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Outline Also Reported In Cases Considered Subsequent Cases Related Articles Legislation Cited

46 ILR BarcelonaTraction Case (Belgium v. Spain)

International law in general — Sources — Equity — Relevance to right of diplomatic protection —

Whether conferring right of diplomatic protection on national State of shareholders if national

State of company unable or unwilling to act — Practical problems of competing diplomatic claims.

Relation of international law to municipal law — Diplomatic protection — Shareholders — Renvoi

to municipal law to determine rights of shareholders — Whether determining right of diplomatic

protection.

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State responsibility — Nature and kinds of — For wrongs unconnected with contractual obligations

— Acts and omissions of State organs and officials — Denial of justice — Exhaustion of local

remedies — Acts of courts injurious to foreign corporation — When local remedies are exhausted

— Whether there is a right of diplomatic protection of shareholders in customary international law.

Claims — Nationality of — Corporations — Diplomatic protection of shareholders — Whether

there is a right of diplomatic protection of shareholders in customary international law —

Relevance of equity — Relevance of municipal law for determining rights of shareholders —

Exhaustion of local remedies — Wrongful acts of local courts — Denial of justice.

The individual in international law — Nationality — As determining right of protection of citizens

abroad — Shareholders in foreign corporation — Whether there is a right of diplomatic protection

of shareholders in third State in international law — Nationality of corporations — Genuine link or

connection with State of incorporation — Right of diplomatic protection — Criteria for

determining — Whether right of diplomatic protection only for State of incorporation — Whether

there is a right of diplomatic protection of shareholders in customary international law.

Treaties — Conclusion and operation of — Effect of treaties on third parties — Statute of

International Court of Justice (Article 37) — States admitted to membership of United Nations and

becoming parties to Statute after drafting of Statute and after dissolution of Permanent Court of

International Justice — Whether Article 37 applicable — Comparison with Article 36 (5) — Aerial

Incident Case distinguished — Interpretation of treaties — Principles and rules of — Reference to

preparatory work — Intention of parties — Provisions to be applied to all parties without

distinction irrespective of date of adherence — Interpretation in figurative sense — Context —

Consideration of preparatory work — As evidence of intention of parties — Whether opposable to

State becoming party to Statute subsequent to its drafting.

Disputes — International Court of Justice — Contentious jurisdiction — Competence — Statute

(Articles 68 and 69) — Discontinuance — Significance of — Whether a bar to future proceedings

— Article 37 —

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Whether distinguishable from Article 36 (5) — Whether applicable to States becoming parties to

Statute after dissolution of Permanent Court of International Justice — Whether Aerial Incident

Case distinguishable — Meaning of phrases ‘in force’ and ‘provides for’ and ‘the parties to the

Statute’— Joinder of preliminary objections to merits — Significance of — When appropriate —

Nationality of claims rule — Local remedies rule — Admissibility — Jus standi — Whether there is

a right of diplomatic protection of shareholders in customary international law — Whether there is

a right of protection of economic interests — Whether considerations of equity relevant to

determine jus standi.

Case concerning the Barcelona Traction, Light and Power Company, Limited

(New Application: 1962)

(BELGIUM

v.

SPAIN)

International Court of Justice.

Judgment of24 July 1964 (Preliminary Objections)Judgment of5 February 1970 (Second Phase)

SUMMARY : The Barcelona Traction, Light and Power Company, Ltd., a holding company incorporated, and with its head office in Toronto, Canada, formed a number of subsidiary companies for the purpose of developing an electric power production and distribution system in Catalonia, Spain. Three of these wholly, or virtually wholly, owned subsidiaries were incorporated and had their registered offices in Canada (Ebro Irrigation and Power Co., Ltd., Catalonian Land Co., Ltd. and International Utilities Finance Corporation Ltd.), the others in Spain.

According to the Belgian Government, Barcelona Traction's share capital came to be held, for the most part, by Belgian individuals or corporate bodies. Large blocks of shares were for certain periods transferred to United States nominees and trustees, but the Belgian Government contended that Belgian nationals continued to be the real owners.

