
International Law (1990); Mummery, AJ, 58 (1964), pp 389-414; Jenks, Prospects for International
Adjudication (1964), pp 527-37; Schwebel and Wetter, AJ, 60 (1966), pp 484-501; Mann,
BY, 42 (1967), pp 31-6; Head, Can YBIL, 5 (1967), pp 142-58;Jennings, Hag R, 121 (1967), ii,
pp 480-86; Dawson, ICLQ, 17 (1968), pp 404-27; Dawson and Head, International Law,
National Tribunals and the Rights of Aliens (1971 ); Chappez, La Regle de l'epuisement des voies
de recours internes (1972); McGovern, ICLQ, 24 (1975), pp 112-27; Trinidade, Rev Beige, 12
(1976 ), pp 499-527, Neth IL Rev, 24 (1977), pp 373-92, and The Application of the Rule of
Exhaustion of Local Remedies in International Law (1983), Draft Articles on State Responsibility,
pt 1, Art 22 and Commentary, YBILC (1977), ii, pt 2, pp 30-50; Arechaga, Hag R, 159
(1978), i, pp 291-7; Rule VII of the UK Government's Rules Applying to International Claims
1985, cited by Warbrick, ICLQ, 37 (1988), pp 1006, 1008; Adler, ICLQ, 39 (1990), pp 641-53.
As regards the burden of proof when the local remedies rule is invoked, see Robertson, ICLQ, 39
(1990), pp 191-6.
Annex 124
524 Responsibility of states
there has been no final pronouncement on the part of the highest competent
authority within the state, it cannot be said that a valid international claim has
arisen. 5 Effective exhaustion of the local remedies requires the alien not only to
have recourse to the substantive remedies available to him, but also to avail
himself of the procedural facilities at his disposal under the local law. 6
The substance of this rule, usually referred to as the 'local remedies' rule, is
frequently included in conventions providing for the jurisdiction of international
tribunals.7 The International Court of Justice has confirmed that the rule 'is a
well-established rule of customary international law'. 8
5 Various reasons for this rule have been given. These include: (a) an alien resident in a state should,
and normally does, have recourse to local courtS before seeking external assistance from his state,
and the rule accordingy reflects what usually happens, and what ought to happen if the legal
system is to function properly; (b) a state must be given the opportunity to redress by its own
means and within its own legal framework any wrong suffered by an alien before being called to
account internationally for its actions; (c) in cases where the international obligation requires a
state to achieve a certain result, the definitive failure to achieve that result, and thus the breach of
the obligation, is not established until procedures for rectifying an initial failure have been
resorted to and have failed; (d) until local remedies have been exhausted, justice has not been
definitely denied; (e) the nature and ex~ent of the damage suffered by an alien, and thus the basis
for his state's intematioqal claim, is not certain until local remedies have been exhausted; (f)
there is considerable convenience in local courts conducting the initial inquiries into the matter,
and should have the opportunity to do so up to the highest level. The ILC regarded the real
reason for the existence of the principle of the exhaustion of local remedies as being 'to enable the
State to avoid the breach of an international obligation by redressing, through a subsequent course
of conduct adopted on the initiative of the individuals concerned, the consequences of an initial
course of conduct contrary to the result required by the obligation': YBILC (1977), ii, pt 2, p 47,
para (48). For consideration by the ILC of the question, which is more of theoretical than
practical significance, whether the local remedies rule is a condition for the existence of international
responsibility or is merely a procedural condition governing the enforcement of responsibility
which has already arisen (with the ILC adopting the former view), see YBILC (1977), ii, pt
2, pp 34-42. The underlying rationale of the rule makes it unlikely that ricourse to arbitration
under the International Convention for the Settlement of Investment Disputes 1965 (.see § 407, n
49) should be treated as a local remedy which needs to be exhausted before a claim which could
have been referred to· such arbitration may be pursued at the international level.
6 'It is the whole system of legal protection, as provided by municipal law, which must have been
put to the test':AmbatielosArbitration (Greece v UK) (1956), RIAA, 12, p 83; ILR, 23 (1956), p
306, and 24 (1957), p 291; and see Lipstein, ICLQ, 6 (1957), at pp 654-5. Also Lawless v Republic
of Ireland, ILR, 25 (1958-1), pp 216, 222. See generally on procedural remedies, Amerasinghe,
ICLQ, 12 (1963), pp 1285-325. It is sufficient if the claims asserted in seeking a domestic remedy
are in substance equivalent to, even if not identical with, the international obligations which are
in question: Guzzardi Case (1980), ILR, 61, pp 276, 304-5; Elettronica Sicula Case, ICJ Rep
(1989), pp 45-6; cf Van Oosterwijck Case (1980), ILR, 61, pp 360, 372-5.
The rule requires 'that recourse should be had to all legal remedies available under the local law
which are in principle capable of providing an effective and sufficient means of redressing the
wrongs for which, on the international plane, the respondent State is alleged to be responsible',
even if those remedies may be regarded as of an extraordinary nature: Nielsen v Government of
Denmark (1959), ILR, 28, pp 210, 227ff. But a tribunal may be reluctant to ~ccept remedies of an
extraordinary nature as being an available reipedy: see the decision of the Human Rights
Committee in Pietroraia v Uruguay (1981), ILR, 62, pp 246, 252-3; Tetiv Uruguay (1982), ILR,
70, pp 287,294. An ex gratia remedy is not among those which have to be exhausted: Greece v
United Kingdom, ILR, 25 (1958-1), pp 27, 29.
' See eg Art 26 of the European Convention for the Protection of Human Rights and Fundamental
Freedoms (on the interpretation and application of which there are many decisions of the
European Court and Commission of Human Rights: see Fawcett, The Application of the
European Convention on Human Rights (1969), pp 288-309; T rinidade, Human Rights Journal,
10 (1977), pp 141-86 and The Application of the Rule of Exhaustion of Local Remedies in
Annex 124
On state responsibility in general 525
However, failure to exhaust local remedies will not constitute a bar to a claim if
there are no available remedies which should have been pursued;9 or if available
remedies are inappropriate for the subject matter of the claim10 or are in practice
shown to be ineffective in relation to the matter complained of;11 or if it is
clearly12 established that, in the circumstances of the case, an appeal to a higher
municipal authority would have had no effect, for instance, when the supreme
judicial tribunal is under the control of the executive organ whose acts are the
subject matter of the complaint, 13 or when the decision complained of has been
given in pursuance of an unambiguous municipal enactment with the result that
there is no likelihood of a higher tribunal reversing the decision or awarding
compensation, or, as a rule, when the injury to the alien is the result of an act of
the government as such.14 Nor do local remedies have to be exhausted where the
International Law (1983); Couvreur, Rev Beige 16 (1981-82), pp 130- 71); Arts 26 and 27(3) of
the Convention on the Settlement of Investment Disputes between States and Nationals of Other
States 1965; Art 46 of the ,'.\merican Convention on Human Rights 1969; Arts 11(3) and 14(7)(a)
of the Convention on the Elimination of All Forms of Racial Discrimination 1966; and Art
41.t(c) of the Covenant on Civil and Political Rights 1966. At the 1930 Hague Codification
Conference the Third Committee adopted the following text (Art 4.1): 'the State's international
responsibility may not be invoked as regards reparation for damage sustained by a foreigner until
after exhaustion of the remedies available to the injured person under the municipal law of the
State'.
8 The lnterhandel Case, IC] Rep (1959), p 27. See generally Briggs, AJ, 53 (1959), pp 547-63. The
local remedies rule has to be distinguished from a requirement, such as that in Art 6(1) of the
European Convention on Human Rights, that, as a matt~r of substantive obligation, a state must
provide for recourse to an independent tribunal to adjudicate upon civil rights and obligations.
9 See egAltesor v Uruguay (1982), ILR, 70, pp 248,253. See also Advisory Opinion OC-11/90 of
the Inter-American Court of Human Rights on Exceptions to (he Exhaustion of Domestic
Remedies (1990) to the effect that indigency, or a general fear in the legal community to represent
a complainant, may justify non-exhaustion of domestic remedies: Human Rights Law Journal,
12 (1991), p 20.
10 Velasquez Rodriguez Case, ILM, 28 (1989), pp 291, 304-9.
II Ibid.
12 If there is any doubt whether a possible remedy will be effective the issue must be submitted to
the national courts before recourse may be had to an international tribunal: PanevezysSaldutiskis
Railway Case (1939), PCIJ, Series NB, No 76, p 19; Retimag SA v Federal Republic
of Germany, YBECHR, 4 (1961 ), pp 384, 400; Xv Federal Republic of Germany, Decisions and
Reports of the European Commission on Human Rights, 6 (1977), pp 62, 63. See also Levey Co v
Federal Republic of Germany (1961), ILR, 42, p 380.
13 See eg Salvador Commercial Company Claim (1902), RIAA, 15, pp 467, 476-7; Bro'[fn's Case,
AD, 2 (1923-24), No 35; Re Arbitration between Valentine Petroleum & Chemical Corpn and
Agency for International Deve/.opment (1967), ILR, 44, pp 79, 91.
14 See the Award of March 1933 given by Unden, Arbitrator, in the dispute between Greece and
Bulgaria concerning the Interpretation of Article 181 of the Treaty of Neuilly: AJ, 28 (1934), p
787; and X, Caba/es and Balkandali v United Kingdom [1983] 5 EHRR 132, 139. See also the
Finnish Ships Arbitration (1934), RIAA, 3, p 1481, between Finland and the UK: for comment
thereon see Borchard, AJ, 28 (1934), pp 729-33; Beckett,.Hag R, 50 (1934), iv, pp 198-303;
Freeman, The International Responsibility of States for Denial of Justice (1939), pp 423-34; and
Fachiri, BY, 17 (1936), pp 19-36. See also ZoV, 4 (1934), pp 671-84; and Re Arbitration between
Valentine Petroleum & Chemical Corpn and Agency for International Development (1967),
ILR, 44, pp 79, 91-2; and Cyprus v Turkey (1978), ILR, 62, pp 4, 76ff. See also Inter-ocean
Transportation Company of America v The United States of America, AD, 8 (19~5-37), No 115
(at pp 272-74), on purely illusory remedies. The interpretation given to the Calvo Clause (see
§ 408, n 22) in some cases - eg Mexican .Union Railway Case, AD, 5 (1929-30), No 129 -
substantially reduces the operation of that clause to a condition of observing the local remedies
rule.
Annex 124
526 Responsibility of states
states con~erned have agreed that that requirement should not apply, 15 or where
the state for whose benefit it would apply has waived the requirement16 or is
estopped from invoking it.17 It is for the state claiming that local remedies have
not been exhausted to demonstrate that such remedies exist;18 and if they are
shown to exist, it is for the opposing pany to show that they were exhausted or
were inadequate.19 If pending proceedings have been unreasonably prolonged
through no fault of the aggrieved person it may be concluded that no funher
domestic remedies remain to be exhausted. 20
§ 154 Bar by lapse of time (extinctive prescription) The principle of extinctive
prescription, that is, the bar of claims by lapse of time, is recognised by international
law.1 It has been applied by arbitration tribunals in a number of cases.2 The
15 The USA-Iran Claims tribunal was given jurisdiction to settle claims notwithstanding nonexhaustion
of local remedies: see Amoco-Iran Oil Co v Iran (1982), 1 Iran-US CTR 493;Amoco
International Finance Corpn v Iran, ILM, 29 {1988), pp 1314, i326. But the tribunal's jurisdiction
was excluded for claims under contracts specifically providing for disputes thereunder to be
within the sole jurisdiction of Iranian courts: see Art II of the US-Iran Claims Settlement
Agreement 1981 (ILM, 20 (1981), p 230, and Stein, AJ, 78 (1984), pp 1-52). See also, for the
non-applicability of the rule by virtue of a treaty provision, Uzielli Claim (1963), ILR, 40, p 149.
16 Government of Costa Rica Case (Re Viviana Gallardo) (1981), ILR, 67, p 578. But waiver will
not be implied from silence on the matter in a general disputes settlement provision in a treaty:
Elettronica Sicula Case, IC] Rep (1989), p 42.
17 Foti and Others Case (1982), ILR, 71, pp 366, 380-82; Corigliano Case (1982), ibid, pp 395,403.
Failure to mention local remedies in the course of 'somewhat desultory diplomatic exchanges'
will not constitute a waiver of the rule by estoppel: Elettronica Sicula Case, ICJ Rep (1989), p 44.
18 Greece v United Kingdom, ILR, 25 (1958-1), pp 27, 29; Foti and Others Case {1982), ILR, 71, pp
366,381 ; Dermitv Uruguay (1982), ibid, pp 354,358; Elettronica Sicula Case, IC] Rep {I 989), pp
46-8.
19 Velasquez Rodriguez Case, ILM, 28 (1989), pp 291, 305.
20 See Teti v Uruguay (1982), ILR, 70, pp 287, 294.
1 See Verykios, La Prescription en droit international public (1934), pp 129-93; Ralston, §§
683-98; Fauchille, §§ 856-57(3), and the Report of Politis and Charles de Visscher, Annuaire, 32
{1925), pp 1- 24; H Lauterpacht, Analogies,§ 129; Cavaglieri, Rivista, 3rd series, 5 (1926), pp
169-204; Witenberg, La Procedure et la sentence internationales (1937), pp 138-43, and Hag R.
41 (1932), iii, pp 27-35; S0rensen, Nordisk TA, 3 (1932), pp 161- 70; Borchard, Annuaire, 36
(1931 ), i, pp 435-41; King, BY, 15 {1934), pp 82-97; Bin Cheng, General Principles of International
Law (1953), pp 373-86; Pinto, Hag R, 87 (1955), i, pp 438-48; Simpson and Fox,
International Arbitration (1959), pp 122-6;Harvard Draft (1961), Art 26. The League Codification
Committee studied prescription in 1928.
In respect of certain particularly serious offences it has been provided that there should be no
temporal limitation on the punishment of offenders. See§ 148, and §§ 157, 435.
2 See Centini Case (1903), RIAA, JO, pp 552-5; Williams Case, Moore, International Arbitrations,
iv, pp 4179-203; Cayuga Indians Case (1926), RIAA, 6, pp 173, 189; Sarropoulos ti .
Bulgarian State, Recueil TAM, 7 (1927), p 47; AD, 4 (1927-28), No 173; Cook Case, AD, 4 ~
(1927-28), No 174; Ambatielos Arbitration, ILR, 23 (1956), pp 306, 314- 17 (on which sec :,
Lipstein, ICLQ, 6 (1957), pp 646-7, and Vallat, International Law and the Practitioner (1965), ·f
pp 30-32); Lighthouses Arbitration, ILR, 23 {1956), pp 659, 671- 2; Kahane v Secretary-General_•.~
of the United Nations (1968), ILR, 43, pp 290, 299-300. . ~
The apparent rejection of the principle of extinctive prescription by the Hague C?un.of,• "'
Arbitration in the Pious Fund case in 1902 (Scott, Reports of the Hague Court of Arbitratw~.L
{1916), pp 3-17) had not been generally followed: see remarks in the Centini case, above . •.
ANNEX 125

Annex 125
A/CN.4/S1:: R. A/2006/Add. I (Part 2)
YEARBOOK
OFTHE
INTERNATIONAL
LAW COMMISSION
2006
Volume II
Part Two
Report of the Commission
to the General Assembly
on the work
of its.fifty- eighth session
1;■- 1 UNITED NATIONS -~ -
New York and Geneva, 2013 • · ~
~ <"'--'
Annex 125
NOTE
Symbols of United Nations docwncnts arc composed of capital letters combined with figures.
Mention of such a symbol indicates a reference to a United Nations document.
References to the Yearhook of rhe /nremationnl Law Commission are ahhreviated to Yearhook ... ,
followed hy the year (for example'. Yearbook ... 2006).
The Yearbook for em.:h session of the International Law Commission comprises two volumes:
Volume I: summary records of the meetings of the session:
Volume II (Part One): reports of special rapporteurs and other documents co1t~idcrcd during the
session:
Volu1m: II (Part Two): report of the Commission to the General Assemhly.
All references to these works and quotations from them relate to the final printed texts of the
volumes of the Yearbook issued as United Nations publications.
,VCN.4/SER.Af2006/ Add.I (Part 2)
UNITED NATIO>JS PUBLICATION
Sales >Jo. : I 2.V.13 (Part 2)
ISBN 978-9'.!- I- I 33798-J
dSBN lJ7X-92- l-05.'\65X- ,;
ISSN OOX2-82X'J
Annex 125
Rcporl of the International Law Commission on the wol'k of its fifty-eighth session
a legal person and as a national of a State. There is no
reason why such legal persons should not qualify for dip
lomatic protection if injured abroad. provided that they
are autonomous entities not fonning part of the apparatus
of the protecting State. 107 Non-profit-making foundations.
comprising assets set aside by a donor or testator
for a charitable purpose. constitute legal persons without
members. Today many foundations fund projects abroad
to promote health. welfare. women ·s rights. human rights
and the environment in developing countries. Should such
a legal person be subjected to an internationally wrongful
act by the host State. it is probable that it would be granted
diplomatic protection by the Stale under whose laws ii
has been created. NGOs engaged in causes abroad would
appear to fall into the same category as foundations. 168
(5) The diversity of goals and structures in legal persons
other than corporations makes it impossible to draft separate
and distim:t provisions to cover the diplomatic prnlection
of dilfcrcnl kinds of legal persons. The wisest. and
only realistic, course is to draft a provision that extends
the principles of diplomatic protection adopted for corporations
to other legal persons- subject to the changes
necessary to take account of the different features of each
legal person. The proposed provision seeks lo achieve
this. It proYides that the principles governing the State
of nationality of corporations and the application of the
principle of continuous nationality to corpora6ons, contained
in the present chapter, will apply. "as appropriate .. ,
to the diplomatic protection of legal persons other than
corporations. This will require the necessary competent
authorities or courts to examine the nature and functions
of the legal person in question in order to decide whether
it would be "appropriate"' to apply any of the provisions
of the present chapter to it. Most legal persons other than
corporations do not have shareholders, so only draft articles
9 and 10 may appropriately be applied to them. If,
however, such a legal person does have shareholders.
draft articles l l and l2 may also be applied to it.169
PARTTllREE
LOCAL REMEDIES
Article 14. Exhaustion of focal remedies
1. A State may not (lrcscnt an international claim
in res11ect of an injur)· to a national or other person
referred to in draft article 8 before the injured person
has, subject to draft article 15, exhausted all local
remedies.
'" /\.s diplomatic protection is a process rc,crvcd for the pro1cctioa
of natuml or Jcgi~ persons not fonning pan of the State. it follows that
in most instlmces the municipality. as a local branch of govemmcm. and
the universitv. fonded and. in the final reson. controlled bv the State.
will not qualify for diplomatic protection. although it may be protected
by other mies dealing with the problem of State organs. Pri,·atc univcrsitic~
woultl. h()WC:Vl'T~ qualify for diplomati(.: protcc.:lion. as would
private schools. if they enjoyed legal personality under municipal law.
'"" Sec further K. Doehring ... Diplomatic protection of non-gornmmcntal
organi~ations ... in M. Ram.i-Montaldo (ed.). Fl derec/10 111/er-
11oc1onal '-'II llll m1111do ,ln transfhrmaciOn: liher amicorum en ltome,u!if!
of prr.,fe.~<or E-auordo J1111e11e.: de . lredwga. Mont~vi<lco. Fundacion
Cultura Univer,itaria. 1994. pp. 571- 580.
'"' Th,s would apply to the ILmitcd liability company known in civil
law countric~ which is a hybrid between a corporation and a partnership.
2. "Local remedies" means legal remedies which
are open to the in_jured person before the judicial or
administratiYe courts or bodies, whether ordinary or
SllCcial, of the State alleged to be responsible for causing
the in_jury.
3. Local remedies shall he exhausted where an
international claim, or request for a declaratory judgement
related to the claim, is brought llrcponderantly
on the basis of an in.jury to a national or other person
referred to in draft article R.
Commemary
(1) Draft article 14 seeks to codify the rule of customary
international law requiring the exhaustion of local
remedies as a prerequisite for the exercise of diplomatic
protection. This mle was recognized by the ICJ in the
lnlerhandel case as "a weU-estahlished mle of customa1y
international law"170 and by a Chamber of the !CJ in
the !'.JS/ case as "an important principle of customary
international Jaw". 171 The exhaus6on of local remedies
rule ensures that "the State where the violation occurred
should have an opponunity to redress it by its own means,
within the framework of its own domestic system". 172 The
Commission has previously considered the exhaustion of
local remedies in the context of its work on State responsibility
and concluded that it is a .. principle of general
international law" supported hy j udicial decisions. State
practice, treaties and the \\Tilings of jurists. 173
(2) Both natural and legal persons arc required to
exhaust local remedies. A foreign company financed
partly or mainly by public capital is also required to
exhaust local remedies. Non-nationals of the State exercising
protection, entitled 10 diplomatic protection in the
exceptional circumstances provided for in draft article 8,
are also required to exhaust local remedies.
(3) The phrase "all local remedies" must be read subject
to draft article 15 which describes the exceptional circumstances
in which local remedies need not be exhausted.
(4) TI1e remedies available to an alien that must be
exhausted before diplomatic protection can be exercised
will. inevitably, vary from State to State. No codification
can therefore succeed in providing an absolute rule
governing all situations. Paragraph 2 seeks to describe. in
broad terms. the main kind of legal remedies that must be
exhausted.174 In the first instance it is clear that the foreign
"" ll1/erho11del. Prelim111or11 Ob1ec/1011s, Judgmelll, l.C..!. Reports
/959. p. 6. al p. 27.
'" EU,! (,ec footnote 149 above). p. 42. par.i. 50.
'" !11ter/im1del (~cc foN note 170 above). at p. '27 .
"'Sec artick 22 of the draft ai1iclc~ 011 State r.:sponsibi lity provi•
sionally adopted by the Conunission on first reading. leorhMk .. 19'16.
vol. 11 (Part Two). chap. lll. sect. D. I (draft ankle 12 was approved by
the C'ommi,,ion a.t its 1w.-nly-ninth se,sion and the text and the ,:orrcsponding
commentary :1rc in )earbuok . 1977. vol. II (Pal1 Two).
chap. 11. sect. B. pp. , 0- 50): and article -U of the draft articles on State
responsibility for internationally wrongful acts :ldopted by the Commission
m its fiftY-third session. }e{ll'/,,,ok. .. 2IHJI. vol. U (Part Two) and
corrigendum. ·p. 120: the conuucntaty to this aniclc is on pp. 120 121.
'" In the A111h,.11idos Claim. the arhitral tribunal declared that '"Ii h
is the whole system of legal protection. as pro,·icted by municipal law.
which must have been put to the te,t'· (.l11dgm ent of 6 ,\larch 1956,
Annex 125
Diploma t ic protection 45
national must exhaust all the available judicial remedies
provided for in the munjcipal law of the respondent State.
lf the municipal law in question permits an appeal in the
circumstances of the case to the highest court, such an
appeal must be brought in order to secure a final decision
in the matter. Even if there is no appeal as of right
to a higher court. but such a court has discretion to grant
leave to appcaL the foreign national must still apply for
leave to appeal to that court.175 Courts in this connection
include both ordinary and special courts since "the crucial
question is not the ordinary or extraordinary character of
a legal remedy but whether it gives the possibility of an
effective and sufficient means of redress ... 176
(5) Administrative remedies must also be exhausted.
The injured alien is, however, only required to exhaust
such remedies which ma)- result in a binding decision.
He is not required to approach the executive for relief in
the exercise of its discretionary 1x)wers. Local remedies
<lo not include remedies whose "purpose is to ohtain a
favour and not to ,indicate a right"''.,, nor do they include
remedies of grace178 unless they constitute an essential
prerequisite for the admissibility of subsequent contentious
proceedings. Requests for clemency and resort to an
ombudsman generally fall into this category. 179
(6) In order to satisfactorily lay tbe foundation for an
international claim on the ground that local remedies have
been exhausted. the foreign litigant must raise the basic
arguments he intends to raise in international proceedings
in the municipal procccdi.ngs. In the l :L.Sl case, the Chamber
of the ICJ stated that "for an international claim to
be admissible. it is sufficient if the essence of the claim
has been brought before the competent tribunals and pursued
as far as permitted by local law and procedures, and
without success·'. 180 This test is preferable to the stricter
test enunciated in the Fi1111ish Ships Arbirrario11 that ·'all
the contentions of fact and propositions of law which are
brought forward by the claimant Government .. . must
haYc been investigated and adjudicated upon by the
municipal Courts.,. 181
U:--IRI/\/\. vol. XII (Sales No. 6:l.V:l). p. I 20). See fu rther on this suhjecl.
C. F. /\mer;isinghe. /,ucal Remedies 111 !11temat1v11al l.mr. 2nd ~u ..
Cambridge U nivcrsity Press. 200-l. pp. 182 I 92.
11
" This would i_ncludc the cert10rari process before the United
States Supreme Court.
'" B. Sch<>mr Nielsen v. Denmark, Appl1calw11 No. 3.J3 57. l>ec1-
s1on of 2 Septemha [()59. European Commission and Europcru1 Court
of Human Rights. learhook of the Fumpean Co11w111w11 011 !111mo11
flights /958 1959. p. -B8. referring to the consideration of the Institute
of lntemacional Law in ii> re.solution of 1954 (, l11111mire de / "lustitul
de droit i11/en,a/i(>na/, vol. 46 (1956). p. 364). Sec also /,:111·/ess v. !,~-land,
.-lpphcal1u11 No. 332 5 7, l)eci.,icm '!( 30 . t11g11s/ 1958. European
Commission and European Court of Human Rights. Y,,,,,-1,nok of t/1<'
F11ropea11 Co11ve11/1011 011 Human Rights /95/i 1959. pp. 308 I'/ sl'q ..
at pp. J 18- 122.
,,., De Hecker v. Belgium. Applicmi<>n llio. 21 ~ 56. Decision of
9 .!1111e 1958. European Commi"inn and European Court of Human
Rights. learl"'ok of the European Co11ven11011 on lfuman Rights 1958
1959, p. 238.
'" S,·e. Claim of Fi11nisl, s/1ipnw11ers OJ!Oiml 0real Bnta111 111
respec1 <//the use 1,fcer/ai11 Fi1111ish wssels dur111g the war r .. Fi11111sh
Ships . lrbt1ra11on '"i , Award of 9 :\foy 1934, lf.'JRIAA. vol. UI (Sales
No. 194\l.V.2), p. 147\l.
'" See,fre11a (footnote 29 above). at pp. 63-66, paras. 135-143.
'"" FT.SI (see fnntnott: 149 above). at p. 46. para . .'59.
'" Finnish Ships Arbi1ra1io11 (sec Jootnotc 178 above), at p. 1502.
(7) The claimant State must therefore produce the evidence
available to it to support the essence of its claim in
the process of exhausting local remedies. rn2 The international
remedy afforded by diplomatic protection cannot
be used to overcome faulty preparation or presentation of
the claim at the municipal level. rn.,
(R) Draft article 1 ~ does not take cognizance of the
"Calvo clause",1s, a device employed mainly by Latin
American States in the late nineteenth century and early
twentieth ccntlLrY to confine an al ien to local remedies by
compelling him to waive recourse to international remedies
in respect of disputes arising out of a contract entered
into with the host State. The validity of such a clause has
been ,,igorously disputed by capital-exporting States'85
on the ground that the alien has no right. in accordance
with the rule in Mavrommatis, 186 to waive a right that
belongs to the State and not its national. Despite this. the
"Cah·o clause·' was viewed as a regional custom in Latin
America and formed part of the national identity of many
States. The ··Calw clause .. is difficult to reconcile with
international law if it is to be interpreted as a complete
waiver of recourse to international protection in respect
of an action by the host State constituting an internationally
wrongfol act (such as denial of justice) or where the
injury to the alien was of direct concern to the State of
nationality of the alien. •ITT The ohjection to the validity of
the .. Calvo clause'" in respect of general international la·w
arc certainly less convincing if one accepts that the right
protected within the framework of diplomatic protection
are those of the individual protected and not those of the
protecting State. ,ss
(9) Paragraph 3 provides that the exhaustion of local
remedies rule applies only to cases in which the claimant
State has been injured '"indirectly'·. that is, through
its national. lt does not apply where the claimant State is
directly injured by the wrongful act of another State, as
here the State has a distinct reason of its own for bringing
an international claim.189
( I 0) 1 n practice it is difficult to decide whether the claim
is ''direct"' or •'indirect" where it is ·'mixed", in the sense
that it contains elements of both inju1y to the State and
injury to the nationals of the State. Many disputes before
the lCJ have presented the phenomenon of the mixed
claim. In the United States Diploma1ic and Consular
Staff i11 Tehran case. •<J<l there was a direct violation on the
part of the Islamic Republic of Iran of the duty it owed
to the United States of Ame1ica to protect its diplomats
" ' Sec the A111hmii>/1>s Claim (f()()tnotc 174 ahove).
"' See D. P. o·conncll. /111,,nuu/(l{w/ Law. vol. 2. 2nd ed .. Lond()n,
Steven,. 1970. p. !059.
"'' Sec footnote I 56 above.
,~, Sec generally D. R. Shea. The Calvo Clause: A Problem o/1111er.
lmer1ca11 and !ntcmaliona/ Lm,· {Ill(/ !)1plomacv. Minneapolis. Univcr~
ity of :vlinnc,ota Pre,~. 1955.
,i,;,. Sec footnote .:!6 abovl~.
'" North . lmerica11 Dredf!lllf! Compal/_\' of7irras /1!.S.i!.! v. United
i\fex1can States. U:-JRl/\A. vol. JV, p. 26.
'" Sec abo\"c pami,•raph (5) of commentary to dmft article I.
"" Sec generally on this subject. C. F /\mcmsinghc. Local f<emed1es
in lnt!'rn(llio11al l.mv (footnote 174 abovt'). pp. 145-168.
'"° U111ted States D1p/o111alic and Consular Staff III Tehran. Jud[!·
me/II, J.C..!. Repons 191/0. p. 3.
