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    Judgment

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    In the case concerning the contract concluded on April 1st/ 14th, 1913, between the "Administration générale des Phares de l’Empire ottoman" and the Ottoman Government,

    Between

    the Government of the French Republic, represented by M. J. Basdevant, Legal Adviser to the Ministry for Foreign Affairs,

    and

    the Government of the Greek Republic, represented first by M. T. Triantafyllakos, Greek Chargé d’affaires at The Hague, and subsequently by M. G. C. Lagoudakis, Envoy Extraordinary and Minister Plenipotentiary of Greece at The Hague,

    The Court, composed as above, delivers the following judgment :

    By a Special Agreement for arbitration, signed at Paris on July 15th, 1931, the French and Greek Governments have agreed to submit to the Court the dispute which has arisen between them as a result of the Greek Government’s refusal to comply with the request of the French Government and to give satisfaction to the French firm Collas & Michel, known as the "Administration générale des Phares de l’Empire ottoman", in a dispute which had arisen between that firm and the Greek Government concerning the validity as against Greece of the contract concluded between the firm and the Ottoman Empire on April 1st/14th, 1913, for the renewal of an existing concession.

    Under Article 2 of the Special Agreement, that instrument was to be notified to the Registry by either Party, as soon as ratifications had been exchanged. The Protocol of exchange of ratifications was not produced to the Court, but the Special Agreement was notified to it by the French Minister and by the Greek Chargé d’affaires at The Hague, who filed the text of the instrument with the Registry on May 23rd, 1933. The Court considers that this official notification by the two Parties concerned constitutes adequate proof of the entry into force of the Special Agreement.

    Under Article 1 of the Special Agreement, the Court is called upon

    "to give its decision upon the question whether the contract concluded on April 1st/14th, 1913, between the French firm Collas & Michel, known as the ‘Administration générale des Phares de l’Empire ottoman’‚ and the Ottoman Government, extending from September 4th, 1924, to September 4th, 1949, concession contracts granted to the said firm, was duly entered into and is accordingly operative as regards the Greek

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    Government in so far as concerns lighthouses situated in the territories assigned to it after the Balkan wars or subsequently1 ".

    The subject of the dispute has thus been indicated in accordance with Article 40 of the Statute.

    The communications provided for in Article 40 of the Statute and Article 36 of the Rules were duly despatched ; the Special Agreement was communicated to Members of the Court on May 23rd, and to States entitled to appear before the Court on July 29th and August 8th, 1933.

    As the Court included on the Bench no judge of Greek nationality, the Greek Government availed itself of its right, under Article 31 of the Statute, to appoint one.

    In Article 3 of the Special Agreement, the Parties proposed that the Court should

    "fix a period of three months as from the date fixed in the Order made by the Court for the purpose (the time-limit granted to the Government of the French Republic and to the Government of the Greek Republic) for the presentation of their respective Cases setting out their views on the question and formulating their submissions, and a period of three months as from the date of filing of these Cases for the presentation of their Counter-Cases in reply, in which, if necessary, they shall formulate any additional submissions".

    The Agent for the Greek Government having been appointed on June 7th, 1933, and the Agent for the French Government on July 27th, the Court, on July 28th, 1933, made an Order in which the date last mentioned was fixed as that from which time-limits should be reckoned. The time-limits fixed by the Order were in accordance with the proposal of the Parties. In the same Order, the Court stated that a clause in a Special Agreement, drawn in terms such as those of the above-quoted Article 3, implied an agreement between the Parties to waive the right to present a Reply. The time-limit for the filing of Counter-Cases expired on January 26th, 1934, and the documents of the written proceedings having been duly filed within the periods fixed, the case became ready for hearing on that date.

    The French Government in its Case prays the Court

    "to adjudge and declare that the contract concluded on April 1st/14th, 1913, between the French firm Collas & Michel, known as the ‘Administration générale des Phares de l’Empire

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    ottoman’, and the Ottoman Government, prolonging from September 4th, 1924, to September 4th, 1949, concession contracts granted to the said firm, was duly entered into and is accordingly operative as regards the Greek Government in so far as concerns lighthouses situated in the territories assigned to it after the Balkan wars or subsequently".

    The Greek Government, on the other hand, prays the Court in its Case

    "to adjudge and declare that the contract concluded on April 1st/14th, 1913, between the French firm Collas & Michel, known as the ‘Administration générale des Phares de l’Empire ottoman’, and the Ottoman Government, prolonging from September 4th, 1924, to September 4th, 1949, concession contracts granted to the said firm was not duly entered into and is not accordingly operative as regards the Greek Government, in so far as concerns lighthouses situated in the territories assigned to it after the Balkan wars or subsequently".

    These submissions were not amended in the respective CounterCases.

    In the course of public sittings held from February 5th to 8th, 1934, the Court heard the oral statements, reply and rejoinder presented :

    On behalf of France, by M. Basdevant, Agent for the Government of the French Republic, and

    On behalf of Greece, by M. Politis, Envoy Extraordinary and Minister Plenipotentiary of the Greek Republic in Paris, entrusted by his Government with the oral presentation of its case before the Court.

    At the oral proceedings, the submissions presented in the respective Cases were maintained in their entirety by the Parties.

    Numerous documents in support of their contentions were filed on behalf of both Parties, either as annexes to the documents of the written proceedings or in the course of the oral proceedings1.

    These are the circumstances in which the Court is now called upon to give judgment in the case submitted to it by the Special Agreement between France and Greece of July 15th, 1931.

    The question submitted to the Court is whether a contract concluded on April 1st/14th, 1913, between the Ottoman Government and a French firm, Collas & Michel, renewing the concession for the maintenance of the lighthouses on the coasts of the Ottoman Empire, was duly entered into and is

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    accordingly operative as regards the Greek Government in so far as concerns lighthouses situated in the territories assigned to Greece after the Balkan wars or subsequently.

