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Lawyers, other representatives, expert(s), tribunal’s secretary

    Judgment

    31
    In the case submitted on appeal from the judgments rendered on July 22nd, 1935, by the Hungaro-Yugoslav Mixed Arbitral Tribunal in cases Nos. 749, 750 and 747 (Pajzs, Csáky and Esterházy versus the State of Yugoslavia),

    between

    the Royal Hungarian Government, represented by M. L. Gajzago, as Agent,

    and

    the Royal Yugoslav Government, represented by M. S. Stoy-kovitch, as Agent,

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

    By an Application instituting proceedings, dated December 1st, 1935, and filed with the Registry of the Court on December 6th, in accordance with Article 40 of the Statute and Article 35 of the Rules of Court (as then in force), the Royal Hungarian Government has instituted before the Court proceedings relating to the above-mentioned judgments of the Hungaro-Yugoslav Mixed Arbitral Tribunal. In order to establish the jurisdiction of the Court, the Applicant relies upon the jurisdictional clauses contained either in Article X of Agreement II, signed at Paris on April 28th, 1930 (which concerns the settlement of questions relating to the agrarian reforms and Mixed Arbitral Tribunals), or in Article XVII of the same Agreement and in Article 22 of Agreement III signed on the same occasion (which concerns the organization and working of an Agrarian Fund known as Fund "A") ; the Applicant also adduces, "but only as a second alternative and purely by way of precaution", the "Optional Clause of Article 36 of the Statute of the Court".

    According to the Application, "the subject of the dispute" concerns, in the first place, the judgments whereby the Hungaro-Yugoslav Mixed Arbitral Tribunal "declined jurisdiction" in cases Nos. 749, 750 and 747 (Pajzs, Csáky and Esterházy versus the State of Yugoslavia) and "in the alternative only", "the attitude which the Kingdom of Yugoslavia has seen fit to adopt" in the dispute which is alleged to have arisen from the fact that Yugoslavia has refused to all Hungarian nationals, including those who do not receive larger compensation from the Agrarian Fund, the benefits of the national régime governing compensation for property expropriated under the agrarian reform introduced in that country.

    32
    After a brief account of the facts leading up to the submission of the case to the Court, the Application proceeds to state "the claim" by saying that the intention of the Royal Hungarian Government is to pray the Court, on the basis of Article X of Agreement II, "to review the said judgments" and, in the alternative, on the basis of Article XVII of Agreement II and Article 22 of Agreement III, "to interpret the Agreements of Paris... and cause them to be justly applied", thus causing Yugoslavia "to alter the attitude" above mentioned, and to adjudge that the Government of that country shall "allow all Hungarian nationals, who have been affected by the agrarian reform in Yugoslavia and who have no claim upon the Agrarian Fund, to have the benefit, equally with all other persons similarly situated and without discrimination, of national treatment in so far as concerns the payment of local indemnities for property of theirs expropriated in the carrying out of the agrarian reform".

    According to the Application instituting proceedings before the Court, the judgments in question rendered by the Hungaro-Yugoslav Mixed Arbitral Tribunal on July 22nd, 1935, were notified to the Agent for the Hungarian Government before that Tribunal on September 7th, 1935 ; this has not been disputed by the Yugoslav Government. Accordingly, the application has been made to the Court "within three months from the notification" to the Agent of the Royal Hungarian Government of the judgments complained of by that Government under Article X of Agreement II.

    On December 6th, 1935, notice of the Hungarian Government’s Application was given to the Yugoslav Government through the Yugoslav Minister to the Netherlands. On December 12th, 1935, the communications provided for in Article 40 of the Statute and Article 36 of the Rules (as then in force) were despatched to all States entitled to appear before the Court. Furthermore, on December 11th, 1935, the Registrar, pursuant to Article 63 of the Statute and Article 66 of the Rules, notified the States which, together with Hungary and Yugoslavia, had signed the Treaty of Peace of Trianon of June 4th, 1920, and Agreements II and III of Paris of April 28th, 1930, of the institution of these proceedings by the Royal Hungarian Government. On receipt of these notifications, the Roumanian and Czechoslovak Governments, availing themselves of the terms of Article 44 of the Rules (Art. 42 of the former text), asked for the documents of the written proceedings in the case. With the consent of the Parties concerned, this request was complied with.

    As the Court included on the Bench no judge of the nationality of the Parties, the Hungarian and Yugoslav Governments availed themselves of their right under Article 31 of the Statute each to nominate a judge.

    By an Order made on December 12th, 1935, the President of the Court, as the Court was not sitting, fixed January 20th, 1936, as

    33
    the time-limit for the filing by the Hungarian Government of its Memorial in the case ; he also fixed the time-limits for the filing of the other documents of the written proceedings. The latter were extended by an Order made by the Court on February 22nd, 1936, March 5th, 1936, being ultimately fixed as the time-limit for the filing by the Yugoslav Government of its Counter-Memorial.

    In its Memorial, which was duly filed by the date fixed as indicated above, the Hungarian Government formulated its submissions as follows :

    "May it please the Court :

    (A) 1. To admit the appeal ;

    2. To adjudge and declare, as a matter of law, after admitting the appeal, preferably by way of reviewing the three judgments in question, that the Mixed Arbitral Tribunal has jurisdiction to adjudicate upon the claims of the Hungarian nationals, stating fully the reasons on which the judgment is based and requiring the Mixed Arbitral Tribunal to conform to such statement of reasons ;

    (B) Alternatively or cumulatively, as the Court may see fit :

    1. To adjudge and declare, generally, how Agreements II and III of Paris are to be interpreted and applied, and to redress the situation created by the Yugoslav Government’s attitude, since that Government, either under its domestic legislation as portrayed in Article 11, paragraph 3, of its law of June 26th, 1931, or under an erroneous interpretation of that legislation by the administrative authorities—though alleged by it to be authorized by and in conformity with Agreements II and III of Paris—at present refuses to recognize in respect of all Hungarian nationals its obligation to pay the sums due to them in accordance with the national treatment applicable to them under its domestic legislation in respect of their lands expropriated in the course of its agrarian reform—extending to them an entirely new and unforeseen treatment discriminatory in character and not provided for in Agreements II and III of Paris—instead of only proceeding in this way in the case of Hungarian nationals who submitted claims in respect of the same lands before the Mixed Arbitral Tribunal and who have had their claims recognized by judgments of the Mixed Arbitral Tribunal against the Agrarian Fund, as laid down in Agreements II and III of Paris ;

    2. To order the Kingdom of Yugoslavia, in particular :

    (a) in its attitude and proceedings, strictly to conform in all circumstances to the interpretation and application

    34
    of Agreements II and III so laid down as correct, and to respect the rights of which the existence was assumed by those Agreements;

    (b) to make good the damage and refund the costs and expenses occasioned to Hungarian nationals by its present attitude and proceedings which are unwarranted by Agreements II and III of Paris.

    (C) To adjudge and declare that the Kingdom of Yugoslavia is also under an obligation to indemnify the Government of the Kingdom of Hungary for all costs and expenses incurred by the latter in obtaining redress for its nationals for the situation in which the Kingdom of Yugoslavia placed them, in spite of warning, including the cost and expenses of the present proceedings before the Court."

    By the date fixed for the filing of the Counter-Memorial, the Yugoslav Government presented a document entitled "CounterMemorial of the Yugoslav Government embodying the submission of a preliminary objection lodged with the Permanent Court of International Justice in the case of the appeal of the Hungarian Government against the three judgments Nos. 747, 749 and 750 of the Hungaro-Yugoslav Mixed Arbitral Tribunal". This document, in the first place, and "before entering upon the merits", lodges certain objections to the submissions of the Hungarian Memorial ; in the second place, "with the object of... avoiding any fresh adjournment of the proceedings in case the Court should consider that it is able to examine the merits", this document presents to the Court a "general statement" on the merits. The CounterMemorial makes the following submissions :

    "May it please the Court :

    1. To adjudge and declare, before entering upon the merits, that the appeal of the Royal Hungarian Government against the three judgments of the Hungaro-Yugoslav Mixed Arbitral Tribunal cannot be entertained and is contrary to Article X of Agreement II of Paris ;

    2. To adjudge and declare, before entering upon the merits, that the request of the Royal Hungarian Government for a general interpretation by the Court of Agreements II and III of Paris cannot be entertained because the essential conditions laid down by Article XVII of Agreement II and Article 22 of Agreement III have not been fulfilled ;

    3. Alternatively, to adjudge and declare that the Hungarian Government’s appeal, under Article X of Agreement II, is ill-founded, and to confirm the three judgments of the Hungaro-Yugoslav Mixed Arbitral Tribunal ;

    35
    4. Alternatively, to adjudge and declare that the three judgments of the Hungaro-Yugoslav Mixed Arbitral Tribunal are consistent with a correct interpretation of the Paris Agreements ;

    5. To order the Royal Government of Hungary to repay to the Royal Government of Yugoslavia the costs and expenses incurred in the present proceedings."