Annex 125
46 Repo,1 or the lntern at iona.l Law Commission on the work of its fifty-eig:hth session
and consuls, hut at the same time there was injury to the
person of the nationals (diplomats and consuls) held hostage:
and in the /nterhandel case, 'Q' there were claims
brought by Switzerland relating to a direct wrong to itself
arising out of breach of a treaty and to an indirect wTong
resulting from an injury to a national corporation_ In the
United States Diplomatic and Consular ,\'ta[[ in Tehran
case, the Court treated the claim as a direct violation of
international law: and in the lnterhandel case, the Court
found that the claim was preponderantly indiiect and that
lnterhandel had failed to exhaust local remedies. In the
Arrest Warrant of I I August 2000 case there was a direct
injury to the Democratic Republic of the Congo and its
national (the Foreign Minister). but the Court held that the
claim was not brought within the context of the protection
of a national so it was not necessary for the Democratic
Republic of the Congo to exhaust local remedies. 191 In
the Avena case. Mexico sought to protect its nationals on
death row in the United States through the medium of the.
Vienna Convention on Consular Relations. arguing that
ii had "itself suITcrcd, directly and through its nationals"
as a result of the United States - failure to grant consular
access lo its nationals under article 36. paragraph I of the
Convention. The Court upheld this argument because of
the "interdependence of the rights of the State and of individual
rights. ._ IY .<
( 11) In the case of a mixed claim, it is incumbent upon
the tribunal to examine the different elements of the claim
and to decide whether the direct or the indirect element
is preponderant. In the F./,Sl case, a Chamber of the !CJ
rejected the argument of the United States that part of its
claim was premised on the violation of a treaty and that
it was therefore unnecessary to exhaust local remedies.
holding that '1he Chamber has no doubt that the matter
which colours and pervades the United States claim as a
whole. is the alleged damage to Raytheon and Machlett
[United States corporations!". 1•>• Closely related to the
preponderance test is the si11e qua 11011 or ·'but for'' test.
which asks whether the claim comprising clements of
both direct and indirect injury would have been brought
were it not for the claim on behalf of the injured national.
If this question is ans,Yered negatively, the claim is an
indirect one and local remedies must be exhausted. There
is, however, little to distinguish the preponderance lest
from the ·'but for" test. If a claim is preponderantly hased
on injury to a national, this is evidence of the fact that the
claim would not have been brought but for the injury to
the national. In these circumstances only one test is provided
for in paragraph 3. that of preponderance.
( 12) Other "tests" invoked to establish whether the
claim is direct or indirect are not so much tests as fa<.:tors
that must be considered in deciding whether the
claim is preponderantly weighted in farnur of a direct or
an indirect claim or whether the claim would not have
been brought but for the injury to the national. TI1e principal
factors to be considered in making this assessment
''' Sec footnote 170 above.
'' ' ..Jrresl II arrn111 of I I April 20110 1 !Jem()Cr{lfic Republic ,,re ·011go
v. Belg111111), .!11dgme111. I.CJ. Rep()m 2002. p. J. at Pl'· 17- 18. p:m1. 40.
'" ..Jw11a (sec footnote 29 above). pp . . ~5- :16. para. 40.
'"' !:LSI (see footnote 149 abow). at p. 4:1. pam. 52. See ab(> /111,,rlm11del
(footnote. 170 ahove). ai p. 28.
are the subject of the dispute. the nature of the claim and
the remedy claimed. Thus where the suhject of the dispute
is a Government official.''" diplomatic official'% or Slate
property1•n the claim will nomially be direct, and where
the State seeks monetary relief on behalf of its national as
a private individual the claim will be indirect.
( 13) Paragraph 3 makes it clear that local remedies arc
to he exhausted not only in respect of an international
claim, bu1 also in respect of a request for a declaratory
judgment brought preponderantly on the basis of an injury
to a national. Although there is support for the view Lhat
where a Stale makes no claim for damages for an injured
national, hut simply requests a decision on the interpretation
and application of a treaty, there is no need for local
remedies to be exhausted. 198 there are cases in which
States have been required to exhaust local remedies where
they have sought a declaratory judgment relating to the
interpretation and application of a treaty alleged lo have
been violated hy the respondent State in the <.:ourse of, or
incidenlal to, its unlawful treatment of a national.'"'>
(14) Draft article 14 requires that the injured person
must himself have exhaus1ed all local remedies. This does
not preclude the possibility that the exhaustion of local
remedies may result from the fact that ano1her person has
submitted the substance of the same claim before a court
of the respondent State."')()
Article 15. Exceptions to the local remedies rule
Local remedies do not need to be exhausted where:
(a) there arc no reasonablJ· available local remedies
to J>rovide effective redress, or the local remedies
1>rovide no reasonable possibility of such redress;
(b) there is undue delay in the remedial 1>roccss
which is attributable to the State alleged to be
res11onsihle;
(c) there was no relevant connection between the
injured person and the State alleged to be responsible
at the date of injur,·;
(d) the injured 1>erson is manifestly precluded
from pursuing local remedies; or
(e) the State alleged to be responsible has waived
the requirement that local remedies be exhausted.
1' 1 See _Jrresl fform11I of I I . l 11gus1 2()00. l.C.J. Reports 2000 (footnote
192 above). para. 40.
'"' Seethe U1111ed States Diplom{lfic 011d Ca11sulnr S1a.ffi11 Tehran
case (footnote 190 above).
1•11 The Cor_ji, Chmmt>I case. ,\ lerits, ./11dgmeul, /.( ·..1. 1/epnrt.,· /9.J'J.
p. 4,
1"' Scl' .-t,r Senil(·e , lgrew11mt <127 ,\ larch 19-16 betwee11 the U1111ed
State.«ifAmenca cmd l·'rn11ce, l>ecisio111>.f 9 f)ecemher /97X, lJNRIAA.
vol. XVJII (Sales No. E/F.80.V.7). p. ~ I 7: ,•lppliwh,h(v ,if 11,e Ub/1gC/tio11
ta .·lrbilmte u11der Sec/inn 21 1>.f" tlw / i11i1ed _ll/n1io11s llendqunners
Agreeme111 of 26 .lune 19-17 . ..ldvisorv Opi11io11, f.C.J. Reports /Ylili.
p. J 2. at p. 29. para. 4 J.
'"' Sec !11/erhn11dt'l (footnote I iO above). at pp. 28 29: and ELSI
(footnote 149 above). at p. 4J.
,~ See !:LSI (footnote J-19 ahovc). at p. 46. para. 59.

ANNEX 126

Annex 126
A/CN.4/SER.A/2001/ Add. I (Part 2)
YEARBOOK
OFTHE
INTERNATIONAL
LAW COMMISSION
2001
Volume II
Part Two
Report of the Commission
to the General Assembly
on the work
of its fifty-third session
UNITED NATIONS .,
New York and Geneva, 2007 ~ -. ~
~~
State responsibility 31
RESPONSIBILITY OF STATES FOR
INTERNATIONALLY WRONGFUL ACTS
General commentary
(1) These articles seek to formulate, by way of codification
and progressive development, the basic rules of
international law concerning the responsibility of States
for their internationally wrongful acts. The emphasis is
on the secondary rules of State responsibility: that is to
say, the general conditions under international law for the
State to be considered responsible for wrongful actions or
omissions, and the legal consequences which flow therefrom.
The articles do not attempt to define the content of
the international obligations, the breach of which gives
rise to responsibility. This is the function of the primary
rules, whose codification would involve restating most of
substantive customary and conventional international
law.
(2) Roberto Ago, who was responsible for establishing
the basic structure and orientation of the project, saw the
articles as specifying:
the principles which govern the responsibility of States for internationally
wrongful acts, maintaining a strict distinction between this task
and the task of defining the rules that place obligations on States, the
violation of which may generate responsibility … [I]t is one thing to
define a rule and the content of the obligation it imposes, and another
to determine whether that obligation has been violated and what should
be the consequences of the violation.32
(3) Given the existence of a primary rule establishing
an obligation under international law for a State, and assuming
that a question has arisen as to whether that State
has complied with the obligation, a number of further
issues of a general character arise. These include:
(a) The role of international law as distinct from the
internal law of the State concerned in characterizing
conduct as unlawful;
(b) Determining in what circumstances conduct is
to be attributed to the State as a subject of international
law;
(c) Specifying when and for what period of time there
is or has been a breach of an international obligation by
a State;
(d) Determining in what circumstances a State may be
responsible for the conduct of another State which is incompatible
with an international obligation of the latter;
(e) Defining the circumstances in which the wrongfulness
of conduct under international law may be precluded;
(f) Specifying the content of State responsibility, i.e.
the new legal relations that arise from the commission
by a State of an internationally wrongful act, in terms of
cessation of the wrongful act, and reparation for any
injury done;
(g) Determining any procedural or substantive preconditions
for one State to invoke the responsibility of
32 Yearbook ... 1970, vol. II, p. 306, document A/8010/Rev.l,
para. 66 (c).
another State, and the circumstances in which the right to
invoke responsibility may be lost;
(h) Laying down the conditions under which a State
may be entitled to respond to a breach of an international
obligation by taking countermeasures designed to ensure
the fulfilment of the obligations of the responsible State
under these articles.
This is the province of the secondary rules of State
responsibility.
(4) A number of matters do not fall within the scope of
State responsibility as dealt with in the present articles:
(a) As already noted, it is not the function of the articles
to specify the content of the obligations laid down by
particular primary rules, or their interpretation. Nor do the
articles deal with the question whether and for how long
particular primary obligations are in force for a State. It
is a matter for the law of treaties to determine whether a
State is a party to a valid treaty, whether the treaty is in
force for that State and with respect to which provisions,
and how the treaty is to be interpreted. The same is true,
mutatis mutandis, for other “sources” of international obligations,
such as customary international law. The articles
take the existence and content of the primary rules
of international law as they are at the relevant time; they
provide the framework for determining whether the consequent
obligations of each State have been breached, and
with what legal consequences for other States.
(b) The consequences dealt with in the articles are
those which flow from the commission of an internationally
wrongful act as such.33 No attempt is made to deal
with the consequences of a breach for the continued validity
or binding effect of the primary rule (e.g. the right of
an injured State to terminate or suspend a treaty for material
breach, as reflected in article 60 of the 1969 Vienna
Convention). Nor do the articles cover such indirect or
additional consequences as may flow from the responses
of international organizations to wrongful conduct. In carrying
out their functions it may be necessary for international
organizations to take a position on whether a State
has breached an international obligation. But even where
this is so, the consequences will be those determined by
or within the framework of the constituent instrument of
the organization, and these fall outside the scope of the
articles. This is particularly the case with action of the
United Nations under the Charter, which is specifically
reserved by article 59.
(c) The articles deal only with the responsibility for
conduct which is internationally wrongful. There may be
cases where States incur obligations to compensate for the
injurious consequences of conduct which is not prohibited,
and may even be expressly permitted, by international law
(e.g. compensation for property duly taken for a public
purpose). There may also be cases where a State is obliged
to restore the status quo ante after some lawful activity
has been completed. These requirements of compensation
or restoration would involve primary obligations; it would
be the failure to pay compensation, or to restore the status
33 For the purposes of the articles, the term “internationally wrongful
act” includes an omission and extends to conduct consisting of
several actions or omissions which together amount to an internationally
wrongful act. See paragraph (1) of the commentary to article 1.
Annex 126
120 Report of the International Law Commission on the work of its fifty-third session
be in writing, nor is it a condition for the operation of the
obligation to provide reparation. Moreover, the requirement
of notification of the claim does not imply that the
normal consequence of the non-performance of an international
obligation is the lodging of a statement of claim.
Nonetheless, an injured or interested State is entitled to
respond to the breach and the first step should be to call
the attention of the responsible State to the situation, and
to call on it to take appropriate steps to cease the breach
and to provide redress.
(4) It is not the function of the articles to specify in detail
the form which an invocation of responsibility should
take. In practice, claims of responsibility are raised at different
levels of government, depending on their seriousness
and on the general relations between the States concerned.
In the Certain Phosphate Lands in Nauru case,
Australia argued that Nauru’s claim was inadmissible
because it had “not been submitted within a reasonable
time”.676 The Court referred to the fact that the claim had
been raised, and not settled, prior to Nauru’s independence
in 1968, and to press reports that the claim had been mentioned
by the new President of Nauru in his independence
day speech, as well as, inferentially, in subsequent correspondence
and discussions with Australian Ministers.
However, the Court also noted that:
It was only on 6 October 1983 that the President of Nauru wrote to
the Prime Minister of Australia requesting him to “seek a sympathetic
reconsideration of Nauru’s position”. 677
The Court summarized the communications between the
parties as follows:
The Court … takes note of the fact that Nauru was officially informed,
at the latest by letter of 4 February 1969, of the position of Australia on
the subject of rehabilitation of the phosphate lands worked out before
1 July 1967. Nauru took issue with that position in writing only on
6 October 1983. In the meantime, however, as stated by Nauru and
not contradicted by Australia, the question had on two occasions been
raised by the President of Nauru with the competent Australian authorities.
The Court considers that, given the nature of relations between
Australia and Nauru, as well as the steps thus taken, Nauru’s Application
was not rendered inadmissible by passage of time. 678
In the circumstances, it was sufficient that the respondent
State was aware of the claim as a result of communications
from the claimant, even if the evidence of those communications
took the form of press reports of speeches or meetings
rather than of formal diplomatic correspondence.
(5) When giving notice of a claim, an injured or interested
State will normally specify what conduct in its view
is required of the responsible State by way of cessation of
any continuing wrongful act, and what form any reparation
should take. Thus, paragraph 2 (a) provides that the
injured State may indicate to the responsible State what
should be done in order to cease the wrongful act, if it is
continuing. This indication is not, as such, binding on the
responsible State. The injured State can only require the
responsible State to comply with its obligations, and the
legal consequences of an internationally wrongful act are
not for the injured State to stipulate or define. But it may
be helpful to the responsible State to know what would
676 Certain Phosphate Lands in Nauru, Preliminary Objections
(see footnote 230 above), p. 253, para. 31.
677 Ibid., p. 254, para. 35.
678 Ibid., pp. 254–255, para. 36.
satisfy the injured State; this may facilitate the resolution
of the dispute.
(6) Paragraph 2 (b) deals with the question of the election
of the form of reparation by the injured State. In general,
an injured State is entitled to elect as between the
available forms of reparation. Thus, it may prefer compensation
to the possibility of restitution, as Germany did
in the Factory at Chorzów case,679 or as Finland eventually
chose to do in its settlement of the Passage through the
Great Belt case.680 Or it may content itself with declaratory
relief, generally or in relation to a particular aspect
of its claim. On the other hand, there are cases where a
State may not, as it were, pocket compensation and walk
away from an unresolved situation, for example one involving
the life or liberty of individuals or the entitlement
of a people to their territory or to self-determination. In
particular, insofar as there are continuing obligations the
performance of which are not simply matters for the two
States concerned, those States may not be able to resolve
the situation by a settlement, just as an injured State may
not be able on its own to absolve the responsible State
from its continuing obligations to a larger group of States
or to the international community as a whole.
(7) In the light of these limitations on the capacity of the
injured State to elect the preferred form of reparation, article
43 does not set forth the right of election in an absolute
form. Instead, it provides guidance to an injured State as
to what sort of information it may include in its notification
of the claim or in subsequent communications.
Article 44. Admissibility of claims
The responsibility of a State may not be invoked if:
(a) the claim is not brought in accordance with any
applicable rule relating to the nationality of claims;
(b) the claim is one to which the rule of exhaustion
of local remedies applies and any available and effective
local remedy has not been exhausted.
Commentary
(1) The present articles are not concerned with questions
of the jurisdiction of international courts and tribunals,
or in general with the conditions for the admissibility
of cases brought before such courts or tribunals. Rather,
they define the conditions for establishing the international
responsibility of a State and for the invocation of
679 As PCIJ noted in the Factory at Chorzów, Jurisdiction (see footnote
34 above), by that stage of the dispute, Germany was no longer
seeking on behalf of the German companies concerned the return of the
factory in question or of its contents (p. 17).
680 In the Passage through the Great Belt (Finland v. Denmark),
Provisional Measures, Order of 29 July 1991, I.C.J. Reports 1991,
p. 12, ICJ did not accept Denmark’s argument as to the impossibility
of restitution if, on the merits, it was found that the construction of the
bridge across the Great Belt would result in a violation of Denmark’s
international obligations. For the terms of the eventual settlement, see
M. Koskenniemi, “L’affaire du passage par le Grand-Belt”, Annuaire
français de droit international, vol. 38 (1992), p. 905, at p. 940.
Annex 126
State responsibility 121
that responsibility by another State or States. Thus, it is
not the function of the articles to deal with such questions
as the requirement for exhausting other means of peaceful
settlement before commencing proceedings, or such
doctrines as litispendence or election as they may affect
the jurisdiction of one international tribunal vis-à-vis another.
681 By contrast, certain questions which would be
classified as questions of admissibility when raised before
an international court are of a more fundamental character.
They are conditions for invoking the responsibility of
a State in the first place. Two such matters are dealt with
in article 44: the requirements of nationality of claims and
exhaustion of local remedies.
(2) Subparagraph (a) provides that the responsibility of
a State may not be invoked other than in accordance with
any applicable rule relating to the nationality of claims.
As PCIJ said in the Mavrommatis Palestine Concessions
case:
It is an elementary principle of international law that a State is entitled
to protect its subjects, when injured by acts contrary to international
law committed by another State, from whom they have been unable to
obtain satisfaction through the ordinary channels.682
Subparagraph (a) does not attempt a detailed elaboration
of the nationality of claims rule or of the exceptions to
it. Rather, it makes it clear that the nationality of claims
rule is not only relevant to questions of jurisdiction or the
admissibility of claims before judicial bodies, but is also
a general condition for the invocation of responsibility in
those cases where it is applicable.683
(3) Subparagraph (b) provides that when the claim is
one to which the rule of exhaustion of local remedies applies,
the claim is inadmissible if any available and effective
local remedy has not been exhausted. The paragraph
is formulated in general terms in order to cover any case
to which the exhaustion of local remedies rule applies,
whether under treaty or general international law, and in
spheres not necessarily limited to diplomatic protection.
(4) The local remedies rule was described by a Chamber
of the Court in the ELSI case as “an important principle of
customary international law”.684 In the context of a claim
681 For discussion of the range of considerations affecting jurisdiction
and admissibility of international claims before courts, see G.
Abi-Saab, Les exceptions préliminaires dans la procédure de la Cour
internationale (Paris, Pedone, 1967); Sir Gerald Fitzmaurice, The
Law and Procedure of the International Court of Justice (Cambridge,
Grotius, 1986), vol. 2, pp. 427–575; and S. Rosenne, The Law and
Practice of the International Court, 1920–1996, 3rd ed. (The Hague,
Martinus Nijhoff, 1997), vol. II, Jurisdiction.
682 Mavrommatis (see footnote 236 above), p. 12.
683 Questions of nationality of claims will be dealt with in detail in
the work of the Commission on diplomatic protection. See first report
of the Special Rapporteur for the topic “Diplomatic protection” in
Yearbook … 2000, vol. II (Part One), document A/CN.4/506 and
Add.1.
684 ELSI (see footnote 85 above), p. 42, para. 50. See also Interhandel,
Preliminary Objections, I.C.J. Reports 1959, p. 6, at p. 27. On the
exhaustion of local remedies rule generally, see, e.g., C. F. Amerasinghe,
Local Remedies in International Law (Cambridge, Grotius, 1990);
J. Chappez, La règle de l’épuisement des voies de recours internes
(Paris, Pedone, 1972); K. Doehring, “Local remedies, exhaustion of ”,
Encyclopedia of Public International Law, R. Bernhardt, ed. (footnote
409 above), vol. 3, pp. 238–242; and G. Perrin, “La naissance de la responsabilité
internationale et l’épuisement des voies de recours internes
brought on behalf of a corporation of the claimant State,
the Chamber defined the rule succinctly in the following
terms:
for an international claim [sc. on behalf of individual nationals or corporations]
to be admissible, it is sufficient if the essence of the claim
has been brought before the competent tribunals and pursued as far as
permitted by local law and procedures, and without success.685
The Chamber thus treated the exhaustion of local remedies
as being distinct, in principle, from “the merits of
the case”.686
(5) Only those local remedies which are “available and
effective” have to be exhausted before invoking the responsibility
of a State. The mere existence on paper of
remedies under the internal law of a State does not impose
a requirement to make use of those remedies in
every case. In particular, there is no requirement to use a
remedy which offers no possibility of redressing the situation,
for instance, where it is clear from the outset that
the law which the local court would have to apply can lead
only to the rejection of any appeal. Beyond this, article
44, subparagraph (b), does not attempt to spell out comprehensively
the scope and content of the exhaustion of
local remedies rule, leaving this to the applicable rules of
international law.687
Article 45. Loss of the right to invoke responsibility
The responsibility of a State may not be invoked if:
(a) the injured State has validly waived the claim;
(b) the injured State is to be considered as having,
by reason of its conduct, validly acquiesced in the lapse
of the claim.
Commentary
(1) Article 45 is analogous to article 45 of the 1969 Vienna
Convention concerning loss of the right to invoke a
ground for invalidating or terminating a treaty. The article
deals with two situations in which the right of an injured
State or other States concerned to invoke the responsibility
of a wrongdoing State may be lost: waiver and acquiescence
in the lapse of the claim. In this regard, the position
of an injured State as referred to in article 42 and other
States concerned with a breach needs to be distinguished.
A valid waiver or settlement of the responsibility dispute
dans le projet d’articles de la Commission du droit international”,
Festschrift für Rudolf Bindschedler (Bern, Stämpfli, 1980), p. 271.
On the exhaustion of local remedies rule in relation to violations of
human rights obligations, see, e.g., A. A. Cançado Trindade, The Application
of the Rule of Exhaustion of Local Remedies in International
Law: Its Rationale in the International Protection of Individual Rights
(Cambridge University Press, 1983); and E. Wyler, L’illicite et la condition
des personnes privées (Paris, Pedone, 1995), pp. 65–89.
685 ELSI (see footnote 85 above), p. 46, para. 59.
686 Ibid., p. 48, para. 63.
687 The topic will be dealt with in detail in the work of the Commission
on diplomatic protection. See second report of the Special Rapporteur
on diplomatic protection in Yearbook … 2001, vol. II (Part One),
document A/CN.4/514.
Annex 126
ANNEX 127

Annex 127
THE INTERNATIONAL
RESPONSIBILITY OF STATES
FOR
DENIAL OF JUSTICE
BY
ALWYN V. FREEMAN
LL,B. (HARV,); DR.SC.POL, (GENEVE)
MEMBER OF THE DETROIT BAR
L0NGMANS, GREEN AND CO.
LONDON • NEW YORK • TORONTO
KRAUS REPRINT CO.
New York
1970
Annex 127
LONGMANS, GREEN AND CO. LTD.
39 :PATERNOSTER ROW, LONDON, E. C, 4
CHITI'ARAl-iJAN AVENUE, CALCUTTA
17 NICOL ROAD, BOMBAY
36A MOUNT ROAD, MADRAS
LONGMANS, GREEN AND CO.
114 FIFTH AVENUE, NEW YORK
221 EAST 20TH STREET, CHICAGO
88 TREMONT STREET, BOSTON
LONGMANS, GREEN AND CO.
215 VICTORIA STREET, TORONTO
First published 1938
LC 39-17013
KRAUS REPRINT CO.
A U.S. Division of Kraus-Thomson Organization Limited
Printed in U.S.A.
Annex 127
CHAPTER IV
HISTORICAL AND LEGAL FOUNDATIONS
OF DENIAL OF JUSTICE
At the opening of this work it was said that some of the confusion
which has obscured the problem of denial of justice arose from a
failure on the part of many authorities to perceive its true position
in the scheme of responsibility for injuries to foreigners. To fit
the concept into its proper place requires an investigation ( 1) of its
earliest origins in the classical soil of international law ; (2) of its
present legal significance and scope ; and (3) of the fundamental
features of the relationship which now exists between municipal
and international law in the matter of judicial protection.
Each of these studies is vital to an adequate appreciation of the
functions which are now performed by responsibility for denial of
justice ; but the first to some extent overshadows the others in
that it definitely stamps the concept as a product of the law of
nations - specifically, as one inescapably bound up with the diplomatic
protection of citizens abroad.1 From this fact flow several
consequences of which the most obvious is the inability of individual
States to fix for themselves the content of the State's duty of judicial
protection.
1. Denial oi Justice in the System of Private Reprisals.2 - There
is a definite historical basis for this duty in the relations between
States : it is found in the classical institution of private reprisals.
In effect, the ancient system of reprisals was the medium through
which the most rudimentary principles of State responsibility
1 De Visscher, in 52 Recueil des Cours (1935), p. 374.
2 For a recent examination of the origin and development of denial of justice, see
Spiegel, in 32 A. J . I. L. (1938), p. 63.
Annex 127
54 DENIAL OF JUSTICE
operated. t And at the basis of a doctrine which permitted a private
resort to force against the subjects of another sovereign reposed
the concept of denial of justice, an illegality which thus appears
as the earliest and most typical form of wrong committed by a
State to the prejudice of foreign subject;..2
Long before the emergence of the modern State it was settled
that an individual who was wronged in a strange land and who
had there been unable to obtain reparation for this injury from the
local sovereign might, with the permission of his own prince, initiate
forceful measures to obtain that justice which had been refused him.
The practice had come to be established in ancient Greece as a
legitimate international procedure for exacting compensation when
justice could not be obtained by peaceful methods.3 However,
it was not until the period of the Middle Ages that it flowered into
the widespread system of protection which distinguished its final
form. This development and its causes are set forth in a remarkable
passage from da Legnano's treatise on reprisals in which the author
concludes that the institution of private reprisals satisfied a real
need in the relations of peoples :
" In the early time, when the Lord governed in his own person, there
was no need of reprisals, since justice was administered by the Lord. In
the time of Noah and his successors in the government of the people of the
Jews, there was no need of reprisals, since justice was administered by
ministers, and subjects among the people recognized a superior whom they
obeyed. In the early days of the supreme Pontiffs and the Roman Emperors
1 I LapradeIJe-Politis, Recueil, p. 213.
2 " ••• the terms " reprisals " and " denial of justice " were for a considerable time,
with the exception of a very short period, linked to one another to such an extent that the
latter was a necessary eondition for the legality of the former. It waR not until the term
" illegality " became known as an integral part of legal theory that it took the place of
denial of justice as a condition precedent to the application of reprisals. Only tht"n ditl
<lenial of justice develop as a separate subject uneonnectcd with what is now known rui
" reprisals ". It is due to the long-lasting association of the terms " reprisals " and
" denial of justice " that the origin of denial of justice is to he found in the law relating
to repr:~als. " Spiegel, op. C'it., pp. 63-G4.
3 This form of self-help the Greeks designated by the word androlepsia (&v8po).:Yjq,(<X).
Cf. Coleman-Philippson, The International Law and Custom of Ancient Greece and Rmm,
vol. 2, pp. 849-852. " Polycharcs, a Messinian, having been defraudt"d by Euaephnus,
a Spartan, with whom he had been associated for the purpose of breeding and exporting
cattle, was denied justice in Sparta, even though his son had been killed by the latter;
consequently he took possession of all he could lay hold of in Laconia, and murdered
every LacadAemonian he caught." Ibid., p. 354,.
But the doctrine of denial of justice wns unknown to Roman Jaw. Cf. Spiegel, op. t:it.,
pp. 63-64.
Annex 127
FOUNDATIONS OF DENIAL OF JUSTICE 55
... there was no need of reprisals, since the complement of justice was administered
by princes, with observance of the due order of law. But when
the Empire began gradually to be exhausted, so that now there are some who
in fact recognize no superior, and by them justice is neglected, the need
arose for a subsidiary remedy, when the ordinary remedies fail, but which
is on no account to be resorted to when they exist... For its final object
is that justice may obtain its due effect, and its occasion is when there is
a failure of remedy (propler defectum remedii) arising from the neglect of
those who govern and rule peoples ... "1
However, da Legnano cautions that the extraordinary remedy
of reprisals is not to he given for slight cause but that a high degree
of injustice must first be proven - such as amounts to a complete
failure of justice. " Otherwise if the failure is partial only .. .for
reprisals do not completely do justice. u Then, in what seems to
have been the earliest discussion of responsibility for unjust judgments,
he amplifies his position :
" ... if the judge does not neglect to do justice, but does injustice by
pronouncing an unjust judgment, then if the State has a judge of appeal
appointed over him, he will be applied to by way of appeal; and if it has not,
reprisals will be declared... But if the judges of appeal do injustice, then
it seems that the party is without any remedy, since no third appeal is allowed;
nor does it appear that reprisals may be declared, since there has
been no failure of jurisdiction. But it may be said that if they pronounced
unjust judgments from favor to the other party, then restitulio in inlegrum
may be claimed; ... but if the reason was favor to the rulers, then they would
be liable to the party for the loss caused him; ... but if the unjust judgment
arose from the judge's sole motion, then the party is without any remedy,
as shown above. " 2
Here we have, as early as the fourteenth century, a clear recognition
of two principles which may be regarded as the precursors of equivalent
rules now operative in the theory of international responsibility:
The first of these is that a denial of justice subjected the
delinquent State to reprisals carried out by private individuals on
1 da Lcgnano, Tractatus de Bello, de Rep·rresaliis et de. Due/lo (1360), ch. CXXIII. In
<:h. CXXIV, he again refers to this remedy, not as one instituted by positive law, (canon
or civil), but as a device to be resorted to when the remedies of positive law fail, " lest
justice should perish " .
2 Ibid., ch. CL. da Legnano's theory appears to have been based upon a work on
reprisals written by Bartolus in 1354 (see the reference on p. 56, note 2, infra), who
took the position that where a superior authority was lacking, the failure of a community
to dispE'nSC justice was a justa causa for reprisals. Cf. Spiegel, op. cit., p. 70.
