Counter-Memorial submitted by the Government of the United Kingdom of Great Britain and Northern Ireland

USITED KISGDO.\I COUSTER->IEMORIAI. (4 II52)
130
I'nrizgrnph
they had bcen called as witnesses, the evidence of
Major Laing or Sir Joseph hlaclay would have
~xoved the existence of such an oral agreement jj-63
The decision of Mr. Justice Hill in the Admiralty
Court and that of the Court of Appeal were hoth
just and in accordance aith the rules of Englisli
law and practice ; in these proceedings the Clai-
mant was given thc same treatment as a United
Kingdom national ........... 64-76
The Claimant failed to exhaust his municipal
remedies .............. 77-79

Review of the diplornatic correspondence. . So-Sg
The treatment of the Claimant did not constitutc a
breach of Article SI', paragraph 3. of the Treaty
of 1886or of any generai rule of international iaw 90-103
The Hellenic Government is precliided by reasoii
of delay from pursuing the claim . . 104-108

Conclusions of the United Kingdom Governinent .

Introductory

I. This Counter-hlemorial is submitted to the Court in pursuance
of an Order of the Court dated 18th May IgjI (I.C.J. ReportsIggI,
p. II), the time specified in that Order for its delivery having been
extended to 15th November 1951 by an Order of the Court dated
30th July 1951 (I.C. J. Reports1951. p. 103). following a requestof

the Hellenic Government for an extension of the time-limit fixed for
the filing of thc Alemorial, andto 15th February 1952 by Orders of
the Court dated 9th November 1951 (I.C. J. Reports1951, p. 113).
and 16th January 1952 (I.C. J. Reports1952, p. 7),at the request of
the Government of the United Kingdom.
2. For the convenience of the Court the Government of the
United Kingdom \vil1first set out a summary of the contentions of
the Hellenic Government and its own contentions in reply elabor-
ated in this Coiinter-llemonal.

3. The Hellenic Goverciment contends in its hlemorial :
(a) that a contract, concluded on 17th July 1919 by 31. Nicolas
Eustache Ambatielos (hereinafter referred to as "the Clai-
mant"), its national, with the Crown for the purchase by him
from the Crown of nine ships then under construction,
contained an oral provision, not includcd in the written agree-

ment, that the ships were to he dclivered by fixed dates; UNlTEU KIXGDOJI COU'ITER-MEIIIORIBL (4 II j2)
131
(b) that six of the ships were delivered after these dates and two
not delivered under the contract at all, and as a result the
Claimant suffered serious financial losses, which prevented
him from completing payrncnt of the purchase price of the
ships and compelled hirn to mortgage seven of the ships to
the Crown as security for the balance ;

(c) that, when the Crown took proceedings under the mortgages
against the Claimant in the Admiralty Division of the High
Court of Justice in England in 'Tovember 1922, it failecl to
call as witnesses Major Bryan Laing and Sir Joseph Maclay,
mho would have proved that delivery dates for the ships had
beeii fixed ;that it also failed to produce to the Court letters
exchanged between these two persons in July 1922, which
would also have proved that delivery dates had been fixed ;
and that the Crown was undcr a duty to produce these
witnesses and letters ; .

(d) that the Crown thereby caused a denial of justice to the
Claimant and as a result obtained judgment against him and
possession of the ships ;
(e) that the Court of Appeal caused a denial of justice to the
Claimant by refusing him leave to call Major Laing and
Sir Joseph Maclay and to produce the letters exchanged
between them in proceedings. by way of appeal from the
Admiralty Court's decision ;
(/) that in the proceedings bcfore the English Courts the

Claimant was given worse treatment than would have been
given to a United Kingdom national ;
(g) that the Crown has been unjustly enriched ;
(14) that the treatment accorded to the Claimaut constituted a
breach of paragraph 3 of Article XV of the Treaty of Com-
merce and Navigation concluded between Greece and the
United Kingdom on 10th November 1886, and a breach of
the general rules of international law ;

(i) that when it took up the case of its national in 1925 and
subsequently claimed reparation for the treatrnent accortled
to the Claimant, the United Kingdom Government refused
reparation and this gave risc to a dispute ;
(j) that the United Kingdom is obliged, bp a Declaration sigried
on 16th July 1926 by the two Governments, to submit this
dispute to arbitration under the Protocol attached to the
Treaty of 1886 and has refused to do so ;
(k! that the Declaration is part of the Treaty of 1926.and the
International Court of Justice has jurisdictioii under Arti-
cle 29 of the Treaty of Commerce and Navigation conclucled
between Greece and the United Kingdom on 16th July 1926,

to order that the dispute be determined by arbitratiou in
accordance with the Protocol attached to theTreaty of 1886 UNITED KINGDODI COUNTER-MEDIORIAL (4 II 52)
132
or, alternatively, that the dispute should be decided by thc
Court itself.

4. The Government of the United Kingdom will reply to these
contentions as follows :

(i) there nere no dates fixed by the Eontract, by an oral provi-
sion or othenvise, for the delivery ofthenineships purchased
by the Claimant (paragraphs 17 to 44 below) ;
(ii) the Claimarit's losses cannot be attributed to any breach of
the contract by the Crown ;seven of the ships were deliv-
ered to him in accordance with the contract and he wrasnot

entitled to delivery of the two remaining ships (paragraphs
45 to 54 below) ;
(iii) the Crown \vas under no duty to cal1 Major Laing or
Sir Joseph Maclay as witnesses in the Admiralty Court or
to produce the letters exchanged betweeii them in July
1922 ;the Claimant could have called them as witnesses
himself but failed to do so ; further, al1information which
their letters could have disclosed \vas fully presented to the
Court from other sources ; the letters did not prove the
existence of any oral agreement for fixed dates of delivery
and there is no reason to suppose that, if they had been
called as witnesses, the evidence of Major Laing or Sir

Joseph Rlaclay would have proved the existence of such an
oral agreement (paragraphs 55 to 63 below) ;
(iv) the decision of Afr.Justice Hill in the Admiralty Court and
that of the Court of Appeal were both just and in accordance
with the rules of English law and practice ;in these proceed-
ings the Claimant was given the same treatment as a United
Kingdom national (paragraphs 64 to 76 below) ;
(v) the Claimant failed to exhaust his municipal remedies (para-
graphs 77 to 79 below) ;

(vi) the treatment of the Claimant did not constitute a breach
of Article XV, paragraph 3, of the Treaty of 1886 or of any
~~.eral rule of international law (paragraphs 90 to 103
below) ;
(vii) the Hellenic Government is precluded by reason of delay
from pursuing the claim (paragraphs 104 to 108 below).;
(viii) the Court has no jurisdiction to order arbitration in this
case or to decide it itself (paragraphs 6 to 16 below).

5. The Government of the United Kingdom raises, as a prelimi-
nary objection under Article 62 of the Riiles of Court, its contention

(viii)-that the Court has riojurisdiction in this case. The remainiug
contentions of the Government of the United Kingdom on the
merits of thecase arcsubmitted without prejiidice to thepreliminary
objection.The United Kingdom Government submits that the Court has no

jurisdiction to order arbitration in this case or to decide it itself

6. The grounds on which the Hellenic Government claims that
the Court has jurisdiction in this case are stated as follows in
paragraph 29 of the Memorial :

"(4) The Court has jurisdiction in this case since it concerns
a disoute with'in the meanine of the Treaties of 1886 and 1026
and because the United ~ingdom Government has undertaien
to refer such disuutes either to a Commission of Arbitratiori or
to the Court." A

The treaties referred to are the Treaties of Commerce and Navigation
of 10th November 1886 and of 16th July 1926, between the United
Kingdom and Greece, which are to be found in Annexes N and Q
respectively of the Memorial.

7. The following provisions apply to the settlement of disputes
under the Treaties of 1886 and 1026 :
(a) A Protocol annexed to theJ~reaty of 1886 provides that

"Any controversies which may arise respecting the interpre-
tation or the execution of the present Treaty, or the consequences
of any violation thereof, shall be submitted, when the means of
settling them directly by amicable agreement are exhansted, to
the decision of Commissions of Arbitration, and that the result
of such arbitration shall be binding on both Governments."
There are further provisions in the Protocol conceming the composi-
tion and procedure of the Commissions of Arbitration.

(b) The Treaty of 1886 was succeeded by the Treaty of 1926~.
On the same day that the Treaty of 1926 was concluded, the
two Governments signed the following Declaration :

"It is well understood that the Treaty of Commerce and Xavi-
gation 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 Govern-
ments 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 10th November 1886 annexed
to the said Treaty."
(c) Disputes under theTreaty of 1926 are governed by Article 29

of that Treaty, which reads as follows :

' Notice of deiiunciationof the Treaty of 1886 was giveii by the Hellenic
up to 28th Julyrrg2G.cfrom which date thettwo Goveinmentsoragreîdsto regulates
their commercial relations in accordance with the provisionof the new Treaty
signed on 16tliJuly 1926. UNITED RINGDOM C0UKTP;K-DIEiILORIAi. (4 II j2)
134
"The two Contracting Parties agree in principle that any dispute
that may arise between them as to the proper interpretation or
application of any of the provisions of the present Treaty shall,
at therequest of either Party, be referred to arbitration.
The court of arbitration to which disputes shall be referred
shall be the Permanent Court of International Justice at The
Hague, unless in any particular case the two Contracting Parties
agree othenvise."

8. Greece has not accepted the compulsory jurisdiction of the
Court under Article 36 (2) of its Statute and therefore can invoke
the jurisdiction of the Court only by reference to a special agree-
ment orthe provisions of a treaty under Article 36 (1).The Hellenic
Government relies, in the present case, on Article 29 of the Treaty
of 1926. The United Kingdom Government admits that theTreaty
of 1926is still in force, and Article 29 must now be read in the light
of Article 37 of the Statute of the Court, which provides that :

"Whenever a treaty or convention in forceprovides for reference
of a matter to a tribunal to haïe been instituted by the League
of Nations, or to the Permanent Court of International Justice,
the matter shall, as between the parties to the present Statute,
bc referred to the International Court of Justice."

Thc United Kingdom Government therefore agrees that any dispute
arising between it and the Hellenic Government as to the interpveta-
tion or apfilicationof any of the provisions of the Treaty of 1926 is
referable by either Party to the Court. It denies, however, that any
such dispute as to the interpretation or application of the provisions
of this Treaty of 1926 exists in the prcsent case.

9. The Hellenic Government, iii its Memorial, makes no serious
attempt ta establish that a dispute exists as to the interpretation
or application of any of the articles of the Treaty of 1926 which is
referable ta the Court under Article 29 of the Treaty. It is true that !
in paragraph 29 of the Memorial the Hellenic Government States

as the first of the grounds on which it relies :
"(1) The Treaties of 1886and 1926 oblige the United Kingdom
to treat Greek nationals in accordance with the principles of inter-
natïonal law and according to the most-favoured-nation clause",

and reference is made in paragraph 22 of the Memorial to Articles 3
and 4 of the Treaty of 1926which provide for most-favoured-nation
treatment in certain matters. However, nothing whatever is said to
show, or indeed would it be possible to show, that most-favoured-
nation treatment nras not accorded to the Claimant or that the
general principles of international law are incorporated into the
Treaty:Moreover, theTreaty of 1926 was not concluded until after

the events complained of by the Hellenic Government took place
and therefore does not apply to this case. UNITED KINGDOM COUXTER-3lE~IORIAT.I. (4 II 52) I35
IO. Since the Heiienic Government is unable to show tkit a
dispute exists regarding the application of any of the articles of the
1926Treaty, it resorts to the followingline of argument. It contends

that the treatmeut accorded to the Claimant gave rise to a claim
against the United Kingdom under Article XV of the Treaty of
1886 ;that, since the United Kingdom rejects this claim, it shonld
be submittcd to arbitration under the Protocol annexed to that
Treaty and continued in force after the termination of the Treaty
by the Declaration made on the date of signature of the Treaty of
1926 ;and finaiiy that the refusal of the United Kingdom to go to
arbitration raises a dispute as to the application of the Declaration
which the Court has jurisdiction to dccide nnder Article 29 of the
Treaty of 1926.

II. In the sub~nissionof the United Kingdom Government, this
reasoning must be rejected because :
(a) the Declaration does not form part of the Treaty of 1926 and

Article 29 of the Treaty is therefore not applicable to it, and
because
(b) the Declaration was only intended to apply to claims brought
before the date of its signature (16th July 1926).
12. The contention in paragraph II (a) is supported on the foiiim-

ing grounds :
(i) The Declaration refers to the Treaty as a separate instrn-
ment ;it is separately signed by the representatives of the
contracting parties ;it is not mentioned in the Treaty and is
not expressed to be an integral part of it ; it relates to the
old Treatv of 1886 and ke~t alive the old Treatv for certain
explicit purposes only.
(ii) The conclusion that the Declaration is not a part of the

Treatv is su~uorted bv the treatv ~ractice of the time. In
the Greco-~Ekish ~greement 1150 the property of their
nationals, concluded on zrst June 1925 (League of Nations
Treaty Series, Vol. LXVII, p. II), there is an accompanying
Declaration, whicb explains the relationship between the
Protocols to the Agreement and certain earlier agreements ;
it is expressed to be an integral part of the Agreement. The
Greco-Italian Commercial Treaty of 14th Eovember 1926
(League of Nations Treaty Series, Vol. LXIII, pp. 51-79, 83)
is cven more in point ;accompanying the Treaty is a Final
Protocol and two Declarations. The Final Protocol is divided
into two parts coiitaining interpretations of articles in the
principal Treaty, and begins with the statement that thsse
are to form an integral part of the Treaty. The two Declara-
tions which follow are separate but, significantly, onc is

expressed to be an integral part of the Treaty while the other
is not so expressed and is identical in form and purpose with136 USITED ~ixc~oni COUSTER-IIE~~ORIA (4LII 52)

the 1926 Anglo-Greek Declaration, since it reserved for deci-
sion by a Commission of Arbitration any claims hased on an
earlier Greco-Italian Treaty of 1889.
(iii) Further, it is well kiiown, as was recognized by thc Perma-
nent Court in the case of Phosphates in Xorocco (Jzidgements,
Orders and Aduisory O$ifzions,Series A/B, No. 74, p. 24) '
that, in accepting the compulsory jurisdiction of the Court
by declaration undcr the "optional clause", States have
studiously avoidcd ;Irevival of old disputes and sought to
preclude the possibility of the siibmission to the Court of

situations or facts dating from a period whcn the State,
whosc action was impugiied, was not in a position to foresee
the legal proceedings to \\.hich these facts and situations
might givc rise. Similarly, in interpreting Article 29 of the
Treaty of 1926, it miist be presumed that the iiitention of
the parties \vas to confer jurisdiction upoii the Court under
Article 29 of the 1926 Treaty in respect only of disputes
arising under that Treaty, that is to say, after its entry into
force. The 1)eclaration. which relates to claiins and disputes

arising under the old Treaty of 1886 and before the new
Treaty, should not therefore be regarded as part of the
' Treaty of 1926 for the purpose of conferring jurisdiction on
the Court uiidcr thc Trcaty of 1926.

13. The contention iii paragraph II (b) abovc is siipportcd on tlie
following grounds :
(i) Records of the ncgotiations which led to the signature of the
Declaration confirm that it was concerned only with claims

actuaily hrought beforc the date of the Declaration. The
origin of the Declaration mas that tlie United Kingdom
Government asked the Hellenic Government for assurances
firstly that the conclusion of the new Treaty of 1926 would
not be regarded by the Hellenic Gorernmeiit as prejudicing
the claim, already made, for exemption, in virtue of Article
XII1 of the old Treaty, of British subjects from a forced loan
exacted by the Hellenic Govcrnmeiit at the heginning of 1926,
and secondly that, in the event of any differences of opinion
between the two Governments on the validity of thesc claims,

the matter shoold, at the request of eithcr Govcrnment, be
referred to arbitratioii in accordance with the provisiotis of
the Protocol annexed to the Treaty of 1886. The United
1"Xot only are the terina espressing the limitativaiioire teiiipoclcar,
but the intention whicli inspircd it seems eclear it was inserted with the
object of depriring the aceeptancofthe cornpulsoryjurisdiction of an) retro-
active effects, in order both to avoid, in genrevivaof old disputes. and to
preclude the possibility of the submission to the Court by means of an appli-
cationofsituations or facts dating from a period when the State whose action
these facts and situations might give rise."the legal proccedings to ivhieh USITED KIKGDOLI COUSTER-3IE.\IORIAL (4 11 j2) '37
Kingdom Government proposed that these assurances should
be recorded in an exchange of notes at the time of thesignature
of the 1926 Treaty. In reply, the Hellenic Government offered
to sign a joint declaratiori.in the following terrns:

"It is well understood that as far that the new Treaty of
Commerce between Great Britain and Grecce does not cover
anterior claimseventually denving from the Anglo-GreekCom-
mercialTreaty of 1886,any differencewhichmight anse between
our two Govcmcnts on the validity of such claims shall, at
the request of either Government. be referred to arbitraiion in
accordance with the provisionsof the Protocolof 10th Noitem-
ber 1886, annexed to the said Treaty."
The United Kingdom Government replied by proposing the
form of declaration which was,in fact, signed. In doing so,

the British Foreign Secretary wrote to the Greek Minister in
London as follows :
"1now mite to let you knowthat wehave examinedthe text
which you left witli me for safeguarding British claims under
the old Treaty of 1886 and that we have no objection to its
substance. We have, however, sliahtlv altered the wordina to
put it in a more legal fonn, and niw enclose a copy ofthe
text thus revised."

The records of the negotiations therefore show that it was the
intention of both sides that the Declaration should apply only
to "anterior" claims, that is to Say, claims which had been
made under the Treaty of 1886 before the date of the Decla-
ration (16th July 1926). No claim based on the Treaty of
1886 was made until 1939.
(ii) It is indeed true that the Hellenic Government intervened
with the United Kingdom Foreign Office on behalf of the
Claimant on 12th September 1925 (text of the note sent by
the Greek Minister in London to the British Foreign Secretary
is to be found in Greek Memorial, Annex R 1),but this inter-

vention was not based upon the provisions of the 1886Treaty
either expressly, since Greece made no reference to Article
XV or to any other provision of the Treaty, or indirectly,
since the note and its supporting memorandum did not
charge the English courts with error and did not complain
of denial of freedom of access to the courts of justice. It was
in fact an informal approach to His Majesty's Government
forexgratia relief. No further representations were made until
1933 (see Greek hlemorial, Annex R 2). and the Treaty of
1886 was first referred to in a note fromthe Greek Minister to
the British Foreign Secretary dated ~1st November 1939 (see
Greek Memorial, Annex R 6). It is clear then that Greece had
made no claim, on behalf of its national, under the 1886

Treaty before that Treaty came to an end in July 1926. ,138 USITED RISGDOSI COUNTER-AlEdIORIAL (4 II 52)
14. In its Mcmorial, the Hellenic Government charges the United
Kingdom with breaches of the gcneral rules of international law and

also with unjust enrichment at the expense of the Claimant : see.
for instance, paragraphs 20 and 29 (2) and (3). Article XV of the
Treaty of 1886 merely providcs that the subjects of each Contract-
ing Party in the dominions and possessions of the other Contracting
Party shall have free access to the Courts of Justice for the protec-
tion and defence of their rights, without other conditions, restric-
tions, or taxes beyond those imposed on native subjects. There is
no other provision in the Treaty of 1886which can be (or indeed is)
invokcd in connection with thcse claims and therefore the Declara-
tion of 1926 does not apply to them. The Treaty of 1926 cannot be
invoked in respect of mattcrs occurring before it came into force,
and in any case there is no provision in the Treaty of 1926 on which

a claim on either of these grounds can be founded.
15. It is co~ivenientto deal here mith the Hellenic Government's.
submission to the Court in paragraph 30 of the klemorial. The Court
is apparently requested to adjudge and declare that the United
Kingdom Government is under an obligation, as a Member of the

United Nations, to agree tothe refcrence of this dispute to the Court.
Such a request comes strangely indeed from a government which
has ncver yet seen fit to accept the optional clause. It is inadmissible
for the reason that the jurisdiction of the Court dcpends on the
consent of the respondent and only eaists in so far as this consent
has been given :see the Judgment in the kIavrommatis Palestine
Concessions case (Ji~dgfnenfs,Ordersand Adnisory Opinions, Series
A, No. 2, p. 16).

16. To sum up, thereforc, on the question of the Court's jurisdic-
tion to entertain the HelleiiicGovernment's application, the Govern-
ment of the United Kingdom submits to the Court :

(1) that jurisdiction must be foundeà, if at all, on Article 29 of
the Treaty of 1926; and that, for the reasons given in (2) and
(3)belo\v, AArticl29 does not apply in the prcsent case ;
(2) that, in so faras the Court is requested to order the Linited
Kingdom to agree to the submission to arbitration of the
Hellenic Government's claim under Articlc Xi' or any other
article of the 1886Treaty, thecourt has nojurisdiction because
the Treaty of 1886 is no longer in force and this claim does
not come under the Declaratiori of 1926 and in any case
Article 29 of the Treaty of rg26 does notapply to the Declara-

tion ;
(3) that, in so far as the Court is requested to ordcr the United
Kingdom to agree to the submission to arbitration of a claim
under the general principles of international law or on the
grouiid of unjust enrichment, the Court has no jurisdiction
because there is no instriimerit which gives jiirisdiction in UPIITED KIPIGDOII COUNTER-MEMORIAL (4 11 52) '39

respect of a claim oneither of these groundsby Greeceagainst
the United Kingdom ;
(4) that, in so far as the Court is requested to adjudicate oii the
merits of the.claim, it has no jurisdiction to do so because
there is no instrument which givcs it jurisdiction in respect of
such a claim by Greece against the United Kingdom.

The United Kingdom Government submits that there were no
dates fixed by the contract, by an oral provision or otherwise, for
the delivery of the nine ships bought by the Claimant

17. The written contract of sale, entered into in Londoii on
17th July~grg between the Claimant and the Cro\isn,is referred to

in paragraph I, and forms Annex A, of the Greek Memorial. The
details and record of the nine ships, the subject-matter of the
contract, are summarized in Aniiex j of this Counter-Memorial.
18. It will be convenient first to describe briefly the persons

concerned in this contract. 1111919, the Ministry of Shipping was a
department of His ivlajesty's Government in the United Kingdom.
Its functions were taken over subsequently by thc Mercaiitile
Marine Department of the Board of Trade. There \vas in 1919 no
titular Alinister of Shipping, but the department mas in charge of
the Shipping Controller, who was at that time Sir Joseph Maclay.
He left the Ministry before 1922 and dicd rccently. The Directorate
of Ship Purchases and Sales was a branch of the Ministry, in the
.charge of Sir John Esplen, Director, who was assisted by Major
Bryan Laing as Assistant Director. Major Laing was, beforc his
period of Goveniment service which ended on 30th Septernber 1920,
a mernber of Laing and Company, shipbuilders. In the Directorate
of Ship Purchases and Sales were also hfr. J. O'Byrne, fiiiarice

officer, and h!r. H.F. Barnber, a marine engineer.
19. The purchase or sale of ships by the Shipping Controller on
behalf of the Cro\vn had always to be approved by the Shippiiig
Control Committee, which was composed of the Shipping Controller,
the Secretary of the Ministry, the Accountant-General of the

Ministry and the Director of Purchascs and Sales. Contracts of sale
were concluded by the Shipping Controller on behalf of the Crown,
and usually signed by the Secretnry of the ivlinistry. It was Major
Laing's duty to interview possible purchasers of Goverriment-owned
ships, whether completed or buildirig. and to inform them of the
specifications, positions, and price, of ships available for sale. He
was further responsible for ensuring that before the sale of any ship
\\.as agreed the Shipping Control Committee had finaUy approved
the price and general conditions ofsale. Mr.O'Byrne was responsible
for dcaling with the financial side and for seeing that jvritten
contracts of salc, prepared by thc legal branch of the Ministry,

10were properly drawzn up as regards their terms and conditions.
Mr. Bamber was an expert adviser on the construction of ships.

20. The contract of sale of nine ships to the Claimant was

concluded after about three weeks of negotiations, which were
carried on partly by correspondence and partly by persona1meetings
at the Ministry. In these negotiations G. E. Ambatielos, a ship-
broker, acted for the Claimant, his brother, who was throughout
the period of negotiation in Paris, while Major Laing acted on
behalf of and subject ta the authority of the Shipping Controller.
Mr. Bamber \vas also consulted in the negotiations and Mr. O'Byrne
was concerned in the final stages. Mr. Law, of the firm of Fergusson
and Law, marine eiigineers, was present at a meeting at the Ministry
on 9th July shortly before the contract \vas concluded, and actually
signed the urritten contract on 17th July 1919 on behalf of the
Claimant.

21. The Hellenic Govemment contends that it was an essential
term or condition of the contract of sale that the nine ships were
to be delivered to the Claimant by fixed dates ; that this term or
condition, which is admittedly not to befound inthe written contract
of 17th July 1919, was orally agreed between Major Laing on behalf
of the Ministry and G. E. Ambatielos at some time in the first half
of July 1919 and confirmed by Major Laing in conversation with
the Claimant in Paris in August 1919 ; that the contractual dates
for delivery of the ships were those contained in the Claimant's
letter of 3rd July 1919 (Greek Memorial, Annex S 3, p. 114); and
that the words "within the time agreed" in clause 7 of.the written
contract (see Greek Rfemorial, Annex A, p. 27) are to be construed
by reference to this oral agreement for fixed dates for delivery. The
Heilenic Government claims that these contentions are supported

by the evidence referrcd to in paragraphs 3 and 4 of the Rlemorial,
paragraphs 5 to 8 of Najor Laing's Statutory Declaration of
19th January 1934 (Greek Memorial, Annex B, pp. 29 and 30).
a letter from Major Laing to Sir Joseph Maclay dated 20th July
1922 (Greek Mcmorial, Annex E), and the testimony given at the
trial in November 1922 by the Claimant, G. E. Ambatielos, and
Mr. Law.

22. The United Kingdom Govemment denies that it was a term
or conditioii of the contract of sale, or that there \vas any agreement
either oral or in writing between the Shipping Controller and the
Claimant, that the nine ships or any of them were to be delivered

to the Claimant by fixed dates. The United Kingdom Government
rests itsdenial upon the following grounds :
(a) there is no provision for delivery by fixed dates in the written
contract of sale of 17th July 1919 (paragraph 23) ; USlTED KISGDOAI COUNTER-MEYORlA (4l.1152) '4'

(b) the evidence does not establish that there was such an oral
agreement between the Claimant and the Shipping Controller
(paragraphs 24 to 40) ;
(c) the written contract of sale of 17th July 1919is complete and
self-consistent and does not cal1for explanation by rcference'
to any oral agreement (paragraphs 41 to 43) ;
(a) it would have been an impossible business proposition for the

ivlinistry of Shipping to promise fised dates for delivery of
ships then being built for it iiiider shipbuilding contracts
which themselves gave only approsimate dates (para-
graph 44).

23 There is 120 proz~isionfor delivery by fixed dates in the wrillett
contract O/sale of 17th July rgrg.-The consequences of this fact in
English law will be considered below (paragraph 63). It is enough
here to observe that G. E. Ambatielos made evcry effort, accortling
to his own testimony at the trial, to get the Ministry to insert such'
a provision in the written contract of sale, but Major Laing refused
to do so ;and that the Claimant finally authorized the conclusion
of the contract on his behalf-after first repudiating the authority
of his agents in London-without such a provision in it. He seeks

to explain his acceptance of the written contract in these terms I>y
pleading an oral agreement or understanding as to delivery dates.

24. The euidence does not establish lhat there was such an oral
agreement betweenthe Claimant and the Shifiping Contvo1ler.-This
is clear from the history of the negotiations leading up to the
contract of 19x9 as disclosed by the correspondence and by the
testimony given at the trial before Mr. Justice Hill (paragraphs
25-30 below), from the conduct of the Parties after the conclusion
of the contract (paragraphs 31-34). and from a companson of state-
ments made from time to time by Major Laing and the factual
inaccuracy of his latter statements which prove their unreliability
(paragraphs 35-39).

25. The negotiations commenced on or about 27th June 1919,
when MajorLainginformedG. E. Ambatielos that there wereseven B
type ships available for sale and then under construction in the
Far East. He gave G. E. Ambatielos a buff slip of paper, prepared

by Mr. Bamber, on which estimated delivery dates for these ships
were set down. G. E. Ambatielos gave the list to his brother, the
Claimant, who was in Paris and who, on 3rd July 1919. wrote a
letter instructingG. E. Ambatielos to negotiate for the purchase of
seven ships on the conditions set out in this letter (see Greek
Memonal, p. 114, for the whole letter), part of which reads :
"1 hereby authorize you to buy for rny account the seven B
type boats now in course of construction at Hong Kong on the
followingterrns and conditions ;delivery, two August-September, UNITED KINGDOM COUSTER-ZIE>IORIhL (4 11 52)
142
two October-November. one in December and the remaining
two not later thaii February 1920."

These dates were taken as regards the first five delivcries from the
dates set out on the buff slip of paper (testimony of the Claimant at
the trial, sixth day, p. 41 ') but, as regards the last two deliveries,

the Claimant extended thc time somewhat in order to offer the
Ministry a margin (testiniony of the Claimant at the trial, sixth
day, pp. 2-3). It is thesc dates tvhich the Claimant and G. E.
Ambatielos. at the trial, alleged (contrary to what is now alleged
in paragraph 3 of the Greek Memorial) to be the dates finally agreed
wviththe Ministry (testimony at the trial, fifth day, p. 73, and sixth
day, p. 41). The buff slip of paper was never produced at the trial

or since, but mysteriously vanished, though the Claimant main-
tained that he stiii had it in his possession in March 1921and showed
it to Mr. O'Byrne (testimony of the Claimant at thc trial, sixth
day, p. 42). It is from the dates set out in the letter of 3rd July 1919
-the last day of each month being used-that the alleged due dates
of delivery set out in the Claimant's memorandum attached to the
note of 12th September 1925 from the Greek Minister iii London to

the British Foreign Secretary (see Greek Mernorial, Annex R 1, at
p. 67) are derived for six of the ships (B type). One of the setren
ships first offered to the Claimant was sold to another buyer before
the negotiations referred to above had really got under way, and
the remaining three C type ships sold to the Claimant were, as will
be seen later, brought into the sale after 3rd July 1919.