    On receipt of this document, the Court, on March 10th, 1936, made an Order in which, after declaring that "this Counter-Memorial is to be regarded as lodging a preliminary objection" within the meaning of Article 38 of the Rules (as then in force) and that, as a result of the filing of this preliminary objection, "the proceedings on the merits are suspended", it fixed April 3rd as the date of expiry of the time-limit within which the Hungarian Government might present a written statement of its observations and submissions in regard to the objection; the Court also declared in the recitals of the Order that it regarded the document filed by the Yugoslav Government within the time-limit fixed for the presentation of the Counter-Memorial as constituting "a Counter-Memorial on the merits".

    The written proceedings in regard to the Yugoslav objections were completed by the filing by the specified date of the statement mentioned above. This statement prayed the Court to overrule the objections, to declare that it had jurisdiction and to order the continuance of the proceedings on the merits.

    After hearings held on April 29th and 30th and May 1st, 4th, 5th and 6th, 1936, the Court, on May 23rd, 19361, made an Order whereby, adducing Article 62, paragraph 5, of the Rules now in force, it joined "the objections lodged by the Yugoslav Government to the merits in the proceedings instituted by the Application of the Hungarian Government filed with the Registry on December 6th, 1935", and stated that it would "adjudicate upon these objections [those presented in the Yugoslav Counter-Memorial] and, if need be, upon the merits in one and the same judgment". On the same occasion the Court fixed fresh time-limits expiring on July 3rd and August 14th, 1936, for the presentation of the Reply and Rejoinder on the merits.

    In its Order of May 23rd, 1936, and with reference to the fact that the Hungarian Government in order to establish the jurisdiction of the Court relied "as a second alternative" upon the Optional Clause of Article 36 of the Court’s Statute, the Court recalled the following circumstances :

    While Hungary, on May 30th, 1934, had renewed her acceptance of this Clause for a period of five years as from August 13th, 1934, Yugoslavia, on May 16th, 1930, had only accepted the Clause for a period of five years as from November 24th, 1930 ; and, as this

    36
    acceptance had not been renewed, Yugoslavia had ceased to be bound by the Optional Clause on December 6th, 1935, the date on which the Application of the Hungarian Government had been filed; the Court also observed that the Parties were in agreement on this point.

    The last documents of the written proceedings on the merits were duly filed within the prescribed time-limits. The Hungarian Reply "recapitulates and defines" the Applicant’s submissions as follows :

    "May it please the Court :

    I. To overrule the preliminary objection of the respondent State ;

    To declare that it has jurisdiction ;

    II. (A) 1. To admit the appeal under Article X of Agreement II; 2. To adjudge and declare, as a matter of law, alternatively :

    (a) (if the judgments complained of are held to be decisions as to jurisdiction) that the Mixed Arbitral Tribunal has jurisdiction and that it can entertain the claims of the Hungarian applicants and adjudicate upon them in accordance with Article 250 of the Treaty of Trianon, there being nothing in the Agreements of Paris rendering that Article inapplicable in this case on the ground either of lack of jurisdiction or of limitation, since there is nothing either in the actual provisions of these Agreements or in their general purpose, as indicated by their origin and the manner in which they are framed, to show that the Agreements do more than lay down in what respects the rules previously in force are to be modified ; and this only applies in respect of certain claims of a different kind from those concerned in this case. The very silence of the Agreements proves that in all other respects they leave the pre-existing law intact ; in particular, there is nothing to prevent the application of Article 250 of the Treaty of Trianon in this case in any of the following : Articles I, VII, XIII (or even Article XVI and all that goes with it, as already construed and applied by the Mixed Arbitral Tribunal in previous cases, viz. : those of the so-called first series, in judgments from which there is no appeal and which have acquired the force of res judicata) or the Preamble of Agreement II; this Preamble even expressly says that as regards any questions not settled in the Agreements, as in the present case, the pre-existing law is maintained in force, subject to the right of free interpretation reserved on either side ; nor is there anything in Article 10 of Agreement III to prevent the application of Article 250 ;

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    (b) (if the judgments are held to be judgments on the merits) that it is for the Court itself to decide on appeal all the questions, whether those of a preliminary character indicated above or those on the merits ; preferably, it will do this by way of revising the judgments appealed from, in conformity with the relevant customary or treaty law, applying in particular Article 250 of the Treaty of Trianon and the provisions of Agreements II and III, and will declare that, as regards the claimants, the suspension or refusal of national treatment, as regards the payment—either in the form of rent or interest, or of a lump sum in cash or of bonds —of the local indemnities due to all landowners to whose property genuine measures of agrarian reform have been applied under the terms of the local law, are inconsistent with these provisions, notwithstanding the fact that this action is alleged to have been taken in application of, or at all events to be based upon the construction placed by the Yugoslav authorities upon, the provisions of Article 11, paragraph 3, and perhaps also paragraph 4, of the Yugoslav law of June 19th, 1931, for winding up the agrarian reform; for the present claimants do not belong to the group of Hungarian claimants of another category whose claims have been admitted against the Agrarian Fund for indemnities larger than the local indemnities—which the latter category of claimants would also obtain comprised in the larger indemnity paid by the Fund ; thus this refusal to apply the national régime would deprive the present claimants—without any act or omission on their part or any other reason—of any indemnity in respect of the property taken from them, a state of affairs which is not contemplated by any provision of Agreements II and III and which cannot be lawful in the absence of express provisions to that effect ; the refusal amounts to discrimination against them as compared with all other owners, even other Hungarian nationals—a state of affairs which is incomprehensible because these latter are, under the Agreements, acknowledged to be entitled to indemnities considerably larger than the local indemnities—as well as Yugoslav nationals; the refusal amounts to the retention of money or other assets due to these Hungarian nationals and thus constitutes a measure of ‘disposal’ in itself forbidden by Article 250 of the Treaty of Trianon and doubly so since it also constitutes, as observed above, a measure of discrimination against them as compared with Yugoslav nationals ;
    38
    it is also a violation of Article 250 of the Treaty of Trianon bringing into play the jurisdiction of the Mixed Arbitral Tribunal which on appeal passes to the Court ; as regards the merits, Article 250 requires full restitution ; Yugoslavia is bound to comply.

    (B) In the alternative, or concurrently, as the Court may see fit :

    To adjudge and declare, by means of the interpretation and application of Agreements II and III, under Article XVII of Agreement II and Article 22 of Agreement III, that : the attitude of Yugoslavia is inconsistent with the provisions of Agreements II and III as specified above under A ; this attitude has manifested itself either through the adoption of the legislative measures in Article 11, paragraph 3, and perhaps also paragraph 4, of the law of June 19th, 1931, for winding up the agrarian reform, or through the interpretation of these measures adopted and applied in practice by the Yugoslav authorities ; for these measures, or their interpretation, have resulted in the suspension as regards the past and the refusal as regards the future of national treatment in the case of Hungarian nationals—even those who have never had any intention of claiming more than national treatment or whose claims against the Agrarian Fund have been rejected ; this national treatment consists in the payment of the local indemnities due to all landowners, in respect of property to which genuinely agrarian measures have been applied, either in the form of rent or interest or in the form of a lump sum in cash or bonds, in accordance with the national law ; such treatment would deprive these Hungarian nationals, without any act or omission on their part calculated to affect the payment of their local indemnities and without any other reason whatsoever, of any indemnity at all in respect of the property taken from them ; such a state of affairs is not contemplated in any of the provisions of Agreements II and III cited above, and cannot be justified in the absence of express provisions to that effect ; it amounts to discriminatory treatment against these Hungarian nationals as compared with all other owners, even all other Hungarian nationals; this state of affairs is incomprehensible, seeing that other Hungarian nationals are, under the Agreements themselves, acknowledged to be entitled to indemnities much larger than the national indemnities ; it also amounts to discriminatory treatment as compared with all Yugoslav

    39
    nationals ; this latter form of discrimination is however definitely forbidden by general international law and by the Treaty of Trianon ; this Treaty also forbids any measure which, though not discriminatory, can be described as a measure of ‘retention’ or ‘disposal’ of Hungarian property in territories detached from Hungary ; and the special rules laid down in Agreements II and III of Paris ultimately rest on general international law and the Treaty of Trianon, so that a breach of the latter cannot ensue if the former are properly applied ; the authorized deviations from the normal law being explicitly indicated ; accordingly, the mere pretence of executing the Agreements, though they are not in fact being carried out, cannot serve to excuse a breach either of general international law or of the Treaty of Trianon ; the state of affairs described above is, as has been indicated, contrary to law, more especially since it is alleged in Yugoslavia that it constitutes the carrying out of the Paris Agreements ; in these circumstances, Yugoslavia is bound to remedy this situation and all its consequences and to ensure that the Agreements are strictly and fairly applied in this respect within their proper limits as regards all Hungarian nationals concerned, whether the actual claimants in the three cases in issue who are also referred to under submission A, or others known or unknown at present.

    (C) To adjudge and declare that the Kingdom of Yugoslavia is under an obligation to indemnify the Government of the Kingdom of Hungary for all costs and expenses incurred by the latter and its nationals in obtaining redress for the situation in which they have been placed by the illegal action of the Kingdom of Yugoslavia, including the cost and expenses of the present proceedings before the Court."