    The concession in question, which covers the management, development, and maintenance of the "system of lights on the coasts of the Ottoman Empire in the Mediterranean, the Dardanelles and the Black Sea", was first granted to this firm in 1860 for a period of twenty years as from 1864. In 1879, however, i.e. five years before its expiry, it was renewed for a period of fifteen years expiring in 1899. It was renewed a second time in 1894, for a period of twenty-five years, expiring on September 4th, 1924. Finally, in 1913, it was again renewed for twenty-five years, i.e. until September 4th, 1949. It is the contract granting this last prolongation which forms the subject of the Special Agreement.

    From the outset, the concession was based on the following principle : the concessionnaires, who were authorized to collect lighthouse dues—from which however war-vessels were exempted —were to be remunerated by the receipts from this source ; the Ottoman authorities were also to place at the disposal of the concessionnaires, without charge, certain premises including some to be used as collecting offices. A proportion of these receipts (in the later contracts 50 %) was reserved to the Ottoman Government. It appeared that this proportion might usefully be employed as security for loans, the Government ceding its share of the receipts to the lender until the sum lent, together with interest, had been repaid in full. On three occasions, the Ottoman Government had recourse to this expedient ; the last occasion was when the most recent renewal contract was concluded in 1913. This prolongation of the concession was preceded by negotiations, apparently extending over a period of about two years and relating also to a new loan secured upon the receipts from the lighthouse dues.

    The circumstances in which the latter renewal contract was concluded were as follows :

    On April 1st/14th, 1913, there was issued a Decree Law— sometimes described as a provisional law—whereby the Sultan authorized the Ottoman Minister of Finance to conclude the convention for the renewal of the concession, and to sign instruments relating to a loan or advance of £500,000 (T.), repayable out of the Imperial Government’s share of the lighthouse receipts ; the texts of the convention and the other instruments were annexed to the Decree. The "convention" was signed on the same day. The instruments relating to

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    the loan, including the "contract for an advance", and the letters authorizing the payment to the lenders of the Government’s share of the lighthouse receipts, were signed on the next day, April 2nd/15th, 1913.

    The Decree Law of April 1st/14th, 1913, was published in the Official Turkish Gazette of May 14th/27th of the same year. The Turkish Parliament ratified the Decree Law on December 18th/31st, 1914. The law was promulgated by a Decree dated December 22nd, 1914/January 4th, 1915, published on December 26th, 1914/January 8th, 1915.

    At the time when the contract of April 1st/14th, 1913, renewing the concession was made, military operations in the first Balkan war had been resumed, after the temporary failure (Jan., 1913) of the peace negotiations initiated in London in December, 1912 ; these operations were terminated, in the last days of April, 1913, by the capitulation of Scutari ; and the Treaty of London was concluded on the following 30th of May. It should however be observed in this connection that, after the capitulation of Adrianople (March 28th), the Great Powers submitted to the belligerents (March 31st) preliminary peace conditions, which were accepted on the following day (April 1st) by Turkey, but were not agreed to by the Balkan Allies until April 20th. From the very outset of the war, the greater part of Turkey in Europe had been occupied by the Balkan Allies and, so far as concerns the Mediterranean coasts and the islands, by Greece. According to the proposal of the mediating Powers, Turkey was to cede the continental territories thus occupied to the Balkan Allies ; she was to abandon her interest in Crete ; and the question of the Aegean islands was to be left to the aforesaid Powers for decision.

    The Treaty of London followed the main lines of this proposal : Turkey ceded to the Balkan Allies her possessions on the mainland of Europe, west of the Enos-Midia line—with the exception of Albania—and also Crete ; and she left to the Powers inter alia the decision as to the disposal of the Ottoman islands in the Aegean, with the exception of Crete. In February, 1914, the Powers assigned these islands, with the exception of three (Imbros, Tenedos and Castellorizo), to Greece.

    The Treaty of London, which was not ratified, made no provision in regard to the treatment of concessions granted by the Ottoman authorities in the ceded territories. The examination of this question, among others, was entrusted to a "Financial Commission on Balkan Affairs", which held a first session in Paris in June-July, 1913, when it drew up certain proposals in regard to this subject. However, these proposals were never submitted for the approval of the Powers concerned.

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    The second Balkan war was terminated, as regards Greece and Turkey, by the Treaty of Athens of November 1st/14th, 1913, which came into force on November 16th/29th of that year. This Treaty maintained the territorial clauses of the Treaty of London. Under Article 5 of the Treaty of Athens, rights acquired "up to the time of the occupation of the ceded territories" were to be respected, subject, however, to the decisions of the Financial Commission on Balkan Affairs ; but that Commission, which was to have held a second session in September or October, 1914, did not meet again.

    After the War of 1914-1918, the relations between Greece and Turkey were to have been settled by the Treaty of Sèvres, of August 10th, 1920, the signatories of which also included France. Article 311 and the following articles of that Treaty, which was not ratified, once more laid down rules for the treatment of concessions granted by the Ottoman authorities, including those granted in the territories detached from Turkey in 1913 after the Balkan wars, but did not take the commencement of the occupation of these territories as the material date.

    As a result of the events which subsequently took place in Turkey, and of the situation which developed between Turkey and Greece, the relations between those two countries were only finally settled by the instruments which were signed at Lausanne in July, 1923, France being amongst the signatories. The question of concessions was dealt with in Protocol XII, attached to the Treaty of July 24th, 1923. That Protocol draws a distinction, in Article 9, between the territories detached from Turkey under the said Treaty and the territories which had been detached from that country after the Balkan wars. In regard to the former, the Protocol fixes October 29th, 1914, as the decisive date for the recognition of concessionary contracts ; in regard to the latter, it adopts the date of the entry into force of the treaty under which the territory was transferred, in each case.