26. On 7th July 1919, G. E. Ambatielos wrote to the Claimant in
the following terms to report thc progress of the ncgotiatioiis :
"The writer called at the Ministry of Shipping at an early hour
this aftemoon and had a very long conversation with Major Laing.
As advised you in our telegram of this morning two of the seven
boats B type actually under construction at Hong Kong hare
. been sold. &Ir. Markettos has bought the fourth delivery and
paid L310,ooo.and a Belgian bought the third delitver) and paid
L315.000.As telegraphed you, we did al1possible in our power to
persuade Major Laing to put before the Committce your offer
for the remaining five at Lz85,oooin accordancc witli your letter
to us of the 3rd instant, but he absolutely declined and pointed
out to us that they would tum it down. After careful cousider-

ation the writer has taken it upon his shoulders to iiicrease the
sum to Lqo,ooo and must ask you to authorize accordingly. The
writer has had lunch with a frieud of his to-day and thoroughly
i\copy of the transcript of the note of the testimony of tliï Claimant and of
Alessrs. O'Byrne, Barnber. G. E. Arnbatielos aLaw. taken down at the trial
by C. E. Rarnett and Co..23 and 24 Elden Chambers. 30 Fleet Street, E.4,
and C. C. Xorman, Official Shorthand \Vriter of the Adiniralty and Frire Courts
in 13nglund. wibe communicated to the Registrar in accordance with Article 43,
paragraph 1,of the RuleçolCourt. for the inse of the Court and of thc Hellenic
Govcrnment. UXITED KINGDO\I COUICTER-ZlE,\IORlAL (4 II 52)
I43
and fully discussed the position. As the Shipping Controller is
absent, no definite decision can be taken, but we had a telephone
message this afternoon from the Ministry and reading between
the conversation we take it for granted that the offer would be
most favourably considered by the Shipping Controller and
accepted. Unfortunately Sir Joseph Maclay (the Shipping Controller)
we are now told will not be in town before Thursday so shall have
to wait till this.
P.S. Deliveries. \Ve forgot to mention that deliveries of these
boats will now be one in September-October ; one or two in
'lovember-December and the remainder hetween January and
February of iiext year."

This letter is of great importance for a iiumber of reasons. First,
the delivery dates mentioned differ from those laid down by the

Claimant in his letter of 3rd July : instead of two in August-
September, thcre is to be one in September-October ; instead of
two in October-November, there is to bc one or twoin November-
Decembcr and instead of one in December 1919 and remaining two
not later than February 1920, the remainder are to be between
January and February 1920. G. E. Ambatielos gave a remarkable
account at the trial of this postcript to his letter of 7th July when
being cross-esamined by Counsel for the Board of Trade, thus
(testimoiiy at the trial, fifth day, p. 67):

"Q. \Vhat do you mean by saying 'the deliveries of these boats
will now be' ...?
A. 1 w:is trying my utinost al1 along to persuade my brother
to givc me the largest possible margin with a view of getting the
Ministry to insert these dates in the contract.
Q. \Vere you intending to convey to your brother that the
Ministry had agreed to the dates you put in this postscnpt ?

t\.xo.
Q. Then what do you mean by saying 'Delirery of these boats
will now be one September-October' ....\Vhat does that mean ?
A. That there was an attempt on my part to see if my brother
would eventually be agreeable to these dates. 1 was trying to
make the dates of al1boats as long as possible.
Q. 1 do not care why you were doing it. Were you deceiving
your brother into believing that the Ministry had agreed to these
dates ?

A. They never agreed ;they iiever proposed them.
Q. 'Deliveries will now be' ....What does that mean ?
A. That means that 1 \\.aproposing to my brother these dates.
1 was trying to get my brother to agree to the longest possible
dates ....
Q. YOUwere deceiving liim ; is tliat 50, orisit net ?

A. That may be so." UNITED KISGDO>l COUNTER-ZfE>IORIA(L 4 11 j2)
144
The second point to notice in the letter of the 7th July is that
G. E. Ambatielos, the writer, and the Claimant, as the reader, were
fully aware that Sir Joseph Maclay was Shipping Controller and
further that Major Laing had no authority to make or accept any
final offers or take any definite decisions in his absence. Thirdly,

the prices of B type ships building in the Far East charged to other
foreign buyers at the time was far above that charged to the
Claimant ; this fact mil1be discussed below (paragraph 47). Finally,
it should be said that the sale of one of the B type ships to
hfr. hfarkettos, referred to in the letter, \vas not completed, and
the ship \vas brought into the sale to the Claimant.

27. But, to resume the narrative, Mr. Law of the firm of Fergus-
son and Law, marine engineers and advisers to the Claimant, had
also been in touch with the Ministry and appears to have been
acting under the authority of G. E. Ambatielos. After visiting the
Claimant in Paris 0118th July 1919, Mr. Law made the following
written offer to the Ministry on or about 10th July :

"1 am now in a position to offer you on belialf of &Ir. N. E.
Ambatielos of Paris for six reinaininB type boats under construc-
tion at Hong Kong and the three C type boats under construction
at Shanghai. Price for theine steamers two and a quarter miliions
sterling. Deliveries two about September, t\vo about October-
ing for next year but not later than April."he three rernain-

Agaiii new delivery dates are quoted in this offer.011 10th July,
G. E. Ambatielos wrote to his brother :

"We are glad to have to report that the Cornmittee of Sales at the
Ministry of Shipping decided to accept the offer that hfr. \Villiain
Law has made on your behalf, but insisted that the price should
be~z,zjj,ooo, and after obtaining Afr.Law's consent and authority
the writer had to agree.... Deliveries, two in September-October.
two in Xovember-Decemher probably three, and the rest between
December and April."

Once again a differeiit set of delivery dates is mentioned, these
dates being on the face of'them approximate, and once again these
dates were invented by G. E. Ambatielos. It was put to him in
cross-examination at the trial that thedates in this letter of 10th July
werc quite different froin tliose in his letter of 7th July, and he
agreed, then (testimony at the trial, fifth day, p. 71) :

"Q. Why are you altering the dates mentioned [in the letter
of 7th July] ? You are trying to deceive your brother ;why are
you altering your method of deception ?
A. 1 was trying to get him to extend the dates, the longer the
better, with a view to inducing the Ninistry to insert some dates
or other in the contract, naturally subject to iny brother's
:ipproval." UNITED KINGDOM COUNTER-.\!EA!ORIAL (4 11 52) I45

This is a clear admission particularly in the phrase "some dates or
other" that at this time the Ministry had not agreed to insert any
fixed dates for delivery in the contract, much less had it accepted
any particular set of dates.

28. When the Claimant received the letter of 10th July, reporting
what G. E. Ambatielos and Mr. Law had been doing, and particu-
larly Mr. Law's offer to the Ministry, he reacted sharply, since that
offer covered three C type steamers which he had not contemplated
purchasing in his letter of instructions of 3rd July ; further, a
higher price had been agreed than that laid down in that letter
and the delivery dates mentioned did not correspond. He sent a
telegram to the Ministry repudiating Mr. Law's authority as agent
to make the offer. However, he was prevailed upon to accept the
position by G. E. Ambatielos, who said at the trial (testimony at
the trial, fifth day, p. 72) that he "explained to him the circiim-

stances". But what he didnot explain at that timewas theMinistry's
attitude to fixed dates of delivery, thus (testimony at the trial,
fifth day, p. 73) :
"Q. Did you ever teil your hrother that the Ministr). refused
to put definite dates of delivery into the contrac?
A. Yes, 1 did.

Q. Tell me when you first told him that ?
A. When 1 went to Pans.
Q. When was that-before or after the signing of the coiitr?ct

A. Oh, after."
As a result, it appears, of his brother's persuasion, the Claimant
wrote the following Ietter to him on 14th July :

"1 am in receipt of your letter of the 10th instant and note
contents.1 beg to confirm my telegraphic reply of this alternoon
i.sfollows: 'Your letter 10th received. 1 authorize Law sign
contract Ministry of Shipping &,z7j,ooo for six l3type and three
C type', which 1 now beg to confirm."
What then was the position when this authority to sign the contract
of sale on hehalf of the Claimant was received ? In the first place,

Mr. Law's offer of 10th July was accepted by the Ministry as the
basis of the contract, tbough the final price was a matter of further
discussion and agreement and the Ministry refused to include in
the contract any reference to fixed delivery dates.
29. G. E. Ambatielos pressed Rlajor Laing throughout the nego-

tiations to include fixed delivery dates in the contract, but admits
that Major Laing refused (testimony at the trial, fifth day,p.20).
"Q. Were you saying to Major Laing that you wanted to have
these dates inserted in the contract?
A. Yés,al1 along.146 UNITED l<lNGDO~i COUSTER-3lE~lORIAL (4 IIj2)

Q. Did he Say he did not want to have the dates inserted in
the contract ?
A. Yes, he did. He said, 'Wellyou know, red tape. The Ministry
of Shipping,they are always like that you know....' But he further
stated that a clause would beinserted in thecontract which would
give ample secunty in respect of the fixed dates of dclivery."

At an earlier interview Alajor Laing is stated by G. E. Ambatielos
to have told him that "it \vas a question of principle with the
Ministry of Shipping that they would never put any dates in the
contract" (testimony at the trial, fifth day, p. 60). It would clearly
have been absurd for the Ministry to have refused to insert fixed
dates in the contract, but to have agreed to the insertion of another
clause having precisely the same effect. The tmth is that G. E. '
Ambatielos knew very well that he had failed to get contractual
dates of delivery for his brother.

30. The Claimant, who was in his ow~iwords "fiirious" to discover
that there \vasno provision for delivery dates in the written contract,
sought assurances from Major Laing direct. Tliey met in Paris in
August 1919 and, according to the Claimant, Major Laing told him

that the words "within the time agreed" in clausc 7 of the written
contract of sale were to be understood as refcrring to the dates in
the letter of 3rd July as regards the B type ships;but the Claimant's
explanation of how they could relate also to the C type ships, ahich
were not offered for sale until after 3rd July, is so confused as to be
unintelligible (see testimony at the trial,sixth day, pp. 3-5).

31. The history of the negotiations outlined above shows conclu-
sively that the Ministry never agreed to make fixed dates of delivery
part of the contract for the sale of the vessels. This is confirmed by
the conduct of the parties after the conclusion of the contract. At
no time during the months follonring the conclusion of the contract
of sale of 17th July 1919 did the Claimant or his representatives
suggest that therc had been any agreement for fixed dates of
delivery or that such agreement had been brokeii. In fact the
letters exchanged between the Claimant's representatives and the

Ministry of Shipping and the instructions sent by him to his agents
in the Far East clearly demonstrate the contrary. There \vas
correspoiidence between G. E. Ambatielos and Mr. Bamber of the
Ministry relating to War MinerlCephalonia and War Irooperf
Ambatielos which begins with a request to Mr. Bamber to tell the
Claimant's representatives when they might definitely expect
delivery of them (Annex 4 (1)). hlr. Bamber replied on 9th Septem-
ber 1919 (Annex 4 (z)), saying :

"It is difficult to estimate from tliis [viz., the fact that War
Miner/Cephalofiiawas launched on 16th August rgrg] when she
will be delivered, but1 have cabled to-day to Hong Kong asking
when thjs steamer and also the War Trooperwill be delivered." USITED KISGDO3I COUSTER-XIE~IORIA (4LII 52) 147

The Claimant's representatives do not appear to have replied to or
made any comment on this, and on 10th October 1919 Mr. Bamber
was able to write further to them as follows (Annex 4 (3)) :
"1 am in receipt of a cable advice from Hong Kong as to the
estimated delivery dates of these steamers as follows:
War Miner will.l>robablybe completed end of October.
War Troo4erlaunchine middle of October. and willbe comuleted

Satisfactory progress is nlso being made mith the War Buglev
and War Piper."

32. No\\, the War 114iner/Cephalonia and the War Trooperl
Ambatielos are alleged in the Claimant's memorandum (see Greek
Memorial, p. 67) to he due for delivery on 31st August 1919 and
30th September 1919, respectively, and the Claimaiit \vas during
the autumn of that year making every effort, with the assistance
of the hlinistry of Shipping, tourge the shipbuildersto make speedy
delivery of the ships he had purchased. It is inconceivable that, had
there been contractual dates of delivery, the Claimant's represen-
tatives would not have alluded to it when they received this letter
from Mr. Bamber of 10th October 1919, which indicated probable
delivery dates at least scveral neeks after the alleged due dates.
Instead, the Claimant's representatives replied on 11th October

(Annex 4 (4)) :
"We are much obliged for your esteemed farour of ycsterday's
date, giving us text of a cable received by you from Hong Kong
regarding completion of the War Miner and War Trooper, also
we note satisfactory progress is being made with the ki7arBrrgler
and I17arPiper."
Itwas not till a letter of 31st October 1919 from the Claimant to
Major Laing (Aniiex 4 (5)), that aiiything approachiiig a complaint

of postponement of delivery of any of these ships was made. In this
letter the Claimaiit said :"As you wiU recollect, at the time of the
negotiations for the purchase of these boats, you intimated that this
steamer War Truoperl Ambatielos would be delivered towards the
end of October." The word "intimated is significant. There is no
suggestion here that the date of delivery was made part of the
contract and still less that the vesse1 should have been delivered
by 30th September or that the contract had been broken already.
Indeed, the tone of the whole letter is inconsistent \rith the Com-
plainant's present allegations of agreed delivery dates and breach
of contract. If we continue reading the letter of 31st October 191g.
we find an explanation of the telegram relating to the &VarTrooperl
Ambatielos relied upon in paragraph 4 of the Greek Memorial. In
the letter G. E. Ambatielos says that he has had word from
hlr. Rossolymos, their Far Eastern Agent, of furtherdelay in deliveiy,
and that delivery is hoped for about 15th December 1919, and
explains that this ship had been chartered with a very handso~neIqS UNITED KISGDO\I COUXTER-MEMORIAL (4 II52)

freight and that the Claimant's representatives had "agreed, what
we thought at the time to be very amplc, and fully covering us;
pst December", as canceuing date for the charter. In order that
War TrooperlAmbatielos might not miss this charter, G. E. Amba-
tielos finally asks Major Laing to send a telegram to the builders
urging them to deliver the ship "at the cnd of November at the
very latest". The telegram referred to (see paragraph 4 of the Greek
Memorial) was sent by the Ninistry on the same day as G. E.
Ambatielos's lctter was written and is to be read in relation to it.
It was sent in order to assist the Claimant and at his representative's
request and not, as alleged by Major Laing in paragraph 7 of his '

Statutory Declaration (Greek Xemorial, Annex B, p. 30). "because
the Shipping Cornmittee foresaw either cancellation of the contract
or a claim made against them". The wordç in the telegram 'hot
later than Xovember" are clearly ta be understood, in the light of
G.E. Ambatielos's letter of 31st October, as the estimated or hoped-
for date. It is important to observe tliat in the Claimant's own
memorandum (Greek Memorial, Annex R 1, p. 67) the aUeged due
date of delivery of this ship is given as 30th September 1919, a
difference of two months. Again, in his letter of 31st October,
G. E. Ambatielos says : "-4s you will recollcct, nt the.time of the
negotiations for the purchase of these boats, you intimated that
this steamer would be delivered towards the end of October." Could
least the War
there be clearer demonstration that as regards at
TrooperlAmbatielos the suggestion that there was a fixed date of
delivery under the contract of sale of 17th July 1919 is a complete
fabrication ? Paragraph 4 of the Greek Memorial relies on one date
while the Claimant and his representatives in their contemporary
lettersallege two wholly different dates.

33. On ~2nd December 1919, G. E. Ambatielos wrote to
hlr. O'Byrne iii the Ministry of Shipping in the fouowing terms
(Annex 4 (6)) :
"Re War Bugler, we confirm telcphonic convcrsation, and as
explained on the phone we do not hold you responsible for the
detention of this boat in Hong Kong as you have nothing to do
with thc same whatevcr, in fact, yoii have done al1 humanly
possible to accelerate delivery of this and al1other steamers."

It may be pointed out here that further delays in delivery occurred
early in 1920 owing to the Claimant's decision to convcrt certain of
the ships-among them the War Coronet/Keramis and War Tiara/
Yannis-to oil burning. He persisted in this policy even though it
involved delay to War Sce$tre/ Trialos, which was not being so
converted (see telegrams passing between his representatives set out

at Annex 4 (7), (9) and (IO)).
34. There is in fact not a single reference in the entire correspon-
dence or in cables passing between the Claimant and his own agents UNITED KIXGDO>I COUNTEW-ZIE\IORIAL (4 11 j2) '49

in the Far East suggesting that there were fixed dates of delivery of
the ships or that the Ministry of Shipping was in any breach of
contract in this respect. No such suggestion or complaint was made
uiitil March 1921. It is inconceivable that, if dclivery dates had been
agreed as part of the contract, no complaint should have been made
until then. Indeed, the tone of the corrcspondcnce is in itself
sufficient proof that no delivery dates were agreed (see, in addition

to the letters quoted above, Annex 4 (II)).
3j. It has now been shown that the iiegotiations leading up to
the contract for the purchase of the ships, as disclosed by the
correspondencc and by the testimony at the trial before Nr. Justice

Hill, and the correspondence after the conclusion of the contract
do not support the Hellenic Govcrnment's contention that delivery
dates were agrecd as part of the contract. We shall now consider
the statements made from time to time by Major Laing which are
heavily relied on by the Hellenic Government to support its case.
These statements are demonstrably inconsistent with each otlier,
erroneous on points of fact and therefore unreliable.

36. In the first place, the picture he draws in paragraphs 2 and
3 of his Statutory Declaration of 19th January 1934 (see Greek
bfemorial, Annex B. pp. 28 and 29) of his own position and duties
in the Ministry of Shipping is tendentious, false and vain. As has
been pointed out in paragraphs 18 and 19 of this Counter-Memorial.
he was subordinate to both Sir John Esplen and the Shipping
Controller ; he had no authority to conclude contracts or to settle
important terms in them without refcrence to higher authorities.
"It was my habit", he says (Greek Memorial, Annex R, p. z8),

"to report the deal which 1 had made and the contract would be
signed in that form embodying the terms which 1 alone had agreed
with the purchasers." This is a false description of his powers :md
contradicts his owri account of the negotiations for the sale of ships
to the Claimant (see his letter to Sir Joseph Afaclay of 20th July
1922, Greek hlemorial, Annex E, on p. 32). where he describes how
he put forward the proposition for their sale to the Shipping
Controller and laid his deductions before the Shipping Committee.
Further, Sir Joseph Maclay's letter of 12th July 1922 (see Greek
Memorial, Annex E, on p. 32) does not, as Major Laing alleges in
paragraph 8 of his Statutory Declaration (Greek Memorial, Aniiex
B, on p. 30), confirm "the powers that 1had for the disposa1of his
Majesty's ships" ; on the contrary, it demonstrates that Major

Laing, far from agreeing terms on his own with the purchasers,
was in "constant touch" with the Shipping Controller.
37. In the second place, Major Laing is wholly wrong in para-
graph 8 of his Statutory Declaratioii (Greek blemorial, Annex B.

p. 30) where he States that he was subpŒnaed to give evidence by
the Crown aiid that this prevented his being approached by the UNITED KINGDOM COUSTER->IE>IORI(:4 ~LII52)
Ijo
Claimant. The records of the Treasury Solicitor, who conducted the
case for the Board of Trade, have been examined, and there is no
entry of a fee paid for Najor Laing's subpcena. Further, it is not,
and was not in 1922, a mle of English law that the subpŒna of a
person as a witness by one party to litigatiori in tlie courts reserves
that person to the party subpŒnaing him.

38. Major Laing's Statutory Declaration also goes beyond his

letter of 20th July 1922 to Sir Joseph Rlaclay, in that the letter
does not state that there \\,as any oral agreement with the Claimant
or his representatives for fixed dates of delivery and is not incon-
sistent with a contrary view. Moreover. the Statutory Declaration
is in conflict with the assurance given by Major Laing to Mr. O'Byrne
before the completion of the contract (sec testimony at the trial.
third day, p. 58) :

"Q. (to AIr.O'Byrne). Did he (Major Laing) tell you that the
delivery of the steamers had been agreed-that both the manner
and the time of delivery had been agreed ?
A. Xo. 1 asked about the question of delivcry, and he said only
as and when they were already for delivery by the builders."

Major Laing's Statutory Declaration is also inconsistent with a
statement (already referred to in the British Foreign Secretary's
note of 7th November 1934 to the Greek Rlinister in London : see
Greek Mernorial, Annex S 4, at p. 117) made by him in 1922to the
Treasury Solicitor when he professed himself entirely unable to
remember whathe might have said or not have said to the Claimant.

39. In short, Major Laing's statements became increasingly
unreliable as time passed, and his Statutory Ileclaration is wrong
in points of fact and is in substance wholly inconsistent with his
conduct and statements at the time of the negotiations and conclu-
sion of the contract of sale. No other member of the Ministry is
alleged to have given any undertaking as to fixed dates of delivery

except Major Laing, and he was not called by the Claimant to give
evidence of it at the trial, although the Claimant had every oppor-
tunity of calling him.

40. From al1 this it must be plain that there was iio agreement
reached as to fixed dates for delivery of the ships, aiidit was not a
term of the contract of sale that the Shipping Controller should
deliver them on fixed dates. The conduct of the parties is throughout
the period from July 1919 to March 1921 wholly inconsistent with
the view that either of them assumed or believed that there were
dates of delivery fixed bythe contract of sale. It \vasindeed precisely
because there were no fixed dates of delivery, non-observance of
which he could treat as a breach of contract, that the Claimant
made his persistent efforts to press for carly delivery. UNITED KINGDOhl COUNTER-MEAIORIiYL (4 II 52) Igl

41. The writlen contract of sale of 17th July 1919 is cornfileteand
selj-consistent and does no2cal1for exfilanation by relerence to any oral
agreement. The Hellenic Govemment insists that the words "withiii
the time agreed" in clause 7 of the written contract refer to dates
orally agreed (see, for example, Greek Memorial, Annex R 3, on
p. 71). This is wrong for the following reasons.

42. Clause 3 of the wntten coiitract (see Greek R'iemorial,Aniiex
A, on p. 26) provides that :
"The steamers shall be deemed ready for delivery immediately
after they have been accepted by the vendor from the contracton",

while the vendor was required by clause 2, as a precondition of
.,vment bv the ~urchaser of the balance of the uurchase urice..to .
give 72 hours' notice to the purchaser or his agent of the steamers'
readiness for delivery, and to make delivcry at the contractcir's
yard. Clause 6 provides that :
"Oii payment of the balance of the purchase money as afore-
said, a legal bill of sale free from incumbrance for the whole of
the shares in each of the steamers or the Builders' certificates
for each of the steamers shall be handed to the purchaser at the
vendor's expense ...."
Clause 7 contains the words "within the time agreed relied on by
the Hellenic Government and provides :

"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
per annum." p;iid with interest at the rate of five pounds per cent

Finally, clause g reads :
"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 ofuch 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 agree-
ment shall ayply mactatismattandis to the purchase of the iiew
steamer or steamers."

43. The contract provides in fact both for the maniier and time
of delivery of the ships. In particular the time for delivery of each
ship is immediately upon acceptance of it by the vendor from the
builder (clause 3 of the written contract), subject to fz hours' notice
of its readiness to the purchaser (clause 2). The contract explains
itself, andit is unnecessary to have recourse to any oral agreement
to elucidate oridentifyits terms. Inany case the expression "within
the time agreed" is inappropriate to the delivery of several shipsIV UXITED tilh.GDOiM COUKTER-ME3lORIAI. (4 II j2)

having, according to the Claimant, different dates for delivery ; for
this the expression would have read "within the times agreed. The
expression is appropriate to the time for delivery provided for in
clauses 2 and 3 of the contract because the same condition is estab-
lished in those clauses for al1the ships ;but it could not be applied
to a number of dates which were ex hypothesi'differentfor each ship.
There is thc further point that the riglit of substitution, under

clause g of the written contract, of "anothcr steamer or steamers of
the same type and expected to be ready at or about the same date"
disposes of any argument that there were contractual dates of
delivery. It is impossible to believe that, had the Claimant got
contractual dates of delivery, as he alleges. he would have agreed
to the substitution of vessels which were merely expected to be

delivered at or abont the same date.

44. Finally, it wozJdhave beenan impossible businessproposition
for the iMinistry of Shipping to promise fixed dates for delivery to the
Claintant when it was selling ships being bziilt under shipbuilding
contractswhich lhenzselves gaveonly approximate dates.This is shown,
for example, by the shipbuilding contract ' with the Shanghai Dock

and Engineering Co., which covered the Wav DiademlPanagis, War
Tiava/Yannis and War RegalialMellon al1 C type ships. Clause 2
of that contract provided :
"The said three steamers shall be delivered by the builders
afloat in Shanghai harbour, the first in about IO months, the second
in about II months, and the third in about 12 months after amval
in Shanghai of the necessary materials named in clause 12 hereof
from the United Kingdom, unless the builders shall be delayed
l'y any strike suspension of labour, etc ...."

Clause 12 refcrred to provides :
"This Agreement is based on delivery in Shanghai of the plates,
shapes and bars required by the builders for the construction of
the said three stcamers at the followingUiiitcd Kingdom of United
States of Arncrica Government prices ...."

Again, the contract for War Trooper/A~nbntielosprovides in
clause 2 that it

"shall be delivcred by the builders afloat in Hong Iiong harbour
as early as possible alter delivery in Hong Kong of al1 necessary
materials and auriliaria".

The conditional dates of delivery and the exceptions clauses in
these building contracts \vould have made it impossible for the.
Ministry to have offered guaranteed dates to the Claimant.

1 Complete copies of tliiscontract and of the contract for War Trooperl
Ambatielos referredto below will bc communicated totliellegistrain accordance
with Article43, paragrapliI. ofthe Rules of Court fortlie usc ot the Courtand
of the Hcllenic Governmcnt. UNITED KINGDOM COUNTER-hlEJIORI.4L (4 II52) 153

The United Kingdom Government submits that the Claimant's
losses cannot be attributed to any breach of the contract by the
Crown : seven of the sbips were delivered to him in accordance
with the contract and he was not entitled to delivery of the two

remaining ships ("War Regalia/Mellon" and "War Piper/
Stathis")

45. The Hellenic Government contends that the Claimant paid
an exceptionally high price for the nine ships, the total amount
of g2,275,000 being about ~500,ooo above the normal market pnce
for the types of ships concerned ;that this surn of L500,ooo repre-
sented the consideration for having fixed dates for delivery ; that,
delivcry of six of the ships heing delayed, and two not beiiig
delivered at all, the Claimant suffered loss from this breach of

contract by the Crown in that the ships were unable to eam the
freights anticipated ;and that in the result he was unable to com-
plete payment for the ships and was compelled to mortgage seven
of them to the Crown in November 1920 as secnrity for the balance
of the purchase price. These contentions may be found principally
in paragraphs 5, 6, and zo of the Greek Memorial, in the Claimant's
memorandum (Greek Memorial, Annex R 1, p. 67), and in the
Hellenic Government's notes of 30th May 1934 and of 2nd January
1936 (Greek Memorial, Annexes R 4 and R 5).

46. The United Kingdom Govemment contends that the aileged
financial losses of the Claimant cannot be attribnted to any failure
of consideration or breach of contract by the Crown ;and that, in
particular, seven ships were delivered in accordance with the
contract ;and that, for the reasons given in paragraph 68 belo~v,
the Claimant was not entitled to the delivery of the War Piper/

Stathis and War Kegalia/Mellon.
47. It has already been shown (paragraphs 17 to 44) that there

were no contractual delivery dates. Moreover, the contention is
unfounded that the pnrchase price was increased by the sum of
,650o.oooin consideration of fixed delivery dates. Thetotal purchase
price of g2,275,ooo for six B type and three C type ships worked
out at g289.166 for each B type ship and ~180,000for each C type
ship, and this conformed closely to prices for newly-bnilt ships then
prevailing in the Far East. For example, a B type ship, of the same
series as those sold to the Claimant, was earlicr in rgrg sold to a
Belgian purchaser for g310,ooo and another B type ship was
accepted by a Greek pnrchaser for g315,ooo (seeG. E. Ambatielos's
letter of 7th July 1919, paragraph 26 above). Again, as late as
February 1920, the Claimant's agent in the Far East, Mr. Rossoly-
mos, reported to him (telegram of 4th Febmary 1920,Annex 4 (8))
that shipbnilders at Kowloon were prepared to take orders for two USITED KlSGDO>I COUSTER->lE>lORIAL (4 II 52) 'I55
losses. The ships were al1 delivered within a reasonable time, four

of them being delivered before the end of 1919, and the rate of
delivery was due in no small part to the pressure exerted by the
Ministry upon the builders. So in a letter of ~2nd December 1919
(Annex 4 (6)), G. E. Ambatielos went so far as to tell Mr. O'Byriie
that al1that was humanly possible had been done on the Ministry's
hehalf to accelerate deliveries of thehips. By the end of March 1020
the first five ships, listed in Annex 5, had been completed and
delivered to him. The sixth ship, namely, War CoronetlKeramies.
was delivered to Mr. Rossolymos on 15th Rlay 1920,and on 20th May
1920 application was made for the balance of the purchase-moiiey
in respect of that ship. War TiaraIYannis was ready for delivery
on 29th May 1920, and \vas later delivered to the Claimant. Further
applications for payment of the outstanding balances on these two

vessels and of amounts due for the alterations and other extras.
ordered by the Claimant for the War Coronet/Keramies. werc made
in June without result, and it was then plain that the Claimant \vas
in financial difficulties. However, though he had not paid the balance
of the purchase-price on the two remaining ships War Regaiial
Mellon and War PiperlStathis, he had fixedboth on valuable charter-
parties, which could be canccllcd by the charterer if the ships were
not made available early. The Rlinistry of Shipping tlierefore agreed
in July 1920 that the two ships should be ailowed to unclertake the
voyages arranged, registered in the name of the Shipping Controller
and under the management of the Royal Mail Steam Packet Com-
pany and Holt Corporation, so that the Claimant might have the
financial benefit of the charter performance.

50. Between June and October 1920 the Claimarit was seeking
means of meeting his liabilities. After various proposals had been
made, it \\,as finally decided by the Shipping Coiitroller that the
best way to assist the Claimant and to protect public fuiids was to
accept a mortgage, suggested by the Claimant, of the seveii ships

which had been delivered to him. The decision to accept the nicirt-
gages of the seven ships was sent to the Claimant's rcprcsentatives
in a letter of 8th October 1920 (Annex 4 (rz)), wliich reads :
"With reference to this Department's letter of Gth instant. 1
have to infom you that it has been decided that this Ministry
willaccept the security offeredby you, viz., a mortgage of 7 vessels
to be placed on the Greek Register, subject to the Greek Govern-
ment confirming that there are no prior charges on these ships,
and, afterthese mortgageshave been duly registered, the remaining
two ships (1Var Regalia/Mellonand War PiperlStalhis) will he
handed over to you-these two vessels in due course also to be
placed on the Greek Mortgage Register."