    On the other hand, the Royal Yugoslav Government in its Rejoinder made the following submissions :

    "May it please the Court :

    1. Adjudicating as a Court of appeal in virtue of Article X of Agreement II, to reject all the submissions of the Hungarian Government and to confirm the three judgments of the Hungaro-Yugoslav Mixed Arbitral Tribunal, which are complained of before the Court ;

    Alternatively, in case the Court should consider that the three judgments are ill-founded, to refer the case back to the Hungaro-Yugoslav Mixed Arbitral Tribunal, in order that the

    40
    latter may adjudicate on all the questions which were raised before it, but upon which it has not yet passed judgment in the judgments impugned before the Court.

    2. Adjudicating in virtue of Article XVII of Agreement II and Article 22 of Agreement III of Paris, to declare that the claims of the three Hungarian nationals are covered by the settlement on a lump-sum basis in the Paris Agreements and that the three Hungarian nationals may not institute proceedings against Yugoslavia based on Article 250 of the Treaty of Trianon but that they must be allowed to lodge their claims in respect of the lands expropriated by the Yugoslav agrarian reform against the Agrarian Fund."

    In the course of public sittings held on October 26th, 27th, 28th, 29th, 30th and 31st, and November 2nd, 3rd, 5th, 6th, 7th, 9th, 10th, 11th and 13th, 1936, the Court heard :

    M. Gajzago, Agent for the Royal Hungarian Government, on behalf of Hungary ;

    and M. Stoykovitch, Agent for the Royal Yugoslav Government, on behalf of Yugoslavia.

    The two Agents, who had in the course of their oral arguments amended or supplemented the submissions presented by them in the written proceedings, filed at the conclusion of the oral proceedings the final submissions of their respective Governments.

    The submissions of the Hungarian Government, dated November 13th, 1936, are as follows :

    "May it please the Court :

    I. To overrule the preliminary objections of the respondent State ;

    To declare that it has jurisdiction ;

    II. (A) 1. To admit the appeal under Article X of Agreement II ;

    2. Preferably, to review the judgments complained of and to adjudge that the Mixed Arbitral Tribunal was competent, there being nothing in Agreements II and III of Paris inconsistent with its jurisdiction. Applying Article 250 of the Treaty of Trianon, to order the respondent State, in accordance with the claim lodged by the applicants before the court of first instance : to treat the latter on a footing of equality with Yugoslav nationals as regards the delivery to them of the valuable consideration (in cash or bonds) constituting the so-called definitive local indemnities due to them in respect of lands of theirs to which the agrarian reform has been applied under a nondiscriminatory domestic law ; to cause these local indemnities, which at the moment are refused to them for no valid reason deducible from Agreements II and III of Paris, to be paid to them—this refusal amounting to a

    41
    retention of assets (not land), and being their only ground of complaint in the present case and one which constitutes discriminatory treatment against them.

    (B) Alternatively :

    To adjudge and declare by means of the interpretation and application of Agreements II and III, under Article XVII of Agreement II and Article 22 of Agreement III, that the attitude of Yugoslavia, described above, is inconsistent with the provisions of Agreements II and III ; this attitude has been adopted towards all Hungarian nationals, even towards those who have never had any intention of claiming more than national treatment and those who had sought to obtain more from the Agrarian Fund which had been constituted in the meantime but whose claims against that Fund had been rejected by the Mixed Arbitral Tribunal, in the same way as those of the claimants in the three cases referred to above ; the inconsistency of Yugoslavia’s attitude with Agreements II and III of Paris is all the more remarkable because this policy has been adopted and maintained in Yugoslavia on the ground that it actually constitutes the carrying out of the Paris Agreements, which is contrary to the fact. The Court is asked to ensure that the Agreements are strictly and fairly applied in regard to this point.

    III. May it further please the Court :

    1. To take note that the Hungarian Government, while making full reservations, no longer relies in the present case on the third of the clauses adduced by it as conferring jurisdiction on the Court, namely the Optional Clause of Article 36 of the Court’s Statute, in view of the fact that Yugoslavia’s acceptance of that Clause expired while the Application was in process of drafting, a few days before it was filed, and has so far not been renewed.
    2. To reject the last portion of the submissions formulated by the respondent State in its oral rejoinder, under No. 5, as constituting an impeachment of those judgments of the Hungaro-Yugoslav Mixed Arbitral Tribunal—the so-called first series of judgments—rendered in agrarian actions more than three years ago, awards from which there is no appeal and which have not been complained of by the Hungarian Government ; these judgments should have been complained of in due time by the Yugoslav Government—had it wished to do so—by way of a request for the interpretation and application of

    42
    the Agreements, and, as regards the form, this should have been done at latest in the Counter-Memorial by way of a counter-claim under Article 63 of the Rules of Court, so as to enable them to be adjudicated upon at the instance of the Respondent in the present proceedings, always assuming that it would have been possible, in these actual cases, and after the lapse of three years, to impeach them by such an exceptional recourse to the method of interpretation and application of the Agreements, solely under Article XVII of Agreement II, in regard to a point decided finally and without appeal by the Mixed Arbitral Tribunal three years previously—a point as delicate as the question of the observance by a very large number of owners of a short time-limit of six months, which expired three years ago.

    3. To reject as ill-founded all the submissions of the respondent State, presented in its oral rejoinder under, Nos. 1 to 3 and 4 to 6.

    IV. To order that the Kingdom of Yugoslavia shall refund to the Kingdom of Hungary all costs and expenses incurred by it in the present proceedings."

    On the other hand, the final submissions of the Yugoslav Government, also dated November 13th, 1936, are as follows :

    "May it please the Court

    A. 1. To adjudge and declare, before entering upon the merits, that the appeal of the Royal Hungarian Government against the three judgments of the Hungaro-Yugoslav Mixed Arbitral Tribunal cannot be entertained and is contrary to Article X of Agreement II of Paris.

    2. To adjudge and declare before entering upon the merits that the request of the Hungarian Government for a general interpretation by the Court of Agreements II and III of Paris cannot be entertained because the essential conditions laid down by Article XVII of Agreement II and Article 22 of Agreement III have not been fulfilled.

    3. To exclude from the present proceedings all questions concerning the interpretation of the reservations made by the three Governments of Yugoslavia, Roumania and Czechoslovakia in the Preamble of Agreement II of Paris.

    B. In the alternative :

    4. Adjudicating as a Court of appeal in virtue of Article X of Agreement II, to reject all the submissions of the Hungarian Government and to confirm the three judgments of

    43
    the Hungaro-Yugoslav Mixed Arbitral Tribunal which are complained of before the Court ;

    alternatively, in case the Court should consider that the three judgments are ill-founded, to refer the case back to the Hungaro-Yugoslav Mixed Arbitral Tribunal in order that the latter may adjudicate on all the questions which were raised before it, but upon which it has not yet adjudicated in the judgments complained of before the Court.

    5. Adjudicating in virtue of Article XVII of Agreement II and Article 22 of Agreement III of Paris, to declare that the claims of the three Hungarian nationals are covered by the settlement on a lump-sum basis in the Paris Agreements, and that the three Hungarian nationals may not institute proceedings against Yugoslavia, based on Article 250 of the Treaty of Trianon, but that they must be allowed to lodge their claims, in respect of the lands expropriated by the Yugoslav agrarian reform, against the Agrarian Fund.

    C. 6. To order that the Royal Government of Hungary shall refund to the Royal Government of Yugoslavia the costs and expenses incurred in the present proceedings."

    Accordingly, it is upon these submissions that the Court has finally to adjudicate.

    Numerous documents have been produced on behalf of each Party, as annexes to the Application and to the documents of the written proceedings, either in regard to the preliminary objections of the Yugoslav Government or on the merits1.

    Similarly, in the course of the oral proceedings on the objections and on the merits, each of the Parties has produced new documents1, either at the request of the Court, or with the consent of the other Party.

    In this connection, the Court has twice been called upon in the following circumstances to take decisions under Article 52 of the Statute and Article 48 of the Rules.

    1. In the course of the oral proceedings in regard to the preliminary objections, the Agent for the Hungarian Government, at the invitation of the Court, produced the application submitting to the Hungaro-Yugoslav Mixed Arbitral Tribunal one of the three cases which culminated in the judgments forming the subject of the present proceedings. In the course of the oral proceedings on the merits, he referred to the application submitting another of these three cases and indicated his intention to produce the text. The Agent for the Yugoslav Government consented to the production of this document, but subject to a condition which was subsequently

    44
    proved not to have been fulfilled. The Court decided to allow the document to be produced in view of the desirability of having in its possession the documents which had been before the tribunal which had rendered the judgments forming the subject of the proceedings before the Court.

    2. In the course of his first oral argument on the merits, as also in the oral proceedings in regard to the objections, the Agent for the Yugoslav Government referred to the minutes of a meeting of the Managing Commission of the Agrarian Fund provided for by the Paris Agreements of April 28th, 1930 ; in this connection he requested the Court to ask the proper authority for a certified copy of this document of which he himself only had an unofficial text. The Court did not comply with this suggestion and, when the Yugoslav Agent once more invoked the text in question in his oral rejoinder, the Hungarian Agent stated that he could not consent to use being made of this document which had not already been produced. The Court decided not to admit the document in question.