    In 1913, the Lighthouse Administration, envisaging with some concern—according to the French Case—the possibility of territorial changes, got into touch with the Greek Government. The latter Government has alleged that the Administration itself then informed the Greek representatives that the contract of 1913 was without importance to Greece, since it could not form the basis of any claim against that country, and that, for this reason, the renewal contract of 1913 was not communicated to the said representatives. It is, however, common ground that, in replying to a questionnaire of the Financial Commission on Balkan Affairs, the Lighthouse Administration indicated, at the same period, among its "firmans of concessions, contracts and conventions", etc., the "renewal contract of April 1st/14th, 1913", and that, in the same reply, the

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    Lighthouse Administration specified among "the chief questions which appear to call for settlement", the "re-instatement of the Lighthouse Administration in the rights and prerogatives which have been conferred on it in all the territories now occupied by the Allied States...", etc.

    On the other hand, the Lighthouse Administration only mentioned among the "pecuniary claims which the Company proposes to put forward" a claim "in respect of the unexpired period of the concession, up to September 3rd, 1924".

    Be that as it may, the competent sub-committee of the Financial Commission appointed in 1913 expressly included the Lighthouse Company, in its report, among those "whose activities would in future extend to two or more territories".

    In December 1914, the Greek Government informed the French Government that it had "decided to take over the management and maintenance of the lighthouses situated in the zone of the new Greek territories, with its own staff, as from January 1st, 1915". This decision, which was based on considerations of neutrality and national defence, was represented as being in pursuance of an intention which the Greek Government had cherished for a long time past, but the execution of which had been delayed by the negotiations for a settlement with the Lighthouse Administration. The latter agreed, in principle, to the operation of the lighthouses being taken over by the Greek authorities in the Greek territories. In spite of this measure, the lighthouse dues continued to be collected in Greek territory by the officials of the Lighthouse Administration until 1929, when their authority to collect them was withdrawn by the Greek Government.

    Towards the end of 1923, that is to say after the signature of the Treaty of Lausanne, the Lighthouse Administration again entered into conversations with the Greek Government for the settlement of certain questions of detail, and also for the examination "of the situation which had arisen, -as a result of the Balkan wars and the World War, in certain portions of Greek territory which fall within our Company’s area".

    This proposal does not appear to have led to any result, with the exception of an enquiry that was undertaken, on behalf of the Greek Government, by M. Botassis, its Naval Attaché at Paris. However, in March 1924, the Greek Director of Transport (Ministry of National Economy) incidentally mentioned to the Lighthouse Administration that, in his view, the concession would expire on 24 September 1924. This communication led the Administration to bring the matter to the notice of the French Government, and in the following month the question entered the phase of diplomatic negotiations, the French Government supporting at Athens the

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    claims which the Lighthouse Administration founded on the renewal contract of April 1st/14th, 1913, for the maintenance of the concession.

    The French Government seems to have gained the impression that, before September 1924, these diplomatic negotiations had led to an agreement recognizing in principle the contract of 1913, though further conversations would have to be pursued for a settlement of accounts and for the réadaptation of the concessions. Be that as it may, negotiations were resumed in 1925. It was then that the Greek Government for the first time stated its legal point of view in writing in a note addressed by M. Rentis, Greek Minister for Foreign Affairs, to the French Minister at Athens on August 17th, 1925. The Greek note raised objections concerning the validity of the contract as against Greece and based not only on points of law but also upon matters of fact. In the words of the note, "the Greek Government is obliged to maintain its view that, neither in fact nor in law, does the contract for the renewal of the French company’s concession imply any obligation on the part of Greece, since, neither before nor after the conclusion of Protocol XII of Lausanne, did it possess any validity as regards that country". It based its opinion more especially on considerations of Turkish constitutional law, from which it was deduced that the contract of 1913 had not been duly entered into.

    Towards the end of 1926, as no agreement or settlement had been reached, the French Government for the first time suggested the possibility of "submitting the claims of the Lighthouse Administration" to the Court. The conclusion of a Special Agreement with that object in view was delayed, because recourse was first had to another procedure : an interchange of arguments between jurists, designated by the two Parties, concerning "the question of the validity of the Administration’s concession". This procedure having failed, the French Government, in April 1928, renewed its suggestion that the dispute should be referred to the Court. The Greek Government accepted this suggestion, and in June of that year it communicated a draft Special Agreement to the French Government.

    As a result of circumstances which do not directly concern the Court, the negotiations concerning the terms of the Special Agreement were somewhat protracted, and an agreement between the two Governments was only reached in April 1931. The Special Agreement was ratified two years later.

    The Special Agreement, in addition to Chapter I, which submits to the Court the dispute as defined above, contains a second Chapter, providing for subsequent proceedings which are to follow the delivery of judgment by the Court and the

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    object of which is the settlement of all pecuniary claims of the Lighthouse Administration against the Greek Government or vice versa, as also the determination of the sum payable for buying out the concession, should the judgment declare that the contract of April 1st/14th, 1913, was duly entered into.

    As already stated, the question put to the Court by Article 1 of the Special Agreement is whether the contract of April 1st/ 14th, 1913, "was duly entered into and is accordingly operative as regards the Greek Government in so far as concerns lighthouses situated in the territories assigned to it after the Balkan wars or subsequently".

    In the first place, the precise import of this question must be determined.

    In the course of the written and oral proceedings, the Parties have debated two points which concern the interpretation of the question and, in particular, the interpretation of the words "contract... duly entered into". Though agreed that the Court must examine the question whether the contract of April 1st/14th, 1913, is valid according to Ottoman law, they disagree in regard to whether the Court has also to consider what binding effect, if any, the contract possesses as regards Greece in the territories in which certain lighthouses are situated. According to the French contention, the question, as put by the Special Agreement, does not cover this point. Furthermore, the Parties disagree in regard to whether an argument based on the intention of the contracting Parties as regards the scope of the contract is admissible under the terms of the question. The French Government would exclude this argument also.

    The Court cannot regard the expression "duly entered into" as a technical term, invariably possessing the same signification. Where the context does not suffice to show the precise sense in which the Parties to the dispute have employed these words in their Special Agreement, the Court, in accordance with its practice, has to consult the documents preparatory to the Special Agreement, in order to satisfy itself as to the true intention of the Parties.