Annex 127
56 DENIAL OF JUSTICE
their own behalf, the second that on no account were reprisals to be
declared as long as there existed local remedies for obtaining one's
due. Transposed into twentieth century legal science this is tantamount
to saying that a denial of justice engages the international
responsibility of the State but that diplomatic claims may not be
made until there has been compliance with the rule that local remedies
must. first be exhausted.1
From the fourteenth to the eighteenth century, a constant trend
of authority supports the rule that reprisals may be exercised to secure
justice where it had been denied or refused.2 Indeed, in frequent
instances it was expressly recognized by treaty. Thus, in the agreement
of 1386 between England and Portugal, it was provided that
in case justice could not be secured by ordinary means, resort to
extreme measures might be had without such acts being considered
as acts of war.3 Only in rare instances, however, up until the
writings of Wolff and Vattel, is there to be found a clearly formulated
doctrine concerning the factors necessary to produce a denial of
justice, or indicating with some degree of precision the cases in which
1 See infra, Chapter XV.
2 Rartolus, Tractatus de Repr., Opera 5, Nr. 9, p. 595, quoted in Hatscheck, An Outline
of International Law, p. 284; Zouche, Juris et Judicii Fecialis s'ive Juris inter Gentes .•.
Explicatio (1650), Part I, VI, p. 33; Rynkershoek, Questionum Juris Publici Libri Duo,
Book I, ch. 24, pp. 172-178, and his statement at p. 173 : "Denegatam igitur justitiam
Repressalire solerit excipere. '' Cf. Grotius, De Jure Belli ac Pacis, lib. III, chap. II,
par. 5, 1, p. 627 ; Pufendorf, Ele111entorum Jurisprudentim Universalis ... , p. 85 ;
VatteJ, Le Droit de.<t Gens, Livre II, ch. 18, §§ 342 and 350. Some publicists even
regarded denial of justice as a just cause of war. See Gentili, De Jure Belli Libri Tres,
Book I, ch. XX.I and Book II, ch. I, pp. 215-216; Hamilton's remarks in The Federalist,
quoted on p. 65, note 1, infra. And compare Wheaton's later work (Elements of lnteTnational
Law, p. 412). quoting Rutherforth.
It is interesting to note that during the Revolutionary War General Washington justified
the exercise of reprisals against the British on the ground of a denial of justice. When
an abortive council set up by General Clinton failed to pronounce judgment upon a
British officer guilty of the brutal hanging of an American Captain, Washington, "considering
this proceeding as a formal denial of justice", ordered execution of one of his
prisoners. The victim, young Asgill, was later released by Washington upon the
entreaties of the youth's mother. Martens, Causes Celebres, vol. II, p. 174.
See also the opinion of Pinkney, C., in the Betsey, Moore, Arbitrations, p. 8183; s. c.,
idem, International Adjudications, vol. IV, p. 24/J.
1 The right to exercise reprisals where an open denial of justice had occurred was
likewise affirmed in Article 60 of the Peace of Munster of January 80, 1648. See
Bynkershoek, op. cit., p. 173.
Diplomatic communications as late as the middle half of the 19th century can be found
in which the principle is reaffirmed. See for example Mr. Bayard to Mr. McLane,
June 23, 1886, quoting Valin, VI Moore, Digest, p. 266. Seftor de las Carreras to Signor
Barbolani (2, I, 1865), Fontes Juris Genlium, Series B, Section 1, Tomus I, par. 2376;
Senhor Loureiro to Mr. Lettsom (20, 8, 1864) ibid., par. 2374.
Annex 127
FOUNDATIONS OF DENIAL OF JUSTICE 57
it could be said to occur.1 Victoria, who acknowledged the right
of an injured sovereign to authorize property seizures against the
malefactors or their innocent co-subjects, did so on the ground
that it was a breach of duty for their sovereign " to neglect to
vindicate the right against the wrongdoing" of his subjects.2 Thus
the wrong justifying reprisals is seen to be a State wrong. But nowhere
does the celebrated Spaniard use the term "denial of justice,,_
Zouche spoke of a form of private war known as Pignoralio,
('Evexupcxaμ.6c;,) which " is when, between different princes or
peoples, on account of a denial of justice (iustitiam denegatam)
a right of seizing goods by public authority is granted to private
persons; and this is commonly called reprisals. " For him justice
was denied not only if judgment could not be obtained against a
guilty person or a debtor within a reasonable time, but also if in a
clear case a judgment was given which was obviously contrary
to law.3 Zouche's remarks were closely patterned after a formula
by Grotius who, like his predecessors, defended seizure by violence
to enforce a right that had been denied.4 The influence of Grotius
upon Wolff may likewise be detected in the latter's reasoning that
the property of foreign subjects might be seized in satisfaction of
a right that had been denied or by way of pledge. 5 Grotius, it may
,. da Lcgnano's analysis of the circumstances in which an unjust judgment subjected
the State to reprisals, apparently remained the most direct attack on this problem for
well over two hundred and fifty years.
2 De Jure Belli Relectiones, sect. 41. Elsewhere Victoria gives as a reason for the legality
of reprisals the fact that "otherwise, they (the injured individuals) could not recover
their own possessions. In this case, moreover, it is a question not of individual persons,
but of a state." De Bello, On St. Thomas Aquinas, "Summa Theolagica ", sect. 15,
translated by Scott, in The Spanish Origin of International Law, Part I, p. cxxiii.
8 Loe. cit. That force could be resorted to for obtaining justice in those instances in
which a State withheld from foreigners the right to appear in court was also affirmed by
Pufendorf, who held that under these circumstances agreements between citizens of the
territorial State and aliens would " have efficacy in the basis of the law of nature alone,
and therefore will give power to apply force, which power, in defect of civil and pacific
action, the law of nations has granted. " Op. cit., p. 85. And compare Wolff, Institutions
du, droit de la nature ... Book VI, ch. VI, MCLXIII, p. 149.
' " Alia e.11secutioni.<I violentae species est ... jus repressaliarurn. .. Locum autem habet,
ut ajunt lurisconsulti, ubi jus denegatur.
" Qund fieri intelligitur non tantum 8i in so-ntem aut deb'itorem judicium, intra tempus
idonewn obtineri nequeat, verumetiam si in re minime dubia (nam in dubia re prasumptio
est pro his qui ad judicia publici electi sunt) plane contra jus judicatum sit ... " De jure
belli ac pacis, Book III, cap. 2, IV-V.
6 " ••• jus vero denegatur non tantum, si judicium in delentorem rei, aut debitorem intra
tempttS idoneum obtineri nequeat, verum etiam si in re minime dubia plane contra jus judicatum
sit, quod lanquam per se clarum sumitur ... " Wolff, Jus Gentium Methodo Scientifica
Pertractatum, cap. V, § 587.
Annex 127
58 DENI.\L OF Jl'STICE
be added, was the first to demonstrate clearly that the judgment
of a domestic court was not itself conclusive of the rights of foreign
subjects.1 In this view both Zouche and Wolff concurred.
But if it was universally admitted that an injured alien might
seek the protection of his prince by requesting a grant of letters of
marque in retaliation for an injustice suffered, it was none the less
true that before private reprisals were permitted, a denial of justice
had to be established. 2 The legalization of reprisals required a
" failure to secure compensation or redress by diplomatic, juridical
or other similar means ", after every practicable effort to use such
means had been made. Private reprisals were not considered as an
alternative to resorting to the local authorities or tribunals of the
State against whose nationals a claim lay ; but they were forceful
measures invoked only after peaceful means had failed.3 An appeal
had to be made to the Prince of the land and if this proved vain,
(whether because of ill will or plain lack of power), the subject who
was armed with his sovereign's sanction could then wage a private
struggle against the people of the delinquent Prince until he had
1 Grotius, Zouche and Wolff all agreed that the authority of the judge did not have the
same validity against foreigners as against subjects. Grotius thus explained the right
of a nation to obtain reparation through reprisals where a judicial sentence was rendered
plainly against right in re mirlime dubia : " ... subjects cannot legally hinder by fort.>e the
execution of a judgment even if it is unjust, or assert their rights by force against it,
because of the effectiveness of the authority over them; but foreigners have the right
of compulsion, which they may not use, however, so long as they can obtain what is
theirs by a judgment. " Loe. cit.
a See the references to Vattel, Grotius, and Bynkershoek on p. 56, .<Jupra, and compare
Victoria, De Jure Belli Relectiones, loc. cit., and 'rrelles in 17 Recueil des Cours (1927),
p. ~no. Cf. Butler and Maccoby, The Development of Intemat-ional Law, p. 176; Strupp,
Worterbuch des V olkerrechts, vol. 1, p. 341 ; Wheaton, International Law. p. 409 ; De Martens,
Precis du droit des gens, vol. I, p. 270; Burlamaqui, Principes du. Drait Politique,
p. 267.
" Is ordo est, ne repressalire concedantur nisi palam denegata justitia. " Rynkershoek,
loc. cit. Por a reappearance of this doctrine in arbitration, see Gore's opinion in
the Betsey, 4 Moore, International Adjudications, p. 236.
s Clark, in 27 A. J. I. L . (1933), on The English Practice With Regard to Reprisals by
Private Persons, p. 694, at pp. 695-696. The principle was one which was rigidly
observed in 13th century England where it was legal for the authorities of one town
to take reprisals on the citizens of another, but only after the claimant failed in his effort
to seek justice before the court of hi;, advt>rsary. See ibid., p. 704.
Although under early English law reprisals could be exerdsed upon the default of a
private debtor, from the 13th century on, (cf.the Leg es Quat.uor Burgorum, cap. 97), reprisals
were only permitted in the case of a C<l1nmunity denying justice; i.e., the basis of reprisals
was no longer the wrong of individuals who denied the claimant's right, but the" default
of the lord or the magistrates in their capacity as representatives of the community."
Spiegel, op. cit., pp. 66-67, and see his summary of the case of Wynand Morant v. Andrew
Papyng and partners, which consecrated this principle. A statute was finally passed
in 1358 restricting the use of reprisals to cases of denial of justice. Ibid., pp. 67-68.
Annex 127
FOUNDATIONS OF DENlAL OF JUSTICE 59
recovered adequate compensation through seizures of property
belonging either to the original malefactor or to his co-citizens.
This restraint upon the exercise of reprisals is further evidenced
by numerous treaties concluded from the twelfth century onward 1
which limit their employ in various ways. In a treaty between
the Duke of Lorraine and the Count of Flanders in 1339, it was agreed
that reprisals should never be resorted to unless justice had first been
sought from the constituted authorities.2 Commercial agreements
concluded in the sixteenth century witness Lhe frequent recurrence
of clauses to the effect that no reprisals are to take place unless for
denial or delay of justice, 3 unreasonable delays thus being early
considered as tantamount to ordinary denial. The Anglo-Spanish
Treaty of 1667 was very precise in this respect, declaring that if no
satisfaction were given upon the intervention of six months after
the instances made, the party might have his letters . .i Such conditions
are occasionally found supplemented with a provision that
execution of the letters granted should be pursued only against
the principal delinquents or their goods. 5
1 Traces of the practice are already found in a treaty hetwecn Sicard of Benevent and
the Neapolitans of 886, (limiting the right of reprisals to denials of justice suffered by
suhje<'ts of the contracting parties), and in a treaty between the Emperor Lotar I on
behalf of a number of Italian Cities with Venice (providing, inter alia, for the right to
exercise reprisals against judges of one territory who denied justice to the subjects of the
other). See Spiegel, op. cit., pp. 64-65, and especially at p. 69 where it is stated that
" in the 13th century there were hardly any treaties of friendship which did not
contain a restriction of reprisals. "
The earliest limitation on the right of reprisals which has come to our attention is that
contained in the treaty between Oeantheia and Chalaeum in the fifth century B. C. This
was an accord of mutual renunciation of the practice except on the open sea and it also
provided for recourse by aliens to the local tribunals in the ca:;e of disputed claims. See
Coleman-Phillipson, op. cit., vol. 2, pp. 357-358.
2 Dumont, Corps Diplomatique, I, ii, p. 185. Compare the treaty of 1406 between
Henry IV and the Duke of Burgundy, anrl of 1474 between Edward IV and the Hanse
Towns. Ibid., JI, ii, p. 805, and III, i, p. 460, resp.
3 l!;ngland and Spain (1515), ibid., IV, i, p. 216.; France and England (1525), ibid.,
p. 438. The provision in the latter treaty thus rea<ls : " Conventwn, conr-0rdatum, et
conctusum est, quod ex neutris Principum praedictorum Cancelleria, ant alia Curia,
imposterum concedantur aliqure Littene Rcpressaliarum, Marcre aut Contramarcre,
nisi super & contra principales de1inquentes, & eorum Uona, f'orumque fautores, vel
in casn manifestre denegationis justit.ire de qui per Litteras Summationis ant Requisitionis,
& prout de Jure requiritur, sufficienter constabit. " Similar clauses are found
in a treaty between the same powers of 1510 (ibid., IV, i, p. 126); nncl between England
and Spain of 1670, referred to in Clark, up. cit., p. 711. See also Dumont, op. cit.,
vol. VU, pt. I, p. 182, and cf. Manning, Com:m.entaries on the Law of Nations ~1875), p. 149.
• Cited in Clark, loc. cit.
ij In adrlition to the authorities cited in Note 8. see the additional treaties concluded
between France and England (1514 and 1515) in. ·Dumont, ibid., pp. 184 and 205 resp.
Compare the treaty of Dec. 25, 1610 between the Emperor of M:oroceo and the StatesAnnex
127
60 DENIAL OF JUSTICE
Frequently such instruments, in addition to reproducing the conventional
formula binding the parties not to resort to reprisals
except in the case of delay or manifest denial of justice, contain
clauses imposing the procedure to be followed as a necessary antecedent
to a grant of royal warrant, and fixing delays ( of three, four
or six months) at the expiration of which - in the contingency that
justice had not been rendered - resort to private force was permissible.
In Article 24 of the treaty of April 5, 1654, between
the English and the States-General, it was agreed that such letters
should not be issued unless the sovereign whose subject complained
of the injury should lay the complaint before the sovereign
whose subject was accused of wrongdoing, and the latter fail to have
justice rendered within three months.1 Somewhat greater care is
found to have been exercised in the drafting of Article 17 of
the Commercial Treaty of April 27, 1662 between the King of France
and the States-General, which, after the customary stipulation
limiting reprisals to refusal of justice, added the proviso that justice
should not be considered denied unless the petition for reprisal he
shown also to the envoys of the sovereign whose subjects were complained
of, so that he might inquire into the truth of the complaint,
and if the allegation be found justified, have four months in which
to render justice.2
Treaties containing this type of provision persist in European
history even after the last stages of private reprisals were reached.
One interesting example at the close of the 18th century is found
in the famous Jay Treaty of 1794 between the United States and
General, Article IX of which specified that neither party should grant letters of
reprisals and that both parties should render justice to each other's subjects (Dumont,
op. cit., V, ii, 158); and compare the treaty between England and Denmark of 1621
(ibid., p. 393).
1 Bynkershoek, op. cit., p. 173. Compare the treaty between Spain and Scotland (1550),
quoted in Butler and Maccoby, op. cit., p. 176.
2 Bynkershoek, op. cit., p. 174: "In this way the peace is not disturbed, and the
sovereign may himself judge regarding the justice or injustice of the charge and pronounce
his own sentence. "
Compare Article 16 of the Treaty of Utrecht of March 13-April 11, 1713, which provided,
inter alia: "A l'avenir, aucune desdites Majestes n'en delivrera de semblables
[e. g. letters of marque] contre les sujets de l'autre, s'il n'apparait auparavant d'un
delay ou d'un deny de justice manifeste, e;c qui ne pourra etre tenu pour constant a
moins que la requete de celui qui demandera des lettres de represailles n'ait ete apportee
ou representee au ministre ou ambassadeur qui sera dans le pais de la part du Prince
contre les sujets duqueJ on poursuivra lesdites lettres ... " De Clercq, 1 llecueil de.s
TTaites de la France, p. 8. To the same effect: Treaty of Commerce between Great
Britain and France, Sept. 26, 1736, Art. III, De Martens, Recueil de T·raites de l'Europe,
vol. IV, p. 157; Spain and Scotland (1550), Dumont, op. cit., vol. IV, iii. 12.
Annex 127
FOUNDATIONS OF DENIAL OF JUSTICE 61
Great Britain. This treaty expressly stipulated in its Article XXII
" that neither of the said contracting parties will order or authorize
any acts of reprisal against the other, on complaints of injuries or
damages, until the said party shall first have presented to the other
a statement thereof, verified by competent proof and evidence, and
demanding justice and satisfaction, or the same shall either have
been refused or unreasonably delayed. " 1
The raison d'etre of thes!3 restrictions is not difficult to find.
Primarily they seem to have been designed to prevent the bringing
of unreasonable charges that justice had been denied and to guard
partially against the abuses inherent in any subjective appreciation
of elements upon which the use of force is made to depend. By
insisting upon the observance of certain forms and prescribed lapses
of time, a " cooling period " was provided which militated strongly
against inadequately justified outbursts of unbridled revenge. However,
the sun of private reprisals had already begun to set by the end
of the seventeenth century,2 and the practical importance of such
safeguarding clauses shrank to an inconsequential minimum. Thereafter
during peace few letters of reprisals were issued; and by the
end of the eighteenth century, the institution had reached a permanent
condition of desuetude.
It is unnecessary to dwell at length upon all the causes of this
decline, (less discrimination against foreigners, better administration
of justice everywhere, etc.), but note must be taken of the change
which occurred in the life of the State and its far-reaching efiect
upon politico-legal theory. As the modern State slowly emerged
1 De Martens, Recueil, vol. V, p. 680. Further examples will be found in Dwnont,
op. cit., VI, ii, pp. 76, 121, 847; and VII, i, pp. 88 and 42.
Municipal statutory regulations on this subject, as we have seen ( cf. supra, p. 58,
note), were not uncommon. Bynkershoek refers to an old law of Amsterdam which declared
that if any citizen of that place suffered wrong outside the domains of the State,
whether by force or by an unjust judgment, and laid his claim before the magistrate of
the place where the wrong was done; then, if after receiving an answer the magistrate of
Amflterdam still considered that an injustice had been done the subject of his city, reparation
should be made to the injured person by a court order, by process against such goods
and persons of the foreign sovereign as might be found in the territory of Amsterdam.
The learned author thus comments on this ordinance : " The law uses the phrase 'by an
unjust judgment ', so that it does not suffice merely to pronounce judgment, [italics
ours] it must also he just; and the magistrate is to be the judge of the fairness, for this
is a matter which is not usually submitted to the decisions of others ..• " Bynkershoek,
op. cit., p. 135. See also the Statute of 4 Hen. V, cap. 7, and the celebrated Marine
ordinance of Louis XIV (1681) as referred to in Wheaton, International Law, p. 402.
s De Martens, PTecis, vol. 2, p. 190; Butler and Maccoby, op. cit., p. 177.
Annex 127
62 DENIAL OF JUSTICE
with its improved political organization, a more effective authority
was developed over the internal activities of the realm. Power
over all the functions of international activity gradually became
concentrated in the hands of a more centralized system which the
new theory conceived of as exclusive subject and organ of international
law, and as such the sole protector of nationals abroad.
This expansion of sovereign power inevitably entailed a steady
encroachment upon the privilege of private persons to deal with
outsiders as they had been accustomed. Whereas during a relatively
early period the State occasionally interposed to take measures of
reprisal on behalf of private persons, 1 this type of action now became
the only one consonant with the new order of things. 2 Simultaneously
legal theory as to the circumstances warranting reprisals also underwent
a transformation. Several authorities came forward to announce
that reprisals might be resorted to not only in the case of a
denial of justice as traditionally understood, but for all claims of
international character whether private or State in origin. 3 And
finally the practice of private reprisals disappeared altogether.
Reprisals could now be exercised only by the State, and their justification
lay not merely in a denial of justice in the classical sense of a
refusal to grant justice to alien subjects, but any international
delinquency, whether the basis of the claim was pecuniary or political,
private or public.4
1 Two early examples, Amald de Santo Martino v. Tht Castilians (1316), and John
de Waghen v. The Lcydenese, are found in Clark, op. cit., pp. 705~708.
2 It is e::i.'tremely interesting to observe how political history has repeated itself here.
In those countries where government was centralized (such as ancient Rome and medieval
Fran1.:e), the doctrine, of reprisals never attained great importance. Similarly, the
practice of reprisals disappeared as the modern State emerged with its concentration
of governmental power. itself capable of providing adequate redress.
3 See Wolff, <>p. cit., §§ 586, 589, 591, 594, 596, and especially at § 603 : " Quamvis vero
etiam contingat, ut repressaliis utatur Rector civitati,;, seu Gens ipsa in causa pttblica .•• "
Italics ours. Compare Gentili, De Ju-re Belli Libri Ttes (1598), Bk. II, chap. I, pp. 215·
216. " .•. the goods of all subjects are liable in respect of debts owing by a civil society,
or its head, whether owing primarily on their own account or because they have made
themselves liable by not enforcing the del>t of another. " Zoucbe, op. cit., Pt. II,
Section VI, 7.
In the Silesian Loans case, a Report of the British Committee declared: " The law
of nations, founded upon justice, equity, conscience, and the reason of the thing, and
confirmed by long usage, does not allow of reprisals, except in case of violent injuries
directed or supported by the State, and justice absolutely denied in re minime dubia
by all the tribunals, and afterwards by the Prince." Quoted in The Zamora, (1916)
2 A. C., p. 77 at p. 94; s. c.; Evans, Cases, p. 619; Dickinson, Casesr p. 45; De Martens,
II Causes Celebres, p. 53.
~ Compare Spiegel, op. cit., pp. 7-1.-75.
Annex 127
FOUNDA'l'I0:--1S OF DENIAL OF JUSTICE 6.1
Thus was there generated a theory of State sovereignty which
has lived to plague us in its diverse forms, but which permitted
the attribution of all the acts of its organs to the State, and vested
the exercise of the protective function in the " person " of the
latter.1 The necessary corollary of this new-born conception of
autonomy, power and exclusive jurisdiction was an external responsibility
for wrongs suffered by aliens within the territorial State.
This responsibility, of course, implied a certain duty of protection, a
duty which has been enlarged by almost imperceptible degrees and
which has come to comprise, among other things, a fundamental
obligation of providing adequate means of judicial redress.
Such was the new cadre into which the concept of denial of justice,
an ancient conditio sine qud non for private letters of reprisals,
came to he placed. No longer the excuse for violence except as the
ullima ratio, denial of justice finally came to occupy the niche of a
relatively common international delict the commission of which
engenders what in legal theory is designated as the responsibility
of the State. 2
From the foregoing brief survey of its classical origins, it is clear
that the concept of denial of justice is one of customary international
law and is not dependent for its validity upon treaty stipulation.
Although many modem treaties expressly or impliedly recognize that
diplomatic interposition is justified by a denial of justice 3 - in
which respect they are similar to early clauses renouncing the right
of reprisal except for the same cause - these instruments are not
creative of the right, but merely declaratory in nature. As a matter
of fact, the present fundamental right of each State to extend its
"diplomatic protection" on behalf of injured nationals is nothing
else than a modern version of the classical right of princes to grant
letters of reprisais. And just as an injured subject was required to
seek redress from the local authorities before obtaining permission
from his prince to resort to force, so today foreign nationals must
have recourse to and exhaust the remedies available under the local
1 De Visscher, in 52 Recueil des Cours (1935), pp. 373-874.
2 De Visscher, foe. cit.
3 See, for example, Article 18, par. 2 of the treaty between .Mexico and Germany,
December 5, 1882, (9 De Martens, Nouveau Recueil General, 2nd Series, p. 474) and
similar agreements cited in the notes on pp. 491-493, infra. Compare Article 4 of the
Arbitration Treaty between Denmark and Italy of Dec. 16, 1905, U.S. Foreign llelations
(1900), Part I. pp. 528-529.
Annex 127
64 DENIAL OF JUSTICE
law before diplomatic interposition is proper.1 There is, however,
this important difference: In the classical system, the sole justification
for an exercise of reprisals was a denial of justice. In its modern
counterpart, denial of justice is by no means the sole ground of diplomatic
interposition on behalf of foreigners despite a popular view
in some quarters to the contrary. 2 This must be distinctly understood
if confusion as to the functions of the local remedy rule is
to be avoided.3
In its elementary features, however the theory of private reprisals
contained the germ of our present system of limitations which
operates between domestic and international law in the matter
of judicial protection. Local courts and princes enjoyed the
opportunity of rectifying wrongs committed within their domains ;
and only where just demands were refused did local supremacy
yield. Denial of justice was then the signal which removed the
bars to an international action - the proof, just as today, that local
justice was deficient. Until that proof was obtained forceful measures
were banned. In other words, it seems that each State was
to be regarded as capable of rendering justice until the contrary
was shown, which is substantially the principle that obtains today.
This aspect of the interrelationship between the two legal systems
inevitably brings up one of the most delicate questions of modem
international practice; viz., that of the finality of domestic judgments.
To the solution of this problem as well the classical system has not
failed to contribute. It is clear that the denial of justice which
justified reprisals comprised not only refusals to judge or unwar•
ranted delays equivalent to a refusal; but even an unjust judgment,
or a judgment " plainly against right ". da Legnano,4 Grotius,6
Zouche,6 Bynkershoek,7 Wolff,8 and Vattel 9 are among the eminent
1 See infra, p. 79. 2 See infra, p. 99.
'See infra, pp. 100, 107. and chap. XV. 4 Supra, p. 55.
'De Ju·re Belli ac Pacis, Loe. cit. 6 Op. cit., p. 33.
7
" An old law of Amsterdam specifies that if any citizen of that place suffers wrong
outside the domains of the State, whether by force or by an unjust judgment ... reparation
shall be made to the injured person by order of the court, by a process against such goods
and persons of the foreign sovereign as may be found in the tel'ritory of Amsterdam.
"The law uses the phrase' by an unjust judgment', so that it does not suffice merely
to pronounce judgment, it must also be just; ... To be sure, treaties of nations usually
say only that letters are not to be given except when • justice has been refused ', but the
plaintiff will readily interpret it as a refusal even when a decision is given, but in an unfair
way, and we may add that sovereigns will generally interpret all unfavourable decisions
Annex 127
FOUNDATIONS OF DENIAL OF JUSTICE 65
early publicists who recognized that adjudication by the local courts
was not conclusive of the justice of a decree for purposes of reprisals.1
The historical background of denial of justice does not, therefore,
bear out the contention - habitually shared by younger and weaker
States of the New World 2 - that the law of nations is indifferent
to the substance of a decree rendered in causes involving aliens.
Finally, a word on the original terminology of denial of justice:
For a long time it denoted a specific type of delinquency, i. e. the
failure to grant justice to foreign subjects, and more precisely,
the failure to redress a prior wrong. But not all classical writers
employed it in that restricted sense. As the basis for reprisals
broadened so as to allow their use in cases of injuries to the State
itself as well as to individuals, " denial of justice " was· enlarged
and gradually appears to have acquired the wide character of a
general international wrong. This is strikingly evidenced by the
works of Wolff. In several passages he plainly regards denial of
justice as the equivalent of an unrepaired violation of State right.
Thus he speaks of a nation refusing " to do justice lo another nation
or lo its citizens " 3 and later holds it to be allowable " to take the
goods of any citizen of another nation if it denies justice lo us or lo
as unfair. It is apparent then, that what this law of Amsterdam provides for is actually
reprisal. " Bynkershoek, op. cit., pp. 135-136.
8 " A right is denied you if you cannot acquire by a judgment that which is your own or
ought to be made your own. It is pJain that this can be brought about .in two ways,
either if the judge refuses to hear you, or if he gives an unjust decision. It is in accord
with civil law that a decision made by a judge ought to be considered just, if either within
a certain time it should not be appea1ed against to a higher court, or should have been
affirmed by it. Therefore, since civil laws bind only members of the state in which they
are promulgated, among nations the decision of a judge whether properly or improperly
made is not considered correct and just, even if it shall have been confirmed by a higher
court. If then in a matter not doubtful a decision has been made plainly contrary to law,
the decision is considered a nullity, and therefore the right denied is properly taken. ,,
Wolff, Jus Gentium Methodo Sci.mtifica Pertractaturn, §587 (italics ours).
t Op. cit., § 350.
1 Additional early recognition of this accepted principle was furnished in Alexander
Hamilton's argument to extend the authority of the Federal Judiciary to all cases involving
the" peace of the confederacy ,,: "As the rlenial or perversion of justice by the sen•
tences of courts, as well as in any other manner, is with reason classed among the just
causes of war, it will follow that the federal judiciary ought to have cognizance of
all causes in which the citizens of other countries are concerned. " The Federalist,
(Lodge Ed., 1888), p. 495.
11 See infra, pp. 120 and ff.
3 Wolff, op. cit., § 586. Italics ours.
5
Annex 127
66 DENIAL OF JUSTICE
our citizens. " 1 Even Wolff's great adapter, Vattel, to whom we
are so deeply indebted for his valuable contribution to the theory
of denial of justice, does not seem to regard it exclusively as a judicial
tort. For example, he declares :
" Reprisals are resorted to between Nation and Nation in order to obtain
justice when it can not otherwise be had. If a Nation has taken possession
of what belongs to another, if it refuses to pay a debt, to repair an injury,
or to make due satisfaction, the latter may seize something belonging to
that nation ...
" Reprisals may be resorted to against a Nation not only for acts of the
sovereign but also for those of his subjects ...
" Likewise the sovereign demands justice, or resorts to reprisals, not
only in his own interest but in that of his subjects, whom he must protect
and whose cause is the cause of the Nation ...
" We have said ... that reprisals should only be resorted to when justice
can not be otherwise obtained. Now, justice may be refused in several
ways: (I) By an outright denial of justice or by a refusal lo hear lhe
complaints of a Stale or of its subjects ...