    The origin of the case submitted to the Court is as follows :

    Even before the final organization of the new Serb-Croat-Slovene State after the War of 1914-1918 an agrarian reform had been contemplated in that country. Thus "transitory measures having the force of law in preparation for the agrarian reform" were issued on February 25th, 1919. Under this legislative measure, promulgated by an ordinance of the Council of Ministers which was ratified by Parliament in 1922, "all large estates in the territory of the Serb-Croat-Slovene Kingdom are subject to expropriation", the areas expropriated to be "used for the purpose of distributing land to those nationals who are engaged in agriculture but do not possess land or do not possess a sufficient quantity of it"1. The ordinance gave a provisional definition of large estates and laid down as a principle that "the large landowners would be compensated for the land expropriated".

    A series of other legislative measures in regard to agrarian reform followed, among which should be mentioned the decree of July 27th, 1919 (ratified on May 20th, 1922) regarding the inalienability and exemption from seizure of large landed estates and the decree of September 3rd, 1920 (which became the law of May 20th, 1922), concerning letting of large landed

    45
    estates on four-year leases. The first of these decrees prohibited, save by special permission, "the alienation of landed property" belonging to the category of "large estates" as defined by the law itself; the mortgaging of such landed property was also forbidden by this decree. The second decree authorized the Government "to take over, pending the final apportionment of large estates, the administration" of the areas affected by the agrarian reform and "provisionally to lease them" for a period of four years to certain categories of persons or associations. The leases might be extended so long as the areas in question had not become the property of the lessees1. The latter were to pay the greater part of the rent direct to the owners by way of annuity or indemnity.

    The first period of compulsory leasing was to extend from October 1st, 1920, to September 30th, 1924. On July 18th, 1924, the Minister for Agrarian Reform, on the basis of the legislative measures above mentioned, issued a decree to the effect that "all provisional leases" were "extended until the enactment of the law for the expropriation and settlement of the large estates"2.

    The measures taken, under the agrarian reform legislation briefly analyzed above, in respect of large estates situated in Yugoslav territory but belonging to Hungarian nationals gave rise to a number of actions brought by these nationals before the Hungaro-Yugoslav Mixed Arbitral Tribunal under Article 250 of the Treaty of Trianon. The same thing had occurred with regard to the other countries of the Little Entente, before the Hungaro-Roumanian and Hungaro-Czechoslovak Mixed Arbitral Tribunals. The three Mixed Arbitral Tribunals, by a series of decisions rendered in typical cases, held that they had jurisdiction to adjudicate upon the merits of the claims which had been submitted to them. These disputes had become particularly acute in the case of landowners who had remained Hungarian by opting for Hungarian nationality.

    The differences of opinion on this subject between Hungary and Roumania had been submitted to the Council of the League of Nations; but no settlement had yet been reached when the difficulties were brought up at the Conferences convened to meet at The Hague in August 1929 and January 1930, for the settlement of questions concerning liabilities for war reparations. A series of proposals, known as the

    46
    "Young Plan", had been prepared for settling the difficulties inherent in the question of war reparations—German and other— but the existence of the difficulties above mentioned rendered the entry into operation of this plan impossible, without the adherence of the States concerned, i.e., not Hungary alone but also Roumania, Czechoslovakia and Yugoslavia.

    The adherence of these countries was secured in principle at the second Conference at The Hague, thanks to mutual concessions made by the States directly concerned and to financial assistance granted by Belgium, the British Empire, France, Italy, Japan and Portugal. This Conference resulted in the adoption on January 20th, 1930, of an "Agreement relating to Hungarian obligations under the Treaty of Trianon" ; to this Agreement were annexed texts laying down and defining "the bases of the agreements which now and henceforth constitute an undertaking on the part of the signatory Governments". The Agreement provided that the final texts were to be drawn up "on these bases" by a Committee which was to include a representative of each signatory Power and was to meet in Paris.

    The Conference which met in these circumstances in Paris, under the chairmanship of M. Loucheur, resulted in the adoption, on April 28th, 1930, of four Agreements "relating to the obligations resulting from the Treaty of Trianon". These Agreements were preceded by a General Preamble according to which, inter alia, the French and English texts were to be equally authentic and the Agreements were to be "considered as inseparably connected and ratified accordingly". They came into effect on April 9th, 1931, and were registered by the Secretariat of the League of Nations on August 20th, 1931, in accordance with Article 18 of the Covenant1. The Governments of the States of the Little Entente signed all the Agreements, but Hungary, though a signatory of the General Preamble, was not interested in Agreement IV, did not cause her representatives to sign the fourth of the Agreements concluded at Paris.

    The provisions of these Agreements will so far as may be necessary be examined later in this judgment. For the purposes of this account of the origin of the case it will suffice to say the following : under Article I of Agreement II, it was "agreed that Yugoslavia" should "promulgate the definitive law [of agrarian reform in that country] before 20th July 1931". Under Article XVI of the same Agreement, "after the promulgation of the definitive law, the Governments of Hungary and Yugoslavia will reach an agreement in order to determine from

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    what act laid down in the said law the period of limitation (six months) shall begin to run". Until the promulgation of the Yugoslav law the time-limits allowed for the filing of applications were those fixed by the rules of procedure of the Tribunal. Lastly, under Article X of Agreement II, the States of the Little Entente and Hungary recognize in certain circumstances "a right of appeal" to the Permanent Court of International Justice, while, under Articles XVII of Agreement II and 22 of Agreement III, any State interested is entitled, in the event of a difference as to the interpretation or application of these Agreements and subject to certain conditions, to address itself to the Court by written application.

    The Paris Agreements were promulgated as a Yugoslav law on May 27th, 1930. The "definitive law", known as the "law concerning the completion of the agrarian reform in respect of large estates", is dated June 19th, 1931, and was promulgated on the 26th of that month.

    According to the Agent for the Yugoslav Government, "the amount of land affected by the agrarian reform", as defined by that "law", is the same as that defined by the law of May 20th, 1922, concerning "the letting of large landed estates on four-year leases". In addition, paragraphs 3 and 4 of Article 11 of the definitive law should be reproduced here1 :

    "3. With regard to the expropriation of large landowners of Hungarian nationality, to whom apply the provisions of the law of May 27th, 1930, concerning the application of the Agreements, particularly of the obligations resulting from the Treaty of Trianon, etc., between Hungary and the victorious Powers, the following action will be taken : in accordance with the provisions of the above-mentioned law, the whole of the estate will be expropriated forthwith for the purposes of the agrarian reform and will be transferred to the State and registered. Then the maximum areas prescribed by the provisions of the present law will be restored in full and entire possession to the owners, and their names will be entered in the land registers.

    4. The indemnities for the expropriation of these estates being paid by the State into Fund A, the agriculturists to whom these expropriated lands have been ceded will pay to the State the sums which they would otherwise pay, under the present law, as purchase money."

    The agreement between the Hungarian and Yugoslav Governments which, as stated above, was provided for by Article XVI of Agreement II of Paris, was promulgated on December 15th, 1931, in the two countries concerned.

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    Among the Hungarian nationals owning land in Yugoslavia and affected by the measures of agrarian reform prior to the promulgation of the "definitive law", were the petitioners (Pajzs, Csáky and Esterházy) in the three cases in which the Hungaro-Yugoslav Mixed Arbitral Tribunal rendered the judgments forming the subject of the present proceedings.

    A limited number of Hungarian nationals owning land in Yugoslavia and expropriated under the agrarian reform, had brought no action against anyone for compensation for the expropriation of their estates. In consequence of the promulgation on June 26th, 1931, of the Yugoslav definitive law, which referred expropriated Hungarian landowners to the Agrarian Fund, the landowners in question have accordingly received no compensation at all.

    The three petitioners (Pajzs, Csáky and Esterházy), on December 21st, 22nd and 28th, 1931, instituted proceedings before the Mixed Arbitral Tribunal against the Agrarian Fund created by the Paris Agreements, asking for judgment against the Fund for an indemnity, the amount of which was specified, in respect of their lands which had been "taken", "seized", or "expropriated" ; they also presented certain minor claims.

    The expropriation decisions referred to in Article 11 of the "definitive law" were not taken until May and June, 1932, in respect of these estates ; the decisions were notified to the interested parties in December of that year. In the words of these decisions, "the indemnity... is to be paid by the Kingdom of Yugoslavia... to the Agrarian Fund which will pay this indemnity" to the interested parties ; the latter are informed that they "may... submit their application to the Mixed Arbitral Tribunal" within a certain limit of time after receipt of the notification. In point of fact, the applications had been lodged before the decisions in question had been notified.

    Thesé proceedings culminated in judgments rendered by the Mixed Arbitral Tribunal on April 21st, 1933 ; by these judgments the Tribunal—save with regard to a piece of land belonging to one of the petitioners in respect of which an agrarian reform measure was applied for the first time under the definitive law—declared the applications out of time and dismissed the petitioners’ claims.