    The first two paragraphs of the preamble to the Special Agreement throw some light on the import of the question submitted to the Court ; these paragraphs are as follows :

    "Whereas a dispute has arisen between the French firm Collas & Michel, known as the ‘Administration générale des Phares de l’Empire ottoman’, and the Government of the Greek Republic concerning the validity as against Greece of the

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    contract concluded on April 1st/14th, 1913, extending the existing concession ;

    Whereas the representations made by the Government of the French Republic with a view to obtaining from the Government of the Greek Republic recognition of the validity of the said contract extending the concession have proved fruitless, and as in consequence of the refusal to give satisfaction to the Lighthouse Administration encountered by the Government of the French Republic, a dispute on this subject exists between the two Governments".

    The first paragraph of the preamble says that the dispute between the Lighthouse Administration and the Greek Government concerns the "validity of the contract as against Greece". These terms are sufficiently wide to cover the points above mentioned, and this is in accordance with the history of the dispute—as the Court has been able to satisfy itself from the documents. The question is whether the definition of the dispute between the two Governments, contained in the second paragraph of the preamble and in the first Article of the Special Agreement, confines the dispute solely to the question of the validity of the contract according to Ottoman law, as is maintained by the French Government.

    The second paragraph of the preamble only mentions "the validity of the said contract" and the fact that "a dispute on this subject exists between the two Governments" ; but the Court cannot draw any decisive conclusion from the omission of the words "as against Greece". The term "validity" has, in fact, often been used by the Parties in the present case, even in connection with the effect of the contract as regards a succession State.

    For these reasons, the Court has reached the conclusion that the precise import of the question put in Article 1 of the Special Agreement, when read in conjunction with its context, is not clear.

    The contention which the French Government bases on Article 1 of the Special Agreement is as follows: the expression "duly entered into" has been—as is common ground between the Parties—taken from Article 1 of Protocol XII, signed at Lausanne on the same day as the Treaty of Peace of July 24th, 1923, and bears the same meaning as in that Article, where it simply means "valid according to Ottoman law". The Special Agreement, therefore, in putting the question whether the contract was "duly entered into", is merely submitting to the Court problems of Ottoman law. This, the French Government contends, is still more evident because Article 1 of the Special Agreement goes on to say : "and is accordingly operative as regards the Greek Government" ;

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    hence the effectiveness of the contract as regards Greece is to be considered simply as a consequence of its validity under Ottoman law. This consequence follows, it is held, directly from Article 9 of Protocol XII, which provides for the subrogation of the Balkan States as regards concessions granted by the Ottoman Government.

    The Court, in this connection, has to consider Protocol XII. This instrument comprises two sections, each dealing with a different question. The first section (Art. 1-8) deals only with territories remaining Turkish, so that no question as to State succession arises ; the latter problem, on the other hand, is dealt with in the second section (Art. 9-13), which concerns the territories detached from Turkey. Accordingly, it follows that the expression "duly entered into" in the first section cannot be meant to cover enforceability against a successionState. The expression was, in point of fact, construed in the competent committee of the Lausanne Conference as meaning that "all formalities must have been fulfilled". Without considering for the moment what the required formalities are, the Court is content to observe that Article 1 of Protocol XII relates solely to the fulfilment of the requirements of Ottoman law.

    As will be seen, it is not, however, certain that the Greek Government has interpreted this expression in Article 1 of the Special Agreement in the precise sense which the Court has just attributed to it. To suppose that it did so, it would have to be assumed that that Government had abandoned its previous standpoint, which was based, inter alia, on arguments of international law.

    Moreover, the history of the Special Agreement does not support such an assumption.

    The first draft of the Special Agreement was framed by the Greek Government ; it is therefore to be assumed that its previous standpoint in regard to the subject of the dispute was expressed therein. What this standpoint was appears from the following passages : in Article 1 of this first draft, the dispute is described as concerning "the validity of the contract as against Greece". This expression, which was subsequently inserted in the first paragraph of the preamble of the Special Agreement as finally adopted, does not refer—as has already been pointed out—only to formalities of Turkish law, but also to the binding force of the contract as against Greece. Article 2 of the Greek draft, which formulated the question for submission to the Court, was differently worded : "The Court will be called upon to say whether the contract... was duly entered into and is accordingly operative as regards Greece, in so far as concerns lighthouses situated in the territories assigned to her after the Balkan wars or subsequently." Nevertheless,

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    it is impossible to infer therefrom that the question thus stated covers a part only of the various problems under discussion, for, according to Article I, it is "the dispute", that is to say the whole dispute, which is referred to the Court. The terms of Article 2 are not inconsistent with this interpretation. The later phrase ("in so far as concerns lighthouses situated in territories assigned to her after the Balkan wars or subsequently") was preceded by a comma (which again appears in the submissions of the Greek Case) and has therefore to be read in conjunction with the words "duly entered into". Accordingly, there was a reference to the problem of international law whether Greece was obliged to succeed Turkey in this contract.

    On the other hand, the French counter-proposal placed in the preamble the description of the subject of the dispute which had been given in Article 1 of the Greek draft. It did not reproduce in its new Article 1 the words : "in so far as concerns lighthouses", etc. This rearrangement might indeed be taken as signifying an intention to modify the Court’s terms of reference, i.e. by submitting to it only a part of the dispute. It might appear that the binding effect of the contract as regards Greece was accepted as the logical consequence of the validity of a contract "duly entered into". At the representations of the Greek Government, the phraseology of Article 2 of the Greek draft was however reinserted (except the comma) in Article 1 of the Special Agreement as finally adopted, and by thus restoring the reference to the territories in question, the Parties would appear once more to have had in mind international considerations. The other changes made, principally in the preamble of the Special Agreement as finally adopted, do not seem to have modified the subject of the dispute, and are explained by anxiety to make it quite clear that the dispute is between two States ; this appears from the diplomatic correspondence.