Barcelona Traction issued several series of sterling bonds secured by trust deed (the National Trust Co., Ltd., of Toronto acted as trustee). The security consisted of a charge on bonds and shares of Ebro and other subsidiaries and of a mortgage executed by Ebro in favor of National Trust. The sterling bonds were serviced out of transfers to Barcelona Traction made by the subsidiary companies operating in Spain. The servicing of the bonds was suspended in 1936 owing to the Spanish Civil War. Authorization by the Spanish exchange control authorities for the transfer of the foreign currency necessary for servicing the bonds was refused, and interest payments on them were never resumed.

On 9 February 1948 three Spanish holders of recently acquired Barcelona Traction sterling bonds petitioned the Court of Reus, Tarragona, for a declaration adjudging the company bankrupt on account of failure to pay interest on the bonds. A judgment declaring the company bankrupt was given on 12 February, and provided for the appointment of a commissioner in bankruptcy and an interim receiver, and ordered the seizure of the assets ofBarcelona Traction, Ebro and Compania Barcelonesa de Electricidad (another subsidiary). Since the shares of Ebro and Barcelonesa had been deposited


with the National Trust Co. in Toronto as security for the bond issues, the possession taken of these shares was ‘mediate and constructive civil possession’, i.e. not physical possession. The commissioner in bankruptcy dismissed the principal management personnel of the two companies, and the interim receiver appointed Spanish directors and declared that the companies were thus ‘normalized’. These measures were subsequently extended to the other subsidiaries also.

Barcelona Traction, National Trust, the subsidiaries and their directors or managers brought proceedings in Spain to contest the bankruptcy judgment. ( Barcelona Traction had, however, received no judicial notice of the bankruptcy proceedings and was not represented at the original proceedings nor did it contest the judgment within the eight-day time-limit provided for by Spanish law; it took proceedings on 18 June 1948.) Motions contesting the jurisdiction of the court suspended the action for redress, and a decision on jurisdiction was itself delayed by an action disputing Barcelona Traction's right to be a party to the proceedings on the jurisdictional issue; one of the motions contesting jurisdiction was not finally dismissed by the Barcelona Court of Appeal until 1963 (after the Belgian Application was filed with the International Court of Justice).

In pursuance of a judgment of the Barcelona Court of Appeal in June 1949 a meeting of creditors was convened and trustees in bankruptcy were elected. They procured decisions that new shares of the subsidiary companies should be created and the shares located outside Spain be cancelled, and that the head offices of Ebro and Catalonian Land should be moved from Toronto to Barcelona. In 1951 they obtained authority from the court to sell all the shares, with all the rights attaching to them, of the subsidiary companies, in the form of the newly-created share certificates. These were then sold by public auction in 1952 to a newly formed company, Fuerzas Electricas de Cataluna, S.A., which thereupon acquired complete control of the undertaking in Spain. Barcelona Traction, National Trust and Sidro (a Belgian corporation holding shares in Barcelona Traction) brought proceedings to contest this sale in the Spanish courts, but without success.

In 1948 the British Government made representations to the Spanish Government concerning the bankrupcty proceedings and the seizure of the assets of Barcelona Traction, Ebro and Barcelonesa, on behalf of the bondholders resident in the United Kingdom, and subsequently supported representations made by the Canadian Government between 1948 and 1955. The Canadian Government complained of denials of justice and of conduct towards Ebro said to be in breach of certain applicable treaty provisions. The United States Government made representations on behalf of Barcelona Traction in 1949 and thereafter. In 1949 the Spanish Government stated that Ebro had not furnished proof of the origin and genuineness of the bond debts, thus justifying the refusal to authorize foreign currency transfers, and subsequently proposed (in 1950) the creation of a committee on which Spain, Canada and the United Kingdom would be represented. This was accepted by the Canadian and United Kingdom Governments, but objected to by the Belgian Government on the ground that it was not invited to participate. A joint statement was issued by the three Governments represented on the committee that the attitude of the Spanish administration in not authorizing the transfers of foreign currency was fully justified. (The Belgian Government contended in the proceedings before the International Court of Justice that this statement was a res inter alios acta which could not be set up against it.) The Belgian Government made

representations to the Spanish Government from 1948, proposing submission of the dispute to arbitration. This was rejected by Spain. After Spain was admitted to membership of the United Nations in 1955, Belgium filed an Application with the International Court of Justice (in 1958) seeking reparation for damage allegedly caused to Barcelona