Mortgages and deeds of covenant were duly executed on
4th November 1920 (sec Greek Memonal, Annex F).156 UYITEL) KISGDO.\I COUSTER-JIE~IORI(A 4LII 52)

51. In view of the allegations in paragraphs 6 and 7 of the Greek
Memarial, it is necessary to explain the terms of the letter of
8th October 1920 set out above. These allegations are to the effect
that there was an agreement between the Ministry and the Claimant
for immediate delivery of the Mellon and Stathis, and that the
possibility of registration ata Greek port had been provided for
in the agreement only in the event of its being impossible to obtain
a certificate from the Hcllenic Government assuring priority to the
mortgages of the other seven ships. At that time a Greek ship could
not be registered under Grcek law until she had proceeded to her
home port, and a mortgage upon her could iiot be registered uiitil
the ship's register had been opened. It was, therefore, possible for
the owner of a still unregistered Greek ship to grant a second or
subsequent mortgage on her, to open the register in Greece upon
the ship's arriva1 there, and register such second or suhsequent
mortgage, so as to give them priority over the first mortgage. The
essential condition of delivery of the two remaining ships ~Mellon
and Stathis was, therefore, that the mortgages of the other seven

should be "duly registered" according to the requirements of Greek
law so as JOgive priority. It was not enough that the Ministry of
Shipping should obtain legally valid mortgages. The Claimant's
representative accepted the conditions regarding the mortgages (see
their letter of 8th October 1920,Annex 4 (13));but later attempted
to say that there had been an oral agreement for immcdiate delivery
of the Stathis and Mellon to the Claimant before registry of the
mortgages in Greece. This is wrong. The Ministry considered hand-
ing over the ships to him in order to assist him financially, even
though the condition of registration of the seven ships had not been
fulfilled, and it {vaswilling, as a matter of grace, to accept in lieu
of its legal rights a certificate from the Hellenic Government that
the mortgages should bc treated as if they were already on the
register. At this point, however, the Claimant intimated that he
might claim damages for the allegedly wrongful non-delivery of the
Stathis and Mellott ; the Ministry replied that they could not
consider the delivery of these two ships so long as he persisted in
such a claim. Then, on 3rd February 1921 (Annex 4 (17))~the
Claimant's brothcr, G. E. Ambatielos, wrote to the Shipping

Controller asking that the Claimant be relieved from prirchasing
the Stathis and Mellon in face of the financial position of shipping
at that time. No assertion or claim \vas made in respect of lateness
of delivery or failurç to deliver by dates certain. The proposa1 was
rejected by the Ministry.

jz. Thc Claimant's financial difficulties also led to the hlinistry's
taking over payment, under a guarantee it had given to the
Claimant's brokers, of insurance premiums due on certain of the
ships betireen January and October 1921. Further, the Clairnant
failed to pay the interest due (under clause I of the Deeds of Covenant) on 1st February 1921, and in fact never paid any of the
interest due. Nor did he pay the instalment of principal due on
4th May 1921, or any later instalments.
53. During 1921, certain of the ships were arrested because of
non-payment of seamen's wages and other debts. In the case of
the Panagis, the Board of Trade intervened and subsequently paid
£600, being the master's claim for wages and disbursements.

54. \+'hile it is not necessary at the present time to go into the
details of the alleged losses caused ta the Claimant by the Ministry
of Shipping, it m;iy be said at once that the Ministry received in
al1 over ~300,000 less than the contract price for the nine ships,
and that the United Kingdom Govemment wholly rejects the
Claimant's claim in respect of loss and damage, which is exaggerated
and unfounded.

The United Kingdom Government snbmits that the Crown was
under no duty to cal1 Major Laing or Sir Joseph Maclay in the
Admiralty Court or to produce the letters exchanged between them
in July 1922 ; the Claimant could have called them as witnesses
himself but failed to do so ; further, al1 information bearing on
the conclusion of the contract which their letters conld have

disclosed was fully presented to the Court from other sources ;
the letters did not prove the existence of any oral agreement for
fixed dates of delivery, and there is no reason to suppose that,
if they had been called as witnesses, the evidence of Major Laing
or Sir Joseph Maclay wonld have proved the existence of such
an oral agreement

j5. The Hellenic Government contends that, when the Board of
Trade sued the Claimant in 1922 in the Admiralty Division of the
High Court of Justice, it failed to cal1 as witnesses Major Laing
and Sir Joseph Maclay, who could have proved the oral agreement
for fixed dates of delivery ; that it failed also to disclose letters
(Greek Memorial, Annex E) exchanged between these two persons
in July 1922 which were also evidence of this oral agreement ;and
that, as a result of this breach of duty by the Crown, the facts of
the case were not so laid before the Court of first instance as to
enable it to arrive at a proper and fair decision. These contentions
are to be found in paragraphs g and.12 to 17 of the Greek Memorial.

56. The United Kingdom Government rejects these contentions
as wholly unfounded in law and misconceived on the facts. The
Crown had no duty as alleged, and in any event the Court was not
misled by the absence of the witnesses or the letters.
57. The steps leading up to the proceedings in the High Court
described in paragraph 58 below were as follows.Between April and15~ UXITED KlXGDOhl COUKTER-lIE31ORIA (4LII 52)

October 1921. negotiations took place between Sir Ernest Glo\rer,
acting for the Board of Trade, which had taken over the functions
of the Ministry of Shipping, and the Claimant and his representa-
tives, for a general settlement, but none was reached. In June 1921
the Claimant sought to refer to arbitration, under clause 12 of the
sale contract,a numher of matters ; but the Board of Trade did not.
as its letter of 29th June 1921 (Greek Memorial, Aiinex J) shows,
accept that there was any dispute under the contract of sale calling
for arbitratioii, althoiigh it named MI. W. N. Raeburn, K.C., as
one who would act as arbitrator for the Board in case of need. But
in the same letter the Board told the Claimant that they were
starting proceedings agaiiist him, nnder the mortgages of November
192o. in the Admiralty Division of the High Court of Justice in
England. Thus there was no "change of attitude" as suggested in

paragraph 8 of the Greek Rlemorial; nor was the right to commence
proceedings under the mortgages in any way "created" bythe draw-
ing out of the negotiations.
58. The Board of Trade, acting on behalf of the Cro\vn as mort-
gagee, brought three actions iîzrelifor valuation and sale of the
A~fbatielos, Ce$/zalonia and Panagis and an action iiz$ersonar~z
against the Claimant for recovery of principal and interest, and
other sums, in respect of the Nicolis also due under the mortgage
deeds and deeds of covenant of November 1920. The Claimant,

defendant in these actions, claimed damages for late delivery of
six ships and non-delivery of two ships, the Mellon and Stathis,
under the contract of 17th July 1919. He also claimed damages oii
the ground that the ships delivered were not according to contract,
but were of less value because of defects and omissions. He enjoyed
every right available to a litigant in the English courts, and even
some pnvileges. He was represented before and at the trial by
counsel of the first rank, namely, Mr. A. D. Bateson, K.C., Mr. W.
A. Jowitt, K.C., and Mr. G. P. Langton, of whom two later became
High Court Judges and one Lord Chancellor. He was given leave
to defend the actions, even though he had allowed time to run on
until, under the rules of court, he could have heen refused leave
to do so. The trial itself, in November 1922, lasted no less than
eight days, in which he had every opportunity to produce evidence
andto establish his case. He called Mr. Bamber, a Board of Trade
official, to give'testimony on his behalf.

59. There was no breach of any rule of English law or practice
by the Crown in not calling Major Laing or Sir Joseph lllaclay as
witnesses at the trial before Mr. Justice HiU. The Crown was, like
any other litigant in the courts, free to call such witnesses as it
considered necessary to prove its case. It was under no duty to call
either Major Laing or Sir Joseph Rlaclay and the Claimant \vas free
and able to call them (see paragraph 37 above). There was no
question of surprise, since the Cro\wXonpened its case for some four USITED KINGDO.\I COUSTER-.\IEUORlr(l4 L 11 52) Ijg

days of the hearing, and, as it did not cal1them, the Claimant had
ample opportunity to decide whether to cd them himself. He could,
if necessary, have asked for an adjournment of the trial.

60. Further, there was no hreach of any rule of English law or
practice by the Crown in not producing to the Court the letters
exchanged in July 1922 between Lord Maclay and Major Laing.
The Crown ncver claimed privilege of State from disclosure of these
letters as alleged by the Claimant in his memorandum attnched to
the Greek Minister's note to the British Foreign Secretary of
12th September 1925 (Greek Rfemorial, Annex R 1). nor could the
Crown have done so, had the Claimant sought an order for produc-
tion of the letters. The Claimant did not trouble to seek any such
order, although he was aware of the existence of the letters (seehis
affidavit at Annex 3). However, had the Claimant sought such ;m

order, it would have been open to the Crown to show, what was in
fact the case, that these letters were called into existence by the
Treasury Solicitor for the preparation of the Crown's case in the
proceedings pending against the Claimant. Sir Joseph Maclay arid
Major Laing were no longer in the Govemment senrice at this time,
and therefore the Treasury Solicitor invited Sir Joseph Maclay to
put certain questions to Major Laing, which he did in his letter of
12th July 1922 (see Greek Memorial, Annex E). Now it is an indis-
putable rulc of evidence in English law-and ajust and reasonable
one-that a litigant shall not be required to disclose documents
called into existence by his legai advisers either for advice or for
the conduct of his case. So Phipson on Evidence (8th edition, 1942)
says at pagc 188 : "A client (whether party or stranger) cannot be

compelled, and a legal adviser (whether barrister, solicitor, the
clerk or intcrmediate agent of either, or an interpreter) wiii not be
allowed without the express consent of his client, to disclose oral or
documentary communications passing hetween them iii professional
confidence", and, on page 193, English court decisions are cited to
show that the same rule applies to oral or documentary information
from third persons, which has heen cded into existence by a solicitor
forthe purposes of litigation. No demand was made for the produc-
tion of these letters of July 1922 either before or at the trial, but,
had such a demand been made, no reason appears why the Crown
should not, like any other litigant, have taken advantage of this
nile. In short, the Crown was in no sense in breach of any duty in
respect of these letters.

61. It follows from the above that. if the Claimant's case was
prejudiced by the fact that neither Major Laing nos Sir Joseph
Alaclay testified at the trial, it was his fault alone. He and his legal
advisers were fully aware of Sir Joseph Maclay's position, as can be
seen from G. E. Ambatielos' letter of 7th July 1919 (seeparagraph
26 above). Further, he and his legai advisers knew well that Major

Laing was a material witness to the existeilce of the alleged oral160 UXITED KINGDOM COUNTER->IEYORIAL (4 II 52)

agreement, as is shown by their efforts to obtain from him a state-
ment of the cvidence he would give if the Claimant chose to call
him (Greek Memorial, Annex P. paragraph 9 ; Annex R 3, top of
p. 73 ; Annex R 4, paragraph 9, pp. 80-81). The Hellenic Govern-
ment admits (Greck Memorial, p. SI) that it was procedurally
possible for the Claimant to have called hfajor Laing (sec paragraph
37 above) : and the suggestion (Greek hfemorial, Annex R 3, p. 73

top, and Annex R j, p. 89 bottorn) that anattempt to subpŒna him
failed is unproven and absurd, since hc was present at the trial and
had been in touch with the Claimant before the trial (see Claimant's
affidavit, Annex 3). The obvious inference to be drayii from the
Claimant's failure to call Major Laingis that drawn by Lord Justicc
Bankes in the Court of Appeal (Annex 2) : namely, the Claimant and
his legal advisers were far from certain what Major Laing would
say, and had in fact no reason whatever for supposing that the
evidence of Sir Joseph hlaclay would be favourable to them. The!
could have called them, but, being uncertain what they would say,
thought it wiser not to.

62. Even if the lctters of July 1922 had been before thc Court
they would have added nothing material to what the Court had '
already been told. With one exception, there is no material informa-
tion in Major Laing's letter of 10th July 1922 which was not
specifically mentioned in the letters exchanged in hfay 1921bctween

Major Laing and the Claimant, which were before the Court (for
full texts, see Greek Memorial, Annex S 3, pp. 114 and rrj). The
exception is the reference to the sum of ~jnn,ono, alleged by the
Claimant to be a part of the purchase price (the accuracy of this
statement as a correct assessment of the position from a business
point of view has been disproved in paragraph 47 above) ;however,
this was mentioned by the Claimant in his testimony before the
Court. In the course of his judgment (Annex 1, p. 187). Mr. Justice
Hill made the following observation about thc letters of May 1921 :

"The letters in May 1921 do iiot help the defendaiit. Major
Laing had ceased to be on the staff of the Ministry on 30th Sel>-
tember 1920and was not the plaintifi's agent to make admissions.
But in any case, the assurance stated to have been given by Major
Laing was not that the dates were contractual, but that he was
satisfied that the dates mentioned in the defendant's letter of
3rd July 1919 could be relied on. It al1 points to the expression
by Rlajor Laing of an expectation of delivery within certain
months. 13ut that is a very difierent thing from a contract that
they shall be so delivered."
These observations would be equally applicable tothe letters of July
1922. For even if it be assumed that Major Laing's statements in
Iiis letter of zotli liily 1022 constitutc on accur;itc;iccourof \r.tiat
~asscd bct\veen hini ancl thc Cl;iirnant. there is iiotliint. to sho\rfthat

hlajor Laing had, on behalf of the Çhipping ~ontrGller, given a UXITED KINGDOlll COGNTER-ME31ORIAI. (4 II52) 161

definite undertaking for fixed dates of delivery of the ships. There
is, indeed, nothing in the letter of 20th July 1922, which is incon-
sistent with the general contention of the Crown that the Claimant
was informed of the dates on which it was anticipated that delivery
would he given, but that no agreement was made that the ships
would in fact he delivered by those dates. It is impossible therefore
to believe that the production of the letters at the trial could have
made any difference to the result, and in any case the Claimant

could have called Major Laing in person.

63. At this point it is relevant to note the position, undcr the
English rules of evidence, of the Claimant's attempt to prove that
the written contract of sale of 17th July 1919 must be read in the
light of the alleged oral agreement for fixed dates of delivery of the
ships. The contract itself contains no provision as to fixed dates of
delivery ;moreover, it has been shown already (paragraphs 41 to
43) that the words "within the time agreed" in clause 7 of the
contract refer to clauses 2 and 3, and further are inappropriate to
describe dates of delivery, and that the time agreed for delivery
was the time when the vessels were completed by the builders. The

contract then does not cal1 for any addition or elucidation in tliis
respect. Therefore, under the English rules, evidence of an oral
agreement imparting fixed dates of delivery was strictly inadmis-
sible.Thus in Phifison on Euidence (8th edition, 1942) we find that :
"Where a contract, not required by law to be in writing, purports
to be contained in a document which the Court infers was not
intended to express the whole agreement between the parties, proof
may be given of any omitted or supplemental oral term, expressly
or impliedly agreed between them before or at the time of executing
the document, if it be not inconsistent with the documentary terms"
(p. 567). But this is an exception to the general rule that "When a
transaction has been reduced to, or recorded in, writing either hy
requirement of law, or agreement of the parties, extrinsic evidence

is, in general, inadmissible to contradict, vary, add to or subtract
from, the terms of the document" (p. 564). The present case didnot
fall within the exception because the alleged oral agreement was
plainly inconsistent with the terms of the written contract as
construed by the Court. The Crown made forma1 objection at the
trial to the inadmissibility of evidence to prove the aiieged oral
agreement, and Mr. Justice Hill, as a matter of form, upheld this
objection. But what is important is that in fact the Crown did not
press this objection at the trial but gave the Claimant the oppor-
tunity of assemhling and presenting to the Court evidence of an
oral agreement ;further, Mr. Justice Hill gave careful attention to
this evidence, though ruling that it was strictly inadmissible, and
devoted a substantial part of his judgment to it. In short, the
Claimant, far from being denied justice in this matter, was given an

opportunity to prove the alleged oral agreement whicli the judge162 USITED KlSCDOll COUNTER-hIEh1ORIAL (4 II 52)

would have been fully justified under English law in refusing to
him. This hardly suggests a "procedure so deficient as to exclude
al1 reasonable hope of fair decisions" (see Greek Nemorial, Aiinex
R 5, at p. 91).

The United Kingdom Government sybmits that the decision of
MI. Justice Hill in the Admiralty Court and that of the Court of
Appeal were hoth just and in accordance with the rules of English

law and practice ; in these proceedings the Claimant was given
the same treatment as a United Kingdom national

64. In a long, careful and detailed judgment running to seventeen
pages, which was delivered on 15th Janiiary 1923, Mr. Justice Hill
dealt first with the Claimant's claim for damages for late delivery
of the ships (Annex r, at p. 185). He held that evidence of a verbal
agreement outside the written contract of sale of 17th July 1919
was inadmissible as contradicting the written contract, pointing out
that the written contract provided both for the manner and for the

time of delivery of each steamer :in particular, each steamer was
to be delivered immediately after it had been accepted bythe vendor
fromthe contractor, the buyer having 72 hoiirs' notice of readiness
for delivery within which to take delivery.
65. Legally, this could have been the end of the Claimant's case
on late delivery. Nevertheless, Mr. Justice Hill reviewed, and gave

his opinion on, the evidence for an oral agreement, as though it had
been admissible (Annex I at p. 186). He found it most improbable
that the Shipping Controller should agree to fixed dates of delivery
tothe Claimant without any clause of exception, when the contracts
under which the ships were built for the Crown gave delivery times
depcnding on conditions and contained wide exception clauses. He
observed that G. E. Ambatielos had done al1he could to induce the
Shipping Controller's representatives to insert fixed times in the
written contract, but they had refnsed ;that Major Laing had no
authority to settle finally the terms of sale and, if he had given any
oral promise as to fixed delive- dates, it ivas not upon such terms
that the contract was finaüy agreed ; and that, while RIajor Laing
had given no evidence, the evidence of Mr. Law was too indefinite,
while that of G. E. Ambatielos was unreliable : "on his own admis-
sion, he nas deceiving the defendant. 1 think that in the box he
was trying to deceive me." But, the learned judge continued, even
if the evidence of an oral agreement for fixed delivery dates were

admissible and the oral agreement had been proved, he found it
impossible to Say what the agreed fixed dates were : "Were they
the estimated months put on a buff slip by blr. Bamber, or the
dates mentioned in the defendant's letter of 3rd July 1919, or the
date 'delivery by March' in a pencilled note of Major Laing's on UNITED KINGDOY COUNTER-~IE>IORI(A 4L 11 52)
164
"If, in the course of the preceding negotiations, any promises
were made by Major Laing as to delivery at fixed times, it was
not upon such tems that the contract was finally agreed."

68. In the next part of his judgment, Mr. Justice Hill dealt
(Annex I, pl). 188-190) with the defendant's claim for damages by
reason that the ships delivered wcre not according ta contract, but of
less value because of defects and omissions. He then cornes to the
claim for damagcs for the non-delivery of the War PiperlStathis and
War Regalia/iMellon,which is an issue raised in the Greek Memorial

(paragraphs 6 and 7). The learned judge points out that, so far as
the claim for non-delivery of these two ships rests upon the allega-
tion that there usas a contract to deliver on fixed dates, it fails for
the reasons already given ;andthat, so far asit rests on the contract
of sale of 17th July 1919, it fails because the Claimant was never
ready and willing to pay the balance of the sale price against delivery
(Annex I,p. 191). The learned judge then reviews the history of the
case up to thc agreement for the mortgage of the ships in October
1920 (Annex 1,p. 191). and finds that the letters of 8th,October 1920
(for text see Annex 4 (12) and (13)) "state the tems verbaily
offered to and accepted by Mr. G. E. Ambatielos. Theletters confirm
that agreement" (Annex I, p. 192). Theÿ madc it clear, in the vic~v

of Mr. Justice Hill, that
"the condition of delivery of the Melloiiand Slalhis without cash
payment was (r) a mortgage of the other seven ships ; (2) the
registration of the other seven ships in Greece ; (3) an assurance
hy the GreekGovemment that there acre no prior chargeson them ;
and (4) the registration in the Greek Hegister of the mortgages.
There was a further stipulation that in due course the Illellmc
and Stathisshould also be mortgaged, for that must be the meaning
of the words 'placed inthe Greek Mortgage Register'."

The dceds of covenant concluded on 4th November 1920 were not
inconsistcnt with the continuance of this bargain. The Shipping
Controller could not now refuse delivery of thc Stathis and Mello~z
solely because of default in payment of the purchasc price, but he
could do so under the bargain of 8th October 1920. "When there-
fore", continues Mr. Justice Hill (Annex 1, p. 193)~"as soon as the

mortgages were execnted, the defendant demanded delivery of the
Mellon and Stathis, the Shipping Controller \vas fully juçtified in
his reply of 8th November 1920; 'The two ships will only be
transferred after the other seven vessels have been duly registered
at Argostoli and the mortgages placed on the Greek register.' "
(See Anilex 4 (IL+),(15) and (16).)

69. In the remainder of the judgment, Mr. Justice Hill dealt with
the Crown's claims (Annex 1, pp. 194-zor), and it is sufficient herc
to note bis finding (Annex 1, p. zoo) that the defendant was "in.
default in a very large amount at the date of the writs". UZIlTED KISGDOJI COUNTER-YEMORIAL (4 II 52) 165

70. The United Kingdom Government contends that this judg-
ment was sound ana just ; that it dealt faithfully with al1that tliere
was to be said in the Claimant's favour, and that it was iii full
accord with thc evidence:

jr. The Claimant, having given notice of appeal from Mr. Justice
Hill's judgment, applied to the Court of Appeal on 5th March 1923
for leave to call Major Laing and Sir Joseph Maclay as witnesses
at the heariiig of the appeal and supported his application by the
affidavit referred to above (paragraph 60). The Court of Appeal
rejected this application (see Annex z), and the HellenicGovern-
ment contends in paragraphs 17 to 19 of the Nemorial that, in doing
so, it committed a denial of justice;that it deviated from its normal
practice on applications to call new evidence on appeal ;and that
it was prejudiced against the Claimant as a foreigner. The United
Kingdom Government considers this contention false and scan-

dalous.
72. There is some confusion in paragraph 17 of the Greek Memo-
rial about the application to the Court of Appeal. The Claimant
applied to cal1two witnesses, not as the Greek i\lemorial suggests to
have the letters produced which were exchanged between them in

July 1922. It is, of course, true that had llajor Laing aiid
Sir Joseph Maclay beencalledon thehearingofthe appeal, they could
have given evidence about these letters ;but the substance of the
application-and so regarded by the Court of Appeal itself-was to
bring these two individuals to testify orally hefore the Court of
Appeal about their rôles in the July 1919 transaction.
73. It can be seen from the judgments of the superïor courts of

England that three conditions must be satisfied before fresh evidence
is admitted iipon the hearing of an appeal against judgment in the
court of first instance. On the general principle, Lord Chancellor
Chelmsford said in Shedden v. Patrick (1869). Law Reports, Scotch
and Divorce Appeals, House of Lords, Volume 1, page 470 :

"It is an invariable rule in al1 the courts ...that if evidence
which either was in the possession of the parties at the time. of
notr~xoduced or has not been procured, and the case is decidedther
adversely to the side to which the evidence was avail?ble, no
opportiinity for producing that evidence ought to be given by
the granting of a new trial."

The three conditions are :first, the evidence must be new ;second,
it must be of such importance that it would very probably have
inffuenced the decision of the Court (per Scmtton L. J. in Rer v.
Copestake (1g27), Law Reports, King's Bench Division, Vol. I. at
p. 477) ; third (the general principle), the new evidence must be
such that theparty seeking to have it admitted could not by reason-

able diligence have produced the evideiicc before (Xaslz v. Rochford UKITED KISGDOhI COUNTER-MEAIORIAL (4 Il 52)1 167

"We had rekon to suppose that Major Laing was a favourable
witness, but we were not quite certain : he would not tell us
exactly what his evidence was goingto be and thereforewedid not
like to risk callinghim. But after the trial and after the case has
have given evidence in our favour."t if we called him he might

He then said :

application to succeed,ecause there wouldbe no end to litigation."

The Court of Appeal arrived at the same conclusion as regards
Sir Joseph Maclay.

76. In this judgment the Court of Appeal adhered strictly to the
rules of English law and to its own practice in regard to the admis-
sion of evidence ; and there is no trace of prejudice against the
Claimant as a foreigner.

The United Kingdom Government submits that the Claimant failed
to exhaust his municipal remedies

77. The Claimant did not attempt to appeal to the House of
Lords against the decision of the Court of Appeal upon his applica-
tion to cal1 Rlajor Laing and Sir Joseph Maclay as witnesses on
the hearing of his appeal ;and he abandoned his main appeal which
he had lodged against the decision of Mr. Justice Hill. The Hellenic
Government has stated, but in no way demonstrated, that these
appeals were not efficacious means of obtaining redress for the
Claimant if the decisions complained of were wrong (Greek Meino-
rial, Annex K 5,p. 93).

78. As regards the decisioii of the Court of Appeal refusing to
admit new witnesses, no reason appears why the Claimant should
not have appealed against it to the highest court, the House of
Lords. The Appellate Jurisdiction Act, 1876, Section 3, provides :

"Subject as in this Act mentioned, an appeal shall lie to the
following, that is to Sayr(1) of Her Majesty's Courts of Appeal
in England ...."

This right is not qualified in the Act itself. Further, it was not
necessary in such a case in 1923 to obt'ain leave for appeal to the
House of Lords, nor was this decision of the Court of Appeal in the
class of decisions by that Court declared to be final by statute. If
the allegations of the Hellenic Government were tme that the
Court of Appeal was prejudiced against the Claimant as a foreigner
and decided contrary to its normal practice regarding the calling of
new evidence on appeal, there is no doubt that the Claimant tiad
an effectiveright of appeal to the House of Lords. 166 UNITED KISGDOJI COUKTER-IIEJIORIAL (4 II j2)

79. The Clairnant also had an effective right of appeal against
Mr. Justice Hill's decision if, as alleged in paragrap9 of the Greek
Memorial, hc found against the weight of al1 the evidence which
was before him. .411appeals to the Court of Appeal are by way of
rehearing, and the Court of Appeal would have been free to draw
such inferences of fact from the cxtensivc documentary and oral
evidence in the case as it thought fit. The compelling inference to
be drawii from the fact that the Claimant abandoned his appeal,
and from the argument iiorvadvanced by the Hellenic Government
(Greek Memorial, paragraph IO) that appeal was useless without the
evidence escluded by the Court of Appeal, is that they had found
r Justice Hill's judgment unimpeachable upon the evidence
before him. Despite the unsupported allegation that his judgnient

\vas "against al1the evidence", the failurc to pursue the appeal is a
tacit admission that he usas right upon such matters as the non-
delivery of the War Piper/Stathis and Wav Regalia/Mellon as well
as on the non-existence of any oral agreement for fixed delivery
dates. Further, it has been showil (paragraph 62 above) that al1
rnaterial evidence was before him. The Claimant's financial dificul-
ties and his own view of whether an appeal would be efficacious do
iiot affect the fact that he did not pursue his remedies to the end in
the Eiiglish courts.

Review of the diplomatic correspondence

60. Before proceeding to examine the merits of the Hellenic
Governrnent's application from the point of view of international
law. it is pertinent to observe that the statement of the Helleiiic
Government's case in the Memorial is the culmination of a lengthy
course of diplomatic correspondence estending intermittently over
a period of twenty-six years. At every stage of that correspondence
complete answers have been furnished to the contentions put
fonvard by the Hellenic Go\rernmeiit, which has constantly shiited
its ground and with the passage of years has become increasingly
free with its complaints of irregularity and injustice, always putting
fonvard new grievances, in an effort to forcc a decision in the
Claimant's favour.

SI. The Hellenic Governmcnt first took up the case in 1925. when
the Greek Minister in London sent to the British Foreign Secretary
a memorandurn ivhich had heen received from the Claimant (Annex
K I to the Greck hlemorial). In this memorandum the Claimant
recognized that "the final judgment of a British court, unappealed
against, closes the transaction from a lcgal point of view". It asked
for a reconsideratioii of the case and relief on moral grounds. It
argued that the Laing-Maclay lettcrs of July 1922 (Greek l\femorial,
Annex E) proved the validity of the contention that delivery dates
had heen agreed as part of the contract for the purchase of the UNITED KISGDO>I COUSTER->IEZIORIAL (4 11 j2) 1~9

ships and that, if the Crown had not relied on a technical privilege
to withhold evidence or if the Claimant had been permitted to
produce the letters on appeal, he could have appealed against the
Admiralty Court's decision with every prospect of success. He made
no complaint of clenial of justice contrary to international law, and
no charge against any officia1of the United Kingdom Government
or of prejudice on the part of the English courts. In reply, the

Foreign Office pointed out that a sirnilar memoraiidum had been
submitted earlier in the year by the Claimant to the President of
the Board of Trade, who, after a full and careful review, had found
that there was no justification, either on legal or on moral grounds,
for granting any relief on the lines desired (Annex S I to the Greek
Memorial).

82. It was not until after the elapse of more than seven years
that the Hellenic Government took upthe case again. On 7th Febru-
ary 1933. the Greek Minister addressed a further note to the Foreign
Secretary (Annex R 2 to the Greek Mernorial). This note put fonvard
no new facts, but, claiming that the dispute was of an international
order, invited the United Kingdom to refer it to the Permanent
Court of International Justice or any other international arbitral
tribunal which might be agreed. The Foreign Officereplied in a note
of 29th May 1933 to the Greek Legation (Annex S 2 to the Greek
Memorial) that the dispute arose from an ordinary commercial

contract and that it had accordingly been settled by the competent
tribunals in England to whose jurisdiction the Claimant had sub-
mitted ; that no question of an intemitional claim arose, unless the
Hellenic Government contended that the decisions of the English
courts constituted a denial of justice, which it had not done ;that
in any case a claim on this ground would be barred because the
Claimant had not exhausted the facilities for appeal provided hy
English law ;and that for these reasons the United Kingdom Govern-
ment was unable to agree that the matter should be submitted to
international arbitration.