    The latter, therefore, on June 15th, October 18th and October 19th, 1933, instituted fresh proceedings before the Mixed Arbitral Tribunal, this time against Yugoslavia as defendant. The three applications, while stating that the actions were the outcome of the measures of expropriation for the purposes of agrarian reform which had been applied to the estates in question, invoked Article 250 of the Treaty of Trianon in asking for judgment against Yugoslavia for an indemnity in respect of these estates payable to the petitioners. In two of the

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    applications it is stated that in the intention of the petitioners the indemnity sought is the so-called "local indemnity" which Yugoslavia pays to her own nationals owning large estates expropriated under the agrarian reform ; thus the petitioner Pajzs asks for "the indemnities for expropriation under the agrarian reform... at the same rate and in the same way" as if he were a Yugoslav subject. The petitioner Esterházy, while stating that "his case does not fall under the Paris Agreements", asks for an indemnity the amount of which he calculates on the basis of Article 10 of Agreement III. The three petitioners invoke the dismissal of their previous applications by the Mixed Arbitral Tribunal ; one of them also states that, since then, he had applied direct to the Yugoslav Government for an indemnity, but that his claim had remained unanswered.

    To these applications the Yugoslav Government lodged a preliminary objection praying the Tribunal to adjudge that the applications could not be entertained, that they were out of time and that the Mixed Arbitral Tribunal had no jurisdiction.

    On July 22nd, 1935, the Mixed Arbitral Tribunal delivered judgment in these three cases. These judgments, which in form adjudicate only upon the first Yugoslav objection, are the judgments now complained of before the Court.

    In these judgments the Tribunal declared that the applications could not be entertained "because they are based on Article 250 of the Treaty of Trianon" ; it added that, "having established that they cannot be entertained, there is no need to adjudicate upon the other preliminary objections lodged by the defendant State".

    The grounds on which all three of these decisions were based may be summarized as follows :

    According to the Mixed Arbitral Tribunal : (a) the subject of the petitioner’s complaint is the refusal of an indemnity after an expropriation effected in application of the legislation relating to the agrarian reform ; accordingly the case is one "in regard to the agrarian reform" within the meaning of Article I of Agreement II ; (b) in that Article it is provided that in all the cases enumerated therein Yugoslavia is relieved of all responsibility ; (c) it is provided in Article VII of Agreement II that "in the legal proceedings referred to in Article I, the Mixed Arbitral Tribunals shall not be competent... to interpret Article 250 of the Treaty of Trianon" ; (d) "the arrangement set forth in Agreement II" is effective only if it covers all cases which have been or may be brought by Hungarian nationals against Yugoslavia in regard to the agrarian reform ; Article I of Agreement II covers them all—whether pending or future—and none of these cases may henceforth be based on Article 250 of the Treaty of Trianon.

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    The judgments were notified to the parties concerned in September 1935. According to a statement made in Court by the Agent for the Yugoslav Government, that Government received from the Hungarian Government on November 12th, 1935, a note asking it "purely and simply to renounce the advantages which it derived from the judgments of the Mixed Arbitral Tribunal and to resume the direct payments of the local annuities to the Hungarian nationals. If this were not agreed to, the Hungarian Government stated that it would be obliged to bring the matter before the Permanent Court of International Justice by lodging an appeal and by making application for the interpretation of the Paris Agreements."

    According to the same source, "the Yugoslav Government replied to this note on December 3rd, 1935. It denied the Hungarian Government’s right to lodge an appeal and pointed out that... it was not entitled to apply to the Court for a general interpretation", since, in the Yugoslav Government’s contention, one of the essential conditions upon which the exercise of the latter right was dependent had not been fulfilled in this case.

    On December 6th, 1935, the Application of the Hungarian Government instituting the present proceedings was filed in the Registry of the Court.

    These are the circumstances in which, pursuant to the Order made on May 23rd, 1936, the Court is now called upon to adjudicate upon the Application filed by the Hungarian Government and upon the objection lodged by the Yugoslav Government.

    The first point to be considered is whether the Court can entertain the appeal of the Hungarian Government from the three judgments rendered by the Mixed Arbitral Tribunal on July 22nd, 1935 ; this appeal forms the subject of the main submission of the Application before the Court and of the objection lodged by the Yugoslav Government.

    According to Article X of Agreement II of Paris,

    "Czechoslovakia, Yugoslavia and Roumania, of the one part, and Hungary, of the other part, agree to recognize, without any special agreement, a right of appeal to the Permanent Court of International Justice from all judgments on questions of jurisdiction or merits which may be given henceforth by the Mixed Arbitral Tribunals in all proceedings other than those referred to in Article I of the present Agreement.

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    The right of appeal may be exercised by written application by either of the two Governments between which the Mixed Arbitral Tribunal is constituted, within three months from the notification to its Agent of the judgment of the said Tribunal."

    As may be seen, the existence of a right of appeal from a judgment of the Mixed Arbitral Tribunals is dependent on the following conditions : (1) the judgment must have been rendered subsequently to the Agreements—in this respect, no question arises in the present case ; (2) the judgment must be on a question of jurisdiction or merits ; and (3) the judgment must have been rendered in a case other than those referred to in Article I of Agreement II. -

    There is no reference to the form in which proceedings must have been instituted before the Mixed Arbitral Tribunal in order to give a right of appeal.

    In the three suits in which the judgments appealed from were rendered, the petitioners, as has been explained above, adduced in support of their applications various arguments derived from sources other than the Paris Agreements and of which the purpose was to obtain a decision that the provisions of these Agreements were not applicable to them. The three judgments in question, however, notwithstanding the finding to the effect that the applications cannot be entertained, are all three based on the view that the above arguments are not well-founded and that, on the contrary, the Paris Agreements are applicable, i.e. they are in reality based on questions of substance raised by the applications.

    Accordingly, there is no need in this case to decide whether a distinction must be drawn before the Court between the inadmissibility of a claim and lack of jurisdiction on the part of the international tribunal called upon to adjudicate thereon ; it will suffice to observe that in the three suits in question the Mixed Arbitral Tribunal, in adjudging that the claims could not be entertained, passed upon their merits.

    The only question remaining is whether the three suits in which these judgments were rendered were or were not proceedings referred to in Article I of Agreement II of Paris, as laid down in Article X.

    The Court must examine these suits, not only from the point of view of the form of the applications submitted to the Hungaro-Yugoslav Mixed Arbitral Tribunal, but also and more especially from the point of view of the substance of the applications.

    First of all, the provisions of Article I of Agreement II must be recalled, since these are the only provisions specified

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    in Article X as defining the proceedings in regard to which there is no right of appeal.

    Article I begins with the following general provision :

    "As from the date on which the present Agreement comes into force, the responsibility of the defendant in all legal proceedings brought prior to January 20th, 1930, by Hungarian nationals before the Mixed Arbitral Tribunals, against Czechoslovakia, Yugoslavia and Roumania, in regard to the agrarian reforms, shall be solely incumbent upon a fund to be called the ‘Agrarian Fund’."

    This first clause is general in scope and provides that henceforth the Agrarian Fund, instead of the three States of Roumania, Czechoslovakia and Yugoslavia, will assume responsibility in all proceedings brought prior to January 20th, 1930, by Hungarian nationals before the Mixed Arbitral Tribunals against Roumania, Czechoslovakia and Yugoslavia in regard to the agrarian reforms.

    As regards their dates, it will suffice to note that the three judgments under appeal were rendered in respect of applications filed after January 20th, 1930, viz. : on June 15th, 1933 (the Esterházy case, No. 747), on October 18th, 1933 (the Pajzs case, No. 749), and on October 19th, 1933 (the Csáky case, No. 750).

    Following the general clause referred to above, Article I contains a paragraph 1. This paragraph relates solely to Roumania and is of no immediate relevance in the present case which concerns Yugoslavia.

    The same applies to paragraph 3 which only concerns Czechoslovakia.

    On the other hand, paragraph 2 is devoted to Yugoslavia ; the first sub-paragraph runs as follows :

    "2. The same rule shall apply to any legal proceedings which Hungarian nationals may later institute before the Mixed Arbitral Tribunals, in regard to the agrarian reform, against Yugoslavia, in which country the agrarian reform has not yet formed the subject of a definitive law, on account of properties which, by virtue of the laws and decrees in force, are already subject to the agrarian reform and in regard to which the owner’s right of free disposal has been limited prior to January 20th, 1930, by the effective application to his property of the provisions of those laws and decrees."

    Paragraph 2 also contains two further sub-paragraphs which provide as follows :

    "It is understood that any proceedings which may be instituted in respect of properties referred to in the first paragraph and paragraph 2 of the present Article, as a result of the

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    application of the new Yugoslav law finally settling the manner in which the said properties are to be dealt with, can only be instituted against the Agrarian Fund, Yugoslavia being relieved of all responsibility.

    In this connection, it has been agreed that Yugoslavia shall promulgate the definitive law before July 20th, 1931, and shall take the necessary action to ensure that the new legislative provisions are applied to the properties referred to above as rapidly as possible and in any case before 31 December 1933."