    The history of the Special Agreement therefore does not exclude the possibility that the words "duly entered into" in Article 1 of that document, read in conjunction with the whole of the context, imply, besides a condition regarding conformity with Ottoman law, a condition regarding conformity with international law. Accordingly, the Court has decided not to omit from consideration the objections of an international character opposed by the Greek Government to the arguments of the French Government. As will be seen hereafter, the inclusion of these objections within the Court’s purview does not modify the conclusions reached by the Court on the basis of other considerations.

    In arriving at these conclusions, the Court has not lost sight of the statement made by the Parties that they were

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    in agreement that the words "duly entered into", in Article 1 of the Special Agreement, were taken from Article 1 of Protocol XII, and that these words have the same sense in the Special Agreement as in the Protocol. The Court accepts the view that the words were in fact borrowed from Protocol XII. It may also be safely assumed that, when the Special Agreement was concluded, each of the Parties to that Agreement thought that the words "duly entered into" in Article 1 were being employed in the same sense in which they are used in Protocol XII. But the Court considers that the two Parties do not attribute the same meaning to these words in the Protocol. There is no doubt that the Greek Government regarded the words in Protocol XII as wide enough to cover the consideration based on international law on which that Government relied, while the French Government regarded the words in Protocol XII as indicating only the question whether the formalities required by Turkish law had been complied with. Accordingly, it is clear that, even if each Party thought that the words "duly entered into" in the Special Agreement were used in the same sense as in Protocol XII, there was no agreement between them as to what the words meant in the Special Agreement, because they were attributing different meanings to the words in Protocol XII. For the same reason, the Court cannot, after its finding that the words "duly entered into" in Protocol XII bear a meaning other than that which the Greek Government attributed to them, hold that the Greek Government has agreed that, in the Special Agreement, the words bear a meaning which the Court holds to be their correct interpretation in Protocol XII.

    With regard to the argument based by the Greek Government on what, in its submission, was the intention of the Parties, according to the contract of April 1st/14th, 1913, namely not to renew the concession in so far as concerns lighthouses situated in territories occupied by the troops of the Balkan Allies—the Court also considers it right to examine this argument. For, according to the Greek Government, this point formed the subject of the discussion between jurists which took place before the conclusion of the Special Agreement, and this objection has in fact been considered in the French Case. It is possible to find a reference to this question of the intention of the Parties with regard to the scope of the contract in the text of the Special Agreement itself, if the passage "in so far as concerns lighthouses situated

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    in the territories assigned to it after the Balkan wars or subsequently"—which was inserted at the instance of the Greek Government—be read in conjunction with the expression "contract... duly entered into". The Court cannot therefore give an affirmative answer to the question put by the Special Agreement without satisfying itself that the contract of April 1st/14th, 1913, covered, in the intention of the Parties, lighthouses situated in the territories which have now become Greek.

    There are therefore three questions of substance with which the Court must deal : it must determine the intention of the Parties as regards the scope of the contract ; it must consider whether this contract was "duly entered into" according to Ottoman law, and whether it is enforceable against Greece.

    In determining the scope of the contract of April 1st/14th, 1913, the Court adopts the standpoint that the contract was one for the renewal of a previous concession. The intention of the Parties to this contract was to maintain for a further period of twenty-five years the relations existing between them under the 1860 concession, with some modifications of detail expressly laid down. Article 1 of the contract accordingly provides that "the lighthouse concession still in force... is granted as from 22 Aghostos, 1340/September 4th, 1924, and in accordance with the existing general conditions".

    This statement is important in connection with the ascertainment of the intention of the Parties as regards the scope of the 1913 contract. If the old concession was renewed, it may be presumed, failing proof to the contrary, that the scope of the 1913 contract remained identical with that of the old concession.

    Accordingly, the onus of proving a contrary intention of the Parties, i.e. an intention to limit the scope of the concession to lighthouses which were to remain Turkish, rests on the Greek Government, and the Court does not consider that that Government has furnished adequate proof of such an intention.

    The Greek Government argues that it is impossible that the Parties should have meant to include in their contract the occupied territories, the cession of which had already been agreed to by the Sultan in his negotiations with the mediating Powers as early as April 1st, 1913. It adds that the Ottoman Government was aware that, under international law, it could no longer grant a concession in the occupied

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    territories. Finally, it maintains, the attitude of the concessionnaires themselves who, prior to 1924, had never adduced against Greece the renewal granted, indicates that it was not their intention in 1913 to acquire rights in respect of lighthouses in occupied territory.

    These arguments are not convincing. In point of fact, the two Parties to the contract had every interest in not reducing the previous scope of the concession, so as to avoid prejudicing either the prospective receipts of the concessionnaires or the aims of the Ottoman Government, which latter was anxious to obtain as large an advance as possible against its share of the receipts derived from the concession. Moreover, the negotiations had already been begun before the Balkan war and, if the intention had been to restrict the scope of the contract, as compared with the concession in force, the fact would, no doubt, have been expressly stated. Finally, the fate of all the occupied territories was not yet decided—for the mediating Powers were to dispose of the islands —and the islands of Imbros, Tenedos and Castellorizo were in fact restored to Turkey. If the Parties had really meant to except the territories occupied on April 1st/14th, 1913, there would have been, as regards the occupied territories subsequently restored to Turkey, a curious uncertainty as to the scope of the renewed concession. Even if there had been a generally accepted rule of international law forbidding a sovereign State from taking measures in respect of occupied territory, the Parties to the contract of 1913 might have had in view the possibility that special provisions in the future peace treaties would subsequently accord recognition to the concessions. As regards the attitude of the concessionnaires, they submitted their renewal contract to the Financial Commission on Balkan Affairs which sat in Paris in 1913. That they omitted, thereafter, to insist upon the rights pertaining to them as a consequence of the renewal, is probably to be ascribed to the unfavourable stipulations in the Treaty of Athens (Art. 5) relating to vested rights ; it is true that this stipulation was not of a definitive character, since it was declared to be without prejudice to the future action of the Financial Commission ; the latter, however, did not continue its work.