83. On 3rd August 1933, the Greek hfinister addressedyet another
note (Annex R 3 to the Greek Memorial) to the Foreign Secretary.
This note argued that the Laing-Maclay letters established beyond
doubt that delivery dates had been agreed ;that local remedies had
been exhausted within the meaning of international law (though it
was admitted that he had not proceeded with his appeal because he
was financially unable to do so) ;and that those who conducted the

case before the English courts on behalf of the Crown had, by .witli-
holding the Laing-hfaclay letters of July 1922, deliberately pre-
sented a case "which was know~nto be or which there was strong
ground for thinking to be untrue", and had thereby caused a mis-
carriage of justice and deprived the Claimant of a fair trial before
the English courts-miscarriage of justice through the conduct of
the Crown's case by the Treasury Solicitor and Attorney-General170 UNITED KIKGDO~\I COUSTER-~IEZIORI (4 II 52)

was the charge now made. The note concludcd by inviting the
United Kingdom Goverilment to reconsider the case and. if it still
entertained doubts as to the validity of the claim, to submit the
matter to arbitration. The consideratioiis put forward in this note
were fully dealt with in the Foreign Secretary's reply of 28th Decem-
ber 1933 (Annex S 3 to the Greek klemorial). Paragraphs 7-13 of the
Foreign Secretary's note answered the contention that delivery
dates had been agreed and demonstrated that the Laing-Maclay
letters contained no evidence which was not before the Court,
thereby repudiating the new accusations of dishonesty on the part
of the officers of the Crown and the suggestion that the non-dis-
closure of the letters'had caused a miscarriagc of justice or deprived
the Claimant of a fair trial. The note also reminded the Hellenic
Government that the Claimant could himself have called Major

Laing and Sir Joseph Naclay as witnesses at the trial without the
slightest difficulty if he had wished to do so (paragraph 14). On the
question of the exhaustion of local remedies, it nras pointed out
that they had clearly not been exhausted, since the Claimant had
abandoned his appeal and the fact that he had been financially
unable to prosecute his appcal was immatcrial in. considering
whether he had exhausted his remedies (paragraph 18). The note
concluded that there was iio justification for the Hellenic Govern-
ment's proposal that these matters should, more than ten years
after theyfoccurred, be reopened and made the subject of inter-
national arbitration.

84. In his next approach, in a note of 30th May 1934 (Annex
R 4 to the Greek Memorial), the Greek nlinister relied on the statu-
tory declaration (Greck Memorial, Annex B) which had been
obtained by the Hellenic Government's solicitors in London from
Major Laing and which was claimed to support the contention that

delivery dates had been agreed. At the same time, the charges of
dishonesty on the part of the officers of the Crown were substan-
tiaily withdrawn and the Ninister's note admitted that as a matter
of "technical legal procedure" Major Laing could have been called
as a witness at the trial but excused the Claimant's failure to cal1
him on the ground that he did not know what Major Laing's
testimony would be. The Hellenic Government offered to have the
question whether local remedies had been exhausted referred to
arbitration asa preliminary issue. The British Foreign Secretary
replied fully ia note of 7th November 1934 (Annex S 4 to the
Greek Rlemorial). In paragraphs 7-12 of his reply, he drew attention
to a number of inacciiracies in Major Laing's latest statement as
reported in the Greek Minister's note, which sho\ved how little
reliance could be placed on any of it. In particular, the Foreign
Secretary mentioned that thirteen years previously Major Laing
had giveii a definite denial that he had assured or guaranteed
.delive. dates (paragraph 9). The United Kingdom Government GSITED KISGDOIL COUSTER->IEIIORIAL (4 II 52) I7I

maintained its refusal to go to arbitration on the ground that there
u-as no justification for the Hellenic Government taking iip the
case which had been finally disposed of by the English courts.

85. A year passed before the Greek Alinister made further repre-
sentations in a note of 2nd January 1936 (Annex R j to the Greek
Memorial). In this note, itas emphasized that the Hellenic Govern-
ment did not regard the responsibility of the United Kingdom
Government as arising from the action of its courts but from the
action or oversight of the officiais or agents of the United Kingdom
Government in not laying al1 the information in their possessioii
before the Court and, in particular, in failing to produce the Laing-
Maclay letters on July 1922. The note also argued that the rule
regarding exhaustion of local remedies did not bar thc Hellcnic

Govemment from taking up the claim. The rule, it \\.as contended,
only required M. Ambatielos to eshaust such remedies as were
efficacious and adequate (on this point see paragrapli IOO below) :
there was no possibility of appeal against the decision of the Court
of Appeal refusing leave to cal1 ncw nitnesses on appcal, and this
decision rendered an appeal against Mr. Justice Hill's decision
inefficacious. The Hellenic Government again yressed the United
Kingdom Govemment to agree to arbitration. The Unitcd Kingdom
Govemment's reply was contained in a note of 1st July 1936 (see
Annex S5 to the Greek Rlemorial). -

86. The Hellenic Government then dropped the casc until 1939,
but in November of that year for the first tznzecharged that thc with-
holding of documents from the Court and the refiisal of Icave to
produce nem evidence on appeal constituted a violation of Article
XV, paragraph 3, of the Treaty of 1886 and claiined arbitration

under the Protocol attached to that Treaty (Annex R 6 to
the Greek hfemorial). The British Foreign Secretary replied on
26th December 1939 that the United Kingdom Governmciit was
unable to accept this belated suggestion and could find no founda-
tion for the contention that it could be called upoii to agree to
arbitratioii under the Protocol (Annes S 6 to the Grcek Meinorial).

87. The Greek Minister repeated the Hellenic Government's
request for arbitrationunder the Protocol and Treaty of 1886 in a
note of 6th August 1940 (Annex R 7 to the Greek Memorial), and
the request \vas again rejected by the United Kingdom Governmeiit
(Annex S 7 to the Greek Memorial).

88. There the matter rested during the \var, but iii1949 the
Hellenic Government agaiii reverted to the case, and this tiine
declared its intention, failing agreement by the United Kingdom
Government to go to arbitration in accordance with the Protocol
of 1886 and the Dcclaration of 1926, of invoking Article 29 of the
Trcaty of 1926.

12 S9. It \siIl be observed that no allegation of breach of theTreaty
of 1886 was made until more than sixteen years after the proceedings
in the English courts which are the subject of the Hellenic Govem-
ment's complaint.

The United Kingdom Government submits that the treatment
of the Claimant did not constitute a breach of Article XV,
paragraph 3,of the Treaty of 18Rhor of any general rule of
international law

90. The Hellenic Government bases its present application to the
Court on Article XV, paragraph 3, of the Treaty of 1886. This reads
as follows :

"The subjects of each of the two Contracting Parties in the
dominions and possessionsof 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 ...."
The Hellenic Government maintains, if its Memorial is correctly
understood, that this provision guarantees to the alien not only
equality of treatment with nationals before the courts, but also a
standard of justice complying in al1respects with the requirements

of international law. It is contended on behalf of the Claimant that
he has not received justice in accordance with Article XV: para-
graph 3, as thus interpreted. In particular, the treatment accorded
to him fell short of the standard of justice required by the Treaty
because :
(1) the Board of Trade and the Court of Appeal were prejudiced
against him as a foreigner (an entirely new allegation) ;
(2) material evidence \vas withheld from Mr. Justice Hill, who
gave the judgment against the Claimant in the first instance ;
(3) the Claimant \vas prevented from producing this evidence
both beforc Mr. Justice Hill and on appeal.

91. Thc Hellenic Government's contentions of fact have already
been dealt with, and it has also been shown that both the conduct
of the proceedings on behalf of the Crown before the English courts
on behalf of the Crown and the decisions of the English courts were
in conforrnity \\rith English la\v and practice. It is now proposed to
examine the international law aspects of this case and to show that
the Hellenic Government bas in reality no case to take up under
Article XV of the Treaty of 1886 or for that matter under the
general principles of international la\\,.

92. It is the submission of the United Kingdom Government that
the language of paragraph 3 of Article XV does not justify the broad
interpretation apparently put upon it by the Hellenic Government.The ~rovision in ciuestioii. in fact. does no more thait euaraiitec that
the Abjects of each ~ontiacting Party shall have the-same freedom
ofaccess to the courtsof thc other Contracting Party as thc iiationals
of that other Contracting Party.

93. The rcasoning hy which the Hellcnic Govemmctit claims that
paragraph 3 of Article XV rcquires a standard of justice complying
with the general principles of international law is clearly at fault.
The United Kingdom Govcrnment does not, of course, deny that
Grcek nationals are entitled to treatment in the United Kingdom
fuUy according to the requirements of international law, and it has
no doubt, indeed, that the Claimant received such trcatment, as
will be sholvn belo\v, but it does deny that Article XV guarantees
siich treatment.

94. The Hellenic Government's argument on this point is set out
as follo\r.s in paragraphs 14 and 15 of the Mernorial :
"This provision guarantees :in absolute equality of trcatment
to the nationals of each State appearing before the courts of
justice ofthc other, whether as plaintiff oas defendant. In allowing
frcedom of access to tticse courts, each State docs so witliout
limitation. In the first place, it is obvious that thc forcigner must
enjoy the samc riglits and privileges as the native subject. But
there is more to it than that : it is not enough that the forcigner
should enjoy freedom of access to the courts of justice, it is also
necessary that the justice administered should comply with inter-
national law ....
15. The principlcs rccognized by Article 15 of the Treaty of
1686 are indeed no more thaii a particular application of a much
more general principle to wliich the Parties have adhered : the
right of free communication. This implies certain minimum essential
rights, in particular, freedom of defence. If the nght of free com-
munication is granted, the laws giving effect to it contribute the
means of the domestic al>plication of an international duty. Conse-
quently, any restrictions imposcd upon the rights of a dcfcndant,
even if applicable to the natiorials of the couiitry concerncd, are
not necessarily binding oii a foreigncr. For a State whicli undcr-
takes to grant the right of free communication iindertakes to
arlegal status which complies with international law. In otherg State
words, it is obliged not only to assimilate the position of the
foreigner to that of nationals with regard to the administration
of justice, but also, and primarily, to guarantee for the foreigner
a type of justice ivhich will comply with the necds of universal
commerce."

The faUacy in this argument is to be found in the secoiid sentence :
"ln allowing freedom of access to these courts, each State does so
without limitation." It is perfectly clear that Article SV, paragraph
3. does contemplatc certain limitations on the right of free access
to the courts, naniely, those which apply to nationals of the State UNITED KINGDON COUNTER-NE~IORIAL (4 II 52j
174
concemed. What it prohibits is "other conditions, restrictions or
taxes" which do not apply to nationals. In other words, the para-
graph grants no more and no less than national treatment. Indeed,
it is obvious that in the general interest and in the interest of the
proper administration of justice access to any courts-whether they
be national courts or the Court of International Justice itself-must
be subject to a number of conditions and restrictions. There is not

a legal system in which such limitations do not exist, and it is
surprising to meet with the argument that either the Treaty of 1886
or the general principles of international law preclude them.
95. The arbitrator in Van Bokkelen's case (Moore's Historical

Digest of the International Arbitrations to which the United States
has beena Party, p. 1842) had to interpret a similar clause to para-
graph 3 of Article XV, and he defined its proper limitatioris as
follo\vs :
"It would seemclear that the guarantee to the citizens of coii-
tracting States of 'free access to the tribunals of justice in al1
cases to which they may be a party on the saine terms whicli
are granted by the lawsand usage of the country to native citizcns',
means that they shall be entitled to the exercise ofal1the processes
of the courts of the respective countries, whether they concem
rights or remedies. And the cxtent to which these processes of
the courts may be invoked is expressed in language equally free
from doubt :'On the same terms which are granted by the laws
and usage of the country to native citizens."

In the \~iew of the United Kingdom Govemment, the meaiiing
which the arbitrator attributed to the clause which he \vas called
upon to interpret accords exactly with the language and inteiitioii
of Article XV, paragraph 3, of the Treaty of 1886.

96. There is no doubt, as has beeii shown in paragraphs above,
that the Claimant did receive the "national" treatment required hy
the Treaty of 1886 in the proceedings before the English courts.
He was subject in these proceedings to no conditionsor restrictions
which would iiot have applied equally to a British subject,and any
suggestion that the law, or the Crown, or the courts discriminated
against him as a foreigner is utterly without foundation. It is note-
worthy that no such suggestion appears in the diplomatic corre-
spondence preceding the application to the Court and \vas not
advanced by the Hellenic Government until the present proceed-
ings, nearly thirty years after the eveiits complained of.

97. Althougb the United Kingdom Government submits that the
above considerations are sufficient to defeat the merits of the
Hellenic Government's case based on the Treaties of 1886 and 1926,
it wishes for the sake of its good name to reply to the allegations
that the treatment accorded to the Claimant fell short of the

standard of justice required by international law. gS. .4 denial of justice such as would give rise to a clairn for
damages under international law was defined thus by the Claims
Commission between the United States and Mexico in the Neer
case (Opinions of Commissioners, 1927, p. 71 ; also in International
Law through the Cases, by L. C. Green, p. 627) :
"1t.i~ immaterial whether the expression 'denial of justice' be
taken in that hroad sense in which it applies to acts of executive
and legislative authorities as well as to acts of the courts, or
whether it he used in a narrow sense which confines it to acts
of judicial authorities only ; for in the latter case a reasoning,
identical to that which-under the name of 'deiiial of justice'-
applies to acts of the judiciary, will apply-bc itunder a difierent
name-to unwarranted acts of executive and legislative author-
ities. Without attempting ta announce a precise formula, it is
in the opinion of the Commission possible ....to hold that the
propnety of governmental acts should be put ta the test of inter-
national standards, and that the treatment of an alien, in order
to constitute an international delinauencv. should amount to
nii oiirrnge. r8ihnrifnirli. to ivilfii~,-~iccroi diiry orrd an insulti-
ciciiï\, of go\.crnmcnt:il :iïiion so fsr sliort of interii:iit;~nd;<rds
that %ver? reasonable and impartial man would readily recognize
its insufficiency."

In the case of Cotesworth and Powell (Moore's Historia1 Digest of
the International ilrbitrations to which the United States has been a
Party, p. 2063) it \vas said:
"Sations arc responsible to those of strangers ....~st, for denials
of justice ;and znd, foracts of notorious injustice. The first occws
when the tribunals refuse to hear the complaint, or to decide
iipon petitions of complainant, made according to the estahlished
form of procedure, or when undue or inexcusable delays occur
in rendering jiiclgment. The second takes place when sentences
are pronounccd and executed in open violation of law, or which
are manifestly iniquitous."

In the Salem case in 1932 (Department of State Arbitrations, Series
Xo. 4 (6). p. 65), the Arbitrator put it as follows :
"International law has from the beginning conceived under
the notion of 'dcnial of justice' forming a hasis of political claims
only esorhitant cases of judicial injustice. Absolute denial of
justice ;inexcusable delay of proceedings ;obvious discrimination
of foreigners against natives ; palpable and malicious inequity
of a judgment-these are the cases which, one after another,
have been included in the notion of 'denial of justice'."

The Preparatory Cornmittee of the Confcrence for the Codification
of International Law held at The Hague in 1930 formulated the
foiiowing definitions :
"A State is respoiisible for damages suffered'by a foreigner as
the result of the fact that :
I. He is refused access to the courts to defend his rights. 2. A jiidicial decision which is final and withoiit appéalis incom-
patible si the treaty obligations or othcr international obli-
gations of the State.
3. 'Shere lias 11een unconscionable delay oii the part of the
courts.
4. Tlic siibstaiice of a judicial dccision lias rnaiiifestly been
proinptcd hy ill-will toward foreigricrs as sucli or as snbjects of
a ptirticular Statc." (Rasis of Discussion No. j.)
"A State is responsible for damage suffcrcd hy a foreigner as
the result of the courts followiiig a procedure aiid rendering a
judgment vitiated by faults so gross as to indicatc that the) did
not offer the guaraiitees indispensable for the propcr administration
of justice." (I3asis of Discussion Xo. Ci.)

99. From these dicta it is clear that to constitute a denial of
justice in international la\$,, there must be something iii the nature
of a palpable injustice and that a mere error of judgment is not
enough. Shere certainly can be no denial of justice if the authorities
of a State act in accordance with local law aiid practice aiid such
law and practice is in itself just and reasonablc. F~irthcrmore, therc
can be 110 denial of justice involving the responsibility of the State
concerned unless al1effective rights of appeal have been exhausted.
In the Ziat case (Réclamationsbritanlziyues dans la zone espagnole
du Maroc, p. 187), it \vas stated :

"lt is a recognized principle of iiitcrnatioiial la\\., at least in
countries where foreigners are subject to territorial jurisdiction,
that a claiiri of an international kind preseiited upon the basis .
of an allegation of denial of justice is oiily rcceivablc if the different
courts of the competent local jurisdiction liavc been exliausted."

Many other decisions can be quoted to the samc effect.

IOO. In the present case thcre can bc no question of a deiiial of
justice in the above seiise giving rise to a possible claim under iriter-
national law. 1iithe first place the Claimant failed to exhaust his
effective rights of appeal. Ithas been showii (paragraph 78 above)
that if, as the Hellenic Government maiiitains, the Coiirt of Appeal
in refusiiig bim leave to cal1 additional witncsses on appeal \vas
prejudiced against him as a foreigner and its decision was contrary
to its practicc iii otlier cases, there must have been a prospect of
the House of Lords overruling its decisioii and therefore there \\,as
an effective right of appeal to that tribunal. Also, the Claimant
abandoned his appeal against the decision of hlr. Justice Hill and
it has beeii showri (paragraph 79 above) that the refusal of the
Court of Appeal to permit the production of t\\.o ne\v witnesses on
appeal did not reiider the right of appeal iiieffective unless it
is admitted that but for the absence of the cvidence of these
two persons blr. Justice Hill's judgmeiit \ras in iio ivay open to

challenge. UÏITED I<IÏGDO>l COUNTER-hIEZIOR1(A 4L 1152) 177

loi. But even if it were shown that the Claimant had exhaiisted
his local remedies, there would still be no possible justification for
a claim by the Hellenic Government on the ground of denial of
justice. There is no evidence whatever of "palpable injustice". It
has been sho\i.n in paragraphs 62 and 67 that al1material evidence
was put hefore Rlr. Justice Hill, and the Laing-Maclay letters of
July 1922 added nothing to the contentions of the Parties in the
proceedings before him. Secoiidly, the Claimant knew ofthe existence
of the letters before the trial and he made no application for their
discovery (see his affidavit, Annex 3). Thirdly; it was open to the
Claimant, if he had wished to do so, to cal1 Major Laing and Sir

Joseph Maclay as witnesses on his own behalf before Mr. Justice
Hill (sec paragraph 37 above). Finally, the conduct of the proceed-
ings by the officers of the Crown and by the English courts was
entirely in accordance with local laus and practice (see paragraphs
55 to 76) and there usas nothing in the rules applied which made
them unjust or unreasonable so as to be obnoxious to international
law. It is the view of the United Kingdom Government that
Rlr. Justice Hiii's jndgment was in accordance with the weight of
the evidence :even if he had made an error, which it is clear that
he did not, there is no reason whûtever to believe-nor indeed is it
suggested by the Hellenic Government-that he \vas incompetent
or that his judgment was dishonest or that he was activated by any
feeling of ill-will towards the Claimant. In fact, the Claimant's case

failed solely on its merits, after a careful trial, in which he had
ample legal assistance and a fair opportunity to establish his rights.
The United Kingdom Government invites the Court to read
Rfr. Justice Hill's judgment and feels sure that if it does so it wiU
agree with the abore assessment of it.

102. The United Kingdom Government therefore submits that
the Hellenic Government had no case to take up on behalf of the
Claimant. As was said in the Cotesworth and Poweii case referred
to above :
"It is only in cases where justice is refused, or palpablc or
evident injustice is committed, or when mles and forms have
been openly violated, or when odioiis distinctions have been made
against its subjects, that the Government of the foreigner can
intervene."

103. In paragraph 20 of its hlcmorial, the Hellenic Government
says that the United Kingdom was unjustly enriched at the expense
of the Claimant to the extent of ~500,ooo said to have been paid
by him in consideration for fixed dates of delivery of the ships and
that the delayed delivery of the sliips constituted a failure of con-
sideration. The United Kingdom Government submits that the
doctrine of unjnst enrichment has no application in the present case
either under international law or under the English law of contract.
It has already been shou~n that in any case there \vas no under-taking for fixed dates of delivery, and there was no appropriation
of ~500,ooo or any part of the purchase price as payment for that
undertaking. Further, as far as concernsEnglish law, the Claimant's
remedy was that which he in fact pursued in the English courts, a
claim for damages for breach of contract, and not a claim for money
had and received (unjust enrichment) as suggested in the Greek
Alemorial. \Vhile in so far as this contention of the Hellenic Govem-
ment rests upon general principles of lam, or upon international
law, the United Kingdom Government submits that it is com-
pletely unfounded.

The United Kingdom Government submits that the Hellenic Gov-
ernment is precluded by reason of delay from pursuing the claim

104. In the submission of the United Kingdom Government, the
above considerations show that there was no justification whatever
for the Hellenic Govemment taking up this claim. Not only is it
evident that the Claimant had a fair trial before competent and
honest judges who faithfully applied just and reasonable rules of law
and practice, biit a careful examination of al1 the evidence ampiy

supports their decisions. In making this submissioii, ho\vever, the
United Kiiigdom Governmeiit asks the Court to considcr one
further-but nevertheless important-aspect of the case.
105. Even if there had been more justification in the Heilenic
Government's claim, it has been guilty of such delays in pursning
the matter, that the United Kingdom Government should not at
this stage be required to submit the case to arbitration.

106. In paragraph 5 of his note of 7th November 1934 to the
Greek Minister (Annex S 4 of the Greek Memorial), the British
Foreign Secretary said :

"Although the events in this case took place betweenthe years
the Greek Government took any steps resembling the presentation
of a claim against His Alajesty'sGovernment. While the matenal
iiow at the disposal of His Majesty's Govemment is sufficient to
enable them to deal with the contentions raised in your note so
far as they contain anything new, two results of this delay are
that the records in their possession are less complete than they
would have been if the matter had been raised within a reason-
able tirne,alter the events in question,and that someof the persons
possessing first-hand knowledge of the facts are no longer alive.
Sucli results are in such circumstances inevitable. and it is because
this is so that intemational la\\. and practice regard avoidable
delay in presentingclaims as constituting a bar to their successfnl
presentation."
107. It $\,asnot until five years later, in his note of zrst Novem-

ber 1939, that the Greek Minister first presented on behalf of the USITED KISGDO31 COUSTER-\IEJlORIAL (4 II52) '79

Hellenic Government a claim of breach of the Treaty of 1886, and
it was not until the present application, nearly thirty years after
the events complained of, that charges of prejudice were levelled
against those who conducted the proceedings before the English
courts on behalf of the Crown and against the English Court of
Appeal. There can have been no possible justification for any of
these delays, apart, of course, from the war.

108. Not only must such delays inevitably raise the greatest
doubts in the minds of any fair-minded person as to the bonafides
of the claim, but the Govemment of the United Kingdom submits

that its position as defendant has obviously been so prejudiced
thereby that it would be unconscionable to permit the Hellenic
Govemment to pursue the matter further. As the umpire in the
Gentini case said (VenezftelanArbitrations, 1903, Ralston's Reports,
p. 720) :

"The principle of prescription finds its foundation in the highest
equity-the avoidance of possible injustice to the defendant,
theclaimant having had ample time to bring his action, and there-
fore,ifhe has lost, Iiaving only his own negligencc to accuse."

The Commissioner in the Williams case (Moore's Historical Digest
of International Arbitrations to which the United States has beerta
Party, p. 4195) said :
"The causeless withholding of a claim against n State until,
in the natural order of things, the witnesses to the transaction
are dead, vouchers lost. and thereby the means of defeiice
essentially curtailed, is in effect anmpairnent of the nght to
defend. The public law in such cases, where the facts constituting
the claim are disputed and dispiitable, presumes a defence."

Conclusions of the ~nited Kingdom Government

The United Kingdom Government accordingly subinits that the
Court should hold and declare :

As regardsjttrisdiction :
1) that, for the reasons given in paragraphs 8, IO to 13
and 15 above, the Court has no jurisdiction

(a) to entertain a request by the Hellenic Govem-
ment that it should order the United Kingdom
Government to submit to arbitration a claim by
the Hellenic Govemment based on Article XV or
any other article of the Treaty of 1886, or
(b) itself to decide on the merits of such a clairn ;180 UNITED KIi\.GDO.\I COUNTER-MEMORIA (4LII j2)

(ii) that, for the reasons given in paragraphs 8, 14and 15
above, the Court has no jurisdiction
(a) to entertain a request by the Hellenic Govern-
ment that it should order the United Kingdom
Government to submit to arbitration a claim hy
the Hellenic Government for denial of justice
based on the general principles of international
la\v or for unjust enrichment, or

(b) itself to decide upon the merits of such a claim.
As regards the ??terit;

II. (If the Court should reject the United Kingdom's con-
tentions with regard to jurisdiction) that, for the
reasons given in paragraphs 104 to 108 above, the
Helleiiic Government is precluded by lapse of time
from submitting any claini based on the Treaty of
1886 or for ùeiiial of justice under international law or
for unjust enrichment.

III. (If,contrary to the contentions of the United Kingdom
Govemment in 1 (i) and II above. the Court should
hold that it has jurisdiction to order arbitration of a
claim by the Hellenic Government based on the Treaty
of 1886 and that the Hellenic Government is not
precluded by lapse of time from submitting any such
claim) that the Court should, as proposed hy the
Hellenic Government in paragraph 30 (4) of its >lemo.
rial, substitute itself for the Commission of Arbitration
provided for in the Protocol annexed to the Treaty of
1886 and itself decide the issues, which would thus fa11
to be arbitrated, in the same maniier as the Commis-
sion of .4rbitration would have to do if the Court should
order arbitration.

IV. (If, in accordance with 111 above, the Court should
decide to snbstitute itself for the arbitral tribunal)
that, for the reasons given in paragraphs 14 and 90 tp
97 above, no claim has been established under Article
XV of the Treaty of 1886or under ariy other provision
of that Treaty.
V. That, for the reasons given in paragraphs 9, 14 and 104

to 108 above, no claim can be based on the Treaty of
1926.
1. (If the Court should hold, contrary tothe submissionsin
1 (ii) and II above, that it has jurisdiction to entertain
a claim not based on the Treaty of 1886, or, contrary
to the submission in V, that a claim can be based on
the Trcaty of 1926) that no claim.has been established UNITED KIXGDOII COUSTER-.\IEAIORIAL (4 II jz) 181

by the Hellenic Government under the Treaty of 1926
or on the basis of on a denial of justice or of any other
wrongful act entailing the responsibility of the United
Kingdom Government iinder international la\{,,either

(a) in connectioii with the conduct of officers and of
counsel for the Crown, in conducting proceedings
before the English courts, for thc reasons given iii
paragraphs 5j to 63 and 98 to 102 above, or
(6) inconnection with the dccisions of the English courts,
for the reasons given in paragraphs 64 to 76 and 98

to IOZ above, or
as an alternative to (a) and (b),

(c) because no binding agreement to delirer the ships by
fixed dates was concluded, for the reasons given in
paragraphs 17 to 44 above, and,
(d) because no damages were suffered by the Claimant

from illegal or wrongful acts of any person for whose
conduct the Crown is responsible, for the reasons
given in paragraphs 45 to 54 and 103 above.

(Signed) VIXCEXT EVANS,
Agent for the Government of the
United Kingdom.

4th February 19jz ANNEXES TO U.K. COUNTER->IE\IORIAL

ANNEXES

LIST OF AVNEXES

ilnnex Tilla Poga
I Judgment of 311.Justice Hill of I5th January 1923. .. 183
z Judgment of the Court of Appeal of jth March 1923 . . 205

3 Appeal oii 5th March 1923Amba...........d in tlie Court of
207
4 Correspondence :
(1) Letter of 5th September 1919froin G. E. Ambatielos
to H. F. Bamber ....... 208
(2) Letter of 9th September 1919from H. F. Bamber to
G. E. Ambatielos ....... ... 208
(3) Letter of 10th October 1919from H. F. ~amber to
G. E. Ambatielos ............ 209
...Letter of 11th October 191< ,om G.E. Ambatielos
to hfinistry of Shipping.......... 209
(5) Letter of 31st October 1919 from K. E. Ambatielos
to Major Laing. . . . . . 210
(6) los to J. O'Bymeec............oin G. E. Ambatie-
(7) Telegram of ~2nd January 1920from Ambatielos to 211
J. D. Rossolymos ..... ... 211
(8) Extract from telegram of 4th ~e'hruary 1920 from
T.D. Rossolymos to G. E. Ambatielos ... 212
(9) ~ele~ram of 1st hlarch 1920 from Ambatielos to
J. D. Rossolymos ..:..... 212
(IO) Telegram of 14th Apnl 1920 from G. E. Ambatielos
to J. D. Rossolymos .......... 212
(II) Letter of ~2nd May 1920 from G. E. Ambatielos to
AlajorLaing .... ... ...
Letter of 8th 0ctober 1920 from J. ~'Byrne to
G. E. Ambatielos ............
Letter of 8th October IQZO from G. E. Ambaticlos
toJ. O'Byrne .............
Letter of 8th November 1920 from J. O'Byme to
G. E. Ambatielos ........~.
Letter of ath November 1020 from G. E- -mbatielos
to J. 0'~irne .... .' ..... ...
Letter of 10th November 1920 from J. 0;~~rne to
G. E. Ambatielos ............
to the Shipping Controller1.......... Ambatielos

j Tlie nine ships : Summary of details and record ...
219 1 AKKEXES IO U.K. COUNTER-DIEMORIA (NO. I)
3 83

Annez I

JUDGMEKT OF MR. JUSTICE HILL

Royal Courts of Justice.
Monda)., 15th January 1923.
IN THE HIGHCOURT OF JUSTICE.
PROBATED , IVORCE AND ADMIRALTD YIVISIOX,
ADMIRALTY.

The Ambatielos-1921. Folio 653.
The Board O/ Tradeonbehalfof His Majesty v.Ownersoj S.SAmbatielos.
The Cephalonia-1921. Folio 645.
The Board O/ Trade onbehalfof His Majesty v. Owners O!S.S.Cephalonia.

The Panagis-1921. Folio 478.
The Board of ïraile on behalfof His Majesty v. Ownersof S.S.Panagis.
The Nicolis-1921. Folio 754.
The Board of Trade (Successorsto the Shipping Controller)on behaljof
His Majesty r. Nicolas Eustace Ambntielos.