" If it should happen that a prince, having cause to complain of some
injustice or some acts in the nature of hostilities, and not finding his adversary
disposed to give him satisfaction, determines, before coming to an
open rupture, to use reprisals in an attempt to force him to listen to the
voice of justice ... " 2
This extreme usage (which is only paralleled by the modern tendency
in some quarters to view denial of justice as the equivalent of all
international injuries to foreigners 3) enjoys a temporary vogue until
the development of a sounder theory of responsibility and the concept
of " international illegality " renders it superfluous. It then resumes
a meaning which is more consonant with its traditional position in
the law of reprisals.4
1 Ibid. , § 591. Italic& ours. See also §§ 592 and 594, and especially 589, where he
states that "there is no place for reprisals, except when another people does an injury
to us or to our citizens, and, when asked, is unwilling to repair it within a proper time, that
is, without delay. "
2 Vattel, Droit des Gens, §§ 342, 347, 350, 354. Italics ours.
3 See pp. 97 and ff., infra.
4
" Originally denial of justice was a condition precedent of (reprisals] ... denial of justice
being the refusal to accord justice to a subject of a foreign state. Although these proceedings
invariably concerned the money and goods of individuals, it must not be forgotten
that the primary consideration was not the pecuniary claim, hut the denial of justice:
for centuries it was the one and only condition precedent of reprisals. Gradually, however,
reprisals became detached from denial of justice and they came to be the consequence of
international delicts in general, regardless of whether such delicts had been committed
against individuals or others. The detachment of reprisals from denial of justice having
taken place, the definition of denial of justice gradually contracted, and the term
came to mean again what it had originally meant: a failure of protective justice .•. "
Spiegel, op. cit., p. 77.
Annex 127
FOUNDATIONS OF DENIAL OF JUSTICE 67
Although during the greater part of its early history denial of
justice seems plainly to designate judicial wrongs, it had not acquired
the full significance which is now attributed to it. On the whole,
its classical connotation, while still adequate to cover the commonest
category of cases which arise in practice, 1 is here of little importance
except to justify a caution as to the evolution in the meaning of the
term. As the rules of international law governing the legal and
judicial status of aliens enlarged to meet the needs of a rapidly
expanding international intercourse, the term itself broadened so
as to include "not only the unjust refusal on the part of judicial
authorities to repair an initial wrong, but also every failure of the
judicial function which involves the violation of an international
duty. " 2
This change in terminology may have contributed to the confusion
which now reigns in treatises, diplomatic correspondence and arbitral
awards on the meaning of the term itself. It is therefore worth mentioning
at this point in order to dispel any possible suggestion that
the classical significance of the term conforms in all respects to its
modern scope.
2. Present Scope and Function of Denial of Justice. - Today the
concept of denial of justice no longer designates merely a failure
on the part of domestic tribunals to repair injuries inflicted by the
private subjects of a foreign Prince ; it regularly functions also as
an international guaranty of the alien's legal status and capacity
before domestic jurisdictions. Let us look more closely at this
modern scope of the term.
Over and over again it has been affirmed in the literature of
international law that a State is under a duty to administer justice
with respect to foreigners; 3 or, as it is more commonly stated>
1 " ••• dans la majorite c.les cas, le deni de justice est reste ce qu'il fut des l'origine : le
refus de reparation d'un tort dont l'Etat n'assume pas la responsabilite directe, .. "
De Visscher, 52 Recueil des Cours (1935), 374.
2 Loe. cit. Translation ours.
8 This duty has been dearly recognized in recent attempts to codify the Jaw. See for
example the discussion of Bases 5 and 6 at the Hague Conference of 1930. Minutes,
passi,m, and the resolutions voted by the lnstitut de Droit International in 1927, Articles 5
and 6, Annuaire (1927), vol. 3, pp. 330 and ff. Cf. also Research in International Law,
Draft Convention, Art. 9 anrl comment, 23 A. J. I. L. (1929), supp., p. 173.
" Le principe que justice est due aux etrangers aussi bien qu'aux ressortissants est un
principe de droit nature! que le droit positif ne saurait meconnaitre, et qu'il reconnait,
ainsi qu'en temoignent des conventions internationales ... " Dupuis, in 32 Recueil des
Cours (1930), p. 198. For an early recognition that even apart. from treaty, sovereigns
are bound to see that justic:e is done to foreigners, see Bynkershoek, op. cit., Book I,
ch. XXIV.
Annex 127
68 DENIAL OF JUSTICE
to allow them access to court to def end " their " rights.1 First
of all, it might be inquired why any such rule exists.
It is clear that unless foreigners are to be regarded as endowed
with certain substantive legal rights, there would be no place for the
argument that they must also be given the procedural right of
invoking local instrumentalities of justice to defend these rights.
The ultimate end of a litigation is the establishment of some substantive
right, the recognition of a particular legal capacity. Thus
the whole concept of denial of justice is really auxiliary in character,
being ancillary to another, more fundamental conception: viz.,
the postulate that aliens enjoy certain substantive rights which every
State must respect. Deprive them of these rights, and there is
no material upon which an international denial of justice can work.
Infringe these rights in the process of judicial " protection ,, , and
the doctrine of denial of justice permits reparation' of the wrong.
Since this is so, it is of some importance to know the extent of the
rights of aliens under general or customary international law.
Denial of justice may arise not only from some defect in the administration
of justice with respect to the rights secured by national
law; but as well from judicial action violative of an international
rule, whether or not that rule has found its way into municipal
legislation. And regardless of the procedural propriety of judicial
activity, one must always look behind it to determine whether there
has been compliance with the substantive international rules relative
to the treatment of aliens. 2
Speaking in a very general way and apart from a number of
common exceptions, it can be said that aliens regularly enjoy, in
so far as concerns their civil capacity, a status which is not appreciably
different from that which is given to nationals throughout civilized
1 Thus, for example, Cavaglieri, Corso di Diritto Internazionale, loc. cit.; Hoijer, in
R. D. I. (1980), vol. 5, p. 117; Fauchille, Traiie, vol. I,p. 533; Ansaldi, Studi di Diritto
Internazionale, p. 436; De Visscher, in II Bibliotheca Visseriana, p. 00.
2 We may add in passing that this aspect of denial of justice seems never to have occupied
the attention of publicists. Pioneers in this field have been concerned almost exclusively
with ascertaining the kind of organization and administration of the local law that is
required by the law of nations. They have apparently not considered the substantive
international rights of aliens - which must ~ observed by the courts as well as by other
organs of the State - as germane to the probJem of denial of justice. 'l'rtte, they have
recognized that judicial activity violative of an international rule engages the State's
respo!lsibility ; but there has been no express recognition that the substantive rights
of ahcns are relevant to a study of those rules whose violation entails responsibility
as for a denial of justice. For an exposition of our position in this matter, sec
pp. 497 ff .• infra.
Annex 127
FOUNDATIONS OF DENIAL OF JUSTICE 69
communities of the world. Indeed, a number of States have
expressly consecrated the principle of equality between aliens and
citizens either in their laws or in their constitutions.1 Thus far
have we progressed from the not distant past when an individual
ventured into strange lands at his peril.2
However, the law of nations does not permit the determination
of the alien's legal status to rest entirely with the State of sojourn.3
Were that the case, it would be possible for a single member of the
international society to wipe out all his rights, to subject him to all
kinds of arbitrary or uncivilized treatment merely by enacting
appropriate legislation or executing the necessary decrees. As
a result the rule requiring judicial protection to be granted to aliens
would become an empty gesture, susceptible of complete devitalization
at the will of any given State.
This is the principal objection to those theories which maintain
that denial of justice consists simply in a refusal to provide judicial
protection for the rights which the national law recognizes in
aliens.4 Denial of justice being a concept of international law,
it is not within the province of any system of domestic law to
emasculate that concept by abolishing the rights which it is designed
to safeguard. The rules which have been spun from the loom of
international intercourse leave no doubt on the matter. Not
satisfied with an empty procedural protection for rights which
might be dissolved at the pleasure of the territorial State, the law
of nations has forged a chain of substantive rights in aliens which
the territorial State cannot break with impunity.
Now the practical value of these rights is directly conditioned
upon,. the legal means available for their vindication. Thus the
f acuity of prosecuting an action before the local courts is an unescapable
and essential coro1lary of the alien's substantive rights
without which they would be hopelessly incomplete and meaningless.
s Once the existence of these rights is recognized, it must
1 Thus, for example, Article 16 of the Argentine Constitution and corresponding Article
of the Constitution of Panama. Compare Article 11 of the Code Civil Suisse; Article 27
of the Spanish Civil Code; Articles 82 and 33 of the Peruvian Civil Code and Title 8,
Sec. 41 of the U. S. Code.
2 Cf. Redslob, Histoire des Grands Principes ... , pp. 67 and ff.
8 Bourquin, in 85 Recueil des Cours (1931), p. 164.
• Sec infra, pp. 123-4.
6 Verdross in 37 Recueil des Cours (1931), pp. 8824383; Scelle, Pree-is: vol. 2, pp. 91-98.
Annex 127
70 DENIAL OF JUSTICE
follow that the State is bound to furnish protection for them through
the methods normally adopted in the .international community
for this purpose. The mechanism chosen by modern States to
dispense justice is a judiciary invested with competence over various
civil causes and charged at the same time with aiding in the enforcement
of the criminal law. To this mechanism, the foreigner
must be allowed access.
On these matters there is little disagreement. The main differences
which are noticeable pertain, f irsl, to the extent of the State's
obI'igation so far as concerns the procedural protection forthcoming
from its judiciary - i. e., whether a State is under any further
international obligation than to grant foreigners mere access to its
tribunals ; and second, to the quantum of substantive rights which
must be observed in aliens under the general rules of international
law: in other words, the principles which local courts cannot ignore
in pronouncing judgment on the merits without engaging the
responsibility of their State.
At first blush, these things may appear to be totally distinct.
Yet reference to the underlying purpose of denial of justice will
show them to be more closely interrelated than might be thought.
We have already indicated that the right of an alien to invoke the
jurisdiction of domestic law courts - a right which has been confirmed
by a multitude of treaties of commerce and establishment 1 -
is no mere favor flowing from the benevolence of the territorial
State ; but rather the logical and necessary consequence of the
rules guaranteeing to aliens a more or less determinate legal status. 2
By and large, it is true, the study of denial of justice in practice
will be found to consist in a study of the circumstances in which
the procedural protection furnished by a given judicial mechanism
has been found inadequate. But in its essential character, the
doctrine of denial of justice is simply a technique for assuring
observance of the alien's substantive rights; in a word, a sort of
sanction for the rules of international law which regulate the
treatment of foreigners.
3. Types of Situations in which an Alien may encounter Denial
of Justice. - A few concrete observations on the more practical
t See the treaties referred to in note, p. 123 infra.
z Scelle, op. cit., p. 91.
Annex 127
DEFINITION OF DENIAL OF JUSTICE (confirmed) 133
3. Denial of Justice as a Procedural Concept in Theories admitting
Responsibility for the Substance of a Judgment.
(a) Expansion of the Procedural Formula to Cases of Insufficient
Guarantees. - It is with attempts to extend denial of justice beyond
its customary slriclo sensu usage that the first serious obstacles to
agreement among publicists are detectable. We have already indicated
that the question of excessive delays offered the occasion for
disagreement in at least one quarter ; 1 but the suggestion that
denial of justice also involves the failure of tribunals to provide those
guarantees which are generally deemed necessary for the proper
administration of justice - whether those guarantees are to be
sought in the organization of the courts in the laws governing
procedure, or in the existence of circumstances assuring regular
operation of judicial proceedings-gives considerable emphasis to the
doctrinal rupture.
Nevertheless, the resolutions which were voted by the Inslitut
de Droit International at its Lausanne Session in 1927, included an
article extending the term to just such a situation:
" Art. 5. The State is responsible on the score of denial of justice :
( 1) When the tribunals necessary to assure protection to foreigners do
not exist or do not function.
(2) When the tribunals are not accessible to foreigners.
(3) When the tribunals do not offer the guarantees which are indispensable
lo the proper administration of justice. " 2
The first two paragraphs of this definition are clear enough. The
second 'is really a necessary implication of the first, inasmuch as it
is obvious that where the tribunals are not accessible to foreigners
it is of no importance whether they exist or function at all. But
paragraph (3) is nothing if not vague, and for that reason alone
could be expected to encounter objection. What are the " guarantees
" which are indispensable to the " proper " administration
of justice ? Is the reference to an organization of the judiciary
of the substantive laws of the country, or by refusing to comply with the provisions of a
law in accordanoe with the interpretation given by the courts, or by refusing to execute
a final sentence, or by amn('Sty laws protecting crimes to the prejudice of the interests of
aliens, or lastly BY ANY OTHER MEANS WHICH DENY REDRESS TO THE
INJURED ALIEN WHO HAS SUFFERED IN HIS INTERESTS." Op. cit., p. 9.
1 Supra, pp. 120-121.
.z Annuairie {1927), vol. 3, p. 381; and 23 A. J. I. L. (1929), Supp., Appendix No. 3,
p. 228, foe the translation contained in the text.
Annex 127
134 DENIAL OF JUSTICE
which 1s so defective as to be generally condemned, or may the
defective operation of proceedings in a single case suffice to bring
paragraph (3) into play ?
These questions are answered to some extent by the comments of
the Institute's rapporteur, M. Strisower, who pointed out that paragraph
(3) was not concerned with the failure of judicial guarantees
in a particular case, but that it was aimed rather at the existence of
general deficient circumstances " such as the exercise of the judicial
function under pressure of the populace " 1
• An earlier draft of
what subsequently evolved into the article under discussion had
declared denial of justice to exist
" .. .lorsque ces trihunaux, d'apres Ieur constitution ou d'apres une experience
sure, n'offrent pas les garanties indispensables pour obtenir une
bonne justice. " 2
This phraseology was apparently meant to dispense with the necessity
of resorting to the local courts under the circumstances envisaged,
a grave exception which will a.lways meet a storm of protest.
Indeed, it is difficult at best to maintain that the existence of defective
courts in and of itself constitutes a denial of justice toward foreigners
of which complaint can be raised in the absence of a judicial determination
infringing their rights. 3
A contrary opinion, however, was expressed by Sir Cecil Hurst
during the discussion to which paragraph (3) gave rise. He argued
that a defective organization of the judiciary was a denial of justice
by the state as distinguished from decisions emanating from the courts
which might be so considered ;4 but this viewpoint must be rejected
in the light of prevailing theory. The "absence of guarantees"
is not in itself generally thought of as constituting a denial of justice,
and for this reason the use of the term to describe that hypothesis
was not a happy one.5 So much for the terminological aspects of
the question.
1 Annuaire, op. cit., vol. 3, p. 121.
2 Ibid., vol. 1, p. 476-477. "Les tribunaux qui n'offrent pas les garanties indispensables
ne sont pas des juridictions aptes a rendre justice et l'Etat qui n'a que de pareils tribunaux
oe remplit pas son devoir de rendre justice, sans qu'il soit necessaire de provoquer une
sentence et d'entrer dans son examen ... " Ibid., p. 477.
3 Compare De Visscher, 52 Recueil des Cours, (1935), pp. 417-418.
4 Annuaire, op. cit., p. 129.
5 See Seferiades, ibid., p . 121.
Annex 127
DEFINITION OF DENIAL OF JUSTICE (conlinued) 135
Fundamentally, to characterize the non-existence of indispensable
guarantees as a denial of justice is simply to restate an a priori
assumption - (an assumption capable of verification by international
practice) - the principle that so far as aliens are concerned, every
State is duly bound to possess a judicial organization guaranteeing
that lawsuits will be impartially and competently adjudicated, after
a sincere investigation of the truth. The procedural apparatus which
is set up must, it is claimed, provide the alien plaintiff or defendant
with effective means for the pursuit of his rights.
All this might seem to be obvious ; and yet the proposition is by
no means universally accepted. One primary difficulty is that the
formula of " guarantees " is inherently as abstract as that of " denial
of justice " itself. For, beyond certain generally admitted safeguards,
there is no single way of determining in advance whether
such guarantees are furnished by a particular court or not.
Acceptance of the "guarantees " doctrine, however, has for its
excellent effect to render more convincing the argument that equality
of judicial protection as between alien and national must be insisted
upon. It then becomes sound to say that, given a member of the
international community which has furnished such guarantees, the
laws in force for the vindication of rights before local courts must
be available to no less extent and without discrimination than they
are to subjects; and, conversely, it then becomes true, at least so
far as the conduct of local proceedings is concerned, that the alien
must be conte;nt with a status of equality. The whole theory finally
boils down to the proposition that what the international legal order
demands is a minimum degree of judicial organization, on a scale
comparable with that found in a normally constituted State. This,
of course, seems in its entirety to approximate something like an
international standard, which alone explains why it has met with
opposition.
A small, but ardent, minority of publicists contends that the
question of adequate guarantees for the administration of justice
is not something which is a proper subject for investigation by a
foreign State. Thus the Rumanian delegate to the Hague Codification
Conference protested that the inclusion of such a provision
in Basis No. u drawn up by the Preparatory Committee would grant
the right to investigate the way in which justice was organized and
administered within a given State:
Annex 127
136 DENIAL OF JUSTICE
" ... can other States be allowed the right to criticise and investigate?
If so, where would the investigation stop? Would it be a formal investigation
? Could it be said that justice was badly administered because
there were three judges instead of five or on account of the particular
method of appointing the judges? Would it be an investigation into
a judge's capacity and honesty?... But what countries can claim to be
the sole depositories of a form of civilisation which entitles them to
enquire whether justice is well or badly organized? " 1
This line of argument, it may be added, has not at all bothered
several subsequent writers who have accepted the conclusions of
the lnslitut as embodying sound principles of public law.2
Article 5, which incorporated the expanded definition of denial
of justice adhered to at Lausanne, again introduces one into the annoying
maze of terminological complications. The Institute, while
defining denial of justice in the manner we have set forth above,
by no means limited responsibility for the conduct of the judiciary
to those sole cases. It did not escape the rapporteur that despite
an adequately organized judiciary a judgment might be rendered
which was so unsound and unjust - whether due to xenophobia
or other reasons - as to provoke a diplomatic claim. For this type
of case, Article 6 of the resolutions adopted posited responsibility
on a different count: that of "manquement manifesle a la justice". 3
Strisower's avanl-projel had employed the terms "defi a la justice",
a phrase which is sometimes encountered in doctrinal utterances, 4
but this was unacceptable to his colleagues because it conjured up
an emotional image and was too vague.5
" Defi " or " manquement manifeste ", - for practical and theoretical
purposes they are one and the same, and quite as objectionable
as the expression " manifest injustice " of Anglo-Saxon writings."
1 Minutes, p. 114. Compare the remarks of the Spanish delegate, ibid., p. 118.
2 'fhus, for example, Dumas, in R. D. I. L. C. (1929), p. 292; (hut who considers the
Institute's formula as incomplete); Cavaglicri, Corso di Diritto Internazionale, pp. 515-
516; Comments of Dr. Cantero-Herrera an Denial of Justice, op. cit., p. 9. Compare Kaufmann,
in 54 Recueil des Coms (1935), p. 432, and c\c(•ioly, op. cit., ~ 416.
3 Art. 6 : " L'Etat est egalement responsable si la procedure ou le jugement constituent
un manquement rnanif cstc a la justice, notamment s'ils ont ete inspires par la malveillance
a l'egard des etrangers, comn,e tels, OU comme ressortissants d'un Etat determine. ,,
Annuaire, op. cit., vol. III, p. 323; and see also Eagleton, Respon.<rimlity, Appendix, p. 265.
• As in Dumas, op. cit., p. 29-t.: '' ... il peut y avoir deli a la justiC:e si la decision rendoe
est t'n contradiction avec les principes essentiels du droit des gens."
6 Annuaire, op. cit., Yol. IIT, p. mo.
• See p. 326, infra.
Annex 127
DEFINITION OF DENIAL OF JUSTICE (continued) 137
By setting up a distinct category of complaint based upon improperconduct
of the trial or the substance of the judgment rendered, the
lnslilul and those jurists who insist on preserving denial of justice
in a procedural shell have done nothing to advance the evolution
of a clear theory of responsibility in this matter. On the contrary,.
they have aided and abetted a usage which dates as far back as
Vattel and which reflects a well-established tendency on the part
of publicists to limit the meaning of the term denial of justice in
accordance with the precepts of municipal law.
Far different is this type of restriction, it is true, from that imposed
in the Guerrero report. Here the sole effect is one of terminology;.
the substantive extent of responsibility is not thereby modified.
Nevertheless, it would , have been less confusing had the term
"denial of justice " not been used at all, (thus avoiding the pointed
criticism that the Institute's resolutions afforded just another sample
of the diverse ways in which the term may be understood - " quoad
formam" and "quo· d maleriam" 1), rather than to consecrate an
unsound terminological distinction between the form and the substance
of judicial proceedings.
To sum up : the admission that a State is responsible when its
tribunals do not offer the guarantees which are indispensable to the
proper administration of justice is a desirable recognition that
the State does not fulfil its international obligations merely by
according the alien free access to court on the same footing as.
nationals. The Institute's resolutions are sound in impliedly denying
that the bare minimum of protection required by international law
is a status of equality. If this were true, it would clearly follow
that a State could, of its own accord, change that status as it pleasedr
thus limiting its international obligations so long as nationals and
aliens were treated indiscriminately. From this it would again
fo1low that any kind of inadequate or corrupt institution might
be set up to receive complaints, invested with judicial functionsr
provided with incompetent judges, and administered under outrageous
procedure, without objection from States whose nationals
suffer injury thereby. This, of course, is an insufficient compliancewith
the duty of protection, as the Institute's resolution attests.
1 Ruegger und Burckha.rdt, Die volkerrechlliche Verantwortlichkeit des Staates, p. 27.
Annex 127
138 DENIAL OF JUSTICE
We have treated Article 5 of the Lausanne resolutions in some detail
because of the expanded definition of denial of justice which it
.contains. However, the principles adhered to by the Institute in
Articles 5 and 6 really fall under the heading of those theories which,
while conserving denial of justice as a procedural concept, nevertheless
admit that international responsibility may be engaged by additional
.acts of judicial wrongfulness toward foreigners. It is these theories
which we now propose to investigate.
( b) Additional Theories dislingu-ishing between " Denial of
Justice" and other Judicial Illegalities to Aliens. - The origin of
the conceptions to be considered under this heading can be traced
directly to Vattel 1 who, while drawing a distinction between a
~, denial of justice properly so-called", (that is, a "refusal to hear"
the complaints of aliens or " to admit them to establish their rights
before the ordinary tribunals "), on the one hand, and a " manifestly
unjust and partial decision ", on the other, clearly admitted that
responsibility existed in both classes of cases. 2 This terminological
differentiation between a procedural refusal of court access and
a substantively unjust judgment has been reproduced not only by
subsequent writers, 3 but by arbitral tribunals as well. In the
Medina case, Commissioner Bertinatti listed as the grounds justifying
a government in extending its protection to citizens abroad, " a
formal denial of justice, the dishon.esty or prevaricalio of a judge
legally proved, ' the case of torture, the denial of the means of
defense at the trial, or gross injustice, in re minime dubia '. " -1 A
1 It is uncertain as to just how much importance should be attached in this connection
to the work of da Legnano, who preceded Vattel by some four centuries. In his Tractatus
De Bello, De Reprresaliis et De Duello, da Legoano, referring to the conditions justifying
reprisals, employed the terms" commission of injustice or the denial of justiC'e " ( Qualiter
constabit de iniuslitia fact a, vel ea denegata ?) in one passage, and in another "neglect to
do justice " as contradistinguished from the doing of" injustice by pronouncing an unjust
judgment. " Op. C'it., ch. CLVI, p. 826, and ch. CL, p. 323, resp.
Several other publicists prior to Vattel had distinguished between the procedural refusal
or neglect to administer justice, and the failure to do justice or pronouncement of an
unjust judgment. See Gentili, De Jure Belli Libri Tres, Book I, ch. XXI, p. 101;
Grotius, De Ju,-e Belli ac Palis, Book Ill, ch. II, V, p. 627. Compare Zouche, op. cit.,
Pt. I, Sect.ion VI, 2, p. 33; and Wolff, Ju~ Gentium Nfrthodo Scientifica Pertractatum,
§ 587, p. 301.
2 Le Dmit des Gens, Book 11, § 850, p. 536.
3 For a few examples see Diena, Diritto lnternazionale, p. 528 ; Phillimore, II Commentaries
(3rd ed.), p . 5; "'estlake, Chapter.~, p. 104. And see the reference to Fauchille and
De Visscher, infra, p. 141. Compare Cavaglieri, Corso, pp. 515-516.
'United States v . Costa Rica, under the convention of July 2, 1860, Moore, A.rbi•
irations, p. 2317.
Annex 127
DEFINITION OF DENIAL OF JUSTICE (continued) 139
more celebrated example in international jurisprudence is the
Colesworlh and Powell case, which has frequently been cited as summarizing
the estal:5lished rules on the question of State responsibility
for acts of the judiciary which inflict damage upon aliens. It was
there stated in the opinion that
" nations are responsible to those of strangers... firsl, for denials of
justice ; and second, for acts of notorious injustice. The first occurs when
the tribunals refuse to hear the complaint, or to decide upon petitions of
complainant, made according to the established forms of procedure, or
when undue and inexcusable delays occur in rendering judgment. The
second takes place when sentences are pronounced and executed in open
violation of law, or which are manifestly iniquitous. " 1
Among modern writers on international law, Anzilotti stands out
as the best-known advocate of this view, just as he is also admitted
to have been one of the very first to present a scientific analysis of
that specific international wrong popularly referred to as "denial
of justice", but concerning which few precise ideas had been previously
entertained. His was at least the merit of perceiving its
proper position with respect to the whole picture of international
responsibility arising out of damages suffered by foreigners.
For Anzilotti and the adherents of his theory, " denial of justice "
consisted in the State's refusal to grant to an alien the protection
of his rights by appropriate court action.2 The fundamental pillar
upon which he constructed the conclusion that this is violative of
the law of nations was the so-called " personality " doctrine. That
doctrine originally sprang from the universalist conception of
international law developed by Victoria, Suarez and Grotius. Under
it, the State was considered as but a member of humanity in its
entirety, and from this was disengaged the principle - based upon
the Christian idea of universal brotherhood - that every State
must respect the human personality in all men, even in aliens. 3
i Great Britain v. Colombia, under the convention of Dec. 14, 1872, ibid., p. 2083.
'fhe relatively recent Chattin case (United States v. Mexico, Opinions, p. 422 at pp. 428-
429), professed to see in the passage quoted support for what we choose to designate as
the " local redress variant " of denial of justice. For a criticism of this position see infra,
p. 157.
2 "La Responsabilite Internationale des Etats ... in 13 R. G.D. I. P. (1906), p. 5 at p. 21.
See also Tosti, in La Riuista di Diritt<> Internazionale (UH5), p. 401; and De Visscher,
in II Bibliotheca Visseriana, p. 99. Compare Cavaglieri, in 26 Recueil des Cours (1929),
pp. 548-549.
3 Verdross, in 37 ibid. (]931), p. 348.
Annex 127
140 DENIAL OF JUSTICE
Thus, for Anzilotti, denial of justice involved a disregard (meconnaissance)
for the individual's legal personality, the primary manifestation
of which
"consiste precisement dans la possibilite de demander et d'obtenir la
protection legale contre toute violation du droit subj ectif. Le refus de cette
protection equivaut, en definitive, a autoriser Ies autres membres de la
societe a ne pas respecter la personnalite de l'individu, a l'offenser impunement
dans sa personne et ses biens, en un mot a le traiter en chose plutot
qu'en sujet de droits ... " 1
In other words, in virtue of the individual's quality as a legal
personality there must be made available to him while abroad the
means essential for the effective pursuit of his rights. Failure to
provide such means is the equivalent of denying his capacity as a
"personality" and therefore contrary to the State's international
obligations.
On the other hand, the impression might be gathered from some
of the early passages in Anzilotti's work that he considered the duties
of the State to be satisfied as soon as foreigners were put in a position
to have recourse to the local tribunals. For, it is said: " Le resultat
du proces ne saurait etre jamais considere comme un deni de justice,
car il est au contraire precisement la reconnaissance et la consecration
du droit. " 2 One is reminded of the Guerrero thesis upon
noting the statement that "un Etat n'est tenu de garantir aux
etrangers que la reguliere prononciation du jugement, et on doit
necessairement admettre que l'arret rendu est conforme au droit. " 3
And yet despite phrases of this kind which might seem to restrict
unduly the obligations of the State, it is clear from subsequent
passages that Anzilotti did not regard the domestic judgment as
absolutely shielded from international review. Thus he declares
that a violation of international law might well be produced every
time there existed a contradiction between the judgment rendered
and some rule of the law of nations, whether this contradiction be
due to the laws applied, to their interpretation by the courts, or
to the failure to promulgate laws required to protect the foreigner
adequately in his rights. In this hypothesis, however, Anzilotti
denied that responsibility was as for a " denial of justice ":
1 Anzilotti, loc. cit.
2 Op. cit., p. 22. 3 Loe. cit.
Annex 127
DEFINITION OF DENIAL OF JUSTICE (conlirmed) 141
" .. .la responsabilite encourue ne provient pas d'un deni de justice,
mais d'une autre violation quelconque du droit des gens. En somme, le
deni de justice n'est pas autre chose que le refus du libre acces aux tribunaux:
ceux-ci ont toujours le droit de declarer le recours admissible ou inadmissible
; au cas d'un jugement deniant action, ou portant quelque autre
disposition, ii y aura seulement a voir s'il ne constitue pas une violation
speciale du droit international. " 1
These views represent the position subsequently taken by Fauchille,
who warns that the "denial of justice " must not be confused
with the mal juge, or judgments violative of law.2 De Visscher
may likewise be cited as having once followed in the footsteps of
the great Italian jurist with his declaration that where responsibility
becomes engaged as a result of judgments pronounced by a State's
tribunals, it is not a case of "justice denied", for "justice" has in
such cases actually been " rendered ".3
Such casuistic quibbling confuses the real issue involved by
sticking two different labels on things which are identical in their
practical effects-viz., the deprivation of judicial protection to which
aliens are entitled. The words "justice rendered " in the passage
quoted can signify nothing else than the functioning of the judicial
process - the act of operating the State's judicial mechanism. So
construed, the consequence of De Visscher's view, as of others
examined in this group, is simply to erect an arbitrary distinction
between judicial acts or omissions which are allegedly different in
kind, but which are actually indistinguishable from the viewpoint
of the legal obligation governing the judicial protection of foreigners.
