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Dissenting Opinion by Lord Finlay


I regret that I am unable to concur in the judgment that has just been delivered. I think that question II ought not to have been put to the experts and am further unable to agree with what is said in the judgment as to the principles governing the assessment of the indemnity.


In its Mémoire, Chapter II, § 2 at page 13, the German Government renounced its claim to restitution of the undertaking in the following terms :

"Le Gouvernement allemand, qui, au commencement, avait demandé la restitution en nature de l’entreprise expropriée, s’est convaincu, au cours des négociations, que la restitution n’entre pas en cause, étant donné que l’usine, qui a été exploitée par l’État polonais pendant presque cinq années et qui a été soustraite aux soins et au développement de l’entrepreneur primitif pour être adaptée aux besoins de son exploiteur actuel, n’est plus, dans son état actuel, au point de vue juridique et économique, le même objet qu’elle était à la date de la reprise, et que, par conséquent, elle n’est pas propre à être restituée."

The Party who has been disposséssed has a choice of remedies. He may claim restitution of the property taken. This is what is meant by restitutio in integrum. He may on the other hand abandon any claim to restitution of the actual property and claim damages instead. The German Government abandoned its claim to restitution, possibly under the impression—which may have been correct—that the alterations were not of a nature which would harmonize with the use to which the German Government intended that the property should be put. If the German Government had obtained restitutio in integrum, it would have got the property itself and any enhanced value which it had reached would necessarily go to the German Government with the property. But since the claim to restitution is abandoned, the only claim is for damages for the wrongful act. A Party who has given up

his right to restitutio in integrum is not entitled to claim damages on the footing that it is right that he should have the enhanced value, if any : that he would have got if he had pressed his claim for restitution. The German Government having renounced restitution cannot make good a claim to recover an amount representing the value of the property which would have to be restored. It has given up restitution and elected to take damages and these damages must be assessed according to the general rule as at the time of the wrong.

There is no trace of anything from which it could be implied that on giving up the right to restitutio in integrum, Germany should be entitled in lieu thereof to get damages on a higher scale than that on which the damages for a wrongful taking would by law be assessed. If the Parties had intended this they would have said so. Germany and Poland merely agreed that the claim for restitution had been abandoned, and that left matters exactly as if that claim had never been put forward. To construe this transaction as involving an agreement that the damages should be assessed in any but the usual way is to make a new agreement for the Parties. What the Parties did was merely to abandon restitution with the consequence that Germany took the right to damages to be assessed in the usual way.

In my opinion, according to the general principle of international law, these damages should be assessed upon the basis of the value of the undertaking at the time of the seizure, " that is the July 3rd 1922, together with a fair rate of interest on that value from that date until the date of payment ; and in addition any other damage directly consequent upon the seizure.

It may be that damages so assessed will amount to no more than the amount which the Polish Government would have had to pay if it had been able to expropriate the undertaking in conformity with the terms of the Geneva Convention ; but this is immaterial. Germany has selected as the form of reparation for the wrong done to her at inter-


national law a pecuniary indemnity corresponding to the loss sustained by her nationals. It is immaterial whether the result of this selection is to put Germany and the German Companies in a better or worse position than that in which they would otherwise have been.

It is said that the general rule as to assessment of damages cannot here be applied and that some distinction must be made between the consequences of a wrongful expropriation and those of a lawful expropriation in accordance with the provisions of the Geneva Convention. The fact that Poland, had she expropriated in accordance with the Geneva Convention, would have been bound to pay an indemnity equal to the amount of the damages, if the damages are assessed according to the general rule of international law, does not affect the matter. The question is what was the loss inflicted on the two Companies by the seizure.

It is argued that it would not be equitable that the liability of a mere wrongdoer should be no greater than that of one who had expropriated the property in accordance with the terms of the Geneva Convention.

Expropriation in accordance with those terms was at the time impossible, in the absence of recognition by the Mixed Commission that this measure was indispensable for the maintenance of the working of the undertaking (Article 7). No special provision is made in the Convention as to what is to happen if the Government takes property in contravention of these provisions : that is left to the general law. It is now however argued that it is not equitable that the general law should apply in such a case, and an effort is made to modify it so as to prevent the Government which has so acted being financially in no worse position than one which has acted under the provisions of the Geneva Convention.

It seems to me that it is entirely beyond the province of the Court in effect to introduce provisions of this nature, in the absence of agreement in treaty or convention to that effect.


If the relevant time for determining the value of the undertaking is the time of the seizure, it follows that the value of the undertaking at the present time, had it remained in the hands of the Oberschlesische and the Bayerische, is irrelevant except in so far as it may give some assistance in determining the value at the time of the seizure. It is not necessary to refer to the experts any question directed to the value at the present time. I think therefore that question II is unnecessary.

That question is in the following terms :

"Quelle serait la valeur exprimée en Reichsmarks actuels, à la date du présent arrêt, de ladite entreprise de Chorzów, si cette entreprise (y compris les terrains, bâtiments, outillage, stocks, procédés disponibles, contrats de fourniture et de livraison, clientèle et chances d’avenir), étant restée entre les mains des Bayerische et Oberschlesische St. W., soit était demeurée essentiellement en l’état de 1922, soit avait reçu, toutes proportions gardées, un développement analogue à celui d’autres entreprises du même genre, dirigées par la Bayerische, par exemple, l’entreprise dont l’usine est sise à Piesteritz ?"


"What would be the value at the date of the present judgment, expressed in Reichsmarks current at the present time, of the same undertaking (Chorzow) if that undertaking (including lands, buildings, equipment, stocks, available processes, supply and delivery contracts, goodwill and future prospects) had remained in the hands of the Bayerische and Oberschlesische Stickstoffwerke, and had either remained substantially as it was in 1922, or been developed proportionately on lines similar to those applied in the case of other undertakings of the same kind, controlled by the Bayerische, for instance, the undertaking of which the factory is situated at Piesteritz ?"

Further, I consider this question unsatisfactory in itself. It is directed to two values under hypothetical conditions. The first of those values is dependent upon the hypothesis that the undertaking remained substantially in the condition in which it was in 1922. It would be difficult to say what the present day value of the undertaking in such an obsolete

condition would be. The second of those values is dependent upon a hypothetical development of the undertaking. The development which the question assumes is one "proportionately on lines similar to" the development which has taken place in what are alleged to be parallel undertakings. It would be difficult to determine the proportions of development applicable. The question of what undertakings may be taken into consideration for this purpose seems to be one for the experts themselves, and I think that question II would present great difficulty in the working.

It is on these two points only that I am unable to concur in the judgment of the Court in this case ; but they are of vital importance.

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