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    Observations by M. Nyholm

    The wish to have recourse to expert opinion for the purpose of estimating the compensation due in respect of the Chorzow factory is certainly legitimate, but is it also possible to obtain a result by this means ? If it were a question of an expert report on a purely mathematical basis, such as the drawing up of a balance sheet prepared from accounts, experts appointed by the Court and by the Parties—working entirely independently and with no liaison with the Court, on a footing of equality amongst themselves and authorized to obtain any information—would doubtless be of decisive assistance in arriving at a just settlement of the matter. But in this case the hypothetical nature of the questions involves an equally hypothetical answer. As it is a question of estimating what financial results the factory would have produced between 1922 and 1928, if it had remained in German hands, the experts will find themselves in a sphere in which they will have difficulty in replying otherwise than by hypothetical answers.

    A considerable number of circumstances enter into account. Amongst others the capacity of the various persons concerned in the management to undertake technical control and to take advantage of the situation of the general market and of the formation of the various groups of factories into consortiums which is a characteristic of the years 1922-1928 ; the capital which might have been at the disposal of the factory, the favourable or unfavourable effect of Polish legislation, etc.

    The answer can hardly take the form of the indication of a precise sum which would enable the affair to be immediately settled.

    Even supposing that, thanks to the declarations of the experts, it might be possible to arrive more nearly at the true situation, the greater or less degree of progress thus made would not be of much importance in a case when the Court’s estimate must always be based on a number of detailed decisions, all arrived at separately, in order to reach


    the total sum. It matters but little whether in regard to some points the figure estimated is for instance 110 instead of 100, if the net result of all the decisions is still in the nature of an approximation.

    It may be wondered therefore whether it is worth while to delay the settlement of the case and to incur the difficulties connected with an expert report, including amongst others the choice of the experts who must, if they are to perform their task properly, possess qualifications but seldom found in one and the same person.

    In the end the Court may be confronted with precisely the same situation as before the expert report and may find that the discussion upon the report between the Parties involves a rediscussion of the case on the same bases as those already considered.

    Again, the numerous data afforded by the documents in the case would appear to make an immediate decision possible. A study of the information and statistics furnished by the documents in regard for instance to the condition of the factory and general development in the industry in question would appear to afford a sufficient basis for the general assessment which the Court must in any case undertake. The application, mutatis mutandis, of this information to the sister factory of Piesteritz would seem particularly likely to produce useful results. There would seem to be a possibility of obtaining corroborative evidence, for instance, by examining the offer of sale made to the Swiss Company, taking into account the situation existing at that time.

    Certain points in this case, which as a whole is of a specific nature, may attract attention from the point of view of law.

    As regards the assessment of the damage, the Respondent again seeks in the present proceedings to revert to points already dealt with, maintaining that it should not pay the


    indemnity because it is not the two Companies which are entitled to receive it, but the Reich. These questions have been decided by Judgment No. 7, which definitely lays down that any damages are due to the two Companies and not to the Reich, which is not the owner, since it sold the factory under the contracts of 1919. The judgment therefore unnecessarily again deals with the Polish objections on this point.

    The Polish contention based on Article 256 of the Treaty of Versailles, again seeks to show that the Reich should be regarded as owner. But this question is already dealt with by the decisions of Judgment No. 7. This is also the case as regards the position of the Reich as pledgee.

    The Court therefore need not again concern itself with this. If Poland is to succeed in her claim based on Article 256, it must be before some other tribunal and not this Court. If she succeeded in establishing her claim before such other tribunal, the result would simply be that Poland would in the future regain what she has to pay now. This claim, therefore, cannot be opposed to the decision contained in Judgment No. 7, which is being applied by the present judgment. There is therefore no reason for again undertaking an examination of Article 256, as is done in the judgment ; nor need the Court again consider the question whether the Reich has become owner in consequence of its position as pledgee. This matter, as also the question regarding Article 256, relates to a stage reached long before the present judgment, and it cannot be reopened on the pretext that, when the preceding judgments were given, the question was to establish the principle of damages, but that now the problem is to estimate these damages. Both are points which have already been decided.

    A question of more general legal interest arises as regards the situation of Germany in the proceedings ; that Germany alone, to the exclusion of the two Companies, can sue, is undeniable, since this is a suit within the jurisdiction of the Permanent Court, which is open only to States. But what is


    the situation of Germany as regards the claim for indemnity ? It cannot be denied that judgment must in form be given in favour of the German State ; but since the damage has been sustained by others, it is not in the capacity of owner that Germany can claim an indemnity.