46 ILR

Traction by acts of organs of the Spanish State allegedly contrary to international law. Proceedings were subsequently discontinued and the case removed from the Court's General List in 1961, with a view to negotiations between the representatives of the private interests concerned.

The negotiations failed, and the Belgian Government submitted a new Application to the Court in 1962, claiming reparation for the damage allegedly sustained by Belgian nationals, shareholders in Barcelona Traction, by acts said to be contrary to international law and committed in respect of the company by organs of the Spanish State.

The Spanish Government raised the following four preliminary objections:—

(1) Any jurisdiction of the Court to decide issues relating to the claim formulated in the Belgian Application had come to an end as a result of the letters of the Belgian and Spanish Governments of 1961 agreeing to discontinue the proceedings, which the Court placed on record in its Order removing the case from its General List in 1961.

(2) The Court lacked jurisdiction to deal with the case since the jurisdictional clause of Article 17 of the Treaty of Conciliation, Judicial Settlement and Arbitration of 19 July 1927 had not created between Belgium and Spain a jurisdictional nexus enabling the Belgian Government to submit the dispute to the International Court of Justice.

(3) The Belgian Government lacked capacity, since Barcelona Traction—the object of the claim referred to the Court—did not possess Belgian nationality, and no claim whatsoever could be recognized on the basis of the protection of Belgian shareholders of the company as the principal of these nationals lacked the legal status of a shareholder of Barcelona Traction, and as international law did not recognize, in respect of injury caused by a State to a foreign company, any diplomatic protection of shareholders exercised by a State other than the national State of the company.

(4) Barcelona Traction had failed to exhaust the local remedies and procedures as required by international law.

The Court rejected the first two preliminary objections and joined the last two to the merits.

Preliminary Objections (Judgment of 24 July 1964 )

The Court held as follows:—

(1) (By twelve votes to four) that the first preliminary objection must be rejected.

Giving notice of discontinuance was a procedural and ‘neutral’ act, the real significance of which must be sought in the attendant circumstances; the absence of express renunciation of any further right of action was inconclusive, and did not establish in itself that there had not been any renunciation or that the discontinuance was not being made in circumstances which must preclude any further proceedings. This was apparent from the inherent character of the relevant provisions in the Rules of Court (Articles 68 and 69) and the records of their drafting. (The Court noted that a distinction should be drawn between discontinuance under Article 68 (a joint act) and discontinuance under Article 69 (a unilateral act).) There was no presumption in favor of renunciation—if anything, any presumption would be in the opposite sense. The implications of discontinuance must be independently established except where the notice of discontinuance gave reasons or referred to acts or undertakings of the parties. There was no conclusive evidence, either in the notice or in the exchanges of the parties or the representatives of the private interests involved, of any understanding that discontinuance involved renunciation. There was no evidence that the representatives of the private interests had acted in such a manner as to bind their Governments. There


was a general rule that, in relation to an understanding said to exist between States parties to a litigation, the Court could only take account of acts and attitudes of Governments or their authorized agents—of which, at the governmental level, there was no evidence. The onus of making its position clear lay on the Respondent Government, which had the right of objecting to the discontinuance or attaching conditions to abstention from objection. A situation of estoppel had not been made out; it was unclear whether the alleged misleading conduct was on the part of the Belgian Government or of private parties and, in the latter case, whether complicity or responsibility of the Belgian Government was alleged. No true prejudice had been suffered by the Respondent either by the discontinuance or by the advantage gained by the Applicant of being able to frame its Application with foreknowledge of the probable nature of the Reply.