    As will be seen, and the point is one of importance, the only clause in Article I which describes the characteristics of the proceedings in question is the first sub-paragraph of paragraph 2.

    It is no less important to note that no reference whatever is made in this text to the actual indemnity which may be claimed by a petitioner in his suit.

    Sub-paragraph 2 of paragraph 2, while applying the principle of the responsibility of the Agrarian. Fund laid down by the general clause at the beginning of the Article, does no more than state against whom the proceedings described above are to be instituted, when they are instituted as a result of the application of the new Yugoslav law finally settling the manner in which the properties in question are to be dealt with. Subparagraph 3 only fixes the time-limits allowed to Yugoslavia in connection with her new law which was not yet in existence at that date.

    The characteristics of the suits so contemplated are therefore limited to the following : they must be suits brought (a) by Hungarian nationals ; (b) after January 20th, 1930 ; (c) in regard to the agrarian reform in Yugoslavia ; (d) before the Mixed Arbitral Tribunals ; (e) in respect of properties which are already, by virtue of the laws and decrees in force, subject to the agrarian reform and in regard to which the owner’s right of free disposal has been limited by the effective application to his property prior to January 20th, 1930, of the provisions of those laws and decrees.

    It is not disputed that the three suits have been brought by Hungarian nationals—that they were brought in June and October 1933, i.e. after January 20th, 1930, and that they were brought before the Mixed Arbitral Tribunal.

    An examination of the applications submitted to the Mixed Arbitral Tribunal enables one to ascertain whether they satisfy the two other conditions prescribed by Article I, paragraph 2, namely whether they were submitted "in regard to the agrarian reform" and "on account of properties which... are already... subject...", etc.

    In application No. 747 (Esterházy case), the petitioner states that an area of 7,854 cadastral jugars 1407 square toises of

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    his land was expropriated as early as 1919 and 1922, according to the evidence attached to the application, and that, having only received compensation in respect of 348 cadastral jugars 1102 square toises, he was still entitled to an indemnity in respect of 7,506 cadastral jugars 305 square toises; he added that, according to Article 10 of Agreement III of Paris, the value of a jugar was 387 gold crowns. The petitioner then prayed the Mixed Arbitral Tribunal to order the Yugoslav State "to pay him, within fifteen days, an indemnity in respect of 7,506 jugars 305 square toises at the rate of 387 gold crowns per jugar, making 2,904,894 gold crowns, besides twenty per cent of that sum—580,979—for subsidiary damage, viz. : a total of 3,485,873 gold crowns, besides all legal expenses".

    In application No. 749 (in the Pajzs case), the petitioners, after describing the measures of expropriation to which their estates were subjected in 1919 and 1922 in respect of 1,361 cadastral arpents 779 square toises, submit that the Yugoslav State should indemnify them for the expropriation under the agrarian reform of the aforesaid 1,361 cadastral arpents 779 square toises to the same extent and in the same manner as if the said petitioners were Yugoslav nationals.

    Similarly, in application No. 750 (Csáky case), the petitioner indicates the area of her landed estates which came, in part, under the agrarian reform and had thereby been subjected to measures of expropriation as early as 1919 ; she prays the Mixed Arbitral Tribunal to declare that the Yugoslav State is bound to grant her the same compensation as would be accorded to her if she were a Yugoslav national in respect of the expropriated area of 756 cadastral arpents 556 square toises, yielding a revenue, computed on the basis of the cadastral area, of 15,104 gold crowns.

    The documents produced by the three petitioners in support of their respective claims were all intended to furnish actual evidence of the measures of expropriation to which they had been subjected in 1919 under the agrarian reform.

    If these three applications are compared with the text of Article I, paragraph 2, referred to above, it is seen that these three suits were undoubtedly instituted in regard to the agrarian reform and on account of properties which, on January 20th, 1930, had already fallen under the agrarian reform and had, for that reason, been subjected to the measures of expropriation specified in Article I of Agreement II of Paris. Nevertheless, the Hungarian Government maintains that the three suits had not thereby become legal proceedings within the meaning of Article I of Agreement II.

    It has been shown that the three suits in question had been instituted in these peculiar circumstances—that is to say,

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    the petitioners had already, in accordance with paragraph 2, subparagraph 2, of Article I, lodged their claims for expropriation indemnities against the Agrarian Fund,—but the claims had been declared out of time because the petitioners had allowed the period accorded to them by Article XIII of Agreement II to expire and had therefore failed to act within the required time. The three petitioners explained that it was for this reason that they re-submitted their claims, instituting the proceedings on this occasion, not against the Agrarian Fund, but against the Yugoslav State. They declared, in effect, that since their claims had been ruled out of time and they had not been able to obtain compensation from the Agrarian Fund, the Yugoslav State could not as against them rely on the provisions of the Paris Agreements or contend that the Agrarian Fund had taken over the liability of the State, as stipulated in Article 11 of the Yugoslav Agrarian Reform Law of June 19th, 1931 ; that they were, in consequence, being subjected to treatment inconsistent with Article 250 of the Treaty of Trianon, and that in virtue of the aforesaid Article 250 they were entitled to claim from the Yugoslav State, according to the first petitioner (Esterházy case, No. 747), payment of the value of the expropriated land, assessed on the basis of Article 10 of Agreement III, and according to the other two petitioners (Pajzs and Csáky cases, Nos. 749 and 750), payment of the indemnity granted by the Yugoslav law to Yugoslav nationals.

    Neither the circumstances nor the wording of the three suits under appeal can alter the fact that they present the different characteristics specified in Article I, paragraph 2, and set out above.

    Neither the fact that the proceedings were instituted against Yugoslavia, instead of against the Agrarian Fund, nor the fact that the claims had been previously declared out of time in regard to the Agrarian Fund, nor again the fact that the petitioners believed that they were entitled to rely on Article 250 of the Treaty of Trianon, nor the fact that two of the petitioners claimed Yugoslav national treatment, nor, lastly, the fact that one of the three petitioners (Esterházy case, No. 747) asked for an indemnity representing the value of the property computed according to Article 10 of Agreement III, could exclude or deprive of its effect any one of the characteristics of the legal proceedings contemplated by the Paris Agreements, and which are present in the three suits under appeal. These suits were not thereby removed from the sphere of the aforesaid Agreements and they could not escape their operation.

    As regards the fact that the petitioners have instituted their proceedings against the Yugoslav State and not—as prescribed

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    in sub-paragraph 2 of paragraph 2 of Article I—against the Agrarian Fund, it is difficult to see anything in that circumstance which could affect the actual character of the suit. It is because a suit presents the characteristics laid down in Article I, paragraph 2, sub-paragraph 1, that the Agrarian Fund becomes liable in place of the Yugoslav State ; it is not the fact that a suit has been instituted against the Agrarian Fund, or against the Yugoslav State, that determines whether or not it acquires the characteristics set forth in paragraph 2 of Article I. How can it be argued that the Paris Agreement intended to leave it open to the petitioners to determine the nature of their suit at their own will and to settle for themselves by their selection of the defendant, who it was who was to be held liable for the expropriation indemnity ? Again, there is nothing in the text of any article of the Paris Agreements which would justify the view that, when the rule as to time-limits penalizes the belated submission of a claim by an expropriated Hungarian owner, it would have the singular result of making the Yugoslav State responsible for this belated submission of the claim by debarring it from employing the method of settlement provided by the Paris Agreements.

    Again, as regards the amount and the method of computing the indemnities claimed by the petitioners in the three suits, it has been shown that the three cases differ from one another ; for while one of the petitioners claims the actual value of his property computed according to the method laid down in Article 10 of Agreement III, the other petitioners reckon the compensation due to them according to the scale of indemnities laid down by the Yugoslav laws for Yugoslav nationals. But neither the amount of the indemnity claimed, nor the method of computing it, nor again the basis on which it is alleged that the indemnity should be computed, can modify the character of the claims and, thereby, the character of the three suits, seeing that—as has been shown—their character is precisely that which is described in Article I, paragraph 2, subparagraph 1.

    The chief argument used in favour of the Hungarian case is drawn from the fact that two of the petitioners have claimed the right to be treated on a footing of equality with Yugoslav nationals ; this, they say, entitles them to hold the Yugoslav State liable to pay them the expropriation indemnities granted to Yugoslav nationals by their national laws.

    The Hungarian Government’s argument is really that the Paris Agreements related solely to the legal proceedings that were pending at that time, or to future legal proceedings, such proceedings being in either case intended to secure the exemption of the Hungarian nationals from the operation of the agrarian reform itself, and that the Agreements did not

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    render the Yugoslav national régime any less applicable than before to the Hungarian nationals. According to the construction placed on the Agreements by the Hungarian Government, the legal proceedings referred to in Article I were exclusively proceedings directed against the agrarian reform, and aiming at the complete restitution of the property or, failing restitution, payment of the actual value of the property ; and the words "in regard to the agrarian reform" have to be understood solely in that sense.