(Transcript of the shorthand notes of Messrs. C. E. Baruett & Co.,
30 Fleet Street, London, E.C. 4, and of C. C. Norman, officia1short-
hand writer ta the tldmiralt& Prizc Court, 30 Fleet Street, London,
E.C. 4.)

The RT. HOIC.SIRERXESTPOLLOCKK , .C., M.P., MI. . N. RAEBURIC,
K.C., and MR.L. F. C. DARBY(instructed by the Treasury Solicitor)
appeared for the Plaintiffs.

hf~.A. D. BATESONK , .C., MRW. A. JOWITT,K.C., M.P., and MR. G. P.
LANGTON (instn~cted by Messrs. W. A. Crump & Son) appeared forthe
Defendants.

Mr. JUSTICEHILL :In these four actions the plaintiffs are the Board
of Trade, on behalf of His Majesty. suingas successors ta the Shipping
Controller. The defendant is MI.N. E. Ambatielos, the owner of the four
ships. He is and was at al1 matenal times of Greek iiationality. The
plaintiffs sue as mortgagees of each of the shipsder mortgages which
are in the Merchant Shipping Act form for mortgages to secure account
current and accompanying deeds of covenant al1 dated 4th Noveniber
1920. The actions in respect of the Ambatielos, the Cephaloniaand thc
Prrnagis are in rem; the action in respect of the Nicolis ispers on an^.
The writ in the Ambatieloswas issued on 15th October 1921, and tlie
sliip was arrested on the same day. The writ in the Cephnlonia was1~4 AKKEXES TO U.K. COUNTER-XIEhIORIAL (?i'<.)
issued on 7th October 1921, and the ship was arrested on the same day.
The writ in the Panagis was issued on 30th June 1921. She was already

under arrest in a Master's actio~i at that time. A caveat was entered on
1st July 1921, and the ship was arrested on 15th October 1921. The wnt
in the Nicolis was issued on 24th November 1921. The claim in the writs
was for the instalments due under the mortgage and for possession. In
the cases of the Ambatielos, the Cephalonia and the Palzagis, judgment
went by default on ~1st December 1921, but on the followiiig day the
defendant obtained leave to enter an appearance. The judgment by
default had ordered possession to be given to the plaintiffs, and posses-
sion was taken under it. On 26th January 1922, an application to set
aside the ~udg-ents of ~1st December 1q21 was by consent adjourned to
the trial.
To the plaintiffs' claim as mortgagees the defendant desired to raise
matters which in part wcre defences but in part were in the nature of
counter-claims. The plaintiffs, as representing the Crown, while unable
to consent to a forma1 counter-claim, agreed that al1 the questions
between the parties should be raised uyon the pleadings and tried in
the action. This accounts for the form of the pleadings. Put shortly, the
plaintiffs assert that there have been breaches of the mortgage agree-

ments entitling them to judgment for the whole amount due by the
defendants and a reference. In the cases of the ships under arrest, they
also ask for appraisement and sale. In the statement of claim they asked
for possession but at the trial they asked for appraisement and sale.
The breaches relied on by the plaintiffs are : (a) failure to pay instal-
ment of principal sum ; (bj failure to pay interest (this was added by
amendment at the trial) ; (cj failure to pay insurance premiums ; (d)
failure to release from arrest one of the ships, thPanagis. The defendant
in substance denies these breaches and says that upon a true view of the
account there was no default. He further sets up various hreaches by
the plaintiffs of the contract of sale under which he bought these and
other vessels from the Shipping Controller and of other agreements
between the parties, including the deeds of covenant accompanying the
mortgages of these and other vessels.
In 1919 there were in course of construction in shipbuilding yards at
Hong Kong and Shanghai a number of steamships of standard types.
They were being built under contracts between the Shipping Controller
and the building firms which had been entered into in 1917 and 1918.

On 17th July 1919, a contract in wnting was entered into between the
Shipping Controller and the defendant for the sale ta the defendant of
nine of these steamships, six of type B and three of type C. They are
described in the schedule to the contract under their Yard numbers and
British names. They were subsequently given Greek names. The com-
plete list is as follows : War Rugler, No. 180 ; Nicolis ; War Miner,
No. 177 ; Cephalonia ;War Coronet, No. 181 ;Keramies ; Wnr Trooper,
No. 564 ; Ambatielos ; War Piper, No. 565 ; Stathis ; War Sceptre,
No. 570 ; Trialos; War Biadem, No. 1505; Panagis; War Tiara, No.
1506 ; Yannis ; War Regalia, Xo. Ij07 ; Mellon. Of these, the Panagis,
Yannis and Mellon were of type C. The rest were of type B. The contract
price of the B type was L289,166 13s. 4d.. and of the C type L180,ooo.
The total price was L2,275,ooo. The IO per cent deposit called for by the
contract of sale was duly paid. The Nicolis, Cephalonia, Ambatielos,
Trialos and Panagis were delivered and paid for. The Keramies and AXNEXES TO U.K. COUNTER-IiEIiORIAI. (No.1)
'as
Yannis were delivered and not paid for except that some payments on
account of the Keramies were made. The Mellon and Stathiswere neither
delivered nor paid for. The Nicolis, Cephalonia, Keramies, Ambatielos,
Trialos, Panagis and Yannis were severally mortgaged by the defendant

to the Shipping Controller on 4th November 1920. The Yannis was sold
by tlie defendant in February 1921. The defendant complains that, in
breach of contract between him and the Shipping Controller (1) the
Nicolis, Cephalonia, Keramies, An~batielos, Trialos and Ynnnis were
delivered late ; (2) tlie Nicolis, Cephalonia, Keramies, Ambatielos,
Trialos, Panagis and Yannis were not according to contract by reason
of defects and omissions ; (3) theMellon and Stathis were not delivered
at all. By reason of these breaches, he alleges damages excceding 2
million. These claims appear in paragraphs 3 to 9 of the defence, and as
to the Mellon and Stathis also in paragraphs 10 to 12. though the case
was put at the tnal in a somewhat different form from paragraphs IO
to 12. A further claim in paragraph 13 was abandoned-there was
nothing in it-and a defence in the plaintiffs' claim inragraph 14 was
also wisely abandoned. Paragraphs T and 2 are denials of the plaintiffs'
allegations.
It will be convenient to deal first with the defendant's claim for

in payment of principal and interest, the appropriation of the pnce
received on the sale of the Yannis, insurance, and the arrest of the
Panagis. First, 1 will deal with the defendant's claim for damages for
late delivery of the ships. The defendant's allegation in paragraph 4
of the defence is that at the time of the contract of 17th July 19x9,
there was a verbal agreement that the ships shoiild he delivered on dates
certain, and that tliis verbal agreement was subsequently confirmed I>y
letters between the defendant and Major Laing of 2nd and 11th May
1921. As Major Laing had ceased to be on the staff of the hfinistry of
Shipping long before May 1921, thcse letters cannot he relied on as
evidencing an agreement in writing. The defendant was therefore com-
pelled to rely upon a verbal agreement and to contend that it was
admissible as explaining the terrns of the written agreement. The nego-
tiations for the sale were conducted partly by correspondence and
partly by interviews between Mr. G. E. Ambatielos, as agent for tlie
defendant, and Major Laing, who held the post of Chief Assistant to

Sir John Esplen, head of the Sales Branch of the Ministry of Shipping.
At the final interview on 17th July 19x9, when the contract was signed
on behalf of the defendant, there were present, hesides Mr. G. E. Amba-
tielos and Major Laing, bfr. O'Byrne of the Ministry of Shipping, whose
duties included those of seeing that contracts were properly drafted and
getting them executed, and Mr. Law of the firm of Fergusson & Law,
who was brought into the matter by Mr. G. E. Ambatielos and the
defendant to sign on behalf of the defendant, apparently because
Mr. G. E. Ambatielos wanted to conceal from some other broker the fact
that Mr. G. E. Ambatielos was to get the broker's conimission, as, in
fact, he did. The defendant's case is that hfr. G. E. Ambatielos and
Major Laing, both before and at the interview of 17th July 1919,verbally
agreed upon fixed months of delivery. It is contended that evidence of
such agreement is admissible to explain the reference in the written
contract to the "time agreed, and that the whole contract is to t~e186 ASSESES TO U.X. COUSTER-XEMORIAL (SO.I)
found, not in the writing alone: but in the writing coupled with the

verbal agreement. In my judgment, the evidence is inadmissible as
contradicting the wntten contract. By clause 1, the vendor agrees to
sell, and the piirchaser to purchase the steamers now being built. By
clause 2, the price is to be paid in part by a deposit, and the balance
in cash in exchange for bill of sale or builders' certificate within 72 hours
of wntten notice of readiness for delivery, such delivery to be giveii at
the contractor's yard. liy clause 3, the steamers are to be deemed to
be ready for delivery iminediately after they have been accepted by the
vendor from the contractors. By clause 6, on payment against bill of
sale or builder's certificate, the steamers are to be at the expense and
nsk of the purchaser. Clause 7 provides for default. As regards the
vendor, it is provided : "If default be made by the vendor in the execu-
tion of legal bills of sale, or in the delivery of the steamers in the manner
and within the time agreed, the vendor shall return the deposit with

interest. Clause g provides for the event of default in delivery of a
steamer by the contractor to the vendor, and gives the vendor the right
either to cancel in respect of such steamer, or to substitute another
steamer "of the same type and expected to be ready at or about the
same date". The defendant's contention is tliat the 'words "within the
time agreed", and "at or about the same date", can only be explained
by reference to an agreement outside the writteii words, and so let in
evidence as to a verbal agree,.nt. 1 do not accet~t that contention.
Th, :igrc.~iiieiiri; sonie\\~llu<,ii.li1r:iftcd tiiiiii'iiiiq,inion.ir doci
pro\.iili. both for thc ni:aririi.r.iiid for th2 tinic oi dclivcry uf t:;it:Iitt.aiiicr.
:\s to iiiann~.r.<Icli\,er\.is to 1)~i.ii:t~lchv dclivcr\. uf hills of salcor buildcr's
certificates, t'lie shipubeing then at the contiactor's yard. As to the,
each steamer is to be delivered immcdiately after it has been accepted
b\ rtic \,endor fruni rlie contr:ii.tur, tlic buyer ti:;?iIioiirs from noticï
of rt.:iiliiicss for delivvr!. withiii u.ti,t;ikc delivery If tlit: coiitrn<:tui

fnil; IO deliv~r :Lst<~;iiiicr.ttil: \,riitlor ma!. siibstitiirc aiii~rher stenmcr
of the same type, provided it is one expected to be ready at or about
the same date as the date at which the steamer defaulted was expected
to be ready. That is my view of the contract. 7here is nothing extra-
ordinary in such a contract. The ships were being built under contracts
which did not give fixed dates, but the times depending upon conditions,
and each building contract contained a wide exception clause. It is far
from iml>robablc that the Shipping Coiitroller should undertake to
deliver as aiid wlien delivery was made by the builders. It is most
improbable that he should agree to fixed dates withoiit any clause of
exception at all.
Assuming that evidence is admissible, it is clear from the evidence
that Mr. G. E. Ambatielos did al1 he could to induce the Shipping
Controller's representatives to insert fixed times in the wntten contract,

and that this was definitely and absolutely refused. 1 have not had the
advantage of hearing any evidence from Major Laing, but 1 have heard
Air. O'Byrne and hlr. G. E. Ambatielos and BLr.Law as to what took
place at the interview at which Mr. Law signed the contract. For many
reasons, 1 distrust the evidence of AIr. G. E. Ambatielos. In July 1919,
on his own admission, he \vas deceiving the defendant. 1 think that in
the box lie was trying to deceive me. Mr. Law's recollection is not
sufficiently definite, and cannot be relied on. 1 accept the evidence of
Mr. O'Byrnc. It was made quite clear that the Shipping Controller ANSEXES TO U.K. COUXTER-AlEMORlAL o. 1) 187
refused to contract for delivery at fixédtimes, and at that interview no
undertaking as to fixed times was given either by Mr. O'Byme or by
Major Laing. None was at any time given by Mr. O'Byrne. If, in the
course of the preceding negotiations, any promises were made by Major
Laing as to delivery at fixedtimes, it was not upon such terms that the
contract was finally agreed. In fact, Najor Laing had no authonty to
finally agree the terms of the sale. That was for the Committec com-
posed of the Shipping Controller, Sir John Esplen, the Accountant-
General, and the Secretary of the hlinistry. Mr. G. E. Ambatielos, and
through him the defendant, if he read Mr. G. E. Ambatielos's letters,
knew that Major Laing bad not final authonty, and so did hlr. Law.
(See letters in the correspondence, p. 9, 7th July 1919 ;p. 17, 9th Jiily
1919 ; p. 26, 10th July 1919 ;and as to hlr. Law, p. 19. 9th July 1919.)
If 1 am wrong in al1this, 1 should still find it impossible to Say what
the fixed dates agreed were. hlr.G. E. Ambatielos said that, at the fiiial
interview on 17th July 1919, tbey were agreed as in the defendant's
January and February, for the "C" type. 1 do not believe Mr.cemberG. E.
Ambatielos's evidence as to that interview. Apart from that evidence,
it is impossible to say what the fixed dates were to be. \Vere they the
estimated months put on a buff slip by Mr. Bamber, or the dates men-
tioiied in the defendant's letter of 3rd July (p. 7). or the date, "delivery
by Xarch", mentioned in Major Laing's pencil note on the letter of
3rd July, or the dates mentioned in the postscript to hlr. G.E. Ambatie-
los's letter of 17th July (p. g), or the dates mentioned in Mr. G. E.
Ambatielos's letter of 10th July (p. 26).on receipt of which the defendant
on 14th July wrote to hlr. G. E. Ambatielos authorizing hfr. Law to
sign the contracts ?If he surmounted al1other difficulties, the defendant
would fnil to prove that Ur. G. E. Ambatielos and hlajor Laing wcre
evcr nd idemas to tlic mouths of delivery. The case is not carried further
by the defendant's evidence of his interview with Major Laiiig in l';iris
in August 1919. Tliat evidence is very curious. The defendant says that
not only did AIajor Laing assure him that the times had been agrccd,
but also promised that if the defendant did not make the expected profit
on the working of the ships, the Shipping Controller mould share with
the defendant the loss measured by the difference between the expected
profit and the profit made. This is so fantastic a thing for Major Laing
to have said at that time that the defendant's memory must be at
fault, and 1 cannot rely on it as to what was said at that interview. If,
prompt work enjoyed by theor Lainbuilders, good weather, abundance of
labour and absence of strikes, that would bc in keeping if Major Laing
was expressing an expectation as to deliveries, but out of place if the
Shipping Controller had hound himself to contract dates. The letters in
3lay 1921 (pl).'961 and 972)do not help thedefendant. Major Laing had
ceased to be on the staff of the blinistry on 30th September 1920, and
was not the plaintifi's agent to make admissions. But, in any,case, the
assurance stated to have been giveii by Major Laing was not that the
dates were contractual, but that he was satisfied that the datesmentioned
in the defendant's letter of 3rd July 1919could be relied on. It al1points
to the expression by Major Laing of an expectation, it may be a confi-
dent expectation of delivery within certain months. But that is a very
different thing from a contract that they shall be so delivered. The
13188 ASSEXES TO U.K. COUXTER-MEMORIAL (XO. 1)

defendant further relies on a cible at page 240~2,signed by MissAf.J.
Straker. It was one of several cables sent at the request of Jlr. G. E.
Ambatielos, urgjng the builders to expedition. 1 cannot upon it find a
contract which is not otherwise proved. Further, the conduct of the
defendant and Mr. G. E. Ambatielos is wholly inconsistent with the view
fixed times. The first delivery of the seven ships was made in Octoberat
1919, and the last on 1st June 1920 The breach by late delivery, accord-
ing to the defendant's case, began in August 1919. There is in writiiig
no suggestion that the vendor was in breach or that the defendant had
any claim for damages in respect of the delivery of the seven ships
until 20th April 1921 (p. 917). This was after the defendant had begun
to get into difficulties in regard to payment made under the mortgage
covenants. The general statement then made was not followed up, and
no further claim was made until the defence was delivered. There was.
1 fincl.no ïc.rb;il siigg~~sof :tny hrclch or chim in regard to deliïer!:
of ttie se\.en ships until \la1321, !\,lien>IrO Ryriii.saw 1l.e<lel~:nJ:int
iri Piiris in rc4c.rcni.ct.o th= dc>feiidant'sdificiilties iiiider the niortg:,ge
co\.cnaiits. il(niiot t,i.lic\.e G.rE. :\iiil~:itiv\i.Iir11,>n!.slie Ijro-
tcstcd 2nd rcr-erïcd the deft-iidnnt's riglits tlir<iiighoiil th,- ~d\,er~u
wliict! dcli\.eïi\wrc I>ciii: ciïeii. In 11iiii:iiiro. \\.hm tlic d,~lcnd:int
first asked for a loan, thereYwas no süggesti;n of any breach by the
Shipping Controller, or of any claim against him. In August 1920,when
the defendant was trying to arrange with the Shipping Controller a
credit on guarantee of Cox and Co. (p. 669, 670 and 671). the total
amount owing by the defendaut usasagreed at a figure representing the
outstanding price of the ships not yet fully paid for, and no suggestion
was made that the defendant had any claim. In October 1920, the
credit was arranged on mortgage and no suggestion of any claim was
made. On the contrary, Jfr. G. E. Ambatielos (p.688)thanks the alinistry
for "al1 the facilities which you have been good enough to grant us".
It is foolish to suppose that the defendant had claims for late delivery
running into many hundreds of thousands of pounds and kept silent
about them ifthey had any foundation in law. It is true that therc are
many complaints by the deferidant as to delay, and rcquests to the
Ministry to hurry on the builders. 13utthat is quite consistent with the
expectation of deliveries within certain times. It does not prove a con-
tractual obligation. Had there heen a contract, the letters urould have
been very different.1 find that there \vas no contract to deliver by times
certain.
The defendant, in the alternative, says that the contract was to
deliver within reasonable time. If that was the contract. there is no
evidence at al1 that each of the seven ships was not delivered within
reasonable time. 1 find against the defendant's,claim for damages for
late delivery of the steamships other than the hlellonaid the Stalhis.
There are further matters to be considered in regard to those two
steamers, and 1will deal with them later on.
Secondly, 1come to the de fendant!^claiin for damages by reasoii thnt
the same seven ships were not according to contract, but of less v;ilue
hecause of defects and omissions. Paragraph Sof the defence alleges that
the ShippingController failed to deliver the steamships in dueand proper
condition as laid down by the terms of the' contract, and that the
defendant has become liable to pay, and has paid large sums in order ANNEXES IO U.K. COUXTER-MEhIORIAL (NO. 1) 1~9

to hring them to the standard necessary to obtain the highest class at
Lloyd's. In the particulars the claim is amplified, and claims are made
in respect of sums expended or necessary to be expended in order to
bring the steamers up to specification standard, including Lloyd's,
Board of Trade and Factory Act requirements, and for renewals of
defective workmanship and material. There are also claims in respect.of
extra wrongly included as such. At the hearing, the defendant's con-
tention was that the ships were to be according ta specification, and to
com~.v ,ith Llovd's reauirements so as to be clas xooA I : and he said
tti;ittlii!.iverc Li man\: rcspccts nut accurdiiic. riiil~rcitic;;tioii,~iid in
iii;,ny rcspccrs did not conil~ly vit11 T.loy~l'îrr<liiircmrnts, and tli.iiii
utlitr rrsi>rcts 1111\:\.urkmansliii>ur rii:.tcrin\\,;Arlt!fccti\.c. 111iiinkine
this case,'the defendant was métby two difficulties :(1) his contention',
were inconsistent with the terms of the contract of 17th July 1919 ;
(2) he was unable to prove what the terms of the specifications were.
By clause I the vendor sold and the purchaser bought the steamers now
being built by the contractors under the yard numbers specified in the
schedule. By clause 4, "the purchaser or any person appointed by him
and approved by the vendor shall have access to the premises of the
contractors ....and al1 proper facilities with a view to making inspec-
tions. The purchaser shall have no power of rejecting work or material,
but may make representations in respect thereof to the vendor, urho
shall thereupon decide whether the same is or is not in accordaiice
with the terms of the contract between the vendor and the contractors,
and shall approve or reject the same accordingly." By clause j, "Al1
classification, anchor and chain certificates relating to the steamers sbaii
be handed to the ~urchaser on deliverv of the steamer. and also co~ies
of rhc tj.l,e >I>~citit:,tionsand ylm.~...Ili tlir ,l>nri:gmr, hoars. ind oirfir
yro\~ided for in the sl~ccific.itionsuf th? sti-micrs and cnginrs, ;iiid
d,:livered bv ttit. coiitr.ictori to the vcndor. sli.11l lit (lcli\.c.rcdto tlic
purchaser on delivery of the steamers." By clause 6, the steamers with
their spare gear and outfit, "shall be taken with al1faults and errors of
description without any allowance or abatement".
The effect of these provisions seems to me to be as follows :(1) The
defendant was entitled to have delivered to bimon completion the ships
"now beine b-ilt" bv the named contractors under the s~ecified vard
niimbiri: (2, hc imi ciitit~cd by tgis rrpr<~ceiitnti~~tto in&wct ;in2 to
mtike rcproscntltions during cuiistnictiori ns ro work ;iiid iii.itcrinls, hiit
tlic dr<:ision\vtictlic.rtlic coiiirnctur \vas fiiltil.,n~ Iiis coiitr;iit with rhc
Sliippiiig Controllrr r<.str.~l ith thc rel~resc~nt;~tivcosfthe Shipping Con-
trullc.r; (3, oii coml,l~riun tlit(l,:fr.ri<l~\VIS to t;ikc tlie 4iip \i.itlal1
faults and errors of description without any allowance or abatemerit ;
(4) the defendant was entitled to have delivered to him al1 the spare
gear, boats and outfit which were provided for in the specifications of
the steamers and engines and were delivered hy the contractor to the
Shipping Controller, and was to take them with al1faults and errors of
description without any allowance or abatement ;(5)the defendant waç
entitled to have handed to him on delivery al1classification, anchor and
chain certificates relating to the steamers and also the type specifications
and plans. To ascertain what classification certificates are referred to, it
is necessary to refer to the type specifications, and it is found to he
xoo A I at Lloyd's. Now it is clear (1)that the defendant appointed his
representative. Mr. Rossolymos, who inspected and who made such=go ASNEXES TO U.K. COUKTER-AIEMORIA (NLo.1)