Generally rejected today by theorists is the confusing attitude
which Anzilotti voiced that once the machinery of justice has been
made available to the alien, a decision of any kind, handed down
by a competent court, barricades the way to objection that a "denial
of justice " has occurred. It is then, according to this view,
immaterial whether the court decides to entertain the action, or
to dismiss it for whatever reason. A decision that the court lacked
jurisdiction or that the alien's case was unfounded in law must
1 Op. cit., p. 23.
2 " ••• un Etat ne saurait etre responsable pour motif de deni de justice des decisions
-contra ircs au droit international, rendues au fond ou sur la recevabilite par ses magistrats.
" FauchilJe, Traite, vol. I , pp. 533-534.
a De Visscher, op. cit. , p. 100, (translation ours). And compare Podesta Costa,
op. cit., pp. 256-257. Professor De Visscher has since altered his position. For a brief
expClsition of his present view, see infra, pp. 162-163.
Annex 127
142 DENIAL OF JUSTICE
not be regarded as a denial of justice, which could be alleged only
where there had been no adjudication at all. But Anzilotti was
careful to acknowledge the existence of responsibility where the
declaration d' irrecevabilite was due to the absence of laws necessary
to endow a court with the required power, ( such as the failure to
provide a remedy), or to their misapplication by the judge. The
very decision then could, as we have seen, be a violation of international
law, " but not a denial of justice properly speaking ".1
This refined distinction - which is rarely taken in modern
practice - seems to have been the logical result of an unnecessary
attempt to limit the scope of the term to its significance in municipal
law. In the present realities of international life, it is a complete
anachronism. In so far as the alien's legal means of protection are
concerned, a decision refusing to entertain an action is the absolute
equivalent of a refusal of court access altogether. The denial of
justice however is none the less real because the judge's decision
was necessitated by a legislative act or omission. Where such a
decision is compelled by the law's express or implied refusal of any
action to aliens, and to them alone, it is quite evident that the
expression of judicial will contained in the judgment is a denial of
justice, which though conceived in legislation, is born of the court's
pronouncement.
It must, however, be clearly emphasized that the consequences
of Anzilotti>s theory as to denial of justice are solely terminological
and in no way !imitative of the extent of the State's responsibility
for acts of the judiciary. His treatment of "manifestly unjust
judgments", i.e., decisions whose content discloses that judicial
protection has been internationally deficient, leaves no doubt on this
score. Although maintaining the proposition that a State is not
hound to keep close vigil over the manner in which its judicial
appointees fulfil their mission - or, therefore, to answer for the
1 Anzilotti, op. cit., pp. 28-24. Compare Tosti, op. cit., p. 405: " ... se tale possibilita
di ricorso vien meno per assoluta mancanza di norme che diano agli stranieri libero accesso
ai tribunali, o per effeto di norme contrarie al diritto internazionale, che sanzionino un
inumano e inciviletrattamento degli stranieri, la mancataemanazione di norme o l'emanazione
di norrne e,-ontrarie al diritto internaziouale costituisce, a parer nostro, anch'essa,
un aspetto del diniego di giustizia dal punto di vista del diritto internazionale. " To the
same effect: Strisower, during discussions of the Institut de Droit International, over
what subsequently became Art. 5, Annuafre, op. cit., p. 122, and Hoijer, R. D. I., vol. V
(1980), p. 119.
"La declaration d'irrecevabilite est un deni de justice consomme par le jugement
d'irrecevabilite. " Moussa, op. cit., p. 446.
Annex 127
DEFINITION OF DENIAL OF JUSTICE (continued) 143
decisions they may render - he quickly qualifies this by insisting
that they perform their functions in good faith. The judgment
must not be a mask to conceal evasion of international duties:
" .. .lorsque, dans un cas donne, la justice a fait absolument defaut,
lorsque, de toute evidence, les juges ont obei a des influences etrangeres
a leur mission et que les passions politiques l'ont emporte sur les raisons
du droit, on peut dire qu'il n'y a plus eu que I'apparence de la protection
judiciaire voulue par le droit international; et, alors, ['obligation de l' Elat
n'a pas ele accomplie, parce que, sous l'e:i:lerieur d'une justice rendue, il n'y
a eu, en fail, qu'une justice deniee. " 1
The conclusions reached seem definitely to throw overboard the
earlier emphasis upon denial of justice as a procedural formula, forit
is said:
" Le deni de justice, en definitive, ne resulte done pas seulement, selon
nous, du refus d'acces devant Jes tribunaux, mais ressort aussi d'un manqueevident
de justice dans la maniere dont le proces a ete conduit et le jugement
prononce. 11 2
Thus Anzilotti arrives at a sound and clear conclusion on the
scope of denial of justice. The only vice of his somewhat inconsistent
development arises from its original insistence upon denial of justice
asaproceduralconcept. This,inturn, wasprobablyduetothe author's
conviction that, as a general rule, removing the barrier to judicial
access suffices in practice to safeguard the alien's rights.
• * •
Just how solid is the theoretical basis for this entire doctrine ?
The authorities who profess to follow it 3 adduce the " personality '~
conception we have described above to demonstrate that denial
of justice is considered as an act contrary to international law.
1 Op. cit., p. 25.
2 Jbid., p. 25. And compare his later work (Cours de Droit International, p. 482), in
which he recognizes that the refusal of access or its equivalent is not the only form which
a denial of justice might assume.
De Visscher, however, held for some time to the opinion that a dishonest judgment
must be termed something else than a denial of justice. (Loe. cit.). Cf. Fitzmaurice,
op. cit., p. 101.
3 Among these may be cited Fauchille, Traite, I, p. 533; De Visscher, Notes sur la
R.esponsabilitt Internationale des Etata, in R. D. I. L. C. (1927), vol. 8, 3rd series, p. 250.
who considers that aH denial of justice comes back to the negation of the human
personality. Thus also Huber, Rapports, p. 53; s. c. Annual Digest (1923-24)>
pp. 158-159.
Annex 127
144 DENIAL OF JUSTICE
Lest it be thought that their argument is akin to the " fundamental
rights of man " credendum, it should be quickly pointed out that no
such problematical basis for the duty of judicial protection was
involved in Anzilotti's reasoning. He conceived of the duty to
respect the individual's legal personality as one running from State
to State - -a duty imposed by international law upon each member
-of the family of nations to treat the other's citizens in a determinate
manner. The orthodox distinction of the individual as object and
not as subject of rights and duties in the international system was
thus followed.1
A few writers have left no room for the possible objection that the
"personality" postulate suggests a "natural " or "fundamental
rights of man " dogma. Tosti, who refined several points in Anzilotti's
approach so as to eliminate its few confusing aspects, reduced
.the whole notion of denial of justice to a definition in terms of the
.rules guaranteeing recognition of the alien's personality:
" Ogni atto .. .il quale ... abbia per risultato, non riparabile secondo ii
diritto interno, di privare lo straniero della protezione legale - quale che
sia l'organo statuale da cui l'atto emani - deve logicamente rientrare nel
-concetto del diniego di giustizia se questo e inteso come l'espressione comprensiva
di ogni concepibile violazione della norma giuridica inlernazionale
-che garanlisce il riconoscimenlo della personalild dello slraniero. " 2
Unless such care is taken, confusion may be produced as to the nature
of the right violated. For example, sometimes it is laid down that
.a subject abroad is invested with certain rights such as the right
to respect for his legal capacity; the rights of man : liberty of
conscience, of worship, and of person; and the like. From this it
is deduced that the State must render justice to him.~ Here it is
the rights of the individual and not of his State which are emphasized.
-Opinions of this kind fail to indicate the precise source of the duties
1 On the orthodox theory as to the place of the individual in the international community,
see: Triepel, Volkerrecht und Landesrecht, pp. 20 ff.; and Anzilotti, Teoria,
p. 116, note 1. On the subjects of rights and obligations in international law in general,
consult: Politis, Les Nouvell,es Tendances du Dr<rit lntemational Public, ch. II; Cavaglieri,
I sogetti del diritto internazionale, in Rivista di Diritto InternazionaJe (1925); Verdross,
Verfassung, p. 156; and especially Bourquin in 35 Recueil des Cours (1931), pp. 40 and ff.
2 Tosti, op. C'it., p. 404. (Italics ours). Tosti's article has been surprisingly overlooked
by writers dealing with the problem of denial of justice.
s Bonde, Traite Elementaire du Droit lnternat-ional Public, p . 303.
Annex 127
DEFINITION OF DENIAL OF JUSTICE (continued) 145
owed toward foreigners, whether the positive law of nations, the
domestic law of the territorial State, or some natural law philosophy.
* • •
At this point in our work, a transition is perceptible from the
view which confines denial of justice within definite, procedural
bounds to the view which extends it to various other failures in the
judicial function. The gap between that school of thought which
denies responsibility for the substantive qualities of a judgment
at all odds, and the school now investigated, is one of tremendous
legal significance; that between almost all the others is mainly one
of terminology.
It will he observed that the ultimate effects of the theories considered
in this section do not substantially differ from those examined
in the section on " guarantees ". There, although the term " denial
of justice " was used with somewhat broader effect, responsibility
for "manifest injustice " or "defi a la justice" was admitted under
a separate heading. Here, after what promised to be a tenacious
insistence upon denial of justice as a narrow, procedural idea, we
find a complete assimilation of denial of justice striclo sensu and
manifestly unjust judgments under the convenient mantle of the
" personality doctrine ".
Perhaps the chief merit of this doctrine as expounded by Anzilotti
and Tosti is that it serves to disclose that the technical confinement
of denial of justice to a bare refusal of court access or its equivalent
is excessive and unrealistic. If this is to be its force, what labels
are to be attached to the various acts of judicial misconduct that may
be produced between the opening of the proceedings and the rendering
of final judgment? And why is a denial of the right to get a cause
examined to be considered as any different from a refusal to recognize
the just right which that cause represents? Or any different from
abusive delays, improper refusal to hear the alien's testimony,
failure to give sufficient notification to permit preparation of a defense
and similar wrongs occurring prior to the unjust judgment?
There i s absolutely no basis in international law for confining the
term " denial of justice " to its significance in municipal codes ; 1
1 "The question remains ... whether the restricted interpretation according to which
denial of justice is merely a refusal of protective justice becomes likewise [i.e., together
with the broad view] superfluous. 'l'his question must be answered in the affirmative
10
Annex 127
146 DENIAL OF JUSTICE
and there is cogent reason for giving it a scope sufficiently large to
cover every case in which there has been a failure by lhe Slate lo comply
with its duly of providing aliens with a judicial proleclion for their
righls that is adequate nol only in organization but in actual operation.
B. DENIAL OF JUSTICE AS INDICATING DEFECTS
IN THE JUDICIAL PROCESS
(Wrongs by Courts as distinguished from other Organs
charged with administering Justice).
Article 9 of the texts adopted by the Third Committee at the
Hague Codification Conference in 1930 declared the State to be
responsible if damage sustained by a foreigner resulted from the
fact:
"(I) That a judicial decision, which is not subject to appeal, is clearly
incompatible with the international obligations of the State;
(2) That, in a manner incompatible with the said obligations, the foreigner
has been hindered by the judicial authorities in the exercise of his right
to pursue judicial remedies or has encountered in the proceedings unjustifiable
obstacles or delays implying a refusal to do justice. " 1
Although these paragraphs do not expressly mention the phrase in
so many words, they incorporate in substance what may be loosely
designated as the "judiciary" conception of denial of justice, or
that conception which omits wrongs by any organs of the State
other than courts or bodies acting in purely judicial capacity.
As used by many writers, this sense of the term covers not only the
refusal or failure on the part of a court to allow an alien litigant
to present his case, hut culpable delay and other improprieties during
the conduct of the proceedings, as well as the pronouncement of
a judgment which is substantively defective.2 The conception,
it will be noted, is limited to acts or omissions of courts, and does not
relate to activities performed by other organs charged with administering
justice such as, for example, the arrest and imprisonment
since, in course of time, other kinds of denial of justice besides the refusal to hear a case
have become international delicts. Today the one and only important consideration
is which particular kind of a failure to accord justice is in issue in a given case. " Spiegel.,
op. cit., p. 79.
1 Minutes, Annex IV, p. 236 at p. 237.
a See Fitzmaurice, op. cit., pp. 102-108 ; and Lissitzyn, op. cit., p. 684.
Annex 127
CHAPTER X\'
DELEGATED CONTROL :
THE " LOCAL REMEDY " RULE
AND ITS RELATION TO DENIAL OF JUSTICE
t. General Considerations. - We have seen that during the era
of private reprisals grants of letters to individuals wronged abroad
were made contingent upon proof of an absolute denial of justice
by the foreign courts and afterwards by the Prince himself.1 Translated
into the language of modern international law, this meant
simply that no violent outbreaks against another State were to be
tolerated as long as the injured subject had not sought redress of
grievances before the local courts and had not there been denied
justice. That a wrong had been done to a foreign citizen was not
regarded, in itself, as giving licence to his sovereign to take up the
matter as long as there had been no application for reparation through
the same channels as were open to nationals.
This dassical doctrine under which complaints as to private
injuries must be submitted to the local courts was early emphasized
in the report of a Committee set up by Great Britain in 1752 to
determine the propriety of certain acts of reprisal in the Silesian
Loans case:
" If ... a subject of the King of Prussia is injured by, or has a demand
upon any person here, he ought to apply to your Majesty's Courts of justice,
which are equally open and indifferent to foreigner or native; so, vice versa,
if a subject here is wronged by a person living in the dominions of His
Prussian Majesty, he ought to apply for redress in the King of Prussia's
Courts of justice. " 2
1 See pp. 53 ff., supra.
2 Quoted in The Zamora (1916) 2 A.C. 77; s. c.: Evans, Cases, p. 619 at. p. 623;
Dic:-kinson, Cases, p . . 1,5 at p. 49; II De Martens, Causes Celebres, p. 52.
Annex 127
404 DENIAL OF JUSTICE
Thus, already at an epoch when the institution of private reprisals
had entered upon its dying phases there is found authoritative
confirmation of a principle which enjoys a position of capital impor.:.
tance in connection with the State's duty of responding in damages
for violation of the rules governing the treatment of aliens. That
principle, whose roots ramify throughout the old practice limiting
reprisals,1 may be formulated in the following terms: No international
claim for indemnity may be presented on behalf of an aggrieved
national as long as there remains at the disposal of the individual
in question effective means for obtaining reparation in the State in
which the wrong was committed. In other words, a complaint
based upon denial of justice or any other wrong to an alien will be
rejected by the international tribunal seised of the matter where it
appears that the claimant has failed to exhausl his local remedies.
Now before proceeding any further with our investigations it
should be distinctly understood that this rule has no application in
those cases where the claim is based upon violation of a right which
is proper to the State itself, and is not one advanced on behalf of a
given national. For example, let us suppose that an ambassador
has been arrested and imprisoned in the country of his post, or has
been the victim of a murderous attack under circumstances leaving
no doubt as to the creation of international responsibility. Here
there is no duty incumbent upon his State to stay its hand until
after the ambassador has vainly sought redress from the local courts,
or until after the result of penal proceedings against the malefactor
has been made known. It may present its demands immejiately.
The same principle governs all complaints by an injured State as
to the violation of treaties concluded by it with the territorial State.2
1 Stowell, International Law, p. 162, note. "For recourse must first be had to the
ordinary remedies, and only if they fail to this remedy, [i.e., reprisals]; and this should
be ascertained by a judge who is asked to declare reprisals. " da Legnano, Tractatu~
de Bello, de Repraesaliis et de Duello (1860), ch. XXIV. " ... before resorting to
reprisals, justice must have been asked for in vain, or at least there must have been
good ~eason to think that the demand for it would be ineffectual." Vattel, The Law
of Natwns, Bk. II, Ch. XVIII, § 343.
8 " ... la regle de l'epuisement des voies de recours internes ne s'applique pas aux cas
ou le droit international exige des Etats une attitude determinee d'ordre convcntionnel
et qui depasse !'obligation d'une bonne application de la loi locale. Lorsqu'on est en
presence d'une telle obligation internationale concretisee, qui veut exclure toute attitude
contraire, sauf s'il s'agit d'une demande en indemnite, Ia regle de l'epuisement ne
joue pas, meme lorsque l'at.titude contraire a cette obligation a pris corps dans le
jugement d'un tribunal ou que le droit interne prevoit un recours, judiciaire ou autre,
contre un acte administratif delictueux." Kaufmann, in 54 Recueil des Cours (1935),
p. 455.
Annex 127
THE " LOCAL REMEDY ,, RULE 405
There are, of course, many instances in which an act violating the
provisions of an international convention may produce at one and
the same time damage to some private individual. Such will be
the case whenever the treaty in question is one regulating the status
and protection of foreigners. All claims presented in lheir behalf
must be subordinated to a preliminary exhaustion by them of the
remedies available under the local law; but this item aside, the
fundamental question between the two States with respect to the
violation of the treaty may be posed forthwith. 1 On the other hand,
the local remedy rule will always apply when the point at issue is
the non-observance of those rules of the law of nations by which
a State is obligated to afford protection to private aliens who are not
vested with the status of organs of the foreign State.
It will be recalled that when an alien has suffered injury as a result
of the conduct of State agents which violates international law, the
State is responsible. This, however, does not mean that diplomatic
interposition is immediately rendered proper, or that the claim,
becomes receivable before an international jurisdiction.2 Just
as in the case of wrongs inflicted by a private person whatever
domestic remedies are available must first be pursued. The necessity
of a resort to these remedies is not, then, dependent upon whether
the actor was or was not an official of the territorial State; but they
must, as a general proposition, be invoked in all cases where an alien
has sustained injury.
It will also be remembered that the State is not, in principle,
responsible for the wrongful acts of mere private individuals where
it is not guilty of a failure to exercise due diligence to prevent such
acts. Its obligations in this hypothesis are limited to affording the
injured party an action against the wrong-doer and to refraining
1 De Visscher, op. cit., p . 425. Accord: Case concerning certain German interests in
PoUsh Upper Sil.e!Jia, Judgment No. 7, Publications, Series A, No. 7, pp. 83-84.
" Nations are not amenable to the courts of other countries and consequently the ru1e
of exhaustion of local remedies of necessity cannot apply to cases of direct responsibility
of one state to another for its own acts. The nnwarranted refusal of the Government
of Egypt, acting through its lawfully constituted agents, to recognize the treaty rights
of the United States constituted a direct wrong against the Government of the United
States as well as against Salem. Such direct national injuries cannot, by the very nature
of things, be subjected to adjudication by the municipal courts of the offending
State. " Brief of the United States in the Salem claim, Arbitration Series No. 4 (2),
pp. 93-94.
2 Cf. Eagleton, llespcmsibility, p. 98.
Annex 127
406 DENIAL OF JUSTICE
from the commission of a denial of justice in conjunction therewith.1
Relief must first be sought in the local courts, regardless of the source
of the wrong. From this flows the interesting consequence that
the initial responsibility which is born of the internationally illegal
conduct of State functionaries may be discharged completely if
local remedies function as required; whereas, on the other hand.
a new, original responsibility will be incurred if the proceedings
against private persons terminate in a denial of justice.2
The relationship between the local remedy rule and the State'f<
luty of providing an adequate judicial protection for the rights of
aliens is so close as to promote continuous confusion. One noteworthy
example of this is the statement frequently encountered
that a State's responsibility for injuries suITered by aliens can only
be put in question after local means of redress have been exhausted
and a denial of justice established, i. c., a failure on the part of local
eourts to administer justice according to reasonable standards of
civilized law and procedure. The fallacy of this proposition resides
in the fact that where the act or omission inflicting injury l!POn
an alien consists in an anterior violation of international law, the
,-;ubsequent operation of local remedies must terminate in adequate
reparation for the damage he has suffered or an international claim will
~lilt lie. It is not necessary that judicial irregularities tantamount
lo a technical denial of justice should be superadded to the original
violation of international law, for, in the case now being considered
it suffices for the purpose of transposing the conflict to the international
plane that the remedies provided by the delinquent State
have been exhausted without adequate redress, in the form of compensation
or otherwise.3 Here the sole function of the local remedy rule
1 A different rule, of course, applies where the injmi('s l'eceived at the hands of
private persons are a result of the State's failure to accord proper police protection or
to exercise due diligence to prevent the wrongful acts. This constitutes an international
illegality, responsibility for which is independent of the question of denial of
justice.
2 Eagleton, loc. cit., and pages following.
3 But cf. supra, p. 78, note. " ... Ja sentence comme tellc ne suffit a eliminer cette
responsabilite. Acte purement interne, elle est e11 soi sans pertinence aucune au regard
du droit international. lei, par consequence, c'est le resultat de l'instance, c'est-a-dire,
la reparation accordee qui est !'element decisif. La responsabilite interna.tionale ne
prend done pas fin par cela seu1 que l'Etat mis en cause est a l'abri du grief de deni de
justice; elle nc prend fin que si l'Etat dont le ressortissant a obtenu la sentence consent
a considerer comme satisfaisantes les reparations accordees et renonce, en consequence,
a introduire ou a poursuivre une reclamation." De Visschcr, op. cit., pp. 430-431.
Annex 127
THE " LOCAL REMEDY " RULE 407
id to give the territorial State an opportunity of appreciating and
discharging a responsibility that has already been engaged.
On the other hand, neither wrongs traceable to mere individuals
acting in a private capacity, nor the illegal conduct of State agents
which dves not violate the law of nations, can ever be invoked as
the basis for an international claim merely on the ground that
domestic remedies have been exhausted without redress of grievances.
1 The sole possible ground of complaint in these circumstances
will be proof that a denial of justice has been encountered. Responsibility
in the first class of claims referred to must have its
foundation in an internationally unlawful act committed by some
State official; that in the present class must be based upon a denial
of justice. In the first class, the exhaustion of local remedies is
indispensable to create the conditions under which the claim will
be receivable before an international forum, but it is not creative of
the grounds upon which such a claim is founded. In the second case,
the denial of justice creates at once the grounds and the conditions
of the claim's presentation.
Thus the rule really enjoys both a procedural and a quasi-substantive
status. With respect to original violations of international law
prior to and unconnected with the administration of justice, it is
a procedural condition precedent to diplomatic interposition. With
respect to wrongful acts by private persons, it enjoys the substantive
faculty of creating responsibility where local remedies function
defectively; i.e., in the case of inadequate judicial protection. But,
of itself, the fact that local remedies have been unsuccessfully
exhausted is without international significance.2 From this standpoint
again the functions of the rule are purely procedural.
In short, to say that local remedies must be exhausted and a
technical denial of juslice 3 established before an international action
hecomes permissible, is an erroneous statement of the law. It
ignores the fundamental distinction between claims arising out of
original breaches of international law other than failures in administering
justice, and claims founded solely on a defective operation of
the judicial function and in which no international wrong was
Compare Friedmann, in R. D. I. L. C. (1933), p. 321.
i Cf. the statements of the American and Colombian delegates at the Hague Codification
Conference, -7l-1inutes, pp. 74 and 78, resp.
3 Cf. sur,a, pp. 77-78, note.
Annex 127
408 DENIAL OF JUSTICE
committed prior to the operation of local remedies. The scope of
the rule is vastly different in these two hypotheses, as we will further
attempt to demonstrate somewhat later.1 But in both of them, it
bears repeating, local remedies must have been exhausted for a claim
to be receivable before an international jurisdiction.2
From what has just been said, one may easily see that a plenary
power is delegated to every State over the international consequences
of unlawful acts produced within its territory to the detriment of
aliens. By appropriately redressing violations of international law
with respect to the person or property of foreigners, the State asserts
a check upon its answerability to other States, discharges the responsibility
that has already been engaged, and thus parries, as it were,
by anticipation, a reaction from abroad. Here its own domestic
tribunals perform, in a very real sense, an international function in
executing the first phase of the series of measures contemplated and
provided by international law for the realization of its rules.
Likewise, in the case of purely individual wrongs, (breaches of
contracts, torts, and crimes committed under circumstances not
creating responsibility), the local remedy rule again permits the
exercise of a control which is delegated to the municipal system,
by international law. This control may not be quite so apparent
since it is ordinarily present only in the opportunity which superior
tribunals are given to supervise and correct the conduct of inferior
courts or to arrest the harmful effects of an inadequate judicial
protection by lower courts, thus again barring the road to a diplomatic
claim. But the function of the judicature even in this case
may still be properly designated as an international one,3 since it
is instituted in virtue uf a norm ui the law of nations by which the
rights of aliens must be given judicial protection. The municipal
tribunals which here assure the execution of international law simply
act as its provisional organs, thus furnishing an example of that
duality of competence which Scelle has called the law of "dedoublemenl
f onclionnel.4 " Otherwise expressed, the present technica]
construction of international law ( or rather the present form of its
1 See infra, pp. 4t.6 ff.
2 The statement is sometimes encountered that there is no need to exhaust local remedies
if the source of the damage was a violation of some rule of international law.
(Thus Brusa, rapporteur, in Annuaire de l'Institut de Droit International, 1898, pp. 127-
128). This point of view is both theoretically unsound and contrary to international
practi('e.
3 Compare Scelle-, II Precis, p. 95. 4 Ibid., p. 92.
Annex 127
THE " LOCAL REMEDY 11 RULE 409
administration) is such as to entrust the execution of its rules, normally,
to the various States.1 Thus, every act of a jurisdictional
nature which controls an international legal situation on the basis
of some rule of international law must be an international legal act.
This conclusion is easily reached when the function of the courts is
detached from its formal organization within a given municipal
system and examined according to the substantive nature of the act
performed rather than according to the particular character of the
agent which performed it.2
Contributing to the confusion in this field is the fact that not
infrequently a claim in behalf of a given national will have a double
foundation, that is, an anterior or initial violation of international
law, followed by a failure of the State to provide an adequate judicial
protection - in other words, a technical denial of justice.3 This
failure is not to be considered as essential to the inception of responsibility,
as its sole function is to confirm the State's responsibility
for an earlier act of misconduct. Since either or both of these acts
create the grounds upon which an international claim may be predicated,
the whole of the circumstances giving rise to the invasion of
the alien's interests is one to which claimant governments find it
convenient to attach the single label " denial of justice. " 4 The
inevitable result of this misdescription is not only to confuse the
proper scope of denial of justice in other cases where an initial
violation of international law is not followed by defects in the operation
of judicial machinery, but also to obscure at the same time
the function of the local remedy rule.
Denial of juslice may proceed from any one of a number of possible
deficiencies in the proceedings themselves, as we have seen,6 or even,
according to a view widely held, from the absence of all remedy
whatsoever in those cases where international law requires a remedy
to be given.6 It is obvious, therefore, that the question of whether
there has been a denial of justice is closely bound up with the question
1 Bourquin, in 35 Recueil des Cours (1981), pp. 81 ff.
·. Scclle, "La Doctrine de Leon Duguit ", Arch. de phil. dzt droit, 1932, p. 93.
3 See supra, pp. 77-78.
• For a recent example of this, see the Note of His Majesty's Government to the
Mexican Government, April 8, 1938, regarding the E:,.,propriation of Oil Properties.
Crrrespondence, Mcx-ico No. I, p. 3.
5 See supra, Chaps. VIII-XIV, inc .
.: A number of authorities (cf., for example, Fitzmaurice, XIII British Yearbook, 1932,
pp.105-106; Beckett, 39 Recucil des Cours, 1932, p. 163; De Visscher, op. cit., pp. 395,
424; and especially, Art. IX of the Project on ResponsiuiHty of States submitted by the
Executive Committee of the American Institute of International Law. Seventh
Annex 127
410 DENIAL OF JUSTICE
of the kind of remedies available lo the alien and the manner in
which they have been administered. Moreover a resort to these ~
remedies is implied in the very concept of denial of justice in so far
as it applies to the vindication of rights before domestic courts.
Nevertheless, one must constantly remember that responsibility
arising out of denial of justice is purely a subslanlive matter; the
local remedy rule is intrinsically a procedural principle and in its own
right has nothing to do with the existence of responsibility although,
in the course of exhausting remedies, the alien may meet with the
phenomenon of a denial of justice.1 The rule, in sum, is an imperative
which interacts with the concept of denial of justice to form
the basis of most international claims.
Confirming the necessity of exhausting local remedies ( as an
indiepensable preliminary to dipJomatic interposition) 1s a
,,,.-ealth of authority in the writings of publicists, 2 in diplomatic
practice 3 and in the decisions of international tribunals. Insistence
International Conference of American States, Document.~ for the Use of Delegate$, p. 20)
c-onsider the absence of remedies in such cases (whether due to the nonexistence of courts
or to the State's failure to provide appropriate remedial procedure) as itself amounting
to a denial of justice. The necessary consequence of this view is that acts or omissions
of the legislature may by themselves constitute denials of justice. For motives already
nlluded to, we are unable to accept this position. Cf. pp. 108-9, 113, 134, 155, 228-229,
310, supra.
1 "Quant a l'epuisement des recours, s'il est une condition de la recevabilite de la
reclamation, jamais ii n'en est le fondement. Quand on formule cette regle, c'est sur le
terrain procedural que l'on se place; on ne prejuge aucunement ni Ia question de savoir
quel est l'acte generateur de la responsabilite ni celle du moment ou la responsabilite
prend naissance. Les frequentes confusions qui s'elevent ici tiennent au fait que, dans
nornbre de cas ou precisement le deni de justice entre en jeu, ii s'etablit une coincidence
dans le temps entre la naissance de la responsabilite et l'epuisement des recours."
De Yisscher, op. cit, p. 427.