Although there was an element of artificiality in the same processes laid down in the Hispano-Belgian Treaty of 1937 being repeated in regard to the same matters of complaint, the treaty processes were not finally exhausted in respect of any one complaint until the case had been either prosecuted to judgment or discontinued in circumstances involving its final renunciation.

Judge Koretsky appended additional observations on the first preliminary objection; Judges Bustamante, Morelli and Armand-Ugon dissented from the conclusion of the Court.

Per Judge Koretsky: The Rules of Court did not provide for a distinction between discontinuance of an action (déistement d'action ) and discontinuance of the proceedings (désistement d'instance ). Articles 68 and 69 provided only for the agreed or unilateral discontinuance of the proceedings. In this case, discontinuance had been conditional—as a precondition for the opening of negotiations. It did not involve abandonment of a substantive right.

Per Judge Bustamante (dissenting): The very close relationship between the first and third objection required that the first objection should be joined to the merits.

Per Judge Morelli (dissenting): By the first objection Spain denied, as a consequence of the Belgian Government's discontinuance, that it was possible for that Government to exercise the right of diplomatic protection in any way whatsoever in respect of Barcelona Traction. It raised a problem concerned with the very way in which the merits of the case should be judged by the Court. It related directly and exclusively to the merits, and should have been declared inadmissible as a preliminary objection.

Per Judge Armand-Ugon (dissenting): After an extensive examination of the background to Article 69 of the Rules of Court, and the discussions between the two Governments and the representatives of the private interests, he concluded that the first objection should have been upheld.

(2) (By ten votes to six) the Court held that the second preliminary objection must be rejected.

The Court distanguished its decision in the Case concerning the Aerial Incident of 27 July 1955 (Israel v. Bulgaria) 1 , which was confined entirely to the applicability of Article 36 (5) concerning declarations under the ‘Optional Clause’. Any decision of the Court on Article 37 would be liable to have far-reaching effects on a considerable number of treaties of a political or technical character, including certain multilateral conventions of great importance. Examining the history of the drafting of Article 37, the Court concluded that the governing concept had been to preserve as many jurisdictional clauses as possible from becoming inoperative and to do so by a process which would automatically substitute the new Court for the Permanent Court in the jurisdictional treaty relations between all Members of the United Nations

1I.C.J. Reports 1959 , p. 127; International Law Reports , 27, p. 557.

46 ILR

and other parties to the Statute, avoiding the need for piecemeal action by special agreement. Moreover, Article 37 represented a compromise between those in favor of universal compulsory jurisdiction and those opposed to it; this article involved the preservation of the already existing field of compulsory jurisdiction—it was natural that the maximum preservation should be aimed at. Examining the actual language of Article 37, the Court concluded that it required the fulfilment of only three conditions: a treaty or convention in force, a provision for the reference of the matter in litigation to the Permanent Court, and that the dispute be between States parties to the Statute of the Court. These conditions were fulfilled in the present case.

The Court then considered whether the words ‘in force’ related to the jurisdictional clause as such, and the meaning of ‘provides for’. It concluded that it would involve both a contradiction in terms and run counter to the intention and purpose of Article 37 to hold that the extinction of a jurisdictional clause should follow from the disappearance of the Permanent Court. Moreover, no distinction should be drawn between those States which became parties to the Statute previous to the dissolution of the Permanent Court, and those which became parties afterwards. The ordinary rule of treaty interpretation should be

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applied to Article 37: unless the treaty or provision concerned expressly indicated some difference or distinction, such phrases as ‘the parties to the Statute’ etc. apply equally and indifferently to cover all those States which at any given time are participants, whatever the date of their several ratifications, accessions or admissions, etc. The reactivation of a jurisdictional clause by virtue of Article 37 was no more than a particular case of the principle of consent given generally and in advance, in respect of a certain category of jurisdictional clauses, and in the case of Spain could be regarded as having been given ipso facto by its joining the United Nations. It would be inequitable to discriminate in favor of States who became parties to the Statute after April 1946. Moreover, in the course of diplomatic correspondence preceding the original proceedings before the Court, the Respondent had implicitly recognized the competence of the Court.