    At the time of the conclusion of the Agreements—the argument continues—there were no suits in regard to the agrarian reform in existence other than those directed against that reform. Therefore—in the Hungarian Government’s view—the Paris Agreements are only applicable to suits that were then in existence or to future suits of like character ; to contend that they were generally applicable to other kinds of claims for expropriation indemnities in regard to agrarian reform would be to overstep the limits of the Agreements. Hence, in the case of Hungarian nationals who do not wish to avail themselves of the Paris Agreements, and who are content to claim only Yugoslav national treatment, the Paris Agreements do not apply at all ; the position of such nationals remains unaffected by those Agreements.

    The Hungarian Government points out, in this connection, that the Preamble of Agreement II refers, in the first place, to legal proceedings which were pending in 1930 and which were then giving rise to the grave difficulties referred to above between Hungary, on the one hand, and Roumania, Czechoslovakia and Yugoslavia on the other hand. No other question was in issue at the time. When Article VII of Agreement II lays down that the Mixed Arbitral Tribunals are not to adjudicate upon the differences of principle, set forth in the Preamble of the said Agreement, nor on the interpretation of Article 250, it refers, and could only refer to the suits mentioned in the Preamble, and these were precisely the suits which disputed the application of the agrarian reform itself to Hungarian nationals.

    Moreover, the argument continues, when the Paris Agreements constituted the Agrarian Fund, and computed the sums that it would require to meet the charges for which it was to be made liable, they were only concerned with landed property, that form of property being the subject of the proceedings then pending and of those of like character which should be instituted later. The basis for this calculation, it is said, was supplied by the Hungarian Government in a Memorandum annexed to Agreement III, and that document, it is pointed out, is only

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    concerned with the lands that were the subject of the proceedings then pending. That again, in the Hungarian Government’s submission, is a proof that the legal proceedings referred to in Article I of Agreement II were only suits that fell within those limits.

    Such an interpretation, involving the restriction of the scope of the Paris Agreements, can scarcely be reconciled with the comprehensiveness of the text of Article I, paragraph 2, sub-paragraph 1, of Agreement II. Over and above the particular criteria already mentioned, no restriction figures in this text ; in particular the text contains no restriction, mention or allusion as to the view with which or the form in which a claim for an expropriation indemnity has to be presented.

    Even admitting that, at the time of the conclusion of the Agreements, there were in existence no proceedings instituted by Hungarian nationals other than suits in which the said nationals claimed exemption from every measure of agrarian reform and the complete restitution of their estates, this does not justify the inference that the Agreements are not designed to prevent and do not prevent the possibility of new suits being instituted in the future, in regard to agrarian reform, and of such suits giving rise to new difficulties, as in the example furnished by the present case. So far from overstepping the boundaries of the Agreements one would appear to be keeping within them by rejecting an argument which would impose by a mere presumption so serious a restriction on their effectiveness ensuing from the scrupulous and precise application of Article I of Agreement II.

    Nowhere was it laid down that the future legal proceedings contemplated by the Agreements were exclusively proceedings instituted—like those that were pending in 1930—with a view to contesting the application of the agrarian reform and to obtaining either the restitution or the full value of the expropriated properties. Nowhere was it laid down that future legal proceedings which were not directed to those objects were to be regarded as extraneous to the Agreements and excluded from their operation.

    On the contrary, where the States concerned desired that certain suits should be kept outside the Agreements, they did not fail to specify this in express terms, as is apparent from the letters exchanged on April 26th, 1930, between the President of the Conference and the first delegates of the States of the Little Entente on the eve of the signature of the Agreements, and of which copies were supplied to the first delegate of Hungary.

    It is true that the Hungarian Government’s Memorandum concerning the extent of the lands affected by the agrarian reform in Yugoslavia, which is appended to Agreement III of Paris, had been submitted when the Agreements were being

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    negotiated at The Hague as a basis for computing the sums that would be payable by Yugoslavia ; but other circumstances supervened later on ; restitutions of land had to be envisaged and carried into effect ; calculations of a somewhat retrospective and hypothetical character were put in by the respective parties on this subject ; there is nothing here which could be regarded as decisive evidence of the contention now maintained by the Hungarian Government.

    The Hungarian Government is equally unsuccessful in the argument which it seeks to derive from Article VII of Agreement II. That Article lays down that, in the legal proceedings referred to in Article I, the Mixed Arbitral Tribunals shall not be competent to pronounce on the differences of principle set forth in the Preamble of the aforesaid Agreement II, or in particular to interpret Article 250 of the Treaty of Trianon. —That is merely evidence that these differences of principle cannot be submitted for adjudication to the Mixed Arbitral Tribunals, and that Article 250 of the Treaty of Trianon may not be adduced before those tribunals in the proceedings referred to in Article I. Henceforth the Agreements can only be construed in these suits as a prohibition of future claims in regard to agrarian reform based on Article 250.

    If the Hungarian argument were sound, not only would the Yugoslav State be bound by the Paris Agreements to make the payments specified in the Agreements to the Agrarian Fund, but if, for any reason, which might be due to a mistake or lack of diligence on the part of the Hungarian national himself, the Agrarian Fund was relieved of liability, the Yugoslav State would none the less have agreed that in any case it would remain responsible and liable for the payment of at least the local indemnity. That is a result which Yugoslavia contests, and which Hungary affirms.

    If the scope of the Paris Agreements is restricted in the manner contended by the Hungarian Government, the Agreements would scarcely appear to give effect to the principle of lumpsum payments which they were intended to establish.

    When we read in Article 2 of Agreement III that the payments to be made by Yugoslavia to the Agrarian Fund are on account of local indemnities ; and when we read in Article 10, paragraph 2, of the same Agreement III that the annuities paid by Yugoslavia represent "a lump-sum settlement of the total indemnities which may be allotted by the Yugoslav law" then in preparation "for the expropriated lands of present and future claimants within the terms of Article I", we are justified in considering these clauses as evidence that the Agreements provided for the settlement of all the agrarian claims, those which were already pending at the time of the signature of the Agreements as well as future claims, subject only to the

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    condition that, in accordance with Article I of Agreement II, such claims must be put forward on account of measures applied to properties already subjected to the agrarian reform prior to January 20th, 1930, and quite irrespective, it may be observed, of the amount of the indemnity claimed by the petitioners.

    No matter what may have been the actual position in 1930, if the intentions of the negotiators of the Paris Agreements— among whom were included representatives of the mediating third States—are to be invoked, it is impossible to disregard the terms of the first paragraph of the Preamble of Agreement No. IV : "By an Agreement of even date with the Hungarian Government the questions relating to the agrarian reforms have been settled." Those words clearly express a conviction on the part of the signatories of this Agreement which, although Hungary was not a party to it, was recognized as being "inseparably connected" with the other three, that they have settled, once and for all, every question concerning agrarian expropriations in Roumania, Czechoslovakia and Yugoslavia.

    If the Paris Agreements were to be interpreted and applied as having left the door open to fresh claims on the part of the Hungarian nationals and to new demands for expropriation indemnities not covered by those Agreements, it might be said that the appeasement which was aimed at by the Paris Agreements in regard to the difficulties raised by the agrarian reforms would not really have been attained.

    The Court finds that, in view of the express terms of Article I of Agreement II, the three judgments under appeal were not delivered in proceedings other than those referred to in that Article. The Court therefore finds that, in accordance with the provisions of Article X of Agreement II, the appeal lodged against these three judgments cannot be entertained.

    The Hungarian Government prays the Court, in an alternative submission in case the appeal under Article X of Agreement II should not be admitted by the Court :

    "II. B. To adjudge and declare by means of the interpretation and application of Agreements II and III, under Article XVII of Agreement II and Article 22 of Agreement III, that the attitude of Yugoslavia, described above, is inconsistent with the provisions of Agreements II and III ; this attitude has been adopted towards all Hungarian nationals, even towards those who have never had any intention of claiming more than national treatment and those who had sought to obtain more from the Agrarian Fund which had been constituted

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    in the meantime but whose claims against that Fund had been rejected by the Mixed Arbitral Tribunal, in the same way as those of the claimants in the three cases referred to above ; the inconsistency of Yugoslavia’s attitude with Agreements II and III of Paris is all the more remarkable because this policy has been adopted and maintained in Yugoslavia on the ground that it actually constitutes the carrying out of the Paris Agreements, which is contrary to the fact. The Court is asked to ensure that the Agreements are strictly and fairly applied in regard to this point."

    In response to this alternative submission presented by the Hungarian Government, the Yugoslav Government presents the following preliminary objection :

    "A. 2. To adjudge and declare before entering upon the merits that the request of the Hungarian Government for a general interpretation by the Court of Agreements II and III of Paris cannot be entertained because the essential conditions laid down by Article XVII of Agreement II and Article 22 of Agreement III have not been fulfilled."

    In this connection, the terms of Article XVII of Agreement II and of Article 22 of Agreement III should be recalled. Those Articles run as follows :

    "Agreement II, Article XVII.— In the event of any difference as to the interpretation or application of the present Agreement and failing agreement between the Parties interested on the choice of a single arbitrator, any State interested shall be entitled to address itself, by written application, to the Permanent Court of International Justice, and shall not be barred by any decision of the Mixed Arbitral Tribunal under` Article I of the present Agreement."