representations as lie thought fit ; (2) that the ships delivered to the
defendant were the ships "now being built" specified in the schedule ;
(3) that the defendant took delivery of them ;(4) that al1 spare gear,
boats and outfit delivered by the contractors to the Shipping Controller
were delivered to the defendant ; (5) that al1classification, ancbor and
chain certificates were handed to the defendant ;and that except in the
case of the Yaiuzis, the certificates were for xoo A I at Lloyd's. The
Shipping Controller but also of Lloyd's surveyors, and, escept theof the
Yanitis, were al1 classed roo A I at Lloyd's. The Yaiznis was classed
xoo A only, because there \vas some deficiency in anchor or cable equip-
ment. The plaintifls admit tliat allowance must be made in regard to
tliat item. The above conditions having been fulfilled, thedefendant took
the ships and their spare gear and outfit with al1faults and errors of
description, but assuming that the defendant is entitled, after taking
delivery, to complain that the ships were not according to the builders'
specifications, he failed to prove the terms of the specifications. Books
were produced containing prints of specifications for B and C ships
respectively. 13ut it \vas proved that many alterations had beeii made
in the specificationsso printed. This was known to Mr. G. E. Ambatielos.
(See as to B sh'ips pp. 99 and 100 of the correspondence, aiid as to C
ships p. 12 and the letter therein referred to, which is on p. 1zo a ;
see also p. 285.)hfr. Rossolymos obtained copies of the sl>ecificationsat
Hongkong and Shanghai and was shown a number of letters modifying
the specifications. He said he handed the copies he received to the ships'
officers.They were not forthcoming at the trial. It is therefore impossible
to Saywhether the matters complained of were or were not in accordance
with the specifications. It is well to add the following observations :
(r) hlr. Rossolymos gave formal certificates of compliance with the speci-
fications in the case of the Paizagis,Trialos, Keramiesand Yannis. On
14th June 1920 (p. 563), after al1 the ships urere completed, ïilr. G. E.
Ambatielos wrote : ''\Ire understand from Our engineer" (that is
Jlr. Rossolymos) "who is out at Hongkong that the boats are tip-top in
every respect and much superior to any pre-war vessel." Of course, in
this part of the judgment 1am dealing with only the seven ships. (2) It
is not inconsistent with the views 1 have expressed, as appears from the
correspondence, that the defendaiit from time to time complained of
defects which he says manifested themselves in the ships, or that the
Shipping Controller took up some of these matters with the builders.
The Shipping Controller's contracts with the builders contained a six
months' clause as to defects workmanship and materials ;and the Sliip-
ping Controller inay wellhave been ready to enforce it for the defendant's
benefit. If the defcridant rcally had a claim against the Shipping Con-
troller,runniiig into the very large sums mentioned in the particulars,
it is most remarkable that nothing was heard of a claim of tliat magni-
tude until after the defendant hegan to get into difficulties under the
mortgage covetiants, and that the indehtedness of the defendant was
agreed in October-November xgzo without any reference at al1 to any
such claim.
As to the defendant's claim that the builders charged as extra items
which were not extra, there is the same difficulty arising from failure to
prove the terms of the specification. But, over and above this, whatever
extras were ordered were ordered by the defendant and were paid for ASXEXES TO U.K. COUSTER-.\IE\IORIAL C o 1.) 191
by the Shipping Controller as agent for the defendant. If the builders
charged as extra things which were not extra, that was no breach of
any contract between the Shipping Controller and the defendant. 'The
defendant's remedy was against the builder. The defendant in the corre-
spondence recognizes this :see, for instance, the letter of 23rd June 1920,
on page 580. 1 find against the defendant's claim for defects and omis-
sions in the seven ships delivered,except as to the small matter in regard
to the Yannis already referred to. For reasons to be presently stated,
this question does not arise in regard to the Alelloizand Stathis.
1 now comc to my third head, which is the defendant's claim for
damages for non-deliaery of the Melloit and Stathis. It is not easy to
discover from the defence and the particulars thereunder what case as
to these sh'ipsthe defendant desired to plead. At the heaxing, the con-
tention was made clear. So far as the defendant's case rests upon the
allegation that there was a contract to deliver at times certain, it fails
for the reasons already given in referencc to the other seven sliips. So
far as it rests upon the contract of 17th July 1919. taken by itself it
fails, because the defendant never was ready and willing to pay the
balance of the sale ri cearaunst deliverv. But the main case was based
upon [lie tr:insacti8ns bcr\v..cn tilt:priic, in 0ctuht:r-So\unt,cr ~!)zo
aii<lis indicated by paragr~litis ro to12 of th<:dcfçnsc. l'liosc pnragraplis
;illegea verbal :igreemc.iittlintiiicoi~sidcrxtionof the iriiiiiedi;itcdeli\.cry
of the .lle/lo~~2nd .Sl<r/his,he defendnnt \vould cscciitc the riiurtga1;es
of [lie otticr ships. Thc drfc~iida~it'case nt tlie tri;tl that, UPOII the
execution of the mortgages of the seven otlier ships, he became ëntitled
to delivery of the Mellon and Stathis. He contended that there was a
bargain to that effect, or. if there was no bargain, then the deeds of
covenant, by giving time for payment, modified the term as to cash
against delivery in the contract of 17th Jtily 1919. The plaintiffs agreed
that there was a bargain, but said that the agreed condition upon which
delivery was to be given of the Mellon and Stathis was that the security
should be a perfected security, mortgages duly registered of ships diily
registered as Greek sliips, and that that condition never was fulfilled.
To understand the transaction of October-November 1920,it is neces-
sary to go somewhat further back. The I<eramieshad been delivered to
the defendant on 15th May 1920(p. 506).The Yannis had been delivered
to the defendant on 31s~May 1920 (p. j38). The defendant had not paid
the whole of the balance of the purchase price due against either of these
deliveries. He had ]laid something in respect ofthe I<eramiesbut nothing
in respect of the Yaanis. The Mellon was ready for delivery by the
builders in June 1920, and the Stathis in July 1920. The defendant was
unable to pay the balances on either. In anticipation of delivery. the
defendant Iiad arranged charter parties from the Far East to Europe
at profitable rates for the Mellon and Stathis. The Shipping Controller
was willing to assist him in the matter of the charter parties, and it was
arranged that the Shipping Controller should take delivery of the Mellon
and the Stathis from the builclers and rcgister them in the name of
for the deiéndant's benefit and at bis nsk, and expense and that theages
defendant should be pemitted to take delivery against payment at a
later date. As appears from a document at page jo4, the defendant
undertook to insure and to be responsible fol al1expenses attaching to
or attending the Mellon from 16th June 1920. 1 was infomed that tlie192 ANNEXES TO U.K. COUNTER-MEMORIAL (NO. 1)
terms astothe Slallzisweresimilar. The ShippingController took delivery
from the builders of the Mellolt on 14th July 1920, and of the Stathis
on 5th August 1920. The charter party voyages were performed. The
ships arrived in the United Kingdom some time in October or early
November. The defendant made preparations for an outward charter
party voyage, bunkering the ships at Cardiff. Meantime, the defendant
had been trying to raise money. In June he applied to the Shipping
Controiler and was refused it. He then tried to get CoxBiCo.to guarantee
to the Shipping Controller the outstanding purchase money of the four
ships. By October this attempt failed. He then again applied to the
Shipping Controller to be allowed credit, and the Shipping Controller
was now ready to assist provided he was fully secured. The amount
owing on the Keramies and Yannis, including some extras together
with the amount which would be payable against delivery of the Mellon
and Stathis and whicli ought to have been paid as soon as they were
ready for delivery, was roughly about L8oo,ooo, of which rather more
than half represented the balance of the purchase price of the Mellon
and Stathis. (For details of this, see page 2 of the plaintiff's account
No. 5, hi chwas put in.)
The correspondence as to the credit begins at pages 688 and 689.
The facts mainly appear from the letters. Where hlr. O'Byme and
Blr. G. E. Ambatielos are in conflict, 1acceptMr. O'Byme'sevidence. On
8th October 1920, hlr. O'Byme stated the Shipping Controiier's terms
(p. 691) :"The Ministry will accept the secunty offered by you, viz. ,
mortgage of seven vessels to be placed on the Greek Register, subject
to the Greek Government confirming that there arc no prior charges on
these ships, and, after these mortgages have been duly registered, the
remaining two ships will be handed over to you-thcse two vessels in
due course also to be placed on the Greek Alortgage Register." hlr. G.
E. Ambatielos replied : "We note with satisfaction that your good
Ministry have definitely decided now to allow the balance due for the
completion of the purchase of the four vessels still unpaid by taking a
mortgage. As the Mellon and Stathis will very shortly be ready to be
delivered to us after completion of their present voyage, we wiU feel
greatly indebted to you if you will push forward with al1possible speed
the necessary documents." hlr. O'Byme said that his letter stated the
terms verbally offered to and accepted by Mr. G. E. Ambatielos. The
letters confirm that agreement. They makc it clear that the condition
of delivcry of the Mellon and Stathis without cash payment was (1)
a mortgagc of the other seven ships ; (2) the registration of the other
seIrenships in Greece ; (3) an assurance by the Greek Governme. that
there were no prior charges on them ; and (4) the registration in the
Greek Register of the mortgages. There was the fiirther stipulation that
in due course the Mellon and Statltis should also be mortgaged, for that
must be the meaning of the ivords "placed in the Greek Alortgage
Register". Counsel for the plaintiffs said they did not rely upon this
further stipulation and it may be that it \vas waived by the Shipping
Controller, though it is not clear that it was. But be that as it may,
there was no waiver of the stipulation as to the registration of the mort-
gages of the seven ships.
Snch was the nosition when the defendant executed the mortgages
and accompanying deeds of covenant of each of the seven steakers.
Each of the seven was mortgaged by a separate mortgage with a separate ASSEXES TO U.K. COUSTER-.\fEi\IORIAL (SO. 1)
I93
deed of coveiiant. Each deed recites that ttie mortgage is to secure
payment of the balance of purchase pnce of the Iceramies, Yannis,
Mclloit and Stathis, and of any sum due orto become due on any accoiint
whatsoever. There is no further mention of the MeIIin and Stathis.
Payment by instalments of the mortgage debt is provided for, and by
clause 13as thedebt isreduced the mortgaged ships are to he successively
released. Clause 7 provides tliat upon the request of the Shipping Con-
troller and subject and without prejudice to the provisions of any then
existing charter party, the mortgagor will cause the mortgaged steamer
to proceed to her declared port of registration and also cause to be
registered there the mortgage and deed of covenant. By accepting these
mortgages and deeds of covenant, the Shipping Controller gave time for
the payment of the purchase price of the MeIIon and Stathis. He coiild
not now'say "1 will not deliver the Mellon and Slalhis except against
cash". But he did not therebv waive his riaht under the bareain made
in October in pursuance of which the mortgages were executeud,nor are
the deeds inconsistent with the continuance of the bargain. It is true
that clause 7 (a) of the deed of covenant requires the owner to register
the ship and mortgage only upon request of the Shipping Controller and
with the bargain that the Mellon and Stathis would be delivered onlysistent
afterthe seven mortgages had been registered. When, therefore, as soon
as the mortgages were executed, the defendant demanded delivery of
the MelIott and Stathis, the Shipping Controller was fully justified in
his reply of 8th November 1920 (p. 734) :"The two ships wiü only be
transfened after the other seveu vessels have been duly registered at
Argostoli. and the mortgagees placed on the Greek register." (Argostoli
was mentioned because that was the port named by the defendant as
the intended port of register of his ships.) The Shipping Controller was
equally correct in his view of the Greek law when, on 10th November
1920 (p. 739). he said : "These mortgages can only be registered after
the ships have been registered at Argostoli." The Shipping Controlier
was, howevei, still willing to assist the defendant and would have been
prepared to accept, iii lieu of registration,a certificate of the Greek
Government, which appears on page 778 a, but, unfortunately, the
defendant, through his solicitors, on 4th December threatened a claim
for damages for delay in delives. of the MeIlon and Stathis and declined
to withdraw it (see p. 772 and 781) ;and the Shipping Controuer there-
upon stood upon his legal rights and refused to make any concession.
In my judgment, the Shipping Controller was within his legal rights,
and there was no breach by him of the bargain as to the delivery of the
Mellon and Slathis.
After the dispute arose in Xovember, the Shipping Controller and the
defendant continued to treat the Mellon and Stathis as still governed by
the contract of sale as modified. They were in conflict as to what the
modification was, but neither treated the contract as determined. 1 need
not refer in detail to the letters which show this. They are to be found
in Volume 3 of the correspondence. The two ships remained at Cardiff.
The defendant continued to recognize his liability to insure and to pay
expenses in connection witli them. The Shipping Controller utas willirig
that if the defendant so desired they should be employed for the defen-
the defeiidant asked the Shipping Controller to release him from having AXXEXES TO U.K. COUXTER~~IEhIORIi\L (NO. 1)
I95
against her, and one of them, the broker, 31.Duchateau, was holding
up the ship's register. No furthcr steps were taken by the Shipping
Controller.
The Trialos was at Bremerhaven, where there were a number of clairns
against her. On 1st June 1922, the plaintiffs recovered judgment in the
German courts and under it obtained possession. The facts as to these
ships do not affect my finding that the time at which the defendant's
default is to be determined is the date of the writs in the present action.
Of course, the results of the judgment in the Trialos may have to be
considered in taking the account in the present action.
1 propose to dcal with the alleged breaches in the following order :
(1)insurance ; (2) interest; (3) instalment of principal sum ; (4) arrest
of the Panagis. By the terms of each of the deeds of covenant, a breach
of any one deed was a hreach of all. This is provided for by clause 8 (9).
Insurance : In pursuance of the bargain of July 1920, by which the
defendant undertook to insure the Mdon and Statttis"until such time
as delivery is actually taken hy the purchaser" (p. 604), and in pursuance
of the covenantin the deeds of covenants relating to the seven mortgaged
ships, the defendint, through Sir \Villiam Garthwaite, insiired al1 the
nine ships. At the material time, the manne risks were covered by
twelve months policies from 29th October 1920 ; the war risks by
insurances eïpiring at varions dates. The premiums on the maiine
policies were payable by quarterly instalments on 29th October rgzo,
29th January, 29th April, and 29th July 1921. The defendant duly paid
the first quarter's instalment. He made no further payment. He had
given Sir William Garthwaite a bill for the second quarter's instalment.
It was renewed under guarantee by the Shipping Controller, but was
not met ; and on 8th April 1921the Shipping Controller paid the second
instalrnent. The defendant had also givcn a bill for the third instalment.
He was unable to meet it, and on 3rd May 1921 (p. 962), so informed the
Shipping Controller, and said : "Will you please, therefore, arrange to
remit Sir \I1illiam Garthwaite the amount of the premiurns due as
before ?" The Shipping Controller, on 17th May 1921, paid the three
instalments. Upon the defendant's failure to pay, al1these payments had
to be made by thc Shipping Controller, or the policies would have been
cancelled. The second quarter's paymcnt made by the Shipping Con-
troller also includcd a small amount for renewal of the war risk insurance
on the Trinlos, and was reduced by a small credit for a P.A. on the
!Meilon.The three quarters' payment made by the Shipping Controller
on thenclKernmies. Tlic fonr quarters' pagment was in respect of eight
ships only, the Yannis having been sold, and the policies on hcr cancelled.
It was not disputcd that the total payments by the Shipping Controller
amounted to the figures proved by the plaintiffs, nainely, £43,696 4s.
This amount was ultimately subject to sornecrcdits for cancelling returns
on the Yannis, aiid a P.A. claim on thc Yannis amounting altogether
to £2.887 13s. qd. (see plaintiffs' document No. 6), and at the end of the
twelve months, namely, on ~9thOctober 1921,substantial laid up returns
became payable whcn adjusted. But the sums which thedefendant ought
to have paid between January and July amounted to ,C43,6964s.. and
at the date of the writs in the present action, the Shipping Controller
ivas under advance in respect of insurances the sum of i43.696 4s, less
£z,887 13s. 4d., iiiakiiig a balance of £40,808 los. Sd. That is a statement198 ASSEXES TO U.K. COUSTER-hlEh1ORIAI. (SO. 1)
The contract of sale was still running, and the account cnrrent open
between the parties still included the balance of purchase rnoney for
which the defendant was still indcbted, and interest was payable on
the whole account. \\>hatever results in the final taking of thc account
may folIo\\.from the iiltimate cancellation of the sale, thcy cannot affect
the question whcther in 1921, at the date of the issue of the writs in
these actions, the defcndant \vas in default.
Instalment of principal sum :By clause 7 (fj,the defendantundertakes
to reduce the amount owing by at least £7j,ooo each six months. "The
amount owing" must mean tlie principal sum, for interest was payable
the 1st February and thc 1st August, and al1other sums except principal
and interest are payable on demand. (See clause 1.)The dcfendant was
therefore bound to pay off £7j,ooo of the principal debt by 4th May
1921. He paid @j,ooo on 8th No\~embcr1920. He paid nothing further.
The defendant contends that the difference was more than satisfied by
the receipt by thc Shipping Controller of part of the procecds of sale
of the Yannis. The plaintiffs coiitend that the obligation ta pay £75,000
half-yearly, and the obligation ta secure to the Shipping Controller pay-
ment of the proceeds of sale of any of the mortgaged ships were cumu-
lative, and that the receipt of proceeds of sale did not affectthe oblig-
ation to pay £7j,ooo. 1 think the plaintiffs are nght. The payment cori-
templated by clause 7 (1) and clause 13 is a payment which leaves al1
the ships under mortgage until, as the amount is reduced, the ships are
successively releascd as providcd by clause 13 ;the contemplated pay-
ment is not one which, whilc rcducing the deht, at the samc timc dim-
inishes the security by withdrawing a ship before its turn for release
cornes. As the plaintiffs pointed out, if the defendant's contention were
sound, then if the sale of onc of the other ships had produced ~~jo,ooo,
the Panagis would also have had ta be released under clause 13, and
two ships would pass out of the security, though thc dcbt was reduced
by £1jo,ooo only.
But in case it should be held elsewhere that the defendant's conten-
tion is right, it is well ta examine the facts as to the Yannis. Clause
7 (bj forbids the sale without the Shipping Controller's consent, but
shall be at liberty to sel1the said steainship on giving four days' written
notice tu the Controller, provided that the purchasc moncy is made
payable to the Controller and provided that the same or the sum of
£~zo,ooo, whichever shall be the larger, is paid over to the Controller in
respect of sucli sale to be applied in reduction of ttie amount duc to the
Controller ....and such sale shall not constitute a hreach of this siib-
clause". Clause 8 (fj enilmerates among the conditions of forfeiture :
''If the said stcamship hc sold and the net proceeds of sale or the sum
of £~zo,ooo, whichevcr shall hc the larger, be not paid to tlie Controller
as aforesaid." Early in 1921, the defendant, through hlessrs. Dodwell&
Co., contracted to sel1thc Yanf~isto the Indo-China Steam Navigation
Co. In making the contract, the dcfendant paid very little attention ta
the provisions of clause 7 (h). The contract did not make the purchase
money payable ta the Controller. The sum was ~127,joo, and, according
to a letter of hlr. G. E. Ambatielos of 9th February 1921 (p. 830). a
commission of £z,joo \vas due to Dodmell, "making the net price to
owner ~12j.ooo". He says tliat there would be a further commission to
himself. He adds that a deposit of £38,250 had been made in the joint ASNESES TO U.K. COUNTER-DLEbLORIAL (Nu. 1)
199
names of buyer and seller at the Commercial Bank of Scotland. The
Shipping Controllcr called attention to clause 7 (b) and demanded that
the balance of the purchase money should be paid to the Commodore
at Hong Kong on his behalf, and that the bank should be told that the
L38,zjo \vas to be Iianded over to the Shipping Controller on completion
of the sale. (Sec pl> 8zS and 841.) Ultimately, by refusing to release the
mortgage until he \vas ~~aid,the Shipping Controller secured payment to
himself of £Sg,z50. He received that sum on 9th May 1921. It was
available for him on 7th AIay 1921, that is after the date on which the
L75,ooo. instalrnent of principal sum, ought to have becn paid under
clause 7 (1).As to the balance of £38,250. the defendant clninied that he
wns entitled to receive ~15,000 of it to cover cxpciises of scnding the
sliip froin the United Kingdom to China, the place of delivcry under
the sale contrnct. He offered to release the difference of L23,250. (Sce
p. 911, letter of 13th May 1921.) The Shipping Controllcr refused to
consider the qucstion of the expenses until after the liad reccived t.hc
whole of the £38,250. (See p. 956, letter of 29th May 1921.) ils appears
by page 968, on 9th May 1921 the defendant instmcted the bank riot
to release any part of the L38.250. The Shipping Controller bas never
received any part of it. It still lies with the bank. The defendnnt at the
trial' said the plaintiffs could have had the £23,250 at any time. But
he did not pay it or cause it to be released to the plaintiffs. In my opinion,
the only amount the Shipping Controller can be considered to have had
in hand was the £89,250 received on 9th May 1921. If the defendant's
contention were right that the L50,ooo still due on the 4th May instal-
ment of the principal sum must be taken to have been satisfied out of
that sum of £Sg,zjo, it would follow that not only had the defendant's
obligation to pay £7j,ooo by 4th May been performed, but fiirtlier that
the Shipping Controller had received L39,zjo heyond the payment due
on 4th àlay. The defendant seeks to appropriate that £39,250 to the
moueys owing by liim for insurance or interest. 1 am not at al1sure that
the words in claiise 7 (b) "to be applied in reduction of the nmoiint due"
do not mean "applied to reduction of the principal sum". Had it been
necessary, 1 should. have had to decide that questiori, but it is not
necessnry, as will preseiitly appear. Before 1 leavc the Yantiis. it is
well to point out that the defendant's obliration under clausc . (b. was
to ri.l>;.fclic l~~ircIi:iioiit:III'rio LOO \vliisli~\~cIw tlic Iirg~r, ;ilid
iindcr il.aiw> //, tlic!IL.[ II~OCCC~of ;il,. or 11Sun? of ~I?O,OOO, \vhicIi-
e\.rr IL rlic I:ir<cr. Ir iiiïtttiiur\vlictl.er 11d.efc>nd;intir:ior \v;isriut
entitled to dcdiict the L15,ooo for expcnses. He was bound to pay at
least Lrzo,ooo, and his failure to do so was in itself a breach of covenant.
There is a fiirther contention of the defendant which arises on his
statement marked Y. On the one liand, he proposes to treat certain
insurance premiums paid by him on the Mellon and Stathis,as haviiig
been paid on the Shipping Controller's account. On the other hand, he
suggests (though it was not argued) that the Shipping Controller must
be considered as having in hand the follou.ingitems :Deposit on ilfello~i
and Slalhis alleged to amount to £48,916 ; extras on Mellon and Stathis
alleged to amount to £3g,Szz ; bunkers and stores on Mellonand Slathis
alleged to amount to £14,306. 1sa), "alleged in these instances because
1 have not investigated the figures, but that is the amount which tlie
defendant puts them at. .4s 1 have already pointed out in dealin with
the item of interest. the contracts relating to the Mellon and flalhis200 .*X'IEXES TO U.K. COUKTER-&IEMORIAL (NO. 1)
bo~h ~ ~6th Jlav and at the date of the writ were still runnine. The
iiii~ir~iiic ~)r~iiiiiirnivcrc paid ù!. thi. dcfcndaiir iii Iiursuniice of Iiis
li~bilit! iindcr tlic I>:irg:iiiini ,liily i<)?o. \\'linti.\~~tliv rfiect of the
iiltirii:itc ~..,iiccll;i$iithc 5;iliiiiinn tlir <Iri>o;iuii 111,onc litiirlniid
~ ~-~~~
a possible claim for damages by the Shipping Controller on the other,
in 1921 the sale had not been cancelled, and, even assuming that the
Shipping Controller ever became liable to return the deposit, he was not
sa liable in 1921. 1 am not suggesting that he ever bccame so liable. But
the question whether he did or not has no bearing on the question whether
the defendant ivas in default. As to the extras ordered and paid for by
the defendant, it is impossible to see how they should ever become a
debt due by the Shipping Controller ta the defendant. If the sale was
cancelled after the defendant had spent this money on the ships, it
would be the defendant's misfortune, but the loss would lie where it
fell. As to bunkers and stores on board the ~Mellonand Stathis when
possession was taken by the Shipping Controller, this matter was not
explained. There ma have been coals and stores on board belonging to
the defendant, but Zr al1 I know they may be still on board ;at any
rate, there is nothing to show that the Shipping Controller became
accountable for them at any date material to the question whether the
defendant was in default.
1 am now in a position ta gather up the results of my findings as ta
insurance, interest and principal sum. They show that the defendant was
in default in a very large amount at thedate of thewnts. At thedate of
the writs in the Ambalielos, Cephalonia and Nicolis, the position was
as follows : the defendant ought to have paid instalments of principal
due 4th May, L75,000 ; interest due 1st February, L35.497 4s. 1d. ;
amounts paid by the Shipping Controller for premiums January, April,
July, less returns received by the Shipping Controller, L40,808 10s. 8d. ;
totalling L151,3oj 14s. 9d.. and to this sum must be added the interest

due 2nd August. 1 have not the precise figure, but it was much more
than the amount due on 1st February. 1 suppose the bank rate in the
meantime had risen. The defendant had paid on 8th Noyember 1920,
Lzg,ooo. .4ssuming him ta be entitled to have brought into the account
the L89,250 received by the Shipping Controller from the sale of the
Yannis, he had paid L114,qo. Assuming him ta be further entitled ta
have brought into the account L23.250, part of the Yannis deposits,
he had paid L137,5oo. Whichever way you look at it, he is greatly in
default. At the date of the writ in the Panagis, the position was the
same, except that the fourth instalment of insurance premiums had not
hecome dueand the returns had not been received. Because the insurance
premiums and because the interest would have to be disallowed there
u~ouldstill be a considerable deficiency. Even if the defendant was right
in saying.that default must be judged as on 6th May 1920, he would
still be in default. The defendantought to have paid instalment of pnn-
cipal, L75.000,interest due 1st February, L3j.497 4s. ~d.,on the second
quarter's instalment of insurance premiums paid by the Shipping Con-
troller, L15.155 19s.. third quarter L14.864 12s. 6d., making a total of
£140,517, 15s. 7d. The third quarter's premiums must be brought into
the account, for, though the Shipping Controller did not actually'pay
Sir William Garthwaite till after6th May, he had already, at the defend-
ant's request, become liable to pay. That being the account on the one
side, on the other the defendant had paid, on 8th November 1920, 202 ASSESES TO U.K. COUSTER-ZIEZIORIAL (SO. 1)

Sir ERSESTPOLLOCK : 1 only wanted to refer to it.
bIr.W. A. Jowirr : 1dare Say the parties can settle tliat qiiite easily.
It is notreally before Your Lordship at all.

hlr. Justice HILL : So, it is not. It is obvious that they must settle it
because it is so easy for the plaintiff to take steps to stop it going out.
blr. W. A. JOWITT :May I just mention one difficulty which is in my
mind, as 1 do not want to be under a misapprehension. 1 do not know
whether therc will be any taking of an account in this case.

Mr. Justice HILL :1 have ordered a reference, and that is taking an
account.
' Mr. W. A. Jow~rr : \\'ouid Your Lordsliip direct that in the taking
of that reference the iMello?rand the Stdthis are now to be disregarded ?

>Ir. Justice HILL : SO, 1 cannot do that wholb. Sice questions might
aise as to how long the interest on the nlellon and Stathis ran, and about
. the cost of insurance of the iMelloiiand Slathis and the deposit on the
Mellon and Stathis. They are al1 questions of account. 1 have had to
decide some of tliem in ordcr to give my ïudgment, but 1 have carefully
not decided others of them, for instance, what is the effect ofthe deposit.
It is part of thc mortgage account. It is now agreed, exccpt for con-
sequential questions, the sale of the Melloiz and Stathis is gonc, but it
has left a contract. It is like an ordinary case where there is a repudiation
which is accepted, but for certain consequences the contract must
subsist. There is tlie effect on the deposit in damages, and so 011.
Mr. W. A. Jowir? : There is only one other point 1 should like to
mention, and that is with regard to the part of Your Lordship's order
that directs the sale.
blr. Justice HILL : That was discussed last time. I was oiily stating
what was arranged last time. 1 am very anxious that more ships should
not be sold than is necessary. 1 am quite sure that the plaintiffs will
not desire that more ships should be sold than iiecessary. They have al1
along been anxious to get the cash othenvise than by the sale of the
ships.

Afr.W. A. JOWITT :Sir Ernest, who 1 know always desircs to meet me
on any point, \vil1perhaps meet me on this. As to the part of Your
for agreement between 11s.immediately or shortly operative. \Vithexcept

regard to that part of tlie order, my clients might like :ln opportunity
would Say, on sucb terms as Your Lordship thinks proper, that so farp

as the order directs a sale there might be a stay. With regard to the
come before Your Lordship again, so with regard to that prob1bdo not think
1need ask for a stay.

Sir ERKESTPOLI.OCK : 1am always very anxious to meet iny lezuned
friend and in a matter of this difficulty 1 would, but 1 really think that
in the interests of al1 parties 1 cannot agree to anything Likea stay.
Your Lordship remembers ho\\, peculiar the position is. It is really not
in the interests of either party that there should be a stay. The \.essels
are al1laid up and have been for a long time. ANNEXES TO U.K. COUNTER-MEMORIA (LO. 1) z03

AIr.Justice HILL :The expenses are very heavy ?
Sir ERNESTPOI.LOCK :Yes ; and they are going on. The position of
the plaintiffs in this case is thatunder the order tliat Your Lordship has
made, a sale could only be undertaken, and indeed, would only be under-
taken. in the interests of thosc who are concerned if it was reallv advan-
tagroiis :and tlinr nicniis:idi.:int;ig~:oiisro 110thsides,becriiisctticre \roiilci
be ;irc.s~ioiisil>iliipiin tliosc ivhocscrciscd tlie poiier of s:ile tu iiistify
thcir action. I3otli sidcs :irv intcresti:<lth:it \i.cshould not incré;isctliosc
expenses, \i.liicIili:~\.e;ilready riiii up to a vcry greiit :iiiiount. 1c:irefull!.
watclicd :ilid listciied ro that yïrt uf \'uur 1.orrlship'sor<ler\r,hichsecin?<l
to me to rcserve nll i>rovcrrialits to tlic defendiirit. 'Tlicrcarc linhilitirs
on the part of the I>lainbffsif-tliey exercise the power of sale ;but there
is a liability on al1 parties to abate the expenses, so as to Save further
expense as far as possible. In al1 1 am saying, 1 am speaking as much
in favour of the interests of the defendant as of the plaintiffs ; but 1
ask Your Lordship not to impose a term which might result in further
liability to whoever ultimately has to pay for it. That is the reason wliy
1 ask Your Lordship not to alter the order which you have made.

>Ir. Justice HILL : Even under this order that the Marshall is to act
at once, it will be some little time before there can be a sale. If by that
time you have given notice of appeal, possibly different considerations
might anse. Your time for appeal will be out long before the Marshall
can bring about a sale.
hlr.JOWITT :hl)'clients might undertake, if so advised, to give their
notice of appeal promptly ; but, frankly, in a difficult and complicated
case of this sort, one wants to consider the position ver). carefully.
Alr.Justice HILI. :Certainly.
-
&Ir.JOIVITT :1 am not indicating for a moment that we shall appeal ;
but we want to consider the vosition. as su min^ before the sale takes
place notice of appeal h,îs been lodged, 1 am me6ly suggesting, on such
terms as Your Lordship considersproper, that it wouldbe right weshould
be granted a stay. Afterall, we have paid large sums of inoney in respect
of these ships, and the ships are in the hands of the Alinistry.
>Ir. Justice HILL :Apart from those things-though you made reduce
the deht by half by eliminating the Mellon and the Stathis-it is not
quite tliat, as there still would be the difficult question about interest-
they will want &OO,OOO or ~5oo.000on any showing, and you will not
set &oo,ooo or ~5oo.000from these ships.
Sir ERNESTPOLLOCK :That is it. hly friend will have the opportuiiity
of consideririe the vosition. If he decides to take the case to another
court, and ifThe ocCasionanses when we are going to sel1 ;if he thinks
the matter of a stay in that particular case ought to be brought before
Your Lordsliip, 1 suggest he sliould reserve his opportunity for asking
for a stay till that occasion, when, if Your Lordship thought we were
acting improperly, unwisely, or imprudently, then Your Lordship could
Say on certain terms you would, with regard to that particular sale,
if it is undertaken, order a stay. Really. to make,a stay at the present
time is very possibly to deprive us of the exercise of advantages which
might inure irifavour of my learned friends just as much as the plaintiffs,
if the judgment was in any way varied. 1 hope, therefore,Your Lordship

'4 ANNEXES TO U.K. COUNTER-MEXORIAL (NO. I)
204
will not makc anything likc ailorder now of stay,but leave my learned
friend, as lie lias got liberty to applyifhe should think proper, to apply
upon the facts of the case as and when occasion for such application may
arise.

hrr.JOWITT :So long as the position is quite clear.
Mr. Justice HILL :1 specially added that you have liberty to apply
with reference to any proposed sale.
Sir ERN'STPOLLOCK :1 am quite content with that.

Mr. Justice HILL :The Marshall will keep both parties informed of any
steps he is proposing to take.
îvfr.Jowrrr :Then my rights as to a stay and the terms on which 1
may get it are quite unprejudiced ?

Sir ERNESTPOLI.OCI :<Quite unprejudiced. RIy friend will be quite
free to come to Your Lordship at any time pending the appeal.
llr. JOWITT :If Your Lordship pleases.
Mr. RAEUUKS : There is one other matter \\.hich 1 should like tc
mention. hly recollection is not very fresh about this, but when the
matter came before Your Lordship and the order was made which
resulted in the trial that we had last term, there were two other motions
for judgment and sale on the part of persons who said that they had
supplied tc this ship necessaries. One plaintiff \vas a firm called Antippa,
Frères. The other plaintiff was a 3lr. Ambatielos, a brother, 1 think, of
the defendant. These motions were ordered to stand over, as the Board
of Trade iiitervened, pending the hearing of this trial.

Mr. Justice HILL : 1 tllink these other actions are standing over pend-
ing tliis decisioii.
Alr. RAEBunr : That is so. 1 do not know what the position may be
about them, but it struck me they might have to be the subject of some
further application to Your Lordship.
hlr. Justice HILL :The plaintiffs will have to bnng them on, or you
will have to inove to dismiss them.

hlr. RAEBUHS :Yes. 1thought it better to mention the matter.
MI. Justice HILL : 1 am not dealing with that. 1 am only giving you,
as mortagees, judgment.
Alr. RAEBURX :Quite so.

Afr.Justice HILL : it will not affect anybody else.
Mr. RAEBURN : Those are actions in which possibly something may
have to be done in view of the order for sale of the ships, because there
is no judgment in either of those tao actions. In fact, the vessels have
not been used since last January.That can be mentioned to Your Lord-
ship at some other time ?
3lr. Justice HILL :Yes. You will have to get those other plaintiffs here.

hfr. RAEBURN :Yes.
>Ir.Justice HILL :If the ships are arrested in their action,1 have none
the less power to order a sale in your action. Tbere is nothing to prevent
my doing that. ANNEXES TO U.K. COUNTER-MEMORIAL (NO.2)
205
Alr. RAEBURN : IYour Lordship pleases.

1 hereby certify the foregoing to he a truc and faithful transcript of
the judgment hcrein.
(Signed) C. H. KORMAN,
For C. E. BARNETT & Co.

JUDGMENT OF THE COURT OF APPEAL

Royal Courts of Justice.

Monday, 5th March 1923.
Ir THE SUPREME COURT OF JUDICATURE,
COURT OF APPEAI.,
ADMIRALTY

Between

The ownersof the S.S. Amhatielos
APPELLANTS
(DEFENDANTS)

and
The Board of Tvadeon behalfof His Majesty

Ambatielos
Belore:

LORDJUSTICEBANKES
AND
LORDJUSTICESCRUTTON

(From the shorthand notes of Cherer& Co.,z New Court, Carey Street,
W.C. 2.)

Lord Justice BANKES : 1do not think this application ought to be

grauted. The rule upon which this kind of application is granted is well
Sir Ernest Pollock ~eferred of Nash v. Rochford Rural District Coicncil

(1917 I,King's Bench, p. 384). and summarized, it may be stated thus,
1 think:That a person who has lost his action in the court helow will ANNEXES TO U.K. COUSTER-AIEhlORIAL (No.3) 207

Now in this case there heing a contract in writing for the purchase of
ships for some ~2,000,000 containing nothing about an agreed date of
delivery in the sense of mentioning the date, the purchaser desires to
set up an oral agreement made by a subordinate of the hlinistry of
Shipping fixing certain dates for delivery. He knows whom he is going
to allege made the agreement, he is in communication with the person
before the case comes on. The affidavits are studiously silent as to when
exactly he was in communication with him ; they are studiously silent
as to when Mr. Ambatielos communicated what he heard to his legal
advisers, but Mr. Ambatielos knew before the case came on that Major
Laing could Say something. 1 dare Say that learned counsel appearing
for Mr. Ambatielos considered very carefully whether or not he should
risk it, and having given careful consideration to the matter they deter-
mined not to risk calling Major Laing, and they were beaten. After the
trial they hear something which leads them to believe that they were
too cautious and they apply that they may now cal! Major Laing. In
my view it would be contrary to the settled principles of this Court to
allow a man who has considered the situation and taken his chance, to
have another try when he finds the chance has gone against him, and
that is what, in my view, the present defendants are doing in this case.
I agree, therefore, that tlie appeal should he dismissed.
Sir ERNESTPOI.I.OCK : 1ask for costs ?
Lord Justice BANKES :Yes.

SirERNEÇTPOLLOCK : If Your Lordshi11pleases.