    The claim put forward in the Reich’s conclusions seems rather to relate to the award of a sum as reparation for wrong inflicted upon its subjects. In the judgment the expressions vary : "The amount of compensation to which the German Government is entitled, on the basis of the damage Suffered by the two Companies" (page 55). Another passage runs as follows : "What sum must be awarded to the German Government in order to enable it to place the dispossessed Companies... in the economic situation... ? " (page 49). A precise indication of the Applicant’s position is not to be found in the judgment. It seems that the problem may be solved in accordance with the following considerations.

    The asset claimed by the two Companies is in itself an asset in the hands of the Polish State, which may be claimed by civil action against the Polish Government and under Polish law ; but as the result of the Geneva Convention, the asset has acquired also an international character. In seizing the factory the Polish Government has also infringed the obligations accepted by it as regards the German State. In basing its action on this infringement, Germany is relying on the wrong done to the Companies ; but she cannot lay claim to the indemnity as her own property. Germany may suffer, as the result of Poland’s action, moral damage represented by the demand for an imaginary sum, and also, maybe, material damage ; but the latter is always based on a fact affecting the State itself. To measure such damage by the actual amount of damage caused to its subjects is to make a claim that finds no support save as regards the special cases where the wrong done to subjects directly affects the State as being privately interested in the enterprise. In the present affair such a case might have arisen, owing to the situation of Germany as pledgee ; no such claim has however been put forward in the proceedings. The State must therefore, as (far


    as itself is concerned, limit its claim to the moral or material damage directly caused to it.

    But at the same time international precedent has laid down that the State may put forward before an international court the claims of its subjects, may "take up" their case, with the result that such claims must then be decided according to international law (see judgments of the Permanent Court of International Justice— Wimbledon and Mavrommatis affairs),

    In this situation the new question arises, since the creation of the International Court, whether the State has the right to take upon itself or at any rate to bring before the Court on its own initiative the claims of individuals.

    As regards this point, it appears that there is no reason for assuming that in international law any change has taken place in the general principles which grant to individuals the protection of their property rights. These rights remain always protected, and the putting forward of a particular claim in international proceedings can only be the result of the existence of a tacit or expressed mandate, arising either from a demand or from the consent of the Parties. That such a mandate exists in the present case cannot be doubted. The documents in the case show that the German State is working in full collaboration with the Companies, who have evidently supplied all information in order that the proceedings may have a favourable issue. From what precedes it results that the claims must indeed be granted to the German Government in name, but only as mandatory for the Companies. The Court cannot therefore award the money to Germany without further comment and without considering the question whether the German State can in law make free disposition of the amount of the indemnity as owner, and without the legal obligation to pay it to the parties dispossessed. The position of the Applicant must be regarded as one of mandatory.

    The argument set out above has an effect upon the question of the award of a lump sum in compensation in favour of the two Companies, the system adopted by the judgment. In the


    documents there is indeed no trace of the existence of a mandate conferring on the German State the right to lump together the two claims. On the contrary, the whole of the pleadings were conducted on the basis of a complete separation.

    The amalgamation of the claims of the Oberschlesische and Bayerische, officially declared by the judgment, seems therefore to have no support in law. And further, in fact, it meets with great difficulties. The claim of the Bayerische is composed of one part representing a percentage on the profits of the Oberschlesische ; but there are other special claims, rights resulting from the management of the factory in relation to other factories united in a consortium under the direction of the Bayerische. As regards the relations between the two Companies, the figures cannot be compared ; for from a financial point of view we have on the one hand a balance sheet for the Oberschlesische for 1928, or a question of capital, and on the other hand, for the Bayerische, a remuneration for the exploitation running as far as 1941. There seems therefore to be no reason for departing from the express wishes of the Parties set out in the pleadings.

    As regards the question of set-off, the judgment has concluded that there was no ground for deciding it, especially because, in any case, the matter had not been raised by the Respondent. It appears therefore that the Court decides that it has jurisdiction.

    On the other hand, the judgment states (page 61) that : "It is clear that the question whether international law allows claims to be set off against each other and if so under what conditions such set-off is permitted is in itself outside the jurisdiction derived by the Court from Article 23 of the Geneva Convention."

    This paragraph appears to have for consequence a declaration of want of jurisdiction to deal with the dispute itself.

    It appears however that the Court, which has jurisdiction as regards the sums in dispute, will also have the right to

    hear and determine the objections. To those which relate to the extinction of the credit claimed may be added the declaration of a set-off which cancels out the credit. In international law no principle can be raised which would establish on this subject a difference between national and international law.
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