    The scope of the contract of April 1st/14th, 1913, is not therefore limited by reason of the fact that certain territories were occupied at that date by the Balkan Allies.

    The Court has next examined the question whether "the contract" of April 1st/14th, 1913, was "duly entered into" according to Ottoman law.

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    The Special Agreement raises the question of the validity of the "contract" and not of the concession ; for the concession is directly granted in the above-mentioned Article 1 of the contract, and nowhere is reference made to any special act performed by Turkish authorities—in addition to the conclusion of the contract—in order to render the concession complete in all respects. It is true that a contract granting a public utility concession does not fall within the category of ordinary instruments of private law, but it is not impossible to grant such concessions by way of contract, and some States have adopted the system of doing so. This was the case in Turkey, as appears from the law of June 10th/ 23rd, 1910, concerning public utility concessions. The provisions of this law, and particularly Article 5, leave no room for doubt that the grant of concessions took the form of contracts made between the concessionnaires and the Government. In principle, and with the exception of the cases enumerated in Article 1, which will be dealt with later, the Government required a special authorization given by legislative enactment. Nevertheless, the contract alone—which was made where necessary in virtue of a law—constituted the immediate title for all the private and public rights of the concessionnaire. The constant references to "concessionary contracts" in Protocol XII of Lausanne are therefore justified, and this expression is also found in the preparatory work of the competent committee of the Lausanne Conference. Accordingly, all that has to be done is to consider whether the contract is valid, i.e. to ascertain whether all formalities have been fulfilled and, in particular, that legislative authorization, if that was necessary, has been given.

    The contract of April 1st/14th, 1913, is signed by the Minister of Finance on behalf and under the authority of the Ottoman Government.

    It has been suggested that the Court should content itself with recording this circumstance and declare that the contract is therefore "duly entered into", because the Ottoman Government had power to grant a renewal of the lighthouse concession on its own authority.

    It is true that Ottoman law does not always require the participation of the legislature in the granting of a concession ; Article 1 of the law of June 10th/23rd, 1910, concerning public utility concessions, provides, according to the complete official translation produced to the Court by the Greek Government, that :

    [Translation by the Registry.]
    "The grant of concessions for works of public utility will be made directly by the executive authority : (1) if they do not involve any kind of financial obligation—present or future—on the part of the State and

    21
    will not necessitate selling or disposing of public movable or immovable property ; (2) if they do not concern a public service provided for in the budget ; (3) if they do not grant privileges other than those specified in this law ; (4) if they do not necessitate the amendment of legislation in force ; (5) if the granting of them depends on the legislation to be enacted for the organization of municipalities in the vilayets and is not within the jurisdiction of the local Government."

    In view of the Decree Law of April 1st/14th, 1913, which expressly authorizes the making of the contract renewing the lighthouse concession, the Court feels that it must deal first with this law and with the questions raised regarding its validity. Only if the said law were found to be invalid would it be necessary to consider whether the terms of the concession are such as to allow the Ottoman Government to dispense with the co-operation of the legislative authority, as provided by the law of June 10th/23rd, 1910.

    The law of April 1st/14th, 1913, was not the result of parliamentary legislation. It was issued by the Government, in virtue of the powers conferred upon it by Article 36 of the Ottoman Constitution. It was what is commonly called in Turkey a provisional law, or a decree law. Article 36 of the Ottoman Constitution, as then in force, was, according to the (French) translation which the Parties have agreed to accept, to the following effect :

    [Translation by the Registry.]
    "In case of urgent necessity, if the General Assembly is not sitting and if time does not allow of the Chamber being convened to pass a law for the protection of the State against some danger, or for the preservation of public safety, the Minister may adopt measures having the force of a provisional law until Parliament is convened, provided always that such measures are not contrary to the terms of the Constitution and that they are sanctioned by an Imperial iradé and submitted to the General Assembly as soon as the latter meets."

    It is common ground that the Ottoman General Assembly was not sitting on April 1st/14th, 1913, that none of the provisions of the Decree Law of that date was contrary to the Ottoman Constitution, and that the said Decree Law received Imperial sanction. The dispute therefore concerns the question whether the other conditions laid down in the above-quoted Article 36 were complied with, that is to say, whether there was "urgent necessity", and whether the measure was one "for the protection of the State against some danger or for the preservation of public safety", and finally whether the Decree Law was thereafter duly submitted to the Turkish Parliament.

    The Greek Government contends, in the first place, that an authorization to renew a concession expiring in 1924 could not,

    22
    in 1913, be a matter of urgency, or of importance for the public safety.

    In regard to this point, the Court observes as follows : The powers conferred on the Ottoman Ministry by Article 36 of the Constitution are genuine legislative powers. As Parliament was not always in session, and as extraordinary sessions were difficult to convene, owing to the vast extent of the Empire, the requirements of the State made it necessary that the Government should be invested with supplementary legislative powers. It is true that these extraordinary legislative powers were not unlimited ; a decree law could not make changes in the Constitution, and two checks were provided : first, sanction by the Sultan, and then submission to Parliament. But any grant of legislative powers generally implies the grant of a discretionary right to judge how far their exercise may be necessary or urgent ; and the granting of this right to the executive authority was particularly necessary for the attainment of the object set forth in Article 36. It is a question of appreciating political considerations and conditions of fact, a task which the Government, as the body possessing the requisite knowledge of the political situation, is alone qualified to undertake. It follows from the foregoing that the Ottoman Government, in the first instance, and, subsequently, the Turkish Parliament, were alone qualified to decide whether a given decree law should, or should not, be issued. The Court is, therefore, not called upon to consider whether the Decree Law of April 1st/14th, 1913, complied with the conditions rendering its issue expedient according to the terms of the Ottoman Constitution.