2 Borchard, Diplomatic Protection, p. 332; idem, in Zeitschrift ... , op. cit., pp. 239-242;
Eagleton, Responsihility, Chapter V.; Hyde, I International Law, p. 505; Foulke, 2 International
Law, p. 28; Liszt, Das Volkerrecht, p. 28:J; Kaufmann, in 54 Rectteil des Cours
(1935), pp. 454-456; De Yisscher, 52 ibid. (1935), pp. 421 ff.; Seferiades. 51 ibid. (1935),
pp. GG-68; Salvio Ii, 46 ibid. (1933), p. 122; Witenburg, 41 ihid. (1982), pp. 50 ff.; Beckett,
39 ibid. (1932), p. 163; Deccnciere-Ferrandiere, Responsabilite, p. 115; Huber, Rapparts,
p. 187; Strisower's draft, Art. 17, Ammaire (1927), vol. I, pp. 492 ff.; Borchard's Report,
ibid. (1931), vol. I, p. 424; Durand, in R. G.D. I. P. (1031), p. 705; Friedmann, in R. D.
I. L. C. (1933), pp. 319 ff.; Anzilotti, Cours, p. 482 (inference); and cf. the Memarandum
of Gaston Jeze in 47 Revue du Droit Public (1930), pp. 558 ff.
8 Cf. General Calonge to Sir J. Crampton, Fell. 16, 1867 (Great Britain), Fontes Juris
Gen.tium, Series B, Sec. 1, 'fomus 1, par. 750; Mr. Gresham to Mr. Osborn, May 17, 1898,
VI Moore, Digest, p. 669; Mr. Day to M:ssrs. Lauterbach et al., in Waller's case, Feb. 27,
1886, ibid., p. 671; Mr. Marcy to Chevalier Bertinatti, Dec. 1, 1856; ibid., pp. 659-660;
Mr. Jefferson to Mr. King, Dec. 7, 1793; ibid., pp. 651-052; Mr. Clay to Mr. Tacon, Feb. 5,
1828; imd., p. 652; Mr. Clay to Mr. Maheuil, l\lar. 28, 1827, loc. cit.; l\lr. McLain to
l\lr. Shain, May 28, 1834, ibid., p. 658; Mr. Buchanan to .Mr. Larrabee, Mar. 9, 1846,
loc. cit.; Mr. Davis to Mr.1.'aylor, Oct. 20, 1871, ibid., p. 661; and the Comentarios of
Dr. Eugenio Cantero-Herrera, counsel for Cuba before the Permanent Commission of
\Vashington in the dispute between Cuba and Peru, pp. 5-7.
Annex 127
THE "LOCAL REMEDY 11 RULE 4 ll
npon the rule has become a cardinal point in the policy of the
United States with reference to the espousal of claims, as is attested
by paragraph 8 of the General Instructions to claimants issued by
t.he Department of State:
" 8. Responsibility of Foreign Government. - Unless the responsibility
for the loss or injury for which reparation is claimed is attributable to a
fl)reign Government, efforts of the Government of the United States on
behalf of the claimants will be futile. It is essential, therefore, for claimants
to show that the responsibility for their losses or injuries is attributable
to an official branch, or agency of a foreign Government. If any legal
remedies for obtaining satisfaction for, or selllemenl of, the losses or injuries
sustained are afforded by a fo,-eign Government before its judicial or adminisfralive
tribunals, boards, or officials, interested persons must ordinarily have
recourse lo and exhaust proceedings before such tribunals, boards, or officials
as may be established or designated by the foreign Government and open to
claimants for the adjustmenl of their claims and disputes. After such remedies
have been exhausted wilh the result of a denial of juslice allribulable lo an
official, branch, or agency of a foreign Government, or have been found inapplicable
or inadequate, or if no legal remedies are afforded, the Department
of State will examine the claim with a view to ascertaining whether, in all
the circumstances of the case and considering the international relations of
t.he United States, the claim may properly he presented for settlement
through diplomatic channels, by arbitration or otherwise ... " 1
Numerous bilateral treaties concluded between Latin-American
and European States expressly incorporated the rule that the legal
means of redress available under the local law must be exhausted
before an international claim becomes proper.2 Moreover, the
principle has been adopted in several recent treaties of compulsory
arbitration. Article 31 of the General Act for the Pacific Settlement
of International Disputes provides that "in the case of a dispute the
occasion of which, according to the municipal law of one of the parties,
falls within the competence of its judicial or administrative aul
horities, the party in question may object to the matter in dispu tc
1 Taken from " Application for tlte support of Claims against Forl'ign Governments"
of Oct. I, 1934. Italics ours.
" His l\Injesty's Government attaches the utmost importance to the maintenance of
the rule that, when an effective mode of redress is open to individuals in the cow-ts of
a civilized country by which they can obtain adequate satisfaction for any invasion of
their rights, recourse must be had to the mode of redress so provided before there is
any scope for diplomatic action." Note of the English Foreign Secretary, April 24,
1016, 10 A. J. I. L. (spec. supp.), p. 139.
~ See infra, pp. •192, 4!J4.
Annex 127
412 DENIAL OF JUSTICE
being submitted for settlement by the different methods laid down
in the present General Act until a decision with final efiect has been
pronounced, within a reasonable time, by the competent authority." 1
A similar provision is found in Article 3 of the Arbitration Conventions
attached to the Locarno Pact.2
Some writers have denied that a failure to comply with the local
remedy rule may be laid hold of as a plea in abatement to dismiss
actions prematurely brought before international tribunals. Tenekides,
for example1 • preLends Lhat as soon as a State intervenes in
order to protect its injured national, there is a sort of "novation "
by which the controversy sheds its private nature and puts on the
attributes of an international conflict.3 Ralston similarly asserts
that the rule is " for the most part a rule of convenience of foreign
offices in determining whether or not they shall interpose to secure
speciaJ relief for their nationals rather than an imperative rule
controlling the jurisdiction of international tribunals. " 4 This
conclusion he considers as compelled by the frequency with which
awards have held the arbitral body to have been substituted for
national forums which otherwise might have been competent in the
matter.
It is true that arbitrators have often dispensed with the require~
ment of exhausting local remedies on the reasoning that by the
very submission of the case to arbitration the two governments had
• League of Nations Treaty Series, No. 2123, Vol. 93, p. 343, at p. 357. See also
25 A. J. I. L. (1931), supp. p. 210. Compare Article 3 of the Treaty of Arbitration
and Conciliation of Dec. 3, 1921, between Germany and Switzerland: " Pour les questions
qui ... relevent de la competence d'autorites judiciaires ... la Partie defenderesst:
peut exiger ... que le litige ne soit soumis a la sentence arlntrale qu'apres qu'une decision
definitive ait ete rendue par ces autorites judiciaiTes et ... que le Tribunal soit saisi dans
Jes six mois au plus tard a compter de cette decision. II en sera autrement s'il s'agit d'un
cas de deni de justice et si les instances de recours prevues par la loi. ont ete saisies. "
(Italics ours). League of Nations, Arbitrauon and Security (C.34.M.74.1926.V), p. 107.
2 llnd., pp. 169, 173, 177, 182; and see also Le Fur et Chklaver, Recueil des Textes,
pp. 867 ff.
3 60 R. D. I. L . C. (1933), p. 514, at pp. 531-582. His position is criticised by
Seferiades in 51 Recueil des Cours (1935), pp. 66 ff.
Similarly, in the Finnish Ships case, Finland argued that resort to local remedies
was unnecessary where a State had previous1y taken up the claim. Memorandum No. 2,
8; Decision, p. 9.
'International Arbitration from Athens to Locarno, pp. 60-61. And compare his
later work (Supplement, p. 38) which (inaccurately) cites a dictum of Arbitrator Bagge in
the Finnish Ships case (Decision, p. 26) as support for the proposition that "particularly
as against agents of the government, failure to resort to local courts has in a number
of cases been held no bar before the international tribunaJ. "
Annex 127
THE " LOCAL REMEDY " RULE 413
meant to waive the rule.1 Thus, in the Lacaze case, the decision,
after admitting that indemnity should have been claimed from the
ordinary courts in an action against the State agent responsible,
asserted that the respondent Government assumed the burden of
reparation by consenting to diplomatic negotiations and arbitration.2
But the great weight of authority definitely does not support the
Ralston thesis, and a multitude of claims have been rejected because
of the claimant's failure to pursue local means of redress.3 In the
1 Research in International Law, Responsibility of States, op. cit., p. 154. Among
such cases are: Davy, Ralston, Venezuelan Arbitrations, p. 410; Selwyn, ibid., p. 822;
1-oung, Smith &: Co., Moore, Arbitrations, p. 3147; (claim based on unlawful seizure
of property held to give standing before commission though no resort was had to local
remedies).
Much, of course, will depend upon the wording of the compromis. The Jay Treaty
was interpreted as giving the Anglo-American Board competence over claims although
remedies had not been exhausted, where it appeared that the claimants were not guilty
of Iaches. See the Sally case, Moore, Arbitrations, pp. 3101-3Il9.
The United States-Mexican Claims Commission of 1868 produced a series of decisions
which are absolutely irreconcilable in their treatment of the local remedies rule.
Among those cited by Dunn as holding the failure to exhaust local remedies no bar to
jurisdiction are the Belden, Turner, Renshaw &: Co., Alexander, Mather and Glover,
Schneider, Wulfing, Elliott, Costanza, Brach and Marshall cases, (Dunn, The Dipl()1natic
Protection of Americans in Mea:ico, pp. 207-215 and the author's statement at p. 217).
The same commission held that failure to comply with the rule was a bar in the Briggs,
Thompson, Black, Slocum, Carey and other cases (ibid., pp. 218-226).
! France v. Argentina, Mar. 19, 1864, II Laprade11e-Politis, Recueil, p. 208.
3 See the Ziat Ben KiTan case (Great Britain v. Spain), Dec. 29, 1924, Huber, Rapports,
p. 185; s. c., Annual Digest (1923~24), p. 166, (damages caused by riot; claim rejected
because local officials not proceeded against); De Caro case, Ralston, op. cit., p. 810,
(dictum); Oberlander and Messenger case, VI Moore, Digest, p. 670; Baldwin case, idem,
Arbitrations, p. 3126; Le.ichardt's case, ibul., p. 8183; the Burn, Pratt and Ada cases,
ibid., pp. 3140, 8141 and 3143, resp.; Turner case, ibid., p. 3126; Green, ibid., p. 3139;
Jennings, Laughland &: Co., ibid., p. 8135; Ana, ibid., p. 3144; Gray v. United States,
21 Court of Claims, p. 340 (illegal capture); Brig Freemason, 45 ibid., p. 555 (failure to
use local remedies against the captor of a prize); Canadian Claims for Refund of Duties,
(Great Britain v. United States under the Convention of Aug. 18, 1910), Niel'.'len's Report,
·pp. 347 ff.; the R. T. Roy case, ibid., p. 406; and compare Hubbell's case, American and
British Claims Arbitration under the Treaty of 1871, Hale's Report, p. 40. See also
the dictum in the Pacific Mail S. S. Co. case, (United States v. Colombia), Moore,
Arbitrations, p. 1418; s. c., II Lapradelle-Politis, op. cit., p. 486; and the recent case of
Interocean Transpurtation Co. v. United States, 32 A. J. I. L. (1938), p. 598 at p. 597.
The objection that local remedies had not been exhausted was raised before the
Permanent Court of International Justice in the Case concerning certain German interests
in Polish Upper Silesia. Here the German Government requested the Court to determine
whether the application of certain Polish legislation affecting the property of
German subjects in Upper Silesia constituted a violation of the Geneva Convention
between the two Governments. Poland objected that the application should not be
entertained, since there were remedies open to the injured individuals. This argument
was rejected by the Court as irrelevant on the gronnd that the dispute in question was one
concerning the application of the convention, and not one in which Germany was advancing
a claim on behalf of private individuals. (Publications, Series A, No. 7, pp. 33-
84). Subsequently, Germany did bring an action directed at the indemnification of
its nationals, and again the Court held that the Polish defense of non-exhaustion of
Annex 127
414 DENIAL OF JUSTICE
recent Salem claim, the American Government attempted to answer
Egypt's objection that the claimant had not exhausted the national
legal means which were at his command (and therefore that the action
was premature) by maintaining that exclusive jurisdiction over
the claim in question had been assigned under the Arbitration
Agreement to the arbitral tribunal. This contention was rejected
by the tribunal which ruled that the conclusion of an arbitration
agreement did not constitute any such implied waiver.1 The necessity
of exhausting internal remedies must be regarded as a fundamental
rule of international law; 2 as mandatory upon international
tribunals (in the absence of an express contrary stipulation in the
compromis), and not as permissive in the sense that it expires when
a foreign government decides to intercede diplomatically.
Overwhelming recognition of the principle that a diplomatic
reclamation may not be presented as long as the injured alien has
1·emedies was no bar, on the following grounds: First, that there were actually no
remedies open to the injured parties; and second, that Poland could not require them to
resort to a remedy which it had, by its violation of the Geneva Convention, rendered
inapplicable. Case Concerning the Factory at Chorzow, Publications, Series A, No. 8,
pp. 25-81. In the case of the &adaptation of the Mav-rommatis Concessions, (Judgment
No. 10, Publications, Series A, No. 11, p. 23), the objection that local remedies
had not been exhausted was raised but not considered because the Court rejected the
complaint for lack of jurisdiction. In the case of the Serlnan Loans, the Court in a die
tum recognized the existence of cases " in which an action cannot be brought before
an international tribunal when there are legal remedies still open to the individuals
concerned." (Judgment No. 14, Publications, Series A, No. 20, p. 19). In the case
concerning the Administration of the Prince Von Pless, Poland raised the objection that
legal remedies available under its law had not been exhausted. The court, however.
"did not consider it necessary to pass upon the question of the applicability of the
principle as to the exhaustion of internal means of redress " since it would " certainly
be an advantage to the Court, as regards the points which have to be established in
the case, to be acquainted with the final decisions of the Supreme Polish Administrative
•rribunal upon the a.ppeals brought by the Prince Von Pless and now pending before
that Tribunal... " Procedure before the Court was hence arranged by it so as to ensure
that this would be possible, time limits being fixed with regard to the filing of documents
so as to give time for the Polish tribunal to render its decision. Preliminary Objection,
Order of Feb. 4, 1933, Series A/B, No. 52, pp. 15-16.
In Diaz v. Guatemo.la, (March 6, 1909), the complaint was dismissed because of the
claimant's faillll'e to take steps before the local courts to recover for hardships suffered
by his wrongful arrest and imprisonment. The Central American Court of Justice
called att.ention to the fact that its jurisdiction was conditioned (under Article II of
the convention creating it) upon an exhaustion of local remedies. 89 Clunet, Journal,
p. 274; s. c., 3 A.. J. I. L. (1909), p. 787.
1 United States (George J. Salem), v. Egypt, June 8, 1932, Arbitration Series No. 4
(0), p. 48. Accord, Canadian Claims for Refund of Duties, March 19, 1925, Nielsen's
Report, pp. 347 ff.
2 Such was the position of the Committee on Responsibility at the Hague Conference.
See Minutes, p. 162. " S'il est vrai que la regle comporte des exceptions, il faut constater
que la pratique )'a consacree." De Vi.sscher, op. cit., p. 422.
Annex 127
THE " LOCAL REMEDY ,, RULE 415
failed to comply with the requirements of this rule is found in the
replies of over twenty Governments to a request for information
by the Preparatory Committee for the Codification Conference.
The point was thus framed:
" Is it the case that the enforcement of the responsibility of the State
under international law is subordinated to the exhaustion by the individuals
concerned of the remedies afforded by the municipal law of the
State whose responsibility is in question? ,, 1
This question was answered in the affirmative by the replies referred
to,2 and the principle {which was incorporated in Basis of Discussion
No. 27),3 was subsequently approved by the Third Committee
in 1930.
It is but a specific application of this rule that no claim based upon
a denial of justice may be predicated upon the decision of a lower
courl.4 The alien must have unsuccessfully pursued all available
modes of appellate revision and have been brought face to face with
a definitive pronouncement of the highest judicial body before such
a complaint will be receivable. This principle was likewise respected
by the Third Committee at the Hague when it admitted that responsibility
is engaged when a judgment" which is not subject to appeal"
is incompatible with a State's international obligations.6 It was
again recognized by the American-Turkish Claims Commission in
the recent case of Christo G. Pirocaco, the opinion there stating:
" As a general rule, a denial of justice resulting from improper action
of judicial authorities can be predicated only on a decision of a court of
last resort. A litigant must exhaust his remedies before it can be said
that he has had that final judicial determination of his case which the
law affords. " 6
1 League of Nations Document, C.44.M.21.1928.V, Point XII, p. 7.
z League of Nation..<1 Document, C.75.M.69.1929.V. Bases, Vol. III. See especially
the replies of: Great Britain, p. 137; Germany, pp. 41-42, 136; Switzerland, p.137; Holland,
p. 45; Denmark, pp. 136-137.
3 This Basis ultimately gave way at the Conference to Article 4 of the draft convention
providing that "The State's international responsibility may not be invoked as
regards reparation for damage sustained by a foreigner until after exhaustion of the
remedies available to the injured person under the municipal law of the State. "
Minutes, p. 236. Compare Article 12 of the &solutions adopted by the Institut de Droit
International at its Lausanne Session, Annuaire (1927), Vol. 3, p. 334.
'De Visscher, op. cit., p. 423. See Hyde, I International Law, pp. 506 ff., and
compare Hatschek, Volkerrecht im Grundriss, p. 195.
5 Minutes, p. 237. 6 Nielsen's Opinions and Report, p. 587, at p. 599.
Annex 127
416 DENIAL OF JUST[CE
Failure to appeal has on more than one occasion been the ground for
an international tribunal's refusal to render an award in cases of
alleged denial of justice.1
2, Justification for the Rule. - Several considerations may be
laid hold of to justify the existence and maintenance of a rule that
the alien must resort to domestic remedies for redress of his
grievances. Its principal raison d'elre Jies in the fact that since the
injury was suffered in the territorial State, the Sovereign of the
locus must in equity be allowed to do justice according to the manner
instituted for that purpose before foreign States may properly file
complaints. It may in fact be utterly pointless for them to proceed
in advance of an adjudication by the local courts, as the proceedings
may culminate in a judgment favorable to the alien, rendering
international action unnecessary. Or, the facts which are brought
to light in the course of those proceedings may be such as to deter
a foreign office from intervening.2
Assuming that the damage was allegedly caused by an original
violation of international law, the delinquent State must be allowed
the right to investigate the charge, to appreciate and - if need be -
to discharge, its responsibility. Fairness demands that it be given
the first opportunity of considering with its own courts the various
points of law and fact which are raised by the claim and of ascertaining
on the basis of their determinations whether reparation is
to be made.3 On the other hand, in so far as the case is not one based
upon an initial breach of international law, the territorial State
undoubtedly has the right to insist upon adjudicating all issues
which fall within its competence under municipal law. And this
right will continue to survive j w,t so long as the presumption of
uniformity between national institutions and the requirements of
international law has not been upset by a denial of justice against
which there is no effective appeal.
1 " The umpire does not conceive that any government can ... be made responsible for
the misconduct of an inferior judicial officer when no attempt whatever has been made
to obtain justice from a higher court." Thornton, U., in the Jennings, Laughland di
Co. case, (U.S. v. Mexico), Moore, ATbitrations, p. 3135 at p. 3136. See also the Burn,
Pratt, Ada and Ana cases, ibid., pp. 8140, 3141, 3148 and 3144, resp.; the Mechanic
(United States v. Venezuela), imd., p. 3210; Snow and BuTges.<J case, Dunn, op. cit.,
p. 218; Smith case, ibid., p. 219; David J. Adams C'ase, (United States v. Great Britain),
Nielsen's Ileport, p. 524 at p. 531.
Contra: Garrison and Fretz case, Dunn, op. cit., p. 202; Jonan case, ibid., p. 204.
2 Foulke, op. cit., p. 28.
3 Decision in the Finnish Ships case, p. 24. See also Borchard, op. cit., pp. 240-241.
Annex 127
THE " LOCAL REMEDY II RULE 417
In this manner, respect is preserved for national autonomy and
dignity with a consequent diminution of interstate friction. The
local remedy rule is not only a rule of practical convenience - since
the function performed by national courts considerably alleviates
the burden of international jurisdictions 1 - but it is an indispensable
balance-wheel between municipal control and international
control, maintaining a desirable equilibrium between the jealously
guarded prerogatives of State sovereignty (or rather the exclusive
jurisdiction implied therein), and the superior exigencies of international
law.2 The value of the rule has been well perceived by
M. Politis, who declared at the Hague Conference that the gravity
and exceptional character of international responsibility, as well
as the apparently privileged character which it confers upon
foreigners in contrast with nationals, necessitated that the facts
alleged as the violation of a State's international obligations should
be doubly clear and certain. For this reason, he proposed that the
rule should be made as wide as possible. " It is a guaranty for the
State; it respects its independence; it makes it possible to avoid
unnecessary disputes. Only those cases which are really worthy
of consideration should be allowed to come before international
courts. " 3 These observations should amply suffice to take the
disparaging sting out of the remark that the plea that local remedies
have not been exhausted " may perhaps not infrequently be regarded
as somewhat technical. " It is undoubtedly true, as Nielsen has
said, that this plea is not concerned with the fundamental question
whether a wrong was initially committed by authorities of a
respondent government.4 But such a plea, although jurisdictional
in character, is greatly concerned with the essential issue whether
the international action is premature and whether an international
tribunal should entertain it. Nothing is gained by designating the
local remedy rule as a mere " technical defense. "
3. Qualifications of the Rule. - It must not, however, be imagined
from what has preceded that the concept of " exhausting local
remedies " is a rigid, mechanical device which demands absolute
' Eagleton in R. D. I . L. C. (1935), p. 508.
2 De Visscher, op. cit., p. 423.
3 Minutes, p. 67.
• Nielsen, C., dissenting, in the International Fisheries case, (U. S. v. Mexico), Opinions
(1930-31), p. 239.
27
Annex 127
APPENDICES 629
In order to be able to continue its work without delay, the Committee
will be grateful to be put in possession of the replies of the Governments
before October 15th, 1926.
The Sub-Committee's report is annexed.
Geneva, January 29th, 1926.
(signed) Hj. L. Hammarskjold,
Chairman of the Committee of Experts.
Van Hamel,
Director of the Legal Section of the Secretariat.
ANNEX REPORT OF THE SUB-COMMITTEE
M. Guerrero, Rapporteur
M. Wang Chung-Hui
1. Whether and, if so, in what cases a Slale may be held responsible for
damage done in ifs territory to lhe person or properly of foreigners.
* * *
Acts performed in the Exercise of Judicial Functions
If there is one general principle concerning which there can be no
discussion, it is respect for the majesty of the law. As between selfrespecting
States, there can be no greater insult than to question the good
faith of municipal magistrates in their administration of justice.
There are certain other principles as unquestioned and as widely observed
as the above. For instance, the principle that all interference or claim to
interference with the regular course of justice in another State is tantamount
to attack on that State's internal sovereignty.
Here we have certain legal standards, as categorical as they are precise,
created by the will of all countries as rules of conduct to be observed in all
circumstances of the life of the international community.
As regards the duty of affording judicial protection to foreigners, it is
sufficient that they should be granted a legal status, which they can assert
through appropriate la;ws and independent tribunals to which they are
allowed access on the same footing as nationals. Neither more nor less.
The decisions of these tribunals must always be regarded as being in
conformity with the law. None but a judge of the country is entitled to
interpret that country's law. Even if he makes a mistake his judgment
must be accepted; the dignity of justice and the character of modern States
demand this.
The opinion that a State is not responsible for a judicial error committed
by its tribunals is so firmly implanted in the minds of nations that legal
publicists in all countries have criticised - and often very harshly criticised
- the arbitral award under which De Martens declared the Netherlands
Annex 127
630 DENIAL OF JUSTICE
to be responsible for the judicial error committed by its courts in the case
of the Australian vessel Costa Rica Packet.
This is equivalent to stating that the community of nations admits no
appeal against judicial errors other than that which the lex loci itself may
afford to foreigners as well as nationals, and that, if no provision is made
for appeal, both parties must acquiesce and cannot claim to invoke any
responsibility at all on the part of the State in which the case was heard.
The same principle must apply to sentences which have been termed
" unjust " or " manifestly unjust. "
Nothing could be more dangerous than to admit the possibility of
rehearing, elsewhere than in the courts of the country, a judicial decision
alleged to be contrary to justice. An opening would thus be afforded for
abuses of every kind, for the most serious violations of internal sovereignty
and for countless international conflicts.
As States are at present organised, each being bound to respect the
institutions of the others, any endeavour to create, at a given moment, a
special court having power to overrule the national judicature would be
unthinkable.
Unless we are ready to overset the one true basis of international law
- the collective will of States - we will not entertain the supposition that
States, when they entered the community, ever contemplated an abridgment
of the dignity and authority of their own courts of law. That, however,
would be the final result of rehearing a case where no provision for appeal
existed under the legislation of the State concerned; and yet the advocates
of the theory of international responsibility, in connection with judicial
decisions vitiated by manifest or flagrant injustice, would inevitably be led
to provide for some such rehearing.
Where would they find a super-judge competent to determine the existence
of such injustice? And, supposing that they could discover such a personality,
what would become of the principle of the equality of States, a principle
on which the international community is based, and which cannot
be disregarded without shaking the whole edifice ot its foundations?
Moreover, to admit the possibility of international proceedings being
brought in another country, in opposition to the original lex loci, would be
contrary to the international rule under which nationals of a foreign State
cannot claim more favourable treatment than nationals. This would,
however, be the result if foreigners had an international appeal open
to them in addition to the remedies offered by the national court.
We should not continue this reasoning any further had not a number of
modern legal publicists unfortunately come forward in favour of this view
of international responsibility. We must therefore persist in our argument,
and we shall substantiate our contention - that no international recourse
is admissible against municipal judgments - by quoting certain cases.
These cases demonstrate the repugnance with which requests for intervention
on these lines have a1most invariably been received.
Annex 127
APPENDICES 631
In 1885, when the Government of the United States of America received
a request of this kind, the Secretary of State, Mr. Bayard, sent a letter to
the American Minister in Mexico in which he said: " This Department is
not a tribunal for the rehearing of decisions of foreign courts, and we have
always laid down that errors of law and even of fact, committed by these
tribunals, do not afford a motive for any intervention on our part. "
Another American Secretary of State, Mr. Marcy, adopted a similar line
in writing to the United States Minister in Chile, Mr. Starkeatter: " Irregularities
committed in the case of an American citizen in Chile, unless they
amount to a refusal of justice, afford no grounds for intervention by the
United States. "
When Great Britain and Portugal submitted to arbitration the question
of the alleged manifest injustice of a decision given by the Corte de Relagao,
the arbitration tribunal stated: "While we unhesitatingly admit that the
decision was erroneous, we cannot agree that it was manifestly unjust.
It would be manifestly unjust to hold the Portuguese Government to account
for faults imputable to the courts of that country. According to the
Portuguese constitution, these courts are absolutely independent of the
Government and therefore the Government can exert no influence over
their decisions. The British Government cannot disregard this fact without
at the same time disregarding the whole existence of Portugal as a civilised
State, and that is obviously not the intention of the British Government. "
A.a these views were expressed in cases in which the party concerned
happened to he a small State, we can well imagine the reception which a
great Power would accord to a claim to hold it responsible for an unjust
decision given by its magistrates.
In every State the independence of the judicature and respect for the
law are recognized as such fundamental principles that even when the courts
are called upon to apply the rules of private international law, which, as
a result of an international treaty, fall within the scope of the State's own
laws, they are not made a subject in doing so to the supervision of their
Government (resolution of the Institute of International Law at its session
at The Hague in 1875).
Another theory which is quite as inadmissible is that international
responsibility is incurred through abnormal delay in the administration of
justice.
No State can claim to possess courts so efficient that they never exceed
the time-limit laid down in the laws of procedure. The larger the State,
the greater the number of cases brought before its judges, and consequently
the greater the difficulty of avoiding delays, sometimes quite considerable
delays.
[[ we agree that the State is responsible neither for judicial errors nor
for the manifest injustice of judicial decisions, nor for abnormal delay in
the administration of justice, are we to infer from this that the State has
Annex 127
632 DENIAL OF JUSTICE
no responsibilities in regard to the manner in which it dispenses justice'?
Certainly not. Its international responsibility may become seriously
involved.
We have already shown that the State owes protection to the nationals
of foreign States within its territory, and must accord such protection by
granting foreigners the necessary means for defending their rights. But
these means can only be such as are made available by the laws and courts
of the country and by the authorities responsible for public order and
security.
In the case in question the State would not be fulfilling its duty towards
other States if it did not allow foreigners to have access to its courts on the
same terms as its own nationals, or if these courts refused to proceed
with an action brought by a foreigner in defence of the rights which are
granted to him and through the means of recourse which are provided
under the domestic laws.
Such responsibility would arise as the result of ad enial of justice.
In saying "on the same terms as its own nationals ", we desired to
emphasise the necessity of equality as regards access to the means of
recourse open to all persons under the same jurisdiction. Thus, if the
nationals of a State are allowed to appeal from the decision of a court of
first instance, the same privilege must be accorded to foreigners when
their recognised rights are in dispute.
The decision of a judicial authority, in accordance with the lex loci,
that a petition submitted by a foreigner cannot be entertained should not,
however, be regarded as a denial of justfre. The State has fulfilled its
duty by the very fact that the local tribunal has been able to give n
decision regarding this request.
Denial of justice is therefore a refusal to grant foreigners free access
to the courts instituted in a State for the discharge of its judicial functions,
or the failure to grant free access, in a particular case, to a foreigner who
seeks to defend his rights, although, in the circumstances, nationals of the
State would be entitled to such access.
In conclusion, therefore, we infer that a State, in so far as it is bound
to afford judicial protection, incurs international responsibility only if it
has been guilty of a denial of justice, as defined above.
* * *
VI
Conclusions 1
The conclusions we are about to draw are the logical outcome of the
principles by which we have consistently been guided in preparing this
1 As reproduced here, the conclusions of the report contain amendments made by
M. Guerrero as a result of the discussion in the Committee of Experts.
Annex 127
APPENDICES 633
report - and which we hold to be the only possible basis for the elaboration
of rules likely to secure the approval of all States.