Annex 3

AFFIDAVIT Bi' Mr. N. E. AMBATIELOS, READ IN THE COURT
OF APPEAL ON jth MAKCH 1923

Before the trial of tliis action, 1 had a con\~ersationwith Ma'or Laing
concerning matters in question in this action. In the course O/ the con-
versation, XIajor Laing mentioned the existence of certain confidential
letters which had passed between him and Sir Joseph Naclay. Mr. Laing
read me a part of the contents of the lettcrs, but refused to show me
the letters or to give me copies thereof. On or about 5th February 1923.
after judgment had been given in this action, copy letters were furnished
to me by Major Laing without any reservation as to their use. If the
letters now supplied to me hy Major Laing are the same as those referred
to in our conversation beforc the tria1,did not receive from tlie extracts
read to mc or froni the conversation which 1 held with Major Laing a
correct impression as to the meaning of the letters. In narticular. 1 did
not underitand that they confirmedmy case as to the'deliverlrof the
vessels on dates certain. Annex 4 (1)

Room 136, ..
hfinistry of Shipping. 46, St. Mary Axe,
St. James's Park, S.W. I. London, E.C. 3,
5th September 1919.
Sir,
Re SteamersBuildi?rgat Hong Iiong

We thank you for your esteemed favour of the 4th inst., and for the
information contained therein.
S.S.War Milier.-Can you please obtain and pass to us the information
as to ivhen this boat has actually been larinclied, and when we may
definitely rely upon delivery.
S.S. War Trooper.-WC note that this boat has been completely
plated, and seeing that the engines and boilers are progressing satis-
factorily, we will thank you if yon will be good enough to inform us
wben we may defiriitely expect delivery of her.
Thanking you in anticipation, etc.
(Sigized) G. E. AMBATIELOS.

Aniiex 4 (2)

LETTER OF 9th SEPTEXBER 1919 FROAI H. F. BAMBER TO
G. E. AIIBATIELOS

Room 137.
9th September 1919.
Sir,
Re SteamersBuilding at Hong Kong

With refercnce to your letter of the 5th instant, the S.S.War Miner
was launclied on the 16th August last.
It is difficult to estimate from this when she will be delivered, but 1
hthe War Trooperwill be delirered.sking when this steamer and also
1 am. etc.
(Signed) H. F. BANBER,

Director of Ship Purchase.
G. E. Ambatielos, Esq.,
46, St. hlary .Axe,
London, E.C. 3.LETTER OF 10th OCTOBEK 1919 FROhI H. F. RAMBER TO
G. E. AJlIIATIELOS
Room 136.

10th October 1919.
Sir,
Steamevs Bz~ildii~al Hong Kong
1 ain in receipt of a cable advice from Hong Kong as to the estimated
delivery dates of these steamers as follow:

War h-iiqzerwill probably be completed end of October.
War Trooper launching middle of October, and will be completed
middk of Xovembcr.

Satisfictory progress is also being made with the War Btigler and
IV1ram, etc.
(Signed) H. F. BAHBER,

Director of Ship Purchase.
G. E. Ambatielos, Esq.,
46, St. Jlary Axe,
London, E.C. 3.

LETTER OF 11th OCTOBER rgrg FROM G. E. AMBATIELOS TO
JfINISTlZY OF SHIPPING

Alinistry of Shipping,
Room 136,
Lake Buildings, 46, St. Xary Axe,
St. James's Park,S.W. 1. London, E.C. 3,
11th October 1919.
Dear Sir,
Steamers Building at Hong Kmzg

We are much obliged for your csteemed favour of yesterday's date
completion of the War Miner and War Trooper,also wenote satisfactory
progrcss is beingrnadc with the War Bz~glerand War Piper.
.Thanking you again, etc.
Per pro. G. E. Ambatielos,
(Signed) H. TITTENSOR,

Hanager. Annex 4 (j)

LETTER OF 31st OCTORER 1919 FR031 X. E. AMBATIELOS TO
MAJOR BRYAS LAIXG

Sir,
S.S. IVav Trooperrenamed Ambatielos

Pray excuse us for troubling you again in connection with the delivery
of this steamer, but as same is being continually put hack, we can only
look to your good self for assistance, as ae know thc large ;imount of
influencc you cxercise on the builders.
As you will rccollect, nt the time of the negotiations forthe purchase
of these boats, yoii intimated that this steamer would be delivcred
towards the end of October.
When our consulting engineer, klr. 3. D. Rosçolymos, arrivcd at Hong
Kong, he wired us on the 4th of this month that we werc to obtain
delivery on 25th November.
Although this naturally disappointed us, we stiU entertained hopes
of getting this steamer earlier.
However, yesterday evcning, much to onr surprise and annoyance,
we received another cablegram from air. Rossolymos, in which he now
states that he hopesto obtain delivery of thissteamer about 15th Decem-
ber.
As you are aware, wehavechartered her with a very handsome freight,
fully covering us, the 3rst December, as cancelling. very ample. and
As things stand now, it is almost impossible for the steamer to catch
ber cancelling date, which will mean avery substantial financial loss to
blr. S. E. Ambatielos. as freights have since greatly declined.
\\le willconsider it, tlierefore, a faifyou mil1obligeusand despatch
a very strongly worded telegram to the builders, urging upon them that
they must do al1Iiumanly possible, with a view to giving us delivery at
the end of November at the very latest.
Pleasc accept Our very best thanks in anticipation.
We remain, etc.
(Sipted) N. E. AMB.%TIELOS. LETTER OF zznd DECEMBER 1919 FR011 G. E. A~IBATIELOS
TO J. O'BYKNE

Ref.: DSP/I.
J.Room 24,, Esq., M.B.E.,
blinistry of Shipping,
St. James's Park, S.W. I. 46 St. Mary Axe,
Lonzznd December ~grg.
Sir,

Re Pfrrchaseof nine oessels
\Ve have to thank you for your esteemed favour of even date and we
are very grateful to your goodself for the prompt attention you gave,
and despatched telegraphic orders to the builders of these boats in
Shanghai and Hong Kong that they are to deliver same immediately on
completion to John Rossolymos and that the expenses incurred for ;tny
extras for modification will be paid by your good hIinistry and will be
recovered from us liere.
Re War Bugler.We confirm teleplionic conversation, and as explained
on the 'phone we do not hold you responsible for the detention of this
boat in Hong Kong as you have nothing to do u-ith same whatcver, in
fact you have done al1 humanly possible to accelerate delivery of this
andall other steamers.
Our protest made referred in our former letter of even date to you
was only against the builders, whicli kindly note.
Ive are, etc.
(Signed) G. E. AI%~ATIELOS.

Annex 4 (7)

CABLE OF zznd JAXUAliY 1920 FROM AblBATIELOS
TO ROSSOLYAIOS
Rossolymos,
care Dodwell,
Hong Kong, London, ~2nd January 1920.

Two your telegram two also your telegram not numbered dated
17th January received do your iitmost to reduce extra lowest possihle
niinimum also fitting oil burning sets and telegrüph definitely which
steamers will be able to burn liquid fucl when delivered to us from Hong
Kong and Shanghai telegraph also whcn two siuall boats willhc dcfinitely
launched and delivered do not detain Trinlos for fitting liquid fuel biit
remaining two large and two small steamers must be fitted biirn liquid
fuel get from al1builders full complete plans in duplicate also builders
certificates in duplicate y011must send one of each these documents by
registered post to us and other with cach ship. (Siglzerl).~J~H.AT~IILOS.212 ANNEXES TO COUXTER->IE\IORIAL o. 4 (8-10))

EXTRACT FROAI CABLE FROhI J. D. ROSSOLYh1OS
TO G. E. AMRATIELOS DATED 4th FEBRUtlKI' xgzo

G. E. Ambatielos,
London. Hong Kong, 4th February xgzo

Kowloon builders prepared to take orders for z or 4 hoats similar
Piper most improved steamer(s) without liquid fuel for L35 per ton
deadweight regardless fluctuation(s) of exchange preparcd place lieel
April delivery(iesIO months xz months after would zz/January accept
order(s) within fortnight from to-day -4mbatielos extra($ 44,000-71
dollarsStathis29,500 al1 approved bv me Pnnngis about 22,000 dollars
(not) yet approved stop Pntrikios Romantzas arrired.(Signed) J. D.
Rosso~~nros.

Aiziiex4(9)

CABLE OF 1st MARCH 19x1
FRORf A~IBATIELOS TO ROSSOLYhIOS

Cable to Rossolymos
care Dodwell, Hong Kong.
1st hlarcli xgzo.
IO your telegram is received 13 receivediïeramies Yannismust burn
liquid fuel even if it will (would) delay steamTrialoswe confirm Our
(my) telegram (of) 7 we have guaraiiteed 7.800 tons deadweight trith
460,000 grain cubic capacity instruct captain place disposa1 of charterers
dispute has arisen here overPanagis Shanghai bunkers hence telegraph
exact amount stop Received from Ministry accounts extra Nicolis
amount(s) to 60,000 dollars al1this work could have been done here for
half this amount we must draw attention extrasremaining steamers you
must only do absolutely necessary modifications charges very unreason-
able and out of proportiontelegraph regarding exact deliveryKeramies
Yannis have booked liquid fuel last four steamers at Tarakan Hong
Kong and Shanghai keep suppliers informed steamers' position(Siglzed)

AMBATIELOS.

CABLE OF 14th APRIL xgzo

FROhI G. E. AATBATIELOSTO ROSSOLYMOS

Rossolymos,
Hong Kong. London, 14th April 1920
No. 16. All your teleg~ams including 24 received you can appoint
second engineer as chicf engineer this position only temporary we might ASSEXES TO COUSTER-JIEhlORIAL (SO. 4 (11)) zr3

keep him if we are satisfied Yanitis we are treating to fix from Java
Laydays not to commence before 1st June therefore take good care this
steamer is properly and well finished in every respect and do not hurry
delivery we are very anxious that al1 steamers must be well finished
therefore telegraph when Yannis, Iceramies Stnthis will be definitely
delivered telegraph if you have settled the dispute regarding extras
Merakies you must not give way do not sigii accounts hfinistry cannot
demand immediate delivery but can give guarantee through West Eng-
land repeat try to get extras and expenses down to loxvestpossible mini-
mum they are absolutely iinbearühle freights rapidly declining remaining
vessels very much smaller profit on homeward trip keep suppliers crude
oil Shanghai and Teralcan informed of expected readiness three remain-
ing steamers and when supplies will be required. (Sigsed) G. E. A~IBA-
TIELOS.

Annen 4 (II)

LETTER OF zznd MAY 1920
FROM G. E. AhfUATIELOS TO AIAJOR LAIXG

G. E. Ambatielos. Villa Mon Repos,
35, High Road,
Streathain.

London, S.W., Saturday, zznd May 1920.
My dear Major Laing,

1am leaving to-morrow for Paris where 1 hope to finda telegram from
you re Taw Shipyard-1 have received from hfr. \Vestacott plan and
prospectus which 1 will submit to my brother, but only your wnrewill
influence him to take an interest into this business, which 1 am sure
will give good results. Please also follow 11pyour telegram with a letter,
giving me as many particulars as you can and your own opinion.
War Coronethad been delivered. This rcally surpnsed me, uasRossolymos'
latest advices were to the effect that she would not be delivered before
the end of this month at the earliest. As1 told you,1 was iiegotiatinga
loan for service ~150,000 to enable us to complete the purchase, biit
there are somany formalities to go through, andnot anticipating delivery
so soon to tell you the truth 1did not botlier the Bank. However, e\.ery-
thing will be completed when 1 retiirn, so that payment will be made
in a few days. 1 shall be obliged if you explain matters to Nr. O'Hyrne,
as he isa very worrying nature and he lias always beeri so good and kind
to me, that 1can assure you, it really hurts me to think that he may
worry about my affairs-1 am also writing to him a few lines.
1 hope to be back by Thursday.

\Vith my best regards, etc.
(Signed) G. E. AMBATIELOS.214 ANNEXES TO COUNTER-3fEMORIAL (30. 4 (12-13))

LETTER OF 8th OCTOBER 1920
FROM J. O'BYRNE TO G. E. AMBATIELOS

D.S.P./1/7zgo7/~8 (Pt. 423).
Room 24

8th October 1920.
Sir,
With reference to this Department's letter of 6th instant, 1 have to
inform you that it has been decided that this hlinistry will accept the
security offcred by you,viz. :a mortgage of 7 vessels to be placed on the
Greek Register, subject to the Greek Government confirming that there
are no prior charges on these ships, and after tliese mortgages have been
duly registered, the remaining two ships will be handed over to you-
these two vessels in due course also to be placed on the Greek Mortgage
Register.
1am, Sir, etc.
(Signed) J. O'BYRNE,
For Director of Ship Purchase.
G. E. Ambatielos, Esq.,
46, St.Mary Axe,
E.C. 3.

Alznex 4 (13)

LETTER OF 8th OCTOBER 1920
FROhl G. E. AAfRATIELOS TO J. O'BYRNE

J. O'Byrne, X.R.E.,
Xinistry of Shipping,
Room 24, 46, St. Mary Axe,
St. James's Park, S.W. I. London, E.C. 3,
8th October 1920.
Sir,

Re Mr. N. E. Ambatielos of Paris
We are much obliged for your esteemed favoiir of the 8th instant, in
which we note with satisfaction that your good Ministry bave definitely
decided oow to allow the balance due for the completion of the purchase
of the four vessels still unpaid, by taking a mortgage.
-4s theS.S. Mellon and S.S.Stathis will very shortly be ready to be
delivered ta us after completion of their present voyage, we will feel
greatly indebted ta you ifyou \vil1push forward with al1possible speed
the necessary documents, and remain, dear Sir, with our best thanks
once more.
Yours respectfully,
(Signed) G. E. AMBATIELOS. Annex 4 (14)
LETTER OF 8th NOVEMBER 1920

FROhf J. O'BYRXE TO G. E. AMBATIELOS

D.S.P./I/~Z~-O~/IS,Pt. 423. Room 24.
8th Xovember 1920.
Sir,
1 have to acknowledge receipt ofyour letters dated 4th and 6th irist.,
the first dated of which only reached me at midday to-day.
Regarding the S.S. Slalltzs and Mellon, 1 have to point out that (as
previously stated to you) these two ships will only be transferred to the
ownership of Mr. N. E. Ambatielos, after the other seven vessels have
been duly registered at Argotoli, Cephalonia, andthe mortgagees placed
on the Greek Register, and therefore your assumption that these two
ships would be handed over to you before they proceed to America is
erroneous.
1 am, Sir, etc.
(Signed) J. O'BYRSE.
For Director of Ship Purchase.
G. E. Ambatielos.
46 St. Mary ~xe, E.C. 3.
Letter read over to Nr. Lewis who quite agreed to its despatch.
J.O'E.

Annex 4 (15)
LETTER OF 9th NOVEAIBER 1920

FROM G. E. AMBATIELOS TO J. O'BYRXE

J. lioomn24,EMinistry of Shipping. 46 St. Mary Axe,
St. James's Park, S.W. I. London, E.C. 3,
9th Xovember 1920.
Sir,
S.S. Stathis-S.S. Mellon

WChave to acknowledge receipt of your favour of 8th inst., contents
of which we must Say have really astonished us.
\\'e are afraid that the competent gentleman at the Xlinistry must he
working under a thorough and entire misunderstanding with regard tothe
transfer of theabove two vessels.
The conditions imposed to us for the transfer of these two vessels to
and is that before such transfer can take place the mortgages on thes
seven steamers which we have given your good Alinistry as security for
the money due, should be completed.
This isexactly what has been verhally arranged. and if further evidetice
js required it can be found in addition to our letters of 4th and 6th inst.(the letter of 6th inst. was airposted by our Senior from Pans), also in
Our letter of 28th Octoher. Further the deeds of covenants are otiite
clear on this subject.
Thcrefore it appears to us that a misundcrstanding exists from your
erid, and now that the inortgage has been duly filcd with the Greek
Consul here will feel obliged if you will see that the matters are put in
their proper and right place and that the S.S.Slathis and S.S.Afello~rare
delivered to us under the Greek flag as arrangcd.
As esplained, both of these steamers will be ready to sail by the end
of this week.
Thanking you in anticipation for your prompt attention, etc.
(Sigrred) G. E. AMB.UIELOS.

-

Annex 4 (16)

LETTER OF 10th NOVEhIBER 1920 FROM DIRECTOR OF SHIP
PUIICHASE TO G. E. AMBATIELOS

(D.S.P./I/~Z~O~/IS,Pt. 432.) Room 24.
Sir, 10th November 1920.

S.S. Stathis andMclloiz
1 am in rcceipt of gour lctter dated 9th instant and have to inform you
that the competeiit gcntlcman at this Ministry is not under a misundcr-
standing with regard to the transfer of the two ahove vessels. 1 would
refer you to this Department's letter dated 8th October last, wherein
you were informed that these two vessels would bc handed over to you
after a mortgage of the seven vessels had been placed on the Greek
Register, subject to the Greek Govemment confirming that there were
no prior charges on these ships, and that after these mortgages had been
duly registered, the remaining two vessels would I>ehanded over to pou.
Thesc two vessels also in due course to be placed on the Greek Mortgages
liegister.
If there has heen iny confusion, it has not been on the side of this
hlinistry, and 1 can only assume that it must be due to a misunderstand-
ing on your part, ancl1have to repudiate thût there has been any verbal
arrangement to hand over the two above-named ships on the signing of
the seven deeds of covcnant for the seven deeds of mortgage. The terms 1
of this Department's letter of 8th October last cannot be varied, i.e.
after the seven vessels have been registered at Argostoli, Cephalonia,
and the mortgages diily entered, the remaining two ships will be trans-
ferred to the owncrship of hlr. X. E. Ambatielos after being placed on
the Greek Aiortgage Register.
1 am, Sir, etc.
For Director of Ship Purchase.
G. E. Ambatielos, Esq.,
46 St. Mary Axe, E.C. 3. I-ETTER OF 3rd liEHIIUARY 1921 FROM G. E. AXIBATIELOS TO
THE SHIPPING COXTROLLER,

(Important.)
The Shipping Controller.
46 St. Mary Axe,
Ministry of Shipping, London, E.C. 3,
St. James's Park, S.W. I. 3rd Febmary 1921.

Sir,
Re N. E. Ambntielos O/ Paris
\\'hilst ayologizing for troubling you with this letter, \ve ask for your
indulgence while we place clearly before you the position we find our-
selves in re the above, in the Iiopethat you may give it sympathetic and
favourable consideration.
In 1919, we bought II steamers from the Xinistry involviiig a suni-
including extras-of over L3million sterling.
From the very fact that this'traosaction involved, as it did, the cash
provision of Lz,zoo,ooo-and lcft only a relativcly small balance of
£Soo,ooo-to be found, we ask you to believe that it was entered usion
only after rnost careful calculations based on business experience, and
was not hastily or rashly undertaken.
Our bankers, bath verbally and in writing, infonned us that we could
rely iipon certain advances which would fiilly cover our reqiiirements to
complete this transaction, and we implicitly relied upon this assurance.
.\Inch to our dismay, however, when the time came for this accom-
modation to be provided, they refused to grant us a loan on the grounds
advanced considerable sums of money ta assist shipping, and that they
were obliged to mect dcmancls fromother customers, not connected with
shipping.
We immediately brought the matter ta the knowledge of the compe-
tent gentleman at the Llinistry, but still continued our efforts to prociire
a loaii through other banl<ers,namcly, Messrs. Cox & Co.,with whom we
negotiated over a long period, but unfortunately they also turned the
biisiness down. These efforts were known to Mr. J. O'Byrnc, who, we
must admit, has al1along done his utmost to assist us in trying to meet
the situation that has ariscn.
\Ve chartered the followingvessels, as under, with first-class American
and English firms :

S.S. forcoassmany consecutive voyages as steamer can make up toper ton,
30th June 1921, from Hampton Roads to \fTestItaly.
S.S. Panagis, chartered on 29th April 1920, for as many consecutive
voyages as steamer can perform up to 1st April 1921,from Hamy
ton Roads to French Atlantic, at the rate of $20 per ton.
S.S. AmbatEelos,chartered zznd April ~gzo. at the rate of $21.50 per
ton, for six consecutive voyages from Hampton Roacls to West
Italy. A1zne.zj

THE NlNE SHIPS
A.-Ships paid for

Namcrx Tonnage Contract Place of Reiiiarks >
Type Deadweighl price building Z
C s d '1
(1Yar Diadem) C 5,150 180,ooo O O Shanghai Paid for. Delivered to M. Ambatielos
Pa~cagis on 9th December 1919. No com- ej
plaint of late delivery in respect o+
this ship. Mortgaged to the Crown O
on 4th November 1920. Subject of C
Admiralty action in November 1922. F
(War Miner) B 8,250 289,166 13 4 Hong Kong Paid for. Delivcred to hl. Ambaticlos 8
Cephalonia on 27th October 1919. Late delivery c
alleged. hlortgaged to Crown on 2
4th November 1920. Suhject of m
Admiralty action in Xovember 1922.

(War 1:rooper) B 8.250 289,166 13 4 Hong Kong Paid for. Delivered to M. Ambatielos g
Ambattelos on 15th December 1919.Latedelivery 5
alleged. hlortgaged to Crown on 2
4th November 1920. Subjcct of $
Admiralty action in November 1922. -'2
(War Bugler) B 8,250 289,166 13 4 Hong Kong I'aid for. Delïvered tM. Ambatielos ?
Nicholas on 19th December 1919.Late delivery
or Nicolis alleged. Ilortgaged to Crown on
4th November 1920. Subject of
Admiralty action in Xovember 1922.
vi 1 The name in brackets is the original namc under \\.hich the ship was sold bg the Cnamenis that under \\.hichh,he
shiwas opcrated by on behalf of the Claimant. 0+4 Z'nmcs 7'0,ivingr Conirnci PloccO/ Re#nnrbs N
I>eaduiri,ohl price building O
5 s d
(War Sceptre) i3 8,250 289,166 13 q Hong Kong Paid for. Delivered to111 Ambatielos
Trialos on 3rd March 1920. Late delivery
alleged. hlortgaged to the Crown on :,
4th November rgzo. Board of Trade z
took possession as mortgngees on 2
zrst July 1922. M
B.-Ships having balanceof purchase price unpaid O>
(War Coronet) B 8.250 289,166 13 4 Hong Kong Delivered to . Ambatielos on 2
Keramies 16th May 1920. Late delivery Ç
alleged. Mortgaged to tlie Croivn j:
on 4th Novernber 1920. O
(War Tiara) C 5.150 180,000 O O Shanghai Delivered to hl. Ambatielos on 1st Jun0
Yanriis 1920. Late delivery alleged. Mort- 2
gaged to the Crown on 4th November 2
1920. Sold by al. Ambatielos in e;
Febmary 1921, and part of procecds z
paid to Ministry of Shipping. g
(War Piper) 13 8.2jo 289,166 13 4 Hong Kong Not delirered to M. Ambaticlos under Z
Stathis the contract, but traded under his
charter party, with Royal MailSte? $
Packet Co.as managers and Shilqxng-
Controlleraç registcred owner. 3
(War Regalia) C 5,150 180,ooo O O Shanghai Not delivered to M. Ambatielos under
Mellon the contract, but traded under his
charter partyith Alfred Holt& Co.
as managers and Shipping Controllcr
as registered owner.

Total purchase pricc 2,z7j,000 O O 3. OBSERVATIONS ET CONCLUSIONS
DU GOUVERNEMENT HELLENIQUE

RELATIVEMENT A L'EXCEPTION D'INCOMPÉTENCE
FORMULÉE PAR I.E
GOUVERNEhlENT BRITANNIQUE

I. Les présentes observatiois et conclusions sont soumises à la
Cour internationale de Justice en exécution de l'ordonnance du
14 février 1952.

2. Objet du diffd~end. - La demande introduite par le Gouver-
nement hellénique tend à obtenir du Royaume-Uni réparation du
dommage causé à un ressortissant hellénique par les autorités
britanniques tant administratives que judiciaires en violation dcs
obligations internationales du Royaume-Uni.

3. Base juridiqzte de la demande. - En présentant cette réclama-
tion le Gouvernement hellénique s'est prévalu avant tout d'une
disposition expresse du Traité de commerce et de navigation inter-
venu entre le Royaume-Uni et la Grèce le IO novembre 1886, dis-
position reproduite presque dans les mêmestermes dans le Traité
de commerce et de navigation signé entre les memes parties le
16 juillet 1926 :

Article XV. paragraphe 3, du Article 12 du Traitéde1926
Traitéde1886
Les deux Parties contractantes
Les sujets de chacune des conviennentde prendre les mesu-
Parties contractantes dans les res les plus appropriées par voie
domaines et possessionsde l'autre de leurlhgislation nationale et de
auront libreacces aux tribunaux leur administrationà la fois pour
pour la poursuite et ladefense de prévenir une application arbi-
leurs droits sans autres condi- traire ou injuste de leurs lois et
tions restrictives ou taxes que reglements en ce qui concerne les
ceiles qu'elles imposent à leurs droits de'douane et autres droits
sujets. similaires et pour assurer des
ou d'arbitrageàtceux qui ont &téres
victimes de pareils abus. Le mode
de procédure sera réglépar les
deux Parties contractantes dans
leurs territoires respectifs.

Le Gouvernement helléniuue s'est prévalu aussi decertaines stivu-
larions expresses communes iiux df.ti~ tr;iités g~rantissilnr ilux rcs-

sorti~ ~nts~ ~s nartics la liI>erl&de coininiinicntion etIc traiteriic.nt
de la nation 14Plus favorisée : 222 OBSERVATIONS HEI-L. SUR I.'EXC. PRBI. .4 IV 52)

Traitéde 1886 'ïriritéde 1926
Article 1 Article 1

Il y aura entre les dominions Il y aura cntrc Ics territoires
et possessions des deux Parties des deux Parties contractantes
contractantes libertéréciproqzrede libertéréciproqzrede commerceet
commerce et de navigation. Les de nauigation. Les szrjets oii
szrjetsde chacunedesdeux Parties citoyens de chacune des der1.r
auront libertéde venir libreme~tt Parties auront liberté de venir
avec leurs navires et cargaisons librement avec leurs navires et
dans toutesplaces,portsetrivières cargaisoits dans toutes places et
des dominions et possessions de ports de l'autre arrxqzrelsses pro-
l'autre auxquels ses propres res- pres ressortissants ont accès ozi
sortissants ont accès ou peuvent peuvent étre azrtorisésde l'avoir
étreautorisésde l'avoiret jouirottt et jouiront des mémesdroits. pri-
respectioementdes mêmesdroits, vilèges, libertés, faveurs,immzr-
priiiilèges,libertés, faveurs,immu- ?filéset exemptions en matière de
nitéset exemptiotrsen matièrede commerce et de navigation que
commerce et de nrzvigation que ceux qlii sot~t ou petruet?/être
ceun qui sont ou peuvent être accord&arrx~zutiotrarrx.
accordés aux nationaux.

Article X Article 4

Les Parties contractantes con- Les deux Parties contractutrtes
viennent qu'en toute matièrerela- convieltfter~tqu'en toute nzatière
tiveau commerceet à la navigrition, relativeau commerce,ii la ~zavi<u-
tout privilège,faveurou immunité lion. A l'industrie ct Ii I'cxercicc
quelconqueque l'une d'entre elles de profcssioiis ou occiip CtLOIIS,
a actuellementaccordéson pourru tout privilège,faveur ou immzr~rité
accorderultérieurementaîcx sujets que l'une d'entre elles a actuelle-
ou citoyens de qnelqu'autreEtat ment accordésou pozrrruaccorder
seront étendusimmédiatementet zrltérieurementaux navires, sujets
inconditionnellementbar elle aux 016citoyensdequelqueautrenation
contractanteto;leur intention étant étrangèreserontétendusimmédilr-
quele commerceetla navigationde tement et inconditionnellement
chaquenation soient traités,à tous sans requête ni compens at1011,
égards,par l'autre sur le pied de aux navires, sujets ou citoyens de
la nation la plus favorisée. l'autre, lezrrintention étantqzrele
trie de chaquenation soient traités
àtouségards par l'autresur lepied
de lu ?rationla plus favorisée.

Article XII Article 3
Les sujets de chaque Partie Les szrjetsOILcitoyensde chaque
contractantequi se conformeront Partie contractante se trouvant
aux lois du pays ne seront pas sur le temtoire de l'autre joui-
sujets en ce qui concenze leurs ront, en cequi concerizeleurs per-
personltesou biens, ou en ce qui sonnes,leurs biens,droits et iiité-
concerne leurs passeports ni en rêts. et en ce qui cotrcer~zeleur OBSERVATIONS HELL. SUR L'EXC. PKÉI..(4 IV 52)
223
CE qui concerneleur commerceou commerce, industrie, profession,
industrieà des taxes généraleosu occupation ou en toute autre
locales, ouà des impôts ou (1des matièrede toute façon du même
obligations de quelque nature traitement et de la mêmeprotec-
qu'elles soient, autres ou plus tion légale que les sujets ou
lourdes que celles qui sont ou citoyens de cette Partie ou de la
peuvent êtreimposéesauxnatio- nation la plus favorisée pour
naux. autant qu'il s'agisse de tuxes,
contributions, droits de douane,
impôts, redevances équivalant
aux taxes et autres charges sirni-
laires.

Le moment n'est pas venu d'examiner de façon approfondie les
divers traités conclus par le Royaume-Uni dont, par application des
dispositions relatives à la clause de la nation la plus favorisée, la
Grèce est fondée à réclamer le bénéfice.Bornons-nous à signaler
qu'un traité avec l'Espagne datant de 1667 et toujours en vigueur
prévoit l'application aux ressortissants des parties, du Icommon
right11,tandis que d'autres font uii devoir aux gouvernements de se
conformer à l'équitéet à la justice, d'agir avec amour et amitié

(Traités avec le Danemark de 1660 et 1670. ,v,c la Suède de IG~",
èt 1661).
Enfin le Gouvernement hellénique entend se réclamer des règles
de droit des gens relatives au traitement des étrangers, notamment
des principes généraux du droit relatifs au déni de justice, parce
qu'il lui paraît évident qu'au moment où le Royaume-Uni et la
Grèce convenaient des faveurs et privilèges particuliers dont joiii-
ront les ressortissants de chacune des parties se trouvant sur le
territoire de l'autre, il n'était pas entré dans leur intention de

renoncer - à supposer qu'elles auraient pu le faire valablement -
au bénéficedu traitement minimum prescrit par le droit des gens
général.