    Even, however, if such an examination were to be undertaken, good reasons might be given in favour of the view that the Decree Law was valid. In Turkish constitutional practice, the field of extraordinary legislation has been a very wide one, as is shown by some legal opinions which were appended to the French Case and Counter-Case, and the contents of which have not been contested by the Greek Government. It is to be noted, according to these opinions, that even after the Reform of 1909, there were periods during which three-quarters of the legislative acts promulgated were decree-laws, though many of them related to matters which in other countries are dealt with by parliamentary legislation. This practice appears to have received general and tacit assent; Parliament never made it a ground of remonstrance to the Government. Moreover, the renewal of the lighthouse concession was essential in order to obtain the advance of £500,000 (T.) ; and the Ottoman Treasury must have been in urgent need of this loan, having regard to the position of the Empire at the end of the Balkan wars.

    23
    The Decree Law of April 1st/14th, 1913, must, therefore, be accepted as having been regularly issued, from the standpoint of Article 36 of the Ottoman Constitution. Both Parties— as also the Court—interpret the Constitution in the sense that a decree law which is regularly issued, immediately acquires full legal force.

    However, the Greek Government has raised in this connection a second objection to the validity of the renewal of the concession. It contends that the validity of a decree law is subordinated to a condition by which it is annulled if the decree law is not submitted to Parliament at the next session or if Parliament should fail to ratify it. The Decree Law of April 1st/14th, 1913, was not ratified until the winter of 1914-1915—a time when a large part of what is now Greek territory had been formally ceded, and when, in consequence, the Turkish Parliament no longer had any jurisdiction over that territory. It had therefore become impossible, according to the Greek Government, for Parliament to ratify a decree law affecting the ceded territories, and that impossibility of ratifying amounted to the same thing as non-ratification. Hence, the Greek Government argues, the Decree Law of April 1st/14th, 1913, had ceased to possess the force of law.

    The Court cannot agree with these deductions. First, it finds that there is no good reason for importing the idea of a nullifying condition into the clauses of the Constitution governing decree-laws. No comparison is possible between the promulgation of a decree law and the making in private law of a contract which was subject to some condition. The decree law presents a form of legislation, imposing legal rules which are immediately valid and which only differ from ordinary laws in one respect, namely that they are issued by the Government, and that their validity may subsequently be terminated by a decision of Parliament. The existence of the latter possibility gives decree-laws a provisional character, but it does not affect the legal force they enjoy up till the time of their rejection by Parliament. The Sultan sanctioned the Decree Law of April 1st/14th, 1913, using a formula which is reproduced (in the French text) in a translation, from a Turkish official source, submitted by the Greek Agent; this translation has encountered no objection on the part of the French Agent.

    [Translation by the Registry.]
    "I have ordered that the present draft law, which shall be submitted on the opening of Parliament for ratification by that body, be added to the laws of the State."

    What is described here as ratification—though the expression is not found in the translation of Article 36 of the Constitution

    24
    furnished to the Court—is not an act that is indispensable in order to elevate a law from a supposedly lower to a higher plan of legal effectiveness. It is not a formal condition upon the fulfilment of which the legislative value of the decree law is dependent. The refusal of Parliament to ratify would alone be relevant ; when Parliament takes no action, the decree law remains intact and continues in force, in the same way as any other ordinary law. It should be noted, in this connection, that no period was laid down within which Parliament had to give its decision. It cannot, therefore, be contended that the alleged nullity of the ratification, owing to the loss of territorial jurisdiction over the districts in question, can have deprived the decree law of its status as a law. There was no refusal to ratify ; there is therefore no need to examine whether such a refusal would have had retrospective effects, perhaps extending even to rights acquired under the régime of the decree law. It also becomes unnecessary to examine whether the cession of the provinces to Greece really incapacitated the Turkish Parliament from ratifying a decree law which, as a fact, merely authorized the Minister of Finance to conclude a contract disposing, amongst other property, of lighthouses situated in those provinces. Ratification, in the case in point, was rather a confirmation of the Government’s action than the imposition of legal provisions, applicable to the future, on the inhabitants of the ceded territories. Moreover, according to Turkish law, the decree law itself was not tainted with nullity because some of the territories covered by the contract which it authorized were in enemy occupation. In constitutional law nothing short of definite cession can produce legal effects prejudicing the rights of the lawful sovereign. The question, which arises in international law, whether the Succession State can be bound by a contract or a law made during military occupation lies entirely outside this subject.

    The Decree Law of April 1st/14th, 1913, was therefore valid in Turkish law. Consequently the contract renewing the concession was also valid between the Parties to it, notwithstanding the fact that the formality of ratification of the decree law by the Turkish Parliament did not take place until after the cession of some of the territories covered by the contract ; accordingly, no formality necessary to render the contract valid remained unfulfilled.

    Nor does the Court arrive at a different conclusion as a result of its examination of the question of international law whether the contract of April 1st/14th, 1913, is "operative as regards the Greek Government". The question whether,

    25
    according to the general rules of international law, the territorial sovereign is entitled, in occupied territory, to grant concessions legally enforceable against the State which subsequently acquires the territories it occupies, was debated at some length between the Parties. Both of them adduced the terms of the Conventions of 1899 and 1907 concerning the laws and customs of war on land, besides precedents, and the opinions of certain authors.

    The Court does not think it necessary to express its opinion on this point. In the present case, it has before it a treaty clause, namely Article 9 of Protocol XII of Lausanne.

    That Article reads as follows :

    "In territories detached from Turkey under the Treaty of Peace signed this day, the State which acquires the territory is fully subrogated as regards the rights and obligations of Turkey towards the nationals of the other contracting Powers and companies in which the capital of the nationals of the said Powers is preponderant, who are beneficiaries under concessionary contracts entered into before the 29th October, 1914, with the Ottoman Government or any local Ottoman authority. The same provision will apply in territories detached from Turkey after the Balkan wars so far as regards concessionary contracts entered into with the Ottoman Government or any Ottoman local authority before the coming into force of the treaty providing for the transfer of the territory. This subrogation will have effect as from the coming into force of the treaty by which the transfer of territory was effected except as regards territories detached by the Treaty of Peace signed this day, in respect of which the subrogation will have effect as from the 30th October, 1918."