Were we to depart from these guiding rules, were we to seek to codify
principles regarding which the collective will is uncertain or actually
divided, our endeavours would be useless; indeed, we should be encouraging
the establishment of a series of continental systems and codifications of
law - which already exist in outline - the sole result being to create
unending sources of disagreement.
We should not lose sight of the fact that the object of our task is to
establish rules which may be embodied in international conventions, and
that these conventions, to be effective, require the consent of all, or nearly
all, the countries of the world.
These are our conclusions:
* * *
6. The duty of the State as regards legal protection must be held to have
been fulfilled if it has allowed foreigners access to the national courts and
freedom to institute the necessary proceedings whenever they need to
defend their rights.
It therefore follows :
(a) That a State has fulfilled its international duty as soon as the judicial
authorities have given their decision, even if those authorities merely state
that the petition, suit or appeal lodged by the foreigner is not admissible;
(b) That a judicial decision, whatever it may be, and even if vitiated
by error or injustice, does not involve the international responsibility of
the State.
7. On the other hand, however, a State is responsible for damage caused
Lo foreigners when it is guilty of a denial of justice.
Denial of justice consists in refusing to allow foreigners easy access to
the courts to defend those rights which the national law accords them.
A refusal of the competent judge to exercise jurisdiction also constitutes a
denial of justice.
* * *
(Signed) Gustavo Guerrero,
Rapportem.
Annex 127
APPENDIX III
ACTS OF THE CONFERENCE FOR THE CODIFICATION
OF INTERNATIONAL LAW
(Held at the Hague from March 13th to April 12th, 1930)
MINUTES OF THE THIRD COMMITTEE
Responsibility of States for Damage caused in Their
Territory to the Person or Property of Foreigners 1
NINTH MEETING
Wednesday, March 26, 1930 at 4 P.M.
Chairman: M. BASDEVANT
17. CONSIDERATION OF BASES OF DISCUSSION Nos. 5 AND 6.
The Chairman :
Translation: To-day we have to take up the consideration of Ba&es of
Discussion Nos. 5 and 6. . ..
If you refer to the observations contained in the Brown Book, (Document
C.75 M.69.1929.V) you will notice that the Preparatory Committee,
when it drew up Basis No. 6, intended particularly to provoke a discussion,
as it noted that, on the points covered by this basis and on other points
more or less related thereto, there were great divergences between the
replies submitted by the various Governments. That is not surprising,
since this problem of the State's responsibility arising out of acts of the
judicial authorities is so complex.
I would remind you of the principles this Committee has adopted by
decisions that were unanimous, save perhaps for a few abstentions which
were rather in the nature of temporary reservations.
Those principles are that international responsibility presupposes three
1 Official No.: C.35l(c).M.145(c).1930.V., pp. 103 ff.
Annex 127
APPENDICES 659
essential factors: first, damage; second, an act or omission imputable to
the State; third, an act contrary to international law.
As regards the second factor, there is no difficulty: the Courts are
obviously organs of the State.
As to the damage, when we consider the problem of the State's responsiblity
on account of the procedure, acts, decisions or possible negligence
of its judicial authorities, it should be noted that damage may occur in
two ways. Damage may be caused by a private individual to a foreigner.
In that case naturally there is, in principle, no responsibility on the part
of the State; but it is the State's duty to ensure foreigners remedies such
as may rightly be expected from it. If, by chance, the State has in any
particular case failed to ensure such remedies, its responsibility is involved.
That is clearly seen in the elementary case of a refusal to judge.
There is, however, another possibility. The damage may, if I may
so put it, be caused directly by the Courts. Suppose, for instance, that
either in a criminal or in a civil case, a judge, in giving a decision, exceeds
his authority according to international law. That was the position in
the Costa Rica Packet case. In those circumstances there is no denial
of justice, but solely an infringement of international law which involves
the State's responsibility.
The third factor, if there is to be any responsibility at international
law, is the performance of an act which is unlawful according to that law.
We must he quite clear on that point. Everybody agrees that an error
on the part of a judge is not enough to involve a State's responsibility.
That view is in harmony with practice and with the decision of international
courts. International responsibility can arise only if in the operation
of the Courts there is shown to be sorne failure to comply with the
State's international obligations. Thus when, as the result of a claim,
a case of this kind happens to come before an international judge, the
latter - and this point must not be overlooked - is not at all in the same
position as a judge of appeal. He does not consider the case from the
same point of view. He has to consider one point only: was there, on
the part of the national judge, any infringement of the State's international
obligations?
That is how the problem should be stated. It is more complex and
more delicate than the problems we have hitherto considered. I shall
not consider it more deeply. I wish merely to remind you of principles
on which there can be no hesitation. I think I have classified the questions
rather than tried to solve them. I declare open the discussion of Bases
Nos. 5 and 6.
Abd El Ilamid Badaoui Pacha (Egypt):
Translation: The special position of the judicial power seems to have
made it somewhat of a residuary power. When an act cannot be ascribed
to any other organ, it is ascribed to the judicial power. I would, in
Annex 127
660 DENIAL OF JUSTICE
particular, point out that, under the name of denial of justice or something
more or less similar to denial of justice, there is a tendency to consider
a judicial decision which correctly interprets a legislative provision
that is itself incompatible with international obligations as an act imputable
to the judicial power. In my view, the decision of the judicial power
is merely the occasion which demonstrates the legislator's infringement
of his international obligations.
Further, the fact that the judicial organisation does not offer sufficient
guarantees has also been held to be imputable to the judicial power. Here
again the failure is merely on the part of the legislator, whose duty and
responsibility it is to enact laws laying down the principles of that
organisation and providing for its mechanism.
I pass over other infringements, which are often wrongly imputed to
the judicial power, and I come to paragraph (2) of Basis No. 5 by which
the State is made responsible for a judicial decision which is final and
without appeal and is incompatible with the treaty obligations or other
obligations of the State.
This paragraph is, as it were, inserted between two forms of denial of
justice. On the one hand there is the refusal to allow a foreigner access
to the courts and, on the other hand, there is unconscionable delay on the
part of the courts, which is assimilated to denial of justice. In their
different forms these two cases represent the idea of denial of justice.
They should therefore be connected with each other in order to bring out
the fact that denial of justice is an infringement of an international
obligation.
But is the judicial power under any international obligation whatever,
apart from the obligation not to commit a denial of justice'? In my
opinion there is no other obligation. The obligation to ensure an effective
administration of justice or the prohibition of a denial of justice is an
obligation which is essentially international in character. It is the only
obligation incumbent upon the judicial power. Whether denial of justice
be understood in a narrow sense or in an extremely wide sense, it is in point
of fact the only infringement that can be ascribed to the judicial power.
As to other obligations, let me take the typical example afforded by
the question of the treatment of foreigners. In the subject with which
we are concerned, this really constitutes the very basis of all international
obligations incumbent upon the legislature, the judicial power and
the executive power. This question of the treatment of foreigners was
to have been the subject of a Convention at the Paris Conference, which,
however, did not achieve its purpose.
But suppose the question had, in fact, been embodied in a Convention
laying down the State's obligations in this respect. Suppose, further,
that a final judicial decision, in a case· in which a particular foreigner was
concerned, had involved an interpretation, of one of the provisions of that
Annex 127
APPENDICES 661
Convention. The State to which that foreigner belongs does not accept
the interpretation which it thinks to be entirely wrong. If the basis be
accepted as it stands, it would in such a case be possible to bring the
question before an international court. But, if the judicial power has any
well-recognized prerogative, it has surely the right to make a mistake.
This right to give a mistaken judgment is removed by paragraph (2),
since that paragraph would make it possible for one of the States concerned
to invoke the responsibility of the other on the ground of an interpretation
which, though mistaken, was merely an interpretation or appreciation
of facts. Yet the matter at stake would be solely a question of
false interpretation or violation of interpretation and in no sense a question
of denial of justice in the strict sense of the term.
The objection may be raised: "But will you leave international treaties
and international conventions at the mercy of national courts, which may
make as many mistakes as they like and may distort and misconstrue
them?" I say: "No, I do not leave them in that position, but I do not
make them a matter for judicial responsibility. I make them the cause
of direct responsibility and of direct discussion between States. "
According to the Statute of the Permanent Court, one of the matters
that may be submitted to international arbitration is the interpretation
of a treaty. If, on any particular point in an international convention
prescribing the State's obligations, the judicial power gave an interpretation
that other States did not accept, that very fact would be a reason
for international proceedings. This would, however, be quite independent
of the fact which gave rise to that final decision. The decision
given by the international court will be law, but it will be so from the
time at which it is given, and not retrospectively, with regard to the
matter which led to the international proceedings.
If paragraph (2) of this basis is to be retained, I do not see any reason
for speaking of denial of justice, since, in accordance with its international
obligations, a State is -necessarily bound never to deny justice to
foreigners. If paragraph (2) is to be understood in its most general sense,
I really wonder whether there is any need to mention the special case of
denial of justice. Why should we waste time over the meaning and scope
of denial of justice, since, even in its widest sense, it is always an infringement
of an international obligation?
Thus, denial of justice could be the only reason for that indirect international
responsibility which is designed to ensure compensation to a
State for acts of the judicial power. A wrongful interpretation which
violates an international obligation can never be the cause of international
responsibility from the standpoint we are now considering; otherwise,
we should definitely take away the judicial power's right to make a
mistake, its right to deliver sovereign decisions on questions of interpretation.
Annex 127
662 DENIAL or JUSTICE
All judicial decisions concerning foreigners would, if the States to which
those foreigners belonged did not accept them, be liable to be taken before
an international court. This view of the matter in no way deprives the
State concerned of its means of rectifying the results of an erroneous judicial
decision, because it might simply start proceedings with regard to any
other obligation or the interpretation of any other provision of an international
convention. As, in a disputed question, the attitude of both
parties may be justified, it is from the time when the international court
decides the law that the law is determined and is binding on the State.
Once the point of law has been settled, there would clearly be a case of
infringement of an international obligation if the courts continued in
their error, or if the State did not take precautions to confirm the judicial
interpretation by a legislative interpretation which its courts would be
bound to apply. Such a legislative interpretation would be the surest
means, if the State feared that its courts might persist in their error even
after the international decision.
If ever national judicial decisions in the same sense were repeated after
a contrary international decision, there would be an infringement of a
well-defined international obligation. Thus, if the question be considered
from this standpoint, we should avoid many causes of friction between
States which would certainly disturb international relations and impede
the proper application of any ultimate convention on the question of
international responsibility.
The question of denial of justice itself will have to be considered during
this discussion. It involves two ideas that are absolutely different. First
there is the formal idea, the scope of which is limited to the simple fact
of the refusal to give justice, or, in more precise terms, the refusal to allow
access to the courts. If need be, we may add the somewhat similar idea
of unconscionable delay. Secondly, there is the extremely wide material
idea that there is a denial of justice whenever a decision is manifestly
unjust. That is the theory adopted and supported by the United States
of America. This Basis of Discussion seems to some extent to acquiesce
in this view, for paragraph (4) speaks of a judicial decision prompted by
ill-will towards foreigners as such, or as subjects of a particular State.
Basis No. 6, too, applies this idea in very vague terms.
Personally, I should not think we were unreasonable if we decided to
direct the progressive codification of international law towards making the
formal idea of denial of justice wider and more elastic. Accordingly I
should readily admit the case where a decision was manifestly prompted
by ill-will towards foreigners. The very grounds of the decision would,
I assume, clearly reveal that ill-will.
I should, however, hesitate to adopt Basis No. 6, as on the one hand
that basis would make a State responsible, not on the ground of any act
or decision by its judicial power, hut on the ground of the judicial organisation
itself, and that would be a repetition of Basis No. 2; while on
Annex 127
APPENDICES 663
the other hand I should hesitate because this basis might imply that, whenever
any State considers that a decision affecting the interests of its
nationals is incorrect, that the procedure followed has not been satisfactory,
or that the decision shows a tendency to partiality (even though
that tendency cannot be described as definite ill-will), the State may put
forward a claim or may invoke the responsibility of the State whose courts
have given the decision in question.
I think the course it is proposed to follow would be a very dangerous
one. It is very difficult to trace any line of demarcation between errors
or differences in appreciation and what is called a manifestly unjust
judicial decision. In this connection we are concerned particularly with
independent organs which receive no instructions or recommendations
from any quarter, whose authority and prestige depend on the respect with
which their verdicts are regarded and the finality of their decisions.
Accordingly, I think it is very dangerous to open any way that might
mean that decisions affecting the interests of foreigners would from time
to time, and at the will of the States to which those foreigners belong, be
submitted to an international judicial body apart from those formal or
material considerations such as a refusal of access ot the courts or unconscionable
delay (a question merely of computing time, which is a simple
matter), or, finally, direct ill-will revealed by the very grounds of the
decision. Beyond those limits I see no safety. All decisions affecting
foreign interests might, on the pretext of manifest injustice, be subjected
to supervision or review.
The conciliation conventions and the particular arbitration conventions
that were invoked when Bases Nos. 5 and 6 were drawn up are in no way
contrary to the interpretation I have just given of infringements of international
obligations in general.
In conclusion, I should like to ask the Committee to consider the following
question. Many systems of law provide municipal remedies in
the case of denial of justice. What will happen when there is in fact a
denial of justice and when some State, acting on the grounds of the
damage suffered by its national, takes proceedings with a view to invoking
international responsibility? Should a foreigner not be compelled to
exhaust the municipal remedies for denial of justice, and should not the
possibility of invoking international responsibility be strictly limited to the
case in which the municipal remedy for denial of justice - in other words
the proceedings themselves - has failed to give satisfaction? I assume,
of course, that the claimant State will argue, that the rejection of the appeal
is it :;elf a denial of justice and therefore confirms the former denial of
justice which led to the appeal. In any case the remedy must be employed,
but it need be employed only once, for there must be an end, sooner or
later, and there can be no obligation to continue to employ remedies which
have" become useless or impossible.
I had one last observation to make concerning the judicial power. It
Annex 127
APPENDICES 665
included in Basis No. 6. We have done this because there seems to be
avery essential distinction between the two classes of cases.
All the matters dealt with in Basis No. 6 - and I am referring now to
the basis my delegation has proposed - deal with the responsibility of
a State for a failure to fulfil the general fundamental obligation to provide
means for the protection and enforcement of rights, to provide a law of
procedure and tribunals which come up to that very general - indeed,
not very exacting - international standard of justice and efficiency.
The term " denial of justice " is often used to cover the whole of that
conception. Whether it is rightly so used, as a matter of terminology,
I do not stop to consider. From the point of view of terminology, one may
very easily criticise the use of the term in such a wide sense. Still, it is
often used merely for convenience to cover all the cases included in this
broad idea, that is to say, the cases where, in a given instance, the result
shows that, either by the fault of the law of procedure, or it may be the
fault of the judge - it may he one or the other - in that particular case
the State has not come up to that minimum standard. Therefore, if we
use for convenience the expression " denial of justice " in that very broad
sense, my Basis No. 6 is an attempt to explain or amplify the cases
covered by that conception.
Now I would like to turn to what is contained in Basis No. 5 of our draft.
It sometimes happens that a municipal court has to deal, even in a
matter between private persons, with a question of public international
law. It is not the usual case; speaking generally, it is comparatively rare,
but sometimes it does happen. It may happen, for instance, in at least
three types of cases. The court may be in effect interpreting a treaty.
Let us take as an example, say, a copyright convention, where a State
has undertaken to give certain protection to copyright under certain
conditions in its country. Of course, such protection has to be exercised
through the courts, and in a given case, the court gives an interpretation,
either a direct interpretation of the treaty (or the legislation implementing.
the treaty - this point is immaterial) which is in conflict with the
convention.
Another case is that in which some question of immunity from the jurisdiction
arises. It may be diplomatic immunity; it may be immunity
which one sovereign State always has from the jurisdiction of another;
or it may be a case of excess of jurisdiction, the exercise of jurisdiction
in a case where the State does not possess any. We all remember, for
instance, the Lotus case. Actually, it was held that in that case there was
jurisdiction. But supposing the decision on the question of law had been
the other way: there would then have been responsibility for the exercise
of jurisdiction by the courts in a case where the State had no jurisdiction.
Another case of this kind is that in which an act has been committed
against a foreigner, by an official or an organ of ~he State, which is conAnnex
127
666 DE~IAL OF JUSTICE
trary to international law, and the foreigner is pursuing his municipal
remedy, as he must, and the municipal remedy fails to give any redress.
It seems to me that in these cases, where the municipal court is in
effect deciding some question of public international law, the responsibility
of the State is engaged if the decision is contrary to international
law, and not, as in all the other cases, where there has been a denial of
justice in the broad sense of the word. It seems to me that there is a
clear distinction between all the other cases and the cases where the actual
point, the issue which arises before the tribunal, is an issue turning directly
on public international law. Where you have a question of public
international law no State can set up its own opinion, or the opinion
of its courts, as being final against anybody else. It is a question
of international law, and therefore on such questions the decision of the
international court must be the final one.
Now, in these cases, where a question of public international law is
involved, it generally happens that it is only involved as one of the issues.
First of all, there is the appreciation of the facts and, it may be, an appreciation
of municipal law as well. Therefore, I maintain that, so far as
the court is merely giving a decision appreciating the facts and coming to
a decision on a question of fact, then of course you can only attack that
decision on the very general grounds set out in Basis No. 6. It is only
so far as the actual question of international law is concerned that the
international court can virtually act as a court of appeal to the municipal
court. The other qualification which is also important is that such a
decision to create responsibility must be final and without further appeal
being possible. All means of appeal must have been exhausted right up
to the last court to which an appeal can be brought.
Now the cases in Basis No. 6 to my mind are absolutely and entirely
different. Here you have the court applying its own municipal law,
or fulfilling its ordinary duty of appreciating and coming to conclusions
on questions of fact, or, it may be, applying private international law;
it is all the same. In those cases there is certainly no international responsibility
merely on the grounds that the court has come to a wrong
conclusion on a question of fact. No international tribunal can presume
to say whether the final court of appeal in any country has or has not
rightly interpreted its own law. Indeed, in a recent interesting case, that
of the Serbian bonds, before the Permanent Court of International Justice,
the Court said most clearly that it would not presume or attempt to do
that. It did not consider that to be within its functions, because it thought
it was its duty as an international court, to hold that to be the municipal
law which the final court of the country in question had proclaimed. If
the final court of a country declared the law of that country, then the
international tribunal must accept that as the law.
In all the cases covered by Basis No. 6, the responsibility of the State
i:; only engaged if there has been, in the broad sense of the term, a denial
Annex 127
APPENDICE'5 667
of justice. Responsibility only arises if it can be shown that the result
of the proceedings is so clearly contrary to the elementary principles
of justice that it constitutes an instance of the failure of the State to
comply with the general fundamental obligation to provide a certain
measure of justice and law within its territory.
It is a very difficult allegation to prove and one which cannot be lightly
made. Still, there are cases where it happens. I will only give one
instance which occurred a long while ago and which I recently read. A
ship was coming into a port of a certain country and, when entering the
harbour, it upset a little boat containing a couple of people rowing in the
harbour. It was a pure accident and the navigating officer of the ship
may or may not have been negligent, but that officer was arrested when
he came on shore and prosecuted for murder; that is to say, he was prosecuted
for the deliberate intention of killing two people in a boat which he
never saw, never had seen and could have had no possible intention of
harming at all. He was tried and ultimately the supreme court quashed
the charge, but on that disgraceful accusation he remained for many
months in prison under trying conditions.
These are very exceptional instances, but I hold that the State is liable
in such cases under the grounds set out in Basis No. 6. You may call it,
if you like, denial of justice, or you may give it another name.
Taking the formulation of Basis No. 6 as we have put it here, I should like,
if I may, just to say a word about it, emphasising all the time that I by
no means attach any particular weight to the wording at all. '\Ve have
put it in this way:
"A State is responsible for damage suffered by a foreigner as the result
of the fact that by reason of defects in its laws of procedure or in the
action of its courts in applying them ... "
It is necessary to make one point clear. It is not always the judge who
is at fault, as Badaoui Pacha has said; it may be the legislature in laying
down a faulty procedure under which justice cannot be had. But, from
the point of view of responsibility, ultimately it is immaterial which of
the two is responsible. Now here is No. I :
" He is not afforded in the courts a reasonable means of enforcing his
rights, or is afforded means of redress less adequate than those afforded
t.o nationals. "
We deliberately say: " less adequate ", instead of " being the same "
because there may be minor differences. The point is not that they should
be exactly the same but that in their efficiency they should be not less
adequate.
Then comes No. 2, which follows really the Preparatory Committee's
draft:
Annex 127
668 DENIAL OF JUSTICE
" A procedure is followed, or a judgment final and without appeal is
rendered, vitiated by faults so gross as to be incompatible with the obligation
of the State to provide a reasonably efficient judiciary and the
guarantees indispensable for the proper administration of justice. ,,
And Nos. 3 and 4 are as follows:
" A decision is given which has manifestly been prompted by ill-will
towards foreigners as such or as nationals of a particular State, or was due
to corruption or pressure from the executive organs of the Government.
" There has been unconscionable delay on the part of the courts. "
Therefore, to conclude, there do appear to me to be these two entirely
different classes of cases. Of course, you might include them all in one
short sentence, if you like. You might include them all in a sentence
saying that a procedure is followed or a decision is given which is contrary
to the international obligations of the State. I fully realise that such a
formula would cover everything, because even in the cases covered by
Basis No. 6 the ground there is a failure to fulfill an international obligation
- namely, the general international obligation to provide justice
coming up to the general minimum standard.
M. Nagaoka (Japan) :
Translation: In principle, the Japanese delegation approves of Basis of
Discussion No. 5. It has, however, proposed certain modifications, for the
sole purpose of making the text clearer. I shaH not take up the Committee's
time by entering into any long explanation. With regard to
paragraph (I) of this basis, however, I desire to make the following
statement:
I understand that the provisions of this basis are not incompatible with
the Imperial Procurator's right to decide, in accordance with paragraph 279
of the Japanese Code of Penal Procedure, not to sanction a prosecution.
The paragraph in question says:
" If, in view of the character, age and position of the accused persons
and also of the circumstances connected with the delict and circumstances
arising after the delict, the Imperial Procurator considers that prosecution
is not necessary, he may refuse to sanction such prosecution."
Further, if a court rejects a request for a prosecution which is directly
addressed to it by a foreigner (because, in Japan, a private individual is
not entitled to prosecute), such action on the part of the court shall not
be deemed to come within the terms of paragraph (I) of Basis of
Discussion No. 5.
I request that this statement should be recorded in exlenso in the
Minutes.
M:. d'Avila Lima (Portugal):
Translation: The underlying principle of Basis No. 5, and particularly
its earlier paragraphs, raises one of the clearest and, at the same time,
Annex 127
APPENDICES 669
most delicate problems concerning the judicial organisation both from an
internal and external point of view.
On the one hand, judicial equality rather than juridical equality has
been accepted by the international community. But, on the other hand,
we must determine how far and on what grounds foreigners are entitled
to protest against the municipal judicial organisation of any Stat~. Notwithstanding
the claims made by certain schools of political reformers,
who would abandon the old theory that the general structure of the State
depends on the separation of the public powers, one postulate is still
admitted - namely, that of the independence of the judicial power.
But (and here we begin to see the first compromise - quite a legitimate
one - with the supreme requirements of the international community)
the necessary conditions for the independence of any judicial system and
the respect paid to such a system are directly dependent on the guarantee
it furnishes for impartial, well-founded and just decisions. There must
be equal justice for nationals and foreigners. There can be no doubt
as to that principle, the means by which and the purposes for which it is
applied. Hence, we may rightly and formally condemn any evasion and
any form of denial of justice, for that would be a flagrant transgression of
the most elementary demands of that legal heritage which, as it belongs
to the family of nations, belongs also to any civilised society.
When may it be claimed that there has been denial of justice and when
may a sovereign State be held responsible therefor? In our opinion, the
first condition for any such claim must be the proof by the party concerned
that he has appealed to all stages of the judicial organisation and
that he has neither renounced nor overlooked any possibilities for securing
redress. In the second place, we must distinguish between judicial
decisions which merely disregard the elementary principles of justice and
those which imply an infringement of international rules. I~ is only in
this latter case that we hold that the State's responsibility clearly exists
(Article 36 of the Statute of the Permanent Court).
It is more difficult to recognise and to lay down rules regarding cases of
error juris and mala {ides. All judicial systems in the world worthy of the
name "progressive" provide remedies and means for claiming and proving
that there have been formal errors.
Apart from quite exceptional cases - such, for instance, as proved ill~
will towards foreigners and particularly towards the nationals of individual
States - we think it dangerous and even wrong to adopt any clause which,
in a general way, satisfies the claims mentioned above.
In conclusion, the State's responsibility for its judicial organisation is
governed particularly by the following consideration: A State must be
deemed to have fulfilled its duty when its courts offer all the necessary
guarantees for impartiality and independence and when it grants to
foreigners the right to take action and brings guilty parties before the
judicial authorities.
Annex 127
670 DENIAL OF JUSTICE
M. Cavaglieri ( Italy) :
Translation: As the Italian delegation desires to expedite the Committee's
work as much as possible, it will limit itself to some very simple
statements which are prompted by its spirit of conciliation and which seem
likely to secure the greatest measure of agreement concerning Bases of
Discussion Nos. 5 and 6.
The Italian delegation definitely supports the fundamental principle
underlying these two bases - namely, that a State is responsible for the
acts of its judicial power. The bases we have already considered referred
to acts of the legislative power and of the executive power.
We must now consider acts of the judicial power.
In this connection, we cannot accept the idea expressed by several
authors that a State is not responsible for acts of the judicial power owing
to the independence which is a feature of that power. The independence
of the judicial power is a fundamental principle in municipal law and in
constitutional law, but is irrelevant in international law. According to
international law, the acts of a State's judicial power are on the same
footing as those of its legislative power or those which are simply administrative
acts. Consequently, they involve the State's responsibility when
they are contrary to the international obligations undertaken by the State.
The difficulty is to determine the cases in which a State is responsible
for wrongful acts of the judicial authorities.
Of all the amendments submitted, the Italian delegation prefers the
proposal of the Austrian delegation both for itsc learness and for its conciliatory
spirit. We think that proposal gives the solution of the problem
before us in its simplest and clearest terms. It distinguishes clearly
between the two cases in which a State is responsible for the acts of its
judicial power. It says:
" A State is responsible for damage suffered by a foreigner as the result
of the fact that:
" 1. A judicial decision which is final and without appeal is incompatible
with the treaty obligations or_ other international obligations of the State;
" 2. There has been a denial of justice. "
In the first case, that is to say, a judicial decision which is final and
without appeal and is incompatible with the State's international obligations,
we think there can be no doubt. If a final decision is contrary to
a State's international obligations, whether they result from a treaty,
from a principle of customary law, or from any other source, the State is
certainly responsible.
The State is not bound to ensure to foreigners that the terms of a judicial
decision shall be applied. Its duty is merely to provide them with regular
and equitable judicial means of enforcing their rights.
The situation is different, however, in the exceptional case where the
Annex 127
APPENDICES 671
terms of a final judicial decision are contrary to the obligations of the State
concerned.
We could without difficulty give a large number of examples of this
principle which, in our view, admit of no doubt. Suppose, for instance,
that a final judicial decision denied to an ambassador or foreign diplomatic
official the privileges that are ensured to him by the best-known and most
widely recognised principles of international law. That would be a case
in which the State is responsible, since the final judicial decision would be
incompatible with the State's international obligations.
Other cases might easily be imagined. Suppose, for instance, that a
State has undertaken by treaty to ensure certain rights to foreigners and
that those rights are denied by a final judicial decision. That final decision
on the part of the judicial organs of the State would be contrary to the
state's international obligations.
I will give one more example before passing to the next point. Suppose
that a State has recognised another Government. That recognition
implies certain consequences. Suppose, further, that a final judicial
decision in that State is at variance with that recognition as regards one of
its consequences - for instance, as regards the laws of the Government
recognised.
Those are cases in which a final judicial decision is certainly incompatible
with the State's international obligations. We do not think there
can be any doubt on that point.
A much more difficult case is mentioned in point 2 of the Austrian amendment,
which the Italian delegation supports. It is the case of denial of
justice. The Austrian delegation stops there. Indeed, if we think of all
of the arguments and all the disputes that may arise with regard to the
definition of denial of justice, we shall perhaps think it wiser to stop there.
Nevertheless, we consider that there are certain cases of denial of justice
on which no doubt is possible. The first of these cases is that referred to
in paragraph (1) of Basis No. 6 - the case in which a foreigner is refused
access to the courts to defend his rights. We know how difficult it is to
define a State's obligations towards foreigners, but if, amongst the few
principles already recognised in this connection, there is one which seems
absolutely certain and indisputable, it is, I think, the foreigner's right to
judicial protection. Any State which denied that right would undoubtedly
he infringing an obligation imposed by international law.
In a spirit of compromise, the Italian delegation would be prepared to
abandon paragraphs (3) and (4) of Basis No. 5, which refer to "unconscionable
delay on the part of the courts", and "the substance of a judicial
decision manifestly prompted by ill-will toward foreigners as such or as
subjects of a particular State. ,, These two principles clearly contain
much that is true, but we are bound to admit that they may lead to very
divergent interpretations and to barely justifiable claims.
Annex 127
672 DENIAL OF JUSTICE
The Italian delegation could not, however, abandon the fundamental
principle contained in Basis No. 6. We know how difficult it is to prove
that the damage suffered by a foreigner is the result of the fact that the
court has not offered all the guarantees indispensable for the proper administration
of justice. We are almost bound to judge each case on its merits.
Nevertheless, we think the principle is indisputable. If, through the
composition of its courts or through its procedure, a State makes possible
a decision which does not offer the minimum guarantees for the proper
administration of justice which are inseparable from the idea of civilisation,
we consider that it is guilty of a denial of justice and must be held responsible
therefor.