    "Agreement III, Article 22.—In the event of any difference as to the interpretation or application of the present Agreement, and failing agreement between the Parties interested on the choice of a single arbitrator, any State interested shall be entitled to address itself, by written application, to the Permanent Court of International Justice."

    These provisions are based on the assumption (a) that there must be a difference as to the interpretation and application of the Agreement, and (b) that no agreement has been reached between the Parties interested on the choice of a single arbitrator.

    (a) The proceedings instituted by the Hungarian Government and the counter-arguments presented by the Yugoslav Government make it difficult to deny that the present case constitutes a difference of opinion between Hungary and Yugoslavia as to the interpretation and application of the Agreements.

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    It is clear that this difference of opinion, as stated in the present judgment in connection with the Hungarian Government’s main submission, concerns, in the first place, the sphere of application of the régime established by the Paris Agreements which, as contended by the Hungarian Government in opposition to the view of the Yugoslav Government, is confined to certain categories of Hungarian nationals affected by the agrarian reform in Yugoslavia, and, in the second place, the right which according to the Hungarian Government those nationals possess to have the benefit of the Yugoslav national régime if they do not benefit by the régime of the Paris Agreements.

    (b) With regard to the absence of prior agreement on the choice of a single arbitrator—the only argument advanced by the Yugoslav Government’s Agent in support of his preliminary objection—it is easy to perceive that that refers and can only refer to the non-fulfilment of a condition of fact, that is to say, it refers to the case in which the Parties interested have not agreed to substitute simplified arbitral proceedings before a single arbitrator for proceedings before the Permanent Court of International Justice.

    Any other interpretation of the words in question would involve a condition the fulfilment of which would be dependent on the will of either of the interested Parties. Moreover, there is no reason why the clauses in question should have made it necessary for a party desirous of applying to the Court, first of all to enter into negotiations on the choice of an arbitrator, while stating at the same time that, for its part, it would not consent thereto.

    For these various reasons, the Court holds that the preliminary objection taken by the Yugoslav Government to the Hungarian Government’s alternative submission is ill-founded and that, in principle, there is nothing in the present proceedings to justify the rejection of this alternative submission as being inadmissible.

    On the other hand, with regard to the substance of the Hungarian alternative submission and in case the Court should entertain that submission, the Yugoslav Government presents the following submission :

    "B. 5. Adjudicating in virtue of Article XVII of Agreement II and Article 22 of Agreement III of Paris, to declare that the claims of the three Hungarian nationals are covered by the settlement on a lump-sum basis in the Paris Agreements, and that the three Hungarian nationals may not institute proceedings against Yugoslavia, based on Article 250 of the Treaty of Trianon, but that they must be allowed to lodge their claims, in respect of the lands expropriated by the Yugoslav agrarian reform, against the Agrarian Fund."

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    In the first place, with regard to the substance of the Hungarian alternative submission and if that submission is read aright, it is seen that "the attitude of Yugoslavia" referred to therein is constituted by the alleged refusal by the Yugoslav Government of the so-called local indemnities to Hungarian nationals whose estates had been subjected to the agrarian reform in Yugoslavia and who, for one reason or another, have received no compensation from the Agrarian Fund.

    This attitude, which Yugoslavia believes that the Paris Agreements entitle her to assume, takes the form of withholding from the aforesaid Hungarian nationals the so-called local indemnities payable under her agrarian legislation to other expropriated landowners.

    The Hungarian submission states that Yugoslavia has adopted this attitude in regard to all Hungarian nationals, that is to say, on the one hand to Hungarian nationals in the same position as the three petitioners in the suits under appeal and, on the other hand, to other Hungarian nationals who have never had any intention of claiming more than Yugoslav national treatment.

    As regards Hungarian nationals in the same position as the three petitioners in the suits under appeal, the Court observes that the reasons why the appeal against the three judgments rendered by the Mixed Arbitral Tribunal on July 22nd, 1935, cannot be entertained by the Court, are furnished by the interpretation and application of the Paris Agreements.

    Where the circumstances are the same, the same interpretation and the same application can but be repeated.

    With regard to Hungarian nationals who have never had any intention of claiming more than national treatment, the Hungarian alternative submission amounts to a request for judgment to the effect that the Yugoslav régime of national treatment remains applicable to all Hungarian nationals who have not been admitted to claim against the Agrarian Fund.

    Here again, the Court is really confronted with the same argument as to the limited scope of the Paris Agreements put forward by the Hungarian Government on the basis of a particular interpretation and application of these Agreements. But the Court has been led to discard this Hungarian argument precisely by means of interpreting and applying the Agreements.

    Again, if certain Hungarian nationals, for reasons of which they are sole judges, have not seen fit to claim in due time against the Agrarian Fund in accordance with the Paris Agreements, they have only themselves to blame.

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    Subject to the foregoing considerations, it is to be observed that the fact that the Hungaro-Yugoslav Mixed Arbitral Tribunal has dismissed the claim of a Hungarian petitioner by applying one provision rather than another of the Paris Agreements, and the regrettable consequences ensuing therefrom, are things for which Yugoslavia cannot be held answerable, nor can the situation created by the Paris Agreements in so far as concerns Hungarian nationals whose estates in Yugoslavia have been subjected to the agrarian reform be altered thereby.

    In the opinion of the Court, the Paris Agreements were intended to secure for Hungarian nationals affected by the agrarian reform treatment different from and in reality better than the Yugoslav national treatment accorded to other foreign nationals and to Yugoslavs.

    Furthermore, it is against the Agrarian Fund that Hungarian nationals whose estates in Yugoslavia have been affected by the agrarian reform and who wish to obtain an indemnity of any kind, must bring their claims by making application to the Mixed Arbitral Tribunal.

    As regards the alternative submission presented by the Yugoslav Government praying the Court to declare that the three Hungarian petitioners Pajzs, Csáky and Esterházy must be allowed to lodge their claims against the Agrarian Fund, the following observation should be made. This submission really relates to the actions which were brought by those three petitioners in 1931 against the Agrarian Fund and which the Mixed Arbitral Tribunal dismissed as out of time. Those judgments of the Mixed Arbitral Tribunal are outside the scope of the proceedings instituted before the Court by the Hungarian Government.

    For this reason, the Court holds that it cannot pass upon those judgments.

    To recapitulate : in that part of the present judgment dealing with the appeal, the Court has given its interpretation of Agreements II and III of Paris in so far as concerns the claims made by Hungarian nationals in respect of expropriations under the agrarian reform. Having reached the conclusion that these Agreements were framed with the object of finally settling all claims which might result from the agrarian reforms in the States of the Little Entente, the Court has explained the reasons why it holds that the Hungarian nationals, having secured under the Agreements the right to special preferential treatment involving the payment of indemnities by the Agrarian

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    Fund, are not free to claim indemnities from Yugoslavia, since that country is relieved of all responsibility.

    In their submissions, each Party has asked the Court to order the other to refund the costs incurred by it in the present proceedings.

    The Court sees no reason to deviate in the present case from the general rule laid down by Article 64 of the Statute that, unless otherwise decided by the Court, each party shall bear its own costs.

    In the opinion of the Court, the remaining submissions of the Parties do not call for examination.

    For these reasons,

    The Court,

    by eight votes to six,

    (1) decides that the appeal of the Hungarian Government against the three judgments rendered by the Hungaro-Yugoslav Mixed Arbitral Tribunal on July 22nd, 1935, in cases Nos. 749, 750 and 747 (Pajzs, Csáky and Esterházy versus the State of Yugoslavia) cannot be entertained ;

    (2) dismisses as ill-founded the preliminary objection lodged by the Yugoslav Government to the effect that the alternative submission of the Hungarian Government cannot be entertained ;

    (3) adjudicating upon the alternative submission of the Hungarian Government, decides that the attitude of Yugoslavia towards the Hungarian nationals affected by the agrarian reform measures in Yugoslavia has been consistent with the provisions of the Paris Agreements ;.

    (4) rejects the alternative submission of the Yugoslav Government praying the Court to declare that the three Hungarian nationals, Pajzs, Csáky and Esterházy, must be allowed to present their claims against the Agrarian Fund ;

    (5) takes note that the Hungarian Government no longer relies on the Optional Clause of Article 36 of the Statute of the Court ;

    (6) decides that there is no reason to deviate from the general rule laid down in Article 64 of the Statute of the Court to the effect that each party shall bear its own costs.

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    Done in French and English, the French text being authoritative, at the Peace Palace, The Hague, this sixteenth day of December, nineteen hundred and thirty-six, in three copies, one of which shall be placed in the archives of the Court and the others forwarded to the Royal Hungarian Government and the Royal Yugoslav Government, respectively.

    MM. Anzilotti, Nagaoka, Hudson, Hammarskjôld, Judges, and de Tomcsânyi, Judge ad hoc, declare that they are unable to concur in the judgment given by the Court and, availing themselves of the right conferred on them by Article 57 of the Statute, have appended to the judgment the separate opinions which follow.

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