4. Base de la com$étencede la Cozw

nement hellénique, de l'article 29 du Traité du 16 juillet 1926, dont
la portée est préciséepar la Déclaration signéelc mêmejour par les

représentants des parties.
Subsidiairement, et en vue de l'hypothèse où, contrairement aux
conclusions du Gouvernement hellénique, la Cour estimerait ne
pouvoir connaître de la demande de réparation, le Gouvernement
hellénique s'appuie non sculement sur la Déclaration de 1926 insé-
parable du traité. mais encore sur les articles 1,paragraphe 1, 2
et 36, paragraphe 3, de la Charte des Nations Unies pour demander
à la Cour d'ordonner au Gouvernement britannique de se prêterà
la procédurearbitrale prévueau Protocole annexé au Traité de 1886.j. Rappel des textes relatifsà la compétence

La compréhension de la discussion relative à la compétence sera
sansdoute facilitée si nous reproduisons encore une fois en traduc-
tion française les trois textesqui gouvernent la matière :

Article29 du Traitéde 1926
«Les deux Parties contractantes sont d'accord en principe que tout
différendqui peut s'éleverentre elles quant à la juste interprétation ou
l'application d'une quelconque des stipulations du présent traité sera,
à la requêtede l'une des Parties contractantes, soumis à l'arbitrage.
La cour d'arbitraee à laouelle les différends seront soumis sera la
Cour peniixiientedc Justice internationale.àmoios que, par une cnii\.cn.
tion ~~~rticuliérel.es deux I'arties n'en décidentautrement.»

Protocoleannexéau Traitéde 1886

u Au moment de procéder,cejour, àla signature du Traitéde commerce
et de navigation entre la Grande-Bretagne et la Grèce, les plénipoten-
tiaires des deux Hautes Parties contractantes ont déclaréce aui suit:
'îoiites qucjtionsqui pcii\.~.iit~'6lt~-ir I'interpr6tation ou I'exCcu-
tion dii ~)ri'je,ittraite. ou les consiquc.nccs dr toiite viileceo1r;iitC
seront soumises. auand les movensde les réelerdirectement Dar accord
amiable seront épuisés, à la dzcision de co&nissions d'arbitrage, et le
résultat de cet arbitrage sera obligatoire pour les deux gouvernements.
Les nieinbres de ces commissions serontchoisis par les deux aouveme-
arbitre ou un égalnombre d'arbitres, et les arbitres ainsi nomméschoisi-
ront un surarbrtre.
La prockdure d'arbitrage devra dans chaque cas êtredkterminée par
les Parties contractantes : àdéfaut, la commission d'arbitrage sera en
droit de la déterminer elle-mêmed'avance.
Les plénipotentiaires soussignésont consenti que ce protocole sera
soumis aux deux Hautes Parties contractantes en mêmetemps que le
traité, et que, lorsqu'il sera ratifié, les accords contenus au protocole
seront également considéréscomme approuvés, sans nécessitéd'une
ratification expresse ultérieure. En foi de quo...n

Déclaration annexa éue Traitéde 1926

RIl est bien entendu que le Traitéde commerce et de navigation entre
la Grande-Bretagne et la Grèce en date d'aujourd'hui ne porte pas
préjudiceaux réclamations faites au nom de particuliers, qui sont basées
sur les dispositions du Traité de commerce anglo-grec de 1886, et que
tous différends qui peuvent s'élever entre nos deux gouvernements,
quant à la validité de ces réclamations, doivent,à la demande de l'un
des gouvernements, êtresoumis à l'arbitrage, conformément aux dis-
positions du Protocole du IO novembre 1886 annexé audit traité. n
6. Champ d'upplication de la compitence de la Cour résultantde

l'article9 du Traite de 1926
Deux observations dominent à l'avis du Gouvernement hellé-
nique l'interprétation qu'il y a lieu de donner en espèce i l'article29 OBSERVATIONS HELL. SUR L'EXC. PRÉL. (4IV 52) 225

du Traité de 1926. L'une c'est que le Traité de 1926 n'est que pour
partie créateur d'engagements nouveaux de la part des parties ;
ainsi qu'il a étéindiqué déjà, certaines de ses dispositions ont été
reprises presque littéralement du Traité de 1886 ;certaines de ses
dispositions peuvent égalementêtreconsidéréescomme une simple
formulation des règlesdu droit des gens préexistantes. Dans cette

double mesure le Traité de 1926 est confirmatif, déclaratif et non
créateur du droit devant régler letraitement des ressortissants de
chacune des parties se trouvant sur le territoire de l'autre partie.
Une question s'élevant sur l'interprétation ou l'exécution du
nouveau traité peut donc se rapporter aussi et simultanément à
l'ancien Traité de 1886 ou aux principes générauxdu droit : cette
circonstance ne suffit pas, suivant le texte de l'article 29, à faire
échapperle différend à la compétence dela Cour.
La deuxièmeobservation est la suivante :il n'y a pas dc différence
essentielle entre les procéduresde règlement des différendsprévues
dans les Traités de 1886 et de 1926. Dans l'un et l'autre, il s'agit

d'arbitrage. La seule innovation c'est que le Traité de 1926 prévoit
comme instance arbitrale, au lieu de la commission d'arbitrage
prévue au Traité de 1886, la Cour permanente de Justice inter-
nationale, dont la Cour internationale de Justice a pris la succession.
Cette deuxième observation conduit àla conclusionqu'en l'absence
de dispositioii contraire, la procédure arbitrale devant la Cour cioit
s'appliquer de plein droit à tout différendnon encore engagédevant
une commission arbitrale, même si le différend a une origine anté-
rieure au 28 juillet 1926 - date indiquée commecelle de la mise en
vigueur du nouveau traité (contre-mémoire. p. 133, note 1). Peu

importe que le différendporte sur l'interprétation ou l'applicatio~i
de règles inscrites expressément ou tacitement dans le Traité de
1886 du moment que ces règles se retrouvent aussi dans le Traité
de 1926.

7. Champ d'a$plication de la procéduredes commissions flrbitrales
aprks la mise en vigueur du Traitd de 1926
C'est la Déclaration du 16 juillet 1926 qui nous fournit la cléde
la solution de ce problème.
Cette fois, sont visées nonpas les «questions qui peuvent s'élever
au sujet de l'interprétation ou de l'application du traité i)mais les

Nréclamations baséessur les dispositions du Traité de 1886 IIEt la
1)éclaratioiidécideque tous différendsqui peuvent s'éleverquant
à la validité de ces réclamations doivent, à la demande de l'uii des
gouvernements, êtresoumis à l'arbitrage, type 1886.
L'hypothèse prévueici est cellede réclamationss'appuyant exclu-
sivement sur les dispositions du Traité de 1886 dans le cas où eues
nc peuvent s'appuyer sur le Traité de 1926 parce que ces disposi-
tions ne s'y retrouvent pas. En l'absence de la Déclaration, pareils
litiges seraient demeuréssans solution, car il n'eût plus étépossible,
après l'expiration du Traité de 1886, de s'appuyer sur le Protocole226 OBSERVATIONS HELL. SUR I.'EXC. PREL.(4 IV 52)

qui l'accompagnait et qui avait expiré aveclui pour provoquer la
constitution d'une commission arbitrale en vue du règlement d'un
différend basé exclusivementsur la méconnaissance de ce traité.

D'autre part, un différend exclusivement basésur le Traité de 1886
sortait nécessairement aussi du champ d'application de l'arbitrage
de la Cour permanente de Justice internationale prévu à l'article 29
du Traité de 1926.
C'est donc à bon droit que le contre-mémoirerelate sous le para-
graphe 12 (1) que l'objet de la Déclaration est de «maintenir le
vieux traité en vie seulement à certaines fins précises i),- mais le
contre-mémoire s'est trompé dans la détermination de ces <ifins
précises 11.

8. Réfutation de l'objection tiréedu lait que la Déclarationde 1926
est extérieureau traité

Le Gouvernement britannique fait valoir que la Déclaration se
réfèreau traité comme à un ninstrument séparé i,,qu'elle serait
signée séparément,non mentionnée dans le traité, non indiquée
comme en formant apartie intégrante Iet qu'elle se rapporterait au
Traité de 1886.

A quoi il peut &trerépondutout d'abord quesans doute le Gouver-
nement hellénique croit trouver dans la Déclaration une confirma-
tion de son interprétation de l'article 29 dii Traité de 1926mais que
cette dernière disposition se suffit à elle-mêmeen sorte que, si mème
la Cour consentait à ignorer la Déclaration, encore l'article 29 du
Traité de 1926lui offrirait une base suffisante pour se déclarercom-
pétente dans le présent litige. Mais ceci dit, le Gouvernement hellé-
nique ne croit pas un instant que la Cour, placéedevant la nécessité
d'interpréter l'article 29 du Traité de 1926, puisse se refuser à

prendre en considération les indications que l'on peut tirer d'une
Déclaration commune des parties signéepar elles le même jourque
le traité, et par laquelie, quelle que soit la qualification juridique
que l'on donne au document, elles ont assurément entendu se lier.
Et sans doute est-il vrai que la Déclaration vise très directement
le Traité de 1886 et la procédure prévue dans le Protocole qui
l'accompagne, mais elle se rapporte non moins certainement aussi
au Traité de 1926. Ne commence-t-elle pas par les mots : RIl est

bien entendu que le Traité de commerce et de navigation entre la
Grande-Bretagne et la Grèce en date d'aujourd'hui ne porte pas
préjudice ...r,ce qui est la formule habituelle d'introduction des
réservesinterprétatives.
Quant aux observations accessoires relatives à la forme de La
Déclaration, nous sommes surpris de l'importance que paraît y
vouloir attacher le Gouvernement britannique. Que le Protocole et
la Déclarationaccompagnant cestraitésaient ou n'aient pas contenu
de mention expresse qu'ils en formaient partie intégrante, rien ne

justifie la signification que le Gouvernement britannique attache à
la présenceou àl'omission de cette mention. Nous ne pouvons que OBSEUVATIOSS tlEi.1.SUU L'EXC. PREL. (4I\'52)
227
renvoyer à cet égard au tableau tracé par M. Basdevarit, précisé-
ment en 1926, de l'arbitraire et de la confusion de termes régnant à
cet égard dans la pratique internationale (BASDEVANT L,a co*~clu-
sion et lu rédactiondes traitéset des instruments diplomatiqzlesuzitres

que les traité: Recueil des Cours de l'Académiede Droit internatio-
nal, 1926, vol.15, pp. 632 ct S.).(Voir aussi MCNAIR.The Law of
Treaties, 1928, pp. 3 et S.)
Ajoutons en dernier lieu que suivant les informations du Gouver-
nement helléniquela Déclarationest matériellementpartie intégrante
du Traité de 1926 au point qiie les parties ont donnéla même
signature au Traité de 1926 et à la Déclaration '. II est presque
superflu dès lors de rencontrer l'argumentation que le Gouvenie-
ment britannique a prétendu baser sur deux exemples de traités
conclus tous deux par le Gouvernement hellénique. tous deux

légèrement postérieurs à la 1)éclaration litigieuse. Examinés de
près, les deux exemples n'infirment du reste en rien la manii:re
de voir exposée plus haut.
Le premier traité citéest iiiaccord gréco-turc qui est à vrai dire
non du 21 juin 1925, comme indiquédans le contre-mémoire, mais
du décembre 1926 et a pari] non au volume T<XVII mais au
volume LXVIII, page 11, du Recueil des Traitésde la S. d. N. II a
pour objet l'application de certaines dispositions du Traité de
Lausanne de 1923 et de la Déclaration no IX annexée à ce traité

et comprend, outre un Protocole final fixant des modalités demise
en vigueur du traité, une Déclaration relative à des Actes >,du
21 juin 1925 qui n'avaient pas étésoumis à ratification et que la
Déclarationabroge pour partie, confirme pour une autre partie. On
comprend très bien le souci qu'ont les deux gouvernements le
décembre 1926 de donner une validité juridique certaine à la
partie conservée desActes du 21 juin 1925 en l'intégrant fictivement
dans l'accord de 1926. On comprend moins l'argument qiie prétend
en tirer le Gouvernement britannique.

De même,le Traité de commerce gréco-italien du i4 iio\~emt)re
1926 (vol. LX111 du Reczieil des Traités, pp. 51-83) se trouve
accompagné d'un Protocole final interprétatif, de deux Déclara-
tions, d'un deuxième Protocole et de deux échanges de lettres. Et
il est exact que, tandis que le Protocole final et l'une des Déclara-
tions sont mentionnés comme partie intégrante du traité de com-
merce signéce jour, il n'en va pas de mêmede la deuxième Déclara-
tion, du deusième Protocole et des deux échangesde lettres. Encore
ilne fois la chose s'explique aisément : le Protocole final est nette-

ment et exclusivement interprétatif du traité (et du tarif à l'entrée
en Grècey annexé) ;de mêmeune des deux Déclarationss'applique
directement et exclusivemeiit à la clause de la nation la plus favo-
risée,dont il soumet I'applicatioii à une condition siipplémentaire
' Noie :C'est donà tort que, claI'anncxe aiiiéinoire,Iïs signatures figi~riint
seulcrncntnu bas<lutraite, alors quc dles docunienofficiels elles fiaiient
basdu traite et ausau basde la d4claration.de réciprocitéau cas où elle serait invoquée relativement au cabo-
tage. D'autre part, le Protocole et les lettresont une portéepurement
politique et morale sans valeur juridique - il s'agit d'une promesse
de prise en considération des vŒux de l'une ou l'autre des parties
en ce qui concerne les soies et laines artificielles d'Italie, les tabacs
et les vins helléniques ;leur intégration dans le Traité de 1926 ne

se concevrait pas.
Qii;iii<ila &usiEme Uécl;ir;itioii,qiii estIdcopie prt.i(liie t"tuvI1~.
de la I)éclarotiun :iccumi~arriaiit le Trait; cri.co-hritaiini<iuc dc 1az6.
l'omission de toute meit&n formelle d'Gtégration poirra srexpli:
quer par l'hésitation à intégrer au nouveau traité ce qui se rapporte
également à un traité plus ancien.

9. Réfutationde l'objectiontiréedu fait que toziteacceptationde com-
pétenceobligatoire,tellecellerésultantdel'article29 du Traitéde 1926,
serait nécessairementdépourvuede force rétroactive

Le contre-mémoirc objecte àl'invocation de la ~éclaration qu'elle
i:*>iidiiira:Ipermettre une ;ipplic:itiuii rAn>:icti\.c dI:icornl~L:tciict:
ohlic:~toire.CL' serait cun~r:iir<ii I:1i>r:i~ioueint~r~i:ition:il<:ll<:
résulte dc l'arrêt de la CO& pérmadente de Justice inter-

nationale dans l'affaire des Phosphates du Maroc (ArrêtA/B no 74,
p. 24). Cependant, la consultation de cette décision conduit à des
conclusions opposées. Car s'ilest vraique, comme la Cour le souligne,
la plupart des États adhérant à la clause facultativeont pris soin de
limiter la compétence de la Cour aux différends naissant après la
ratification de la présente Déclaration au sujet de situations ou de
faits postérieurs à la ratification, le souci qu'ils ont pris de formuler
cette exclusion confirme qu'à défaut de pareille limitation l'attribu-
tion de compétence se serait étendue à l'ensemble des différends
ayant l'un des objets énumérés à l'article 38 dii Statut quelle que
soit la date des faits dénoncés.
Le Gouvernement britannique perd au surplus de vile qu'en

l'espèce il ne s'agissait pas pour les parties du Traité de 1926
d'inaugurer une procédure de contrôle international alors qu'auté-
rieurement elles n'auraient eu aucun compte à rendre à personne.
.4u contraire, ainsi qu'il a étéditplus haut, le principe de l'arbitrage
avait étéadmis par les partiesdepuisquarante ans et il ne s'agissait
plus que de l'adapter à l'institution réccnte de la juridiction inter-
nationale iiouvelle. Les considérations développéesà cet endroit du
contre-mémoire par le Gonvernement britannique sont doncdépour-
vues de tolite pertinence.

IO. Réfntation de l'objection tiréedz~fait que la Déclarptions'appli-

querait senlement à des réclamationsiormuléesavant le 16 juillet 1926
L'argument britannique est à double fin : il tend à démontrer '
que, quelque interprétation qu'cil donnc à la Déclaration de 1926,
ni les commissions arbitrales ni la Cour nc seraient compétentes OBSERVATIONS HELL. SUR L'EXC. PREL. (4 IV j2) 2Z9
pour connaître de réclamations formuléesaprès le 16 juillet 1926

au sujet de faits antérieurs.
Mais il saute aux yeux que la Déclaration ne permet aucunement
pareille interprétation, que bien au contraire elle l'interdit car elle
vise expressément (les différends qui peuvent s'élever a ou qui
Cpourront s'élever >i,rwhich may arise >iet non Iwhichhavearisen n,
en sorte que l'on peut dire que le texte vise exclusivement les
différends futurs que le contre-mémoire prétend exclure de ses

prévisions.
Et il est naturel qu'il en ait étéainsi :car il n'y avait à la date di1
16 juillet 1926 aucune réclamation formuléepar I'unc des parties
relativement au Traité de 1886 et si un différendavait étépendant
devant des commissions arbitrales. il n'eût fallu aucune Iléclaration
pour que cette procédure continuât.
Il convient d'ajouter que l'interprétation proposéetlaiis Iï contre-

mémoire aurait cette signification assurément extraordinaire de
créer entre les différends relevant des commissions arbitrales -
parce que relatifs aux réclamations formulées avant le 16 juillet
1926 - et les différendsrelevant de la Cour - parce qiie relatifs
aux réclamatioiis formuléesaprès le 16 juillet 1926 et concernant
des situations ou des faits postérieurs à cette date - un vacuum,
c'est-à-dire une catégorie de différendséchappant à tout mode de

règlement pacifique obligatoire. Ce seraient les différends nés de
reclamations formulées après le 16 juillet 1926, mais portant sur
des situations ou des faits antérieurs à cette date. Et cela alors que
manifestement les négociateurs gréco-britanniques ne pouvaient
pas savoir lorsqu'ils signaient la Déclarationsi leurs compatriotes
n'avaient pas eu à se plaindre d'actes fautifs - dommageables dans
les mois précédantcette signature.

Le Gouvernement britannique prétend, il est vrai, trouver une
confirmation de sa manière de voir dans les travaux préparatoires
de la Déclaration.
Le Gouvernement helléniquepourrait exprimer quelque surprisc
à voir des représentants britanniques proposer à la Cour de recourir
à des travaux préparatoires pour l'interprétation d'uri document
dont le texte est clair. Cependalit le Gouvernement hellenique se

garde de s'opposer à l'invocation de circonstances qui corroborent
pleinement sa manière de voir :car'il semble bien qu'à la date du
16juillet 1926il y avait une négociation encours au sujet del'exemp-
tion de l'emprunt forcé à laquelle, sur la base du Traité de 1886.
les sujets britanniques avaient droit, mais il n'y avait pas de récla-
mation britannique à cet égard, aucun d'eux n'ayant étéastreint
à payer, et il ne s'agissait pas dès lors d'un «différend I),lequel n'a

donc pu êtreprévu qu'à titre d'éventualitéfuture 1.
Mais les faits rappelés par le Gouvernement britannique préseri-
tent cet autre intérêtessentiel de démontrer que ce dont les deux

' Note : Voirence senslu lettredu ForeignOffice du22 juin 1926ci-annerbe.230 OBSERVATIONS HELL. SUR L'IZXC. PREL. (4IV 52)

gouvernements se lxéoccupaient à-l'époque, c'était des différends
exclz6sivementrelatifs au Traité de 1886. En effet, la clause du
Traité de 1886 (articleXIII) portant exemption de tout emprunt
forcéa disparu du Traité de 1926. Le Gouvernement britannique
est préoccupédu fait que si ses ressortissants n'obtiennent pas
satisfaction il faudra bien que, prenant fait et cause pour eux, il
puisse porter le différend devant une commission arbitrale. Mais il
faut pour cela une Déclaration.
En eût-il étéautrement, il résulte de la rédaction proposée par
Ic Gouvernement hellénique, citée par le contre-mémoire (par. 13)
et sur la substance de laquelle le Gouvernement britannique se

déclare d'accord, que l'on eût eu recours à la procédure arbitrale
de la Cour permanente. Car lorsque le Goiivernement hellénique
propose de dire :
«it is well understood that as for thut [lisez: in so far as] the
new treaty of commerce between Great Britain and Greece does
not cover anterior claims euentuallyderiving from the Treaty
of 1886, any difference which migltt uris...»,

il vise parN anterior claims IIles réclamations non encore formulées
qui s'élèveraient sur des faits dérivant du Traité de 1886, mais il
admet implicitement que, dans une certaine mesure, ces différends
seront couverts par le nouveau traité de commerce, c'est-à-dire dans
la mesure où les dispositions du Traité de 1886 se retrouvent dans
celui de 1926.

ri. Afifilication au firésentdifévend de l'interprétation doi~i~iea
l'article 29 dzc Traitéde 1926
Elle iic présente aucune difficulté. Ainsi que le Gouvernetneiit
hellénique l'a montré au paragraphe 3 du présent document, les

dispositions du Traité de 1886 sur lesquelles se base directement ou
iiidirectement la demande hellénique ont étémaintenues dans le
Traité de 1926, et de mêmeon doit supposer que celui-ci, comme
celui-là, conserve aux ressortissants réciproques le bénéficedes
principes du droit des gens général relatifsau dénide justice qiii se
trouvent également invoqués dans le mémoire. Dès lors, pour
employer les termes utilisés par le Gouvernement hellénique dans
son projet de Déclaration, le Traité de 1926 «couvre 1le présent
différend ct il y a lieu de faire application de l'arti29e qui prévoit
l'arbitrage de la Cour permanente de Justice internationale, dont
la Cour internationale de Justice a pris la succession aux termes dc
l'article 37 de son Statut.

12. Interpvétatioi~de l'article 29 [EtcTraité de 1926 et interfirétatioi~
de la Déclarationde 1926 proposéespar le Gouvernementhellénique
à titre subsidiaire

A titre subsidiaire et par unique souci d'êtrecomplet, le Gouver-
nement hellénique désire rencontrer une autre interprétation de OBSERVATIONS HELL. SIJR I.'EXC. P~L. (4IV 52)
231
l'article 29 du Traité de 1926 ainsi que de la Déclaration, que
permettent à première vue les termes de ces documents, bien que,
pour les raisons indiquéesci-dessus, l'interprétation proposée à titre
principal doive lui êtrepréférée.
Dans ce systèmel'article 29 aurait bien eu lui-mêmela portéeque

le Gouvemement helléniquelui a attribuée, ou pourrait méme se
voir attribuer un champ d'application embrassant tous les différends
relatifs au traitement des ressortissants, mais il serait affectégrave-
ment dans son application par la Déclaration du même jourpour
les différendsse rapportant à l'application du Traité de 1886, que
les règlesinvoquées aieiit ou non étémaintenues en 1926. Pour tous
ces différendsla Déclaration dérogeraitau principe de compéterice
obligatoire de la Cour, en permettant à chaque partie contractarite
de marquer sa préférencepour la procédure des commissions arbi-
trales prévues au Traité de 1886.

13. Application an présentdifférendde l'ir~terprétation proposée ù
titre subsidiaire

Normalement cette interprétation subsidiaire doit conduire à la
même conclusionqu'en l'espèce le différend relèvd ee la compétence
obligatoire de la Cour internationale de Justice ;car non seulement
le Gouvernement britannique n'a pas exercé son option en faveur
de la compétence des commissions arbitrales, mais il a expressé-
ment repousséla proposition en ce sens que lui adressait le ministre
de Grèceà Londres (annexe R 6 du mémoire) le 21 novembre 1939.
Tout au plus la Cour pourrait-elle estimer opportun, dans l'hypo-
thtse où elle admettrait l'interprétation subsidiaire, de fixer au

Royaume-Uni un délaitrès court à l'issue duquel il serait présumé,
sans manifestation contraire de sa part, avoir renoncéà la constitn-
tion d'une commission arbitrale. Car on ne peut supposer que le
droit d'option puisse se transformer en une faculté de délibérer
indéfinimentet d'ajourner indéfinimentle règlement d'un différend.

14. Interprétationplus subsidiaire de l'article 29 du Traitéde 1926
ainsi que de la Déclarationde 1926
Pour être complet le Gouvernement hellénique désireexaminer
aussi l'hypothèse où la Cour, adoptant en grande partie les inter-
prétations défenduesdans le contre-mémoire,estimerait quela com-
pétence obligatoire prévue à l'article 29 du Traité de 1926, ne

s'applique qu'aux différendsrelatifs à desréclamations baséesexclu-
sivement sur le Traité de 1926 et que, pour les réclamations nées(le
situations antérieures et qui donc ne peuvent pas êtrebaséesexclu-
sivement sur ce traité, seul le Protocole de 1886 peut recevoir
application.

15. Afiplication au présentdifférenddeI'interprétatiop1zi.subsidiaire
Uaiis le syst&mcd'iiitirprCtntion crpusCau par;~graplie~~rc:c;.dent.
la Cour ne polirrait plus jaii; (I<iutecoiiiiaitrc dit fJii(difiCrciid232 OBSERVATIONS HELL. SUR L'EXC. PRÉL. (4 IV 52)

mais du moins celui-ci devrait-il être porté devant une commission
arbitrale ainsi que la Grècel'a proposé.
Si dans une affaire récente (affaire de l'Anglo-Iranian Oil Co.,
p. 23 de la Requête) le Gouvemement britannique a pu considérer
qu'il y avait dénide justice de la part du Gouvernement iranien
à se refuser de seconformer àla clause compromissoire de la Conven-
tion du 29 avril1933. combien plus certain encore apparaîtrait le
caractère international du dénide justice du Gouvernement britan-
nique s'ilpersistait dans son refus de donner exécution au Protocole

de 1886.
Sans doute, le Gouvernement britannique ne se fait-il pas faute
d'indiquer que le Gouvernement hellénique ne peut se réclamer
d'aucun engagement généralpar lequel il aurait, à charge de réci-
procité, conféré compétence à la Cour pour connaître de toute
violation de traité, et qu'en l'absence de pareil engagement la Cour
n'a pas cette compétence. Mais s'il est vrai qu'en généralles viola-
tions de traité échappent au contrôle de la Cour si les parties ne
lui ont pas attribué compétence àcet égard, le Gouvemement hellé-
nique est d'avis qu'il en va autrement dans le cas où un certain
mode de règlement arbitral a étéacceptépar les parties auquel l'une
d'elles prétend ensuite se dérober.Car il est dans la vocation de la
Cour de se montrer la gardienne du principe accepté par les Nations
Unies de régler leurs différendspar dcs moyens pacifiques de telle
manière que ...la justice ne soit pas mise en danger (art. z de la
Charte).
En l'espèce,la compétencede la Cour pour statuer sur l'étendue

de l'engagement arbitral de 1886 s'imposerait d'autant plus inévita-
blement que, mêmesi la Cour admettait l'interprétation plus sub-
sidiaire exposée au paragraphe précédent, ce ne pourrait &tre
qu'aprèsavoir vérifiéde prèsla frontière entre les champs d'applica-
tion de l'une et l'autre procéduresdites arbitrales.

16. ~99lication au présentdioérend de l'intégralité deisntererkta-
tions juridiques firoposéesfiarleGouvernementbritannique

Le Gouvernement britannique ne s'est pas bornédans son contre-
mémoireà considérerque les différends visésdans la Déclaration de
1926 échappaient totalement àla compétenceobligatoire de la Cour ;
il a considéré,nous l'avons vu, que, suivant la Déclaration, ils ne
devaient êtresoumis à la procéduredes commissions arbitrales qu'à
condition que les réclamations aient étéformuléesantérieurement à
la Déclaration.
Quelque étonnante que lui ait paru cette interprétation, le Gou-

vernement helléniquetient à souligner que, mêmedans cette hypo-
thèse,le présentdifférendn'échapperait pas à la procédurearbitrale.
Car s'il est vrai que ce n'est qu'après 1926 que le Gouvernement
hellénique a élevéune véritable protestation contre le traitement
infligépar les autorités britanniquesà M. Ambatielos, il avait, dèsle 12 septembre 1925, marqué la volontéd'exercer en faveur de son
ressortissant son droit de protection, ce qui suffitàdonner date au
différend.

17. PAR CES ~IOTIFS, le Gouvernement helléniquedemande qu'il
vlaise à la Cour de reieter l'exceution d'incomvétence vrésentée Dar
ie Gouvernement bricannique et,.statuant sur ÎesdemaAdesrelathes

iila compétence, formuléesdans la requête introductive d'instance
et qui sont préciséesci-après, de bien \,ouloir:
1. en ordre $ri?zci$al dire pour droit quc le Gouvernement du
Royaume-Uni est tenu d'accepter la soumission A la Cour inter-
nationale de Justice siégeantcomme cour arbitrale du différend

entre ce gouvernement et le Gouveruemetit hellénique, et en
conséquence fixer aux Parties les délais pour le dépôt de la
réplique et de la contre-réplique visant le fond du différend ;
2. en ordre sz~bsidiaireautoriser le Gouvernement britannique à
notifier dans le délaid'un mois au Gouvernement hellénique sa

préférenceéventuelle pour la soumission du différend à la déci-
sion d'une commission arbitrale comme prévu dans le Protocole
de 1886, étant entendu que, faute par le Gouvernement britan-
nique d'avoir exercécette option dans le délai prescrit, la procé-
dure an fond sera reprise devant la Cour, dont le Président, sur
simple requête du Gouvernement hellénique, fixera les délais
pour le dépôtde la répliqueet de la contre-réplique ;

3. en ordre9121s subsidiaire renvoycr les Partiesà la procédurede la
Commission arbitrale prévuepar le Protocole de 1886 ;
4. en ordretout à fait sz~bsidiaireet pour le cas où la Cour estimerait
ne pouvoir se prononcer sur sa compétenceavant d'avoir recueilli

de plus amples explications sur le fond, faisant application de
l'article 62 de son Règlement, joindre l'incident au fond.

Le 4 avril 1952.
(Signé) N. G. LÉLY,
lfinistre de Grèce,

.4geiit du Gouvernement hellénique
prèsla Cour iiiternationale de Justice. Annexe

LETTRE DU 22 JUIN 1926 DU FOREIGN OFFICE
AU AIIXIçTRE DE GRÈCE A LOXDRES

Foreign Office
The Greek Alinister. 22 Junc 1926.

Sir,
Hefore proceeding to the signature of the commercial treatyhetween
Greece and this country, 1 would ask for an assurance that the conclu-
sion of the treatyillnot be regarded hy your Government açprejudicing
the claims of British subjects for compensation or relief on the ground
that the recent Greek loan is contrary to Articl13 of the Anglo-Greek
Commercial Treaty of 1886,and for a further assurance tliat in the event
of any difference of opinion hetween our two Governments with reference
to the validity of these claims, the matter shall, at the request of either
Govemment, be referred to arhitration in accordance with the provisions
of the Protocol of November IO, 1886, annexed to the said Trenty.

(Signed) M. LA~IPSOK,
For the Secretary of State.