In conclusion, the Italian delegation supports the fundamental idea that
a State's responsibility may be involved by certain acts of its judicial
power. It thinks that, when a final judicial decision is incompatible with
a State's international obligations, the State is undoubtedly responsible.
It thinks, further, that a State is responsible in the case of denial of
justice, and that there is undoubtedly a denial of justice when a foreigner
is refused access to the courts to defend his rights. It thinks, finally that
there is denial of justice when a court does not off er the guarantees for the
proper administration of justice which are inseparable from the very idea
of civilisation.
* * *
20. CONSIDERATION OF BASES OF DISCUSSION Nos. 5 AND 6 ... 1
M. Leltmaler (Austria):
Translation: I had, I confess, prepared a lengthy speech in support of
the Austrian proposal; hut since the Italian delegate has been good enough
to explain the meaning of that proposal and to give reasons for it much
more clearly and much more eloquently than I myself could have done,
I have only to thank him for the valuable support he has kindly given us.
M. Sipsom (Roumania):
Translation: Can the judicial power, in the performance of its jurisdictional
function, involve the responsibility of the State through its
decisions? That is the question we have to consider with regard to Bases
Nos. 5 and 6, which are now before us.
In principle, the judicial power cannot, through its acts, involve the
responsibility of the State, for the judicial power is not an organ for the
fulfilment of obligations. In its function, which is to enunciate the law, it
does not represent the State. All that can happen is that this jurisdiction
may decide wrongly: it may give what is called an erroneous judgment.
Can a State, on the ground of such an erroneous judgment, invoke
t Op. cit., pp. 112 ff.
Annex 127
APl'ENDICI•::-- 673
another State's responsibility for the non-fulfilment of international obligations?
No. What can happen then? Undoubtedly, when the judge's
decision fails to recognise a law which has nevertheless been recognised by
international undertakings, those obligations remain unfulfilled. The
State is undoubtedly responsible for the non-fulfilment of an obligation,
but not on the grounds of its judge's decision.
Consequently an erroneous decision is not of itself a cause of responsibility.
Even if it is admitted, it is solely a municipal matter. It does
not affect the rules of international law, as, in general, the courts are not
asked to appreciate or deduce the rules of international law or the international
obligations of States. The international relations between States
do not theoretically come within the jurisdiction of municipal courts.
There are, indeed, systems of law (our own, for instance) in which the judge
is not asked to decide - is not allowed to decide, in fact - what is involved
by the execution of an interpretation of a treaty. This, as in French law,
constitutes a governmental act, which the judge is not allowed to criticise.
Hence it is incorrect to say that the State can incur any responsibility
through acts of the judicial power in its jurisdictional capacity. The
State is sometimes responsible through the non-fulfilment of its international
obligations, but not through the judge's decision.
The only remedy against an erroneous judgment is afforded by the
higher courts of the State, and is therefore identical with the remedy
granted to a national of the country. The courts cannot treat foreigners
differently from nationals.
This principle is admitted in the Roumanian Constitution; that is why
I refer to it. From the standpoint of jurisdiction and of civil rights,
foreigners are granted the same rights, under the same conditions, as
nationals, but no more. That is the limit beyond which we cannot go.
Accordingly, if a national has no remedy against a decision of the municipal
courts other than that offered by the higher courts, we cannot conceive
of any further remedy being granted to foreigners.
That is my view, and I think it represents the maximum concession we
can or ought to make to the equivalence of rights as between foreigners
and nationals.
Accordingly, we cannot understand how anyone can claim that the
State may incur responsibility through its jurisdictional function.
I come now to the second point. The courts sometimes exercise the
right to give orders. Some of their acts do not come within their jurisdictional
capacity. Those acts may give rise to damage. Is there any
responsibility?
Suppose an examining magistrate or a public prosecutor takes certain
measures against a foreigner. .The courts act thus in pursuance of their
right to give orders. If a foreigner suffers damage, can the State be held
responsible?
43
Annex 127
67-t DENIAL OF JUSTICE
The question must be solved, I think, by applying the idea of correlation
in the responsibility for the actions of the courts towards nationals
and towards foreigners. If there is any municipal remedy against abuse
or error, I agree that it should be granted equally to the foreigner, but I
cannot agree that more should be granted to him than to the national.
The theory of risks may again be invoked, and it may be claimed that
the State ought to insure the foreigner against all the risks he is likely to
incur within its territory. Thus, any mistaken, irregular or wrongful
act on the part of the courts would entail damage, for which reparation
should be made.
I think this theory of risk goes somewhat too far. I can understand
that a person who starts an enterprise should bear the risk. He undertakes
certain things : he must bear the risks.
I can understand, too, that the person who profits by anything shou]d
bear the risk. An employer, the head of a great industry, employs many
workers. He profits by their work; he ought therefore to bear the risks
incurred by all his workers.
But, if we admit the kind of risk which is associated with an enterprise
which is inherent in the idea of profit, can we go farther and contemplate
a risk that is imposed upon someone, that is to say, a risk without any
corresponding profit?
Why should the State be bound to assume this obligation to insure any
foreigner who cares to come within its territory when the foreigner knows
perfectly well the extent of the guarantees offered by that State? Such
a foreigner runs a risk; he derives advantage and profit. He ought to run
the risK of being treated differently from the way in which he thinks he
would be treated under a system of ideal justice.
There have already been many attempts to frame new theories of the
judicial system, but they are not yet definitely accepted. An attempt has
been made to construct a theory of insurance, of State responsibility based
not on imputability but on risk. Such a view might, at most be approved
at municipal law, but never at international law.
We must try to follow the evolutionary process and adapt ourselves to
it. There are indeed, new theories to explain the ultimate nature of the
State. They say it is a congeries of public services with an obligation to
conduct the undertaking in a fitting manner. Accordingly, any public
damage suffered by an individual should be made good by the whole of
the taxpayers, that is to say, from the proceeds of taxation. The charges
to be borne by the society are collected from members of the society. That
could be understood as a division of public burdens between the individuals
composing the same State, provided we accept this theory, which
I think a hold one. But to extend this theory to foreigners, or rather to
create it for their benefit, goes, I think, beyond the bounds of any possible
legal theory. The reason for which such rights might be granted to the
Annex 127
APPENDICES 675
members of a community is that they share in all the burdens of that
community. They pay taxes, it is their activity which constitutes the
capital from which compensation may be paid to the person who has run
a risk. But for a person to claim that he is insured whereas he makes no
contribution seems to me inadmissible. Accordingly, I do not think we
can consider this second principle, and consequently I do not see how the
State can have any responsibility towards foreigners on account of the way
in which the judicial power operates, provided that power shows no
partiality as between nationals and foreigners.
I turn now to Basis No. 5, and I can readily support the Italian proposal
to accept the following part of that basis:
" A State is responsible for damage suffered by a foreigner as the result
of the fact that he is refused access to the courts to defend his rights."
Such a refusal would undoubtedly be a denial of justice. The State's
international responsibility may be involved through that fact, provided
the same right is accorded to nationals. But if the right to bring a
certain case before the courts is not granted to nationals, it would be
unreasonable for a foreigner to claim that he has been the victim of a
denial of justice through the application of the common rule.
The State is also responsible for damage suffered by a foreigner as the
result of the fact that a judicial decision which is final and without appeal
is incompatible with the treaty obligations or other international obligations
of the State. I accept that principle, but not as the direct consequence
of the decision given by the judicial power. I accept it on the
ground that the State has not fulfilled its international obligation, hut the
nonfulfilment of the obligation cannot he attributed to the courts, for
it is not the duty of the judiciary to define or fulfil the State's international
obligations.
As to paragraphs (3) and (4) of Basis of Discussion No. 5, we think they
should be omitted. Paragraph (3) refers to "unconscionable delay on the
part of the courts. " That would lead us to enter upon investigations
that we should not undertake. I might go so far as to admit that, if such
delay were only a cloak for a denial of justice, if it were absolutely tantamount
to a denial of justice - and that would be a very serious matter
and would require to be dearly proved and never merely presumed - we
might accept this principle; nevertheless I should prefer this case to he
omitted.
Finally, I think paragraph (4) is quite unacceptable, for it would have
the effect of allowing an enquiry, not only as to the correctness or otherwise
of any particular judicial decision, but also as to the good or bad
faith of the judges.
I come now to Basis No. 6, and I regret that on this point I am unable
to support the Italian delegation. That delegation accepts Basis No. 6
on certain conditions. In my view it is unacceptable in principle. It says:
Annex 127
676 DENIAL OF JUSTICE
" A State is responsible for damage suffered by a foreigner as the result
of the courts following a procedure and rendering a judgment vitiated by
faults so gross as to indicate that they did not offer the guarantees indispensable
for the proper administration of justice. "
That is a very serious proposal, and I do not think any State could
accept it. What do these conditions mean if not the right to examine the
way in which justice is organised and administered in any particular State?
And who is to examine, inspect and investigate? The other States. If
the administration of justice is effectively organised in any country, or if,
according to the euphemism employed by the British delegation, it is
adequately organised, can other States be allowed the right to criticise and
investigate? If so, where would the investigation stop? Would it be a
formal investigation? Could it be said that justice was badly administered
because there were three judges instead of five or on account of the particular
method of appointing the judges? Would it be an investigation
into a judge's capacity and honesty? How could we describe such a
procedure? There is only one name for it; let us say it - it is investigation
into the organisation of the judicial system of a country, an investigation
carried out by one or more other countries. But what countries can
claim to be the sole depositories of a form of civilisation which entitles
them to enquire whether justice is well or badly organised?
If we go as far as that, we shall scrap the principle of sovereignty in so
far as it implies independence. You cannot claim to be independent if
you are subject to investigation. I adopt the spirit of the League of
Nations, the spirit that guides modern evolution, and I can understand
the limitation of sovereignty; hut I adhere to the formula that is generally
accepted, the only one that can be accepted - namely, self-limitation
of sovereignty. That is the only formula that any independent State can
accept. But I cannot understand any self-limitation imposed by others.
That goes beyond my comprehension whether from the legal or from the
moral standpoint.
Consequently, we cannot allow any indirect responsibility, any investigation
which would he tantamount to a limitation of sovereignty. For
that reason I do not think we can retain Basis No. 6, since in my opinion,
it is out of harmony with the general principles by which we are bound
together.
I have just received the French delegation's proposal, which reads as
follows:
" A State is responsible for damage suffered by a foreigner as the result
of the fact that:
1. He has wrongfully been refused access to the courts or there has been
on the part of the courts wilful and unjustifiable delay such as to be
equivalent to a denial of justice. 11
That is, in point of fact, a definition of a denial of justice. It implies
Annex 127
APPENDICES 677
a kind of investigation against which I protested but which, in these terms,
might be accepted.
" 2. A judicial decision which is final, every process of appeal having
been exhausted, is incompatible with the international obligations of the
State. "
In reality, those obligations would not be fulfilled, since a judicial
decision cannot constitute the fulfilment of an international obligation
on the part of the State.
This proposal suggests that Basis of Discussion No. 6 should be omitted,
and I agree with it.
M. Matter (France) :
Translation: I imagine that, when calmly studying this interesting
brown volume containing the Bases of Discussion, each of us must have
felt a certain uneasiness and anxiety on reading Bases Nos. 5 and 6. There
was a double thread of argument which it was very difficult to reconcile.
On the one hand, there were the arguments which were so forcibly submitted,
both yesterday and to-day, by our Egyptian, Portuguese and
Roumanian colleagues, to the effect that in this connection we have to
consider the independence of the judiciary. No one who has the honour
to sit here respects the judiciary more than I.
On the other hand, they showed that if a foreigner enters a country he
is entitled to share in all its advantages, but he cannot have rights that
are not enjoyed by nationals of the country. We could not fail, however,
to be struck by the weighty arguments advanced by the British delegation
and eloquently urged yesterday by Mr. Beckett. There is one international
duty above all others - the duty to ensure in every country impartial
justice, equal for all, for foreigners as for nationals. This difficulty is
perhaps still further increased by the way in which the Bases of Discussion
have been drafted. It was pointed out yesterday that they are merely
Bases of Discussion, drafts which make possible the consideration of the
question in substance.
The Bases of Discussion follow a plan quite different from that adopted
as regards the other failures to comply with international obligations for
which the State may be responsible. In the case of failures on the part of
the legislature and the executive and on the part of officials qua officials,
mention is made only of the State's international obligations in general.
The same principle is laid down in paragraph (2) of Basis No. 5, but there
is in addition a list of cases, and we have that most unsatisfactory system
which consists of stating a general principle and then giving a number
of examples without any indication as to whether the list is exhaustive or
merely illustrative.
The difficulty is stiJI further increased when, on considering all the
amendments submitted, we observe that, though they aH assert the same
Annex 127
678 DENIAL OF JUSTICE
principle - namely, the necessity for the State to ensure a satisfactory
administration of justice, each one gives examples. Why these particular
examples and not others? Who can say whether, after a few years,
other examples not given in the list may not be added, and once more the
great difficulty arises as to the nature of the examples? Are they given
simply as illustrations or are they exhaustive?
I was very glad to read the amendments, and yesterday I was pleased
to hear one of the speeches delivered in this Committee. I was delighted
to find the formula, submitted by M. Leitmaier, which we shall shortly
adopt, as it gives us entire satisfaction. There was no need for me to
propose any amendment; I had merely to make a slight correction which
seems very much like an act of plagiarism.
I also had the pleasure yesterday of hearing my friend M. Cavaglieri
make a speech which was admirable from every point of view. There
was no need for me to make a speech.
Thus I had no text to frame, no speech to deliver. That is an ideal
position for the head of a delegation.
Accordingly, I merely refer you to the explanations that have been
given. As M. Cavaglieri right lysaid, all the cases mentioned both in the
brown book and in the various amendments - and also all those given
by Mr. Beckett - are covered by the general formula submitted by
M. Leitmaier.
So we have a solid basis, a basis for conciliation and compromise, and I
was not at all surprised when my friend, M. Sipsom, accepted it. I was,
indeed, particularly anxious that the French proposal should be handed
to him before he concluded his speech.
Nevertheless, I have made slight textual changes for two reasons.
First, I thought that the order of the cases mentioned by the Austrian
delegate was perhaps not strictly logical. Before we can claim that the
law has been broken, we must know whether the court is prepared to give
a decision in the ordinary course of procedure. Denial of justice comes
before the violation of the law, since the court can violate the law only
by applying it.
What is meant by " denial of justice " ? At Paris I consulted a series
of te:x:ts from different codes of civil procedure which all give a very precise
definition of denial of justice. All these codes, both of criminal procedure
and of civil procedure, the Italian, Roumanian and German Codes, agree
that there is a denial of justice when judges refuse to reply to applications
or neglect to decide cases awaiting judgment.
There is another meaning to the words "denial of justice. " It is the
common meaning. After losing a case, on returning broken-hearted from
the law courts, the first cry of the unfortunate applicant is: " It is a denial
of justice ! " Often he means to accuse the judge of ill-will. Here we
come within the terms of paragraph (4) of Basis No. 5.
Annex 127
APPENDICES 679
Which of these two extremes shall we choose? Obviously the legal
definition. But I think that in international law denial of justice has
a wider meaning than in municipal law, although theorists do not absolutely
agree on the definition of denial of justice.
A little precision is necessary. There must be a very clear definition.
I have tried to give one in paragraph (I) of the proposal before you.
You may ask why I use the word " wrongfully " . I do so because a
court may rightly refuse to hear a case. There may be good reason for
its claim that it has no jurisdiction either ralione loci or rafione personae.
It would not be acting contrary to the law. It would merely be applying
the municipal law.
As regards paragraph (3) of the Basis of Discussion, we have tried to
make it a little more definite by adding " or there has been on the part of
the courts wilful and unjustifiable delay such as to be equivalent to a
denial of justice. " I think that, slriclissimo sensu, that is what denial of
justice means in international law. Anything else that may be included
in that definition and described as denial of justice will be found in
paragraph (2) of the proposal before you.
Thus, this text covers all the cases mentioned, both in Bases of
Discussion Nos. 5 and 6 and in Mr. Beckett's speech.
At the end of his illuminating remarks, Mr. Beckett said that it is the
duty of every State to organise and administer justice satisfactorily, and
any failures on the part of the State are covered by this formula. That is
precisely what I have tried to say in rather general terms. This general
formula covers all cases. You have, perhaps, noticed my great anxiety
to find a solid basis for discussion, agreement and compromise. This
formula, for which I give all the credit to M. Leitmaier and M. Cavaglieri
(I would remind you of M. Cavaglieri's remarkable speech yesterday) seems
to be acceptable by all. That is why I propose it.
As to the meaning of "international obligations ", if I had spoken a
few hours ago, I should perhaps have said that this definition was still
disputed, but, after the statement made by our Rapporteur, M. de Visscher,
you know that I can now refer to the Sub-Committee which you appointed.
The legal basis of its text is undeniable, its legal consequences incontestable.
I think everyone will be able to accept it. I attach no special
importance to the wording of the French delegation's proposal which you
have just received. I am prepared to accept any verbal modification,
but I think the principle underlying this formula is one with which all
those present must concur.
* * *
.M. Ants Piip (Estonia) :
Mr. Chairman - The Estonian delegation desires to support the proposal
made by the head of the French delegation, M. Matter, to combine
Annex 127
680 DENIAL OF Jl'STICE
Bases Nos. 5 and 6 in a single one as previously suggested by the Austrian
and United States delegations.
The formula presented covers in a precise and clear form, if not alJ, the
majority of the cases foreseen in Bases Nos. 5 and 6 as drafted by the
Preparatory Committee, to which a reference was made by the British
delegate, Mr. Beckett. Indeed, the first paragraph is self-explanatory and
contains a rule recognised at present by every nation.
There seems to be no such general agreement regarding the second
paragraph because, up to this time, as was said here yesterday, very many
writers and States have considered that the international responsibility
of the State for the damage done to foreigners does not arise at all if the
foreigners have access to the properly constituted courts. A decision of
the national jurisdiction releases the State of its further responsibility
towards foreigners. Accordingly, the second paragraph of the French
proposal constitutes a certain innovation in international law; it is, we
may say, lex ferenda. But this innovation is not very far-reaching, because
it does not question the decisive value of the judgments of the national
supreme courts, which will in se remain ·final also in the future.
No attempt has been made to introduce an appeal from the decisions
of the national supreme courts to an international court to control or
revise the municipal jurisdiction. Such an attempt was made, as you
all know, regarding the decisions of the national prize-courts in the very
progressive Twelfth Convention of the Second Peace Conference in this
City, in 1907, but that Convention remains unratified at present. The
real innovation consists in fixing the State's responsibility for the acts of
the judicial branch of the Government, which principle has been already
accepted by the Committee for the acts of the legislative and executive
branches of Government in order to guarantee a minimum international
standard of rights in the modern world.
Furthermore, since, according to Article 4 of our Constitution the rules
of international law, universally recognised, are in force in Estonia as
integral parts of Estonian law, we are also in favour of the principle of the
international responsibility of States for the final acts of the judicial power
in the same way as such responsibility arises for the acts of the legislat.ive
or executive powers.
M. Sieczkowski (Poland) :
Translation: Gentlemen - I do not wish to enter into any detail$, 2s
the Polish Government's reply to the questionnaire addressed to it clearly
explains our point of view on the questions now under discussion.
I must admit that, when the Polish delegation framed its amendment,
it was not aware of the French proposal, but it notes with pleasure that
there is a certain similarity between the two.
There is, however, a difference between our proposal and that of the
Annex 127
APPENDICES 6-81
French delegation. This difference is the outcome of our view that responsibili~
y in regard to the judicial power must be limited.
The State's responsibility for acts or omissions on the part of its legislative
and executive powers cannot be assimilated to its responsibility
on account of acts of the courts.
We must, in the first place, consider the independence of the courts.
This is a general principle which must be admitted as a principle of international
law. Responsibility in this connection must be limited.
That is the object of our amendment, which reads as follows:
" A State is responsible for damage suffered by a foreigner as the result
of the fact that:
1. The judicial authorities illegally resist the foreigner's exercising his
rights (denial of justice). "
As you see, we also refer to denial of justice, but our formula follows
the proposal made to the Pan-American Union by the American Institute
of International Law.
The French proposal mentions access to the courts and wilful and
un justifiable delay. Our proposal states that, if the judicial authorities
illegally resist a foreigner's exercising his rights, the State is responsible.
Fundamentally, our proposal is entirely in agreement with that of the
French delegation.
The Polish delegation proposes that paragraph 2 should. read as follows:
"2. A judicial decision not subject to appeal constitutes an evident
breach of a precisely determined obligation of international law. "
We think this wording obviates certain disadvantages attaching to the
Austrian proposal, which refers merely to a final decision. We must,
however, consider the case in which a judicial decision becomes final without
all remedies being exhausted. That is the case when a decision by a court
of first instance becomes final, because no appeal has been lodged.
The French proposal would correct this inaccuracy by introducing the
principle of the exhaustion of remedies, and in that respect it is similar to
the Polish proposal which, however, suggests a greater limitation by stipulating
that a judicial decision must have been given by the highest court.
That is not the same thing. The wording of the Polish proposal emphasises
this difference. It is a fundamental condition, and, if it is not fulfilled,
any intervention would be out of place.
If we wish to emphasise the independence of the courts, we must admit
the State's responsibility only in extraordinary cases; for instance, when
there is " an evident breach " of obligation. I have borrowed this
argument from the Japanese delegation, which desired to insert the word
" manifestly " in Basis of Discussion No. 5.
Annex 127
682 DENIAL OF JUSTICE
As regards the " breach of a precisely determined obligation of international
law ", I have taken this argument from the observations submitted
by Belgium (Document C.75. M.69. 1929. V., page 43).
Basis of Discussion No. 6 has already been mentioned, and I think there
is not much more to be said. I should, however, like to point out that
this basis covers two cases: first, the nonexistence of such courts as are
essential to a satisfactory administration of justice; secondly, the existence
of such courts but with an unsatisfactory administration of justice.
If the organisation of the courts reveals certain defects and certain
shortcomings, the fault cannot be laid to their charge, as such an organisation
always depends upon a law. If a State has not organised its courts
and has not passed a law providing for that organisation it is the legislative
power which must be blamed, and which will involve the State's responsibility.
But if the courts are badly administered, that is another matter. If
there are judges who are incapable of performing their duties, or who are
guilty of corruption, they should be punished in some way, but then it
was the duty of the executive power not to appoint such judges. We
thus come back to the terms of our Basis No. 5. Basis No. 6 should be
omitted, purely and simply.
M. Vidal (Spain) :
Translation: On this important question of a State's infringement of
an international obligation through the act of its judicial organs, the
Spanish delegation desires to express its view in such a way that the
meaning and purpose of its vote may be quite clear.
We think that a State is undoubtedly responsible in the case of a decision
by its judicial power which is final and without appeal if that decision
is contrary to an international obligation. We cannot borrow from
municipal public law the argument as to the independence of the judicial
power and apply it against this fundamental principle. That argument
can be employed only to stop any intervention, by the State of which the
injured person is a national, so long as the matter is pending before the
courts of the State in the territory of which that person lives. But when
those courts have given their decision and, contrary to pre-existing
international obligations, have by that very decision caused damage to
foreigners, the judicial organ - like the executive organ and the legislative
organ - involves the responsibility of that State towards the other
States concerned.
Having thus laid down the principle, we might sum up its consequences
under the general heading "denial of justice". But when is there a
denial of justice? If these words had any clear and undisputed meaning,
the question would not arise. Unfortunately that is not the case, and the
more opinions we hear, the more points of view that are expressed, the
more we realise the difficulty of reaching the agreement desired.
Annex 127
APPENDICES 683
In these circumstances there are two possibilities. We might try to
define " denial of justice " so as to leave no doubt as to its meaning, or we
might evade the difficulty, without solving it, by stating the principle and
leaving the courts in each particular case, taking into account the circumstances
involved, to determine whether or not there was any denial
of justice.
In my opinion the first course would be the better. It is also the more
difficult to follow. In the present state of the problem I fear the result
of our work must he almost negative. Accordingly, in view of the real
difficulty of this question, the Spanish delegation, though regretting that
it is not possible at present to adopt any definite formula expressing the
idea in all its implications, supports those who favour a limited notion of
denial of justice.
From this standpoint I must say that, if a foreigner is refused access
to the courts to defend his rights, that case clearly comes within the
strictest and most limited conception of denial of justice, and the State is
responsible ipso facto. The same is true of a judicial decision which is
incompatible with international obligations, but the position is different
in the cases mentioned in paragraphs (3) and (4) of Basis No. 5. I admit
that delay in the administration of justice on the part of the courts, if it
really amounts to unconscionable delay, should involve the responsibility
of the State. But that raises a question of fact which is extremely difficult
to prove and the consequences of which in practice might be most
regrettable.
If this formula cannot be made more precise, it would perhaps be better
to agree to this slight sacrifice and omit this paragraph in the interest of
the general principle. I find that the French delegation's proposal is
somewhat more definite and marks such progress that we should most
seriously consider accepting it. But in the case of a judicial decision
which is manifestly prompted by ill-will towards foreigners - however
difficult that ill-will may be to prove - I think we are bound to admit
the possibility and to say that, if the fact is proved, the State is responsible.
I regret that the French proposal omits that point.
We come now to the most delicate question, that of Basis No. 6. Here,
as in many other cases, it is much easier to lay down the principle than
to frame rules for its application. It is certain that, if the courts of any
country do not offer the guarantees indispensable for the proper administration
of justice, the State must be held responsible for the defects in
its judicial organ. But on what grounds can we judge the guarantees
in question? What, indeed, are the minimum guarantees which are
indispensable for the proper administration of justice? Who shall decide
that the judicial organ is not capable of discharging its duties? This
matter is particularly delicate because here we are not concerned with the
actual judicial decision, but with the organ itself, the suitability of which
is contested and its capacity called into question. The claimant State
can hardly be qualified to settle the question on its own authority and,
Annex 127
684 DENIAL OF JUSTICE
though there still remains the international jurisdiction which we accept
in the last resort, yet the question raises great difficulties and the solution
proposed has very serious implications.
Accordingly, the Spanish delegation thinks it would be better to omit
this basis unless it can be made so clear as to lessen the possibility of more
or less disguised abuses.
In a spirit of compromise and caution we desired the omission, if possible,
of paragraph (3) of Basis No. 5. In the same spirit of caution - although
I recognise the soundness of the principle - I specifically ask for the
omission of Basis No. 6, in view of the numerous difficulties involved by
its application. As drafted, this basis would lead to more serious consequences
than paragraph (3) of Basis No. 5. The idea underlying Basis
No. 6 is not included in the restricted notion of denial of justice, and it is
that restricted notion alone which seems to have reached the stage at
which codification becomes possible.
We might, if necessary, admit only the case of clearly proved prevarication
on the part of the judge. But even in that case no further remedy
against the decision must be possible under the municipal law. In its
present form, in which a refusal on the part of the organ entrusted with the
administration of justice is envisaged, we think that the text of this basis
is unacceptable and that its contents are dangerous for the sovereignty
of States, and we ought to remember that that sovereignty also constitutes
a fundamental principle of international law.
23. REFERENCE OF BASES OF DISCUSSION Nos. 5 AND 6 TO THE
FIRST SUB-COMMITTEE.
The Chairman :
Translation: There are still eight names on my list of speakers, but
M. Giannini wishes to submit a point of order. I must therefore ask him
to speak first.
M. Giannini ( Italy) :
Translation.: We have heard several speakers and we now have before
us eight proposed amendments. The Committee cannot agree to the
proposals of the British and Indian delegations. The Portuguese delegation
has submitted a radical proposal to strike out these bases. The
addition proposed by our distinguished Danish colleague is, I think, based
on treaties of arbitration and conciliation. There is also a Japanese
amendment.
Apart from these proposals, there are four amendments submitted
respectively by the delegations of Austria, France, Poland and the United
States of America. These are more or less on similar lines.
For the reasons of expediency advanced by our Spanish colleague, the
Italian delegation supports the proposal to omit Basis No. 6.
Annex 127
.\PPENDICES 683
Apart from the divergences between the other delegations, the discussion
has brought out one principle on which I think we all agree. The
only question left for consideration is that of form. We must have some
basis or other and we must take account of the first paragraph of the
Austrian proposal.
Further, it seems that a certain measure of agreement has been reached
concerning " denial of justice ".
There are still some differences as to the form to be given to the text.
I have no wording to propose. The French proposal, after mentioning a
final decision, says: "every process of appeal having been exhausted. 11
But, if a decision is final, it is obvious that every process of appeal has
been exhausted. Again, our Polish colleague employs the expression:
"not subject to appeal. " If I do not observe the time-limit laid down
for appeal, I have not come before the final court; nevertheless, the
decision is again final.
All these questions are very difficult to settle in full committee. As
our points of view have been brought into line and as time presses, we
might refer this problem to the First Sub-Committee, to which would be
added those delegates who intimated their desire to speak on this question
and whom we have not yet heard, together with any other delegates who
still wish to submit observations.
That Sub-Committee will be able to agree on a formula that will satisfy
everyone. When it submits a test for our consideration, we shall still
be able to amend it, but we shall have a definite text for discussion. It
is very difficult to say " I accept this or that formula ", when there are
several before us.
The agreement which apparently has been nearly achieved will easily
be reached in the Sub-Committee, and we shall thus save time. The SubCommittee
might meet on Monday, and to-morrow afternoon we could
continue our discussion of the other questions on the agenda.
M. Guerrero (Salvador) :
Translation: I support M. Giannini's proposal. I think that, apart from
questions of drafting, agreement has almost been reached in the interesting
discussion that has taken place. The Sub-Committee, which will be asked
to consider the various amendments, will probably be able to submit a
text. We shall perhaps find it easier to consider and adopt that draft.
M. Hackworth (United States of America):
I desire on behalf of the delegation of the United States to give my
wholehearted support to the suggestion of the Italian delegate. We might
go on debating these bases indefinitely in full committee, but I think the
Sub-Committee could handle the matter more expeditiously and probably
more efficiently.
* * *