    This Article lays down that the Succession States are subrogated as regards concessionary contracts entered into with the Ottoman Government prior to October 29th, 1914, in so far as concerns the territories detached from Turkey under the Treaty of Lausanne, and prior to the coming into force of the respective treaties of peace, in so far as concerns territories detached from Turkey after the Balkan wars. The Greek Government is not therefore entitled to object to its subrogation as regards the contract of April 1st/14th, 1913, on the ground that certain territories were occupied by Greek troops at that date. Article 9 of Protocol XII naturally presumes that the concessionary contracts in question are valid contracts. The only objections to subrogation which it admits are those based on the date or the validity of a concessionary contract.

    In regard to the question of date, the contract under consideration was concluded on April 1st/14th, 1913, whereas the Treaty of Athens, which assigned some of the territories in question to Greece, did not come into force until November 16th/29th,

    26
    1913. Therefore, in the present case, the date of the concessionary contract cannot be a ground of objection to the subrogation of the Greek Government.

    In regard to the validity of the concessionary contract, that question has to be considered from the standpoint of Ottoman law ; and from that standpoint the Court has already recognized that the ratification of the decree law empowering the Government to enter into the contract was not necessary to render the latter valid. Neither does Article 9 of Protocol XII require, as a condition for the subrogation of the Succession State, that the decree law should have been approved by the Turkish Parliament before the material date.

    The Greek Government has further pleaded three objections to the consequences of applying Article 9 of Protocol XII. In the first place it has adduced Article 10 of the aforesaid Protocol, which states as follows :

    "The provisions of Section I of this Protocol, except Articles 7 and 8, will be applied to the contracts referred to in Article 9. Article 3 will only have effect in detached territories where the property or the services of the concessionnaires were utilized by the State exercising authority in such territory."

    Founding itself on this Article, the Greek Government draws attention to Article 1 of the Protocol, which provides that:

    "Concessionary contracts and subsequent agreements relating thereto, duly entered into before the 29th October, 1914, between the Ottoman Government or any local authority, on the one hand, and nationals (including companies) of the contracting Powers, other than Turkey, on the other hand, are maintained."

    In order to be regularly concluded, a concessionary contract must therefore, in the Greek Government’s contention, satisfy the requirements of international law, and the contract of April 1st/14th, 1913, does not satisfy them in that Government’s view, because of the special circumstances in which it was made.

    In this connection, the Court recalls that the two sections of Protocol XII are concerned with two different problems, and that Article 1 , having regard to the ground covered by the first section of the Protocol, only stipulates for validity under Ottoman law. As Article 9 of Protocol XII also presumes that the contract is valid—which amounts to requiring that it must have been duly entered into—the reference to Article 1 need not be taken into account in interpreting Article 9. This solution is in accordance with

    27
    the terms of Article 10. For Article 10 lays down that "the provisions of Section I... will be applied to the contracts referred to in Article 9". The "provisions" of Section I are to be applied to the contracts referred to in Article 9, that is to say, to "contracts entered into", in so far, of course, as such application is reasonable. The provisions of Article 1 cannot apply to Article 9 at all, because they relate to a different situation, as has been shown in the present judgment.

    If, applying Article 1 of Protocol XII, it were possible to argue that concessions granted by the sovereign during the occupation were not operative as regards the Succession State, the provision in the second sentence of Article 9, which fixes the day of the coming into force of the treaty of peace as the material date, could never be applied in practice.

    Secondly, the Greek Government argues that the treatment of concessions is a question which was definitely settled by the Treaty of Athens—Article 5 of which requires Greece to respect rights acquired before the occupation—and that it could not therefore be re-opened at Lausanne. In this connection it must be pointed out, to begin with, that the second paragraph of the same Article states that the terms of that Article in no way prejudice any decisions which might be rendered by the Financial Commission on Balkan Affairs ; furthermore, it is always open to parties to amend earlier treaties.

    Finally, the Greek Government has endeavoured, without success, to show that there are adequate grounds for barring the application of the rule laid down in Article 9 of Protocol XII—i.e. the rule under which the contract of April 1st/14th, 1913, has been held to be enforceable against Greece. True, Article 9 discriminates between the Principal Allied Powers and the Balkan States in that the former, as successors to the territories detached from Turkey by the Treaty of Lausanne, only recognize concessions granted prior to the opening of hostilities by Turkey in the war of 1914-1918, whereas the latter have to respect concessions granted up to the time when the territories were formally ceded. This discrimination was, however, intentionally made and it does not suffice, in itself, to support objections to the Article. Nor can the Court accept the Greek Government’s objection that it signed Protocol XII in the belief that it did not in practice differ from the terms of the Treaty of Athens. It has already been pointed out in another connection that the Greek Government had been aware since 1913 of the existence of the renewal contract. If the concessionnaires subsequently observed à: certain reticence, this may be ascribed to the unfavourable solution which the Treaty of Athens appeared to

    29

    des Phares de l’Empire ottoman"‚ and the Ottoman Government, extending from September 4th, 1924, to September 4th, 1949, concession contracts granted to the said firm, was duly entered into and is accordingly operative as regards the Greek Government in so far as concerns lighthouses situated in the territories assigned to it after the Balkan wars or subsequently.

    This judgment has been drawn up in French in accordance with the terms of Article 39, paragraph 1, second sentence, of the Statute of the Court, the Parties having agreed in the Special Agreement that the case should be conducted in French.

    Done at the Peace Palace, The Hague, this seventeenth day of March, one thousand nine hundred and thirty-four, in three copies, one of which is to be placed in the archives of the Court and the others to be forwarded to the Governments of the French and Greek Republics respectively.

    MM. Anzilotti, Judge, and Séfériadès, Judge ad hoc, declare that they are unable to concur in the judgment given by the Court and, availing themselves of the right conferred upon them by Article 57 of the Statute, have appended to the judgment the dissenting opinions which follow.

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