‘Provides for’ must be read in a figurative sense, as denoting a treaty or convention, still in force as such, containing a clause providing for or making provision for a reference to the Permanent Court—this being a convenient method of defining or identifying the category of disputes in respect of which jurisdiction was conferred upon the International Court of Justice.

The Court emphasized that the jurisdictional clause of the Treaty of 1927 was an integral part of the treaty as a whole and must be considered in its context—the basic obligation to submit to compulsory adjudication in Articles 2 and 17 (1) which showed both the seriousness of the obligation and that it was not exclusively dependent on the existence of a particular forum. Although it might become inoperative with the disappearance of the forum it could be subsequently rendered operative by agreement between the parties or by the automatic operation of some other instrument, as in the present case.

The Court rejected the contention that if the jurisdictional clause had been reactivated on Spain's admission to the United Nations, it formed part of a new or revised obligation, applying to disputes arising after that date. The limitations ratione temporis contained in the Treaty of 1927 applied automatically to any new or revised obligation.

Judges Spender, Wellington-Koo and Tanaka appended additional and separate observations. Judges Spiropoulos, Armand-Ugon and Morelli appended dissenting opinions.

Per Judges Spender, Wellington-Koo and Tanaka: Although concurring in the Court's interpretation of Article 37, they found no decisive distinction in principle between the issue raised by Article 37 in the present case and that


raised regarding Article 35 (5) in the Aerial Incident (Israel v. Bulgaria) case. They expressed agreement with the Joint Dissenting Opinion in the latter case.

Per Judges Spiropoulos and Armand-Ugon (dissenting): The purpose of Articles 37 and 35 (5) was similar. The Court should have followed its decision in Israel v. Bulgaria and held that it was without jurisdiction.

Per Judge Morelli (dissenting): This was the only preliminary objection on which it was open to the Court to take a decision at this stage of the proceedings. The objection should have been upheld. The Statute of the Court, including Article 37, did not come into force for Spain until 14 December 1955, as a result of Spain's admission to the United Nations. On that date Article 37 had no possibility of application, because at that date there was no treaty or convention providing for reference to the Permanent Court which could be considered, as such, as being in force within the meaning of Article 37. Article 17 (4) of the Hispano-Belgian Treaty of 19 July 1927 had lapsed on 18 April 1946, as a result of the dissolution of the Permanent Court.

(3) (By nine votes to seven) the Court held that the third preliminary objection should be joined to the merits. On the general question of joinder of preliminary objections to the merits, the Court observed that it might find the objection to be so related to the merits that it could not be considered separately without going into the merits (which the Court could not do while proceedings on the meritsstood suspended as a result of the preliminary objection, under Article 62 of the Rules of Court), or without prejudging the merits before they had been fully argued. The Court would not join a preliminary objection to the merits except for good cause, the object of a preliminary objection being to avoid any discussion of the merits. Joinder did not indicate that the objection had been ignored.

The third preliminary objection had both a preliminary aspect relating to the admissibility of the claim and, in so far as it raised the issue whether international law recognized for the shareholders in a company a separate and independent right or interest in respect of damage done to the company by a foreign State and, if so, to what extent and in what circumstances, and whether including those of the present case, it raised the issue of substantive legal rights pertaining to the merits. Thus the proceedings on the merits would place the Court in a better position to adjudicate with full knowledge of the facts, and the questions raised by the third preliminary objection and those arising on the merits were too intimately related and closely interconnected for the Court to be able to adjudicate upon the former without prejudging the latter.

Per Judge Spiropoulos: The Court should have considered as relevant the arguments on which the Spanish Government founded its third preliminary objection.

Per Judge Wellington-Koo: The third preliminary objection should have been rejected. Prima facie the Applicant had established its jus standi . The evidence placed before the Court had not established the existence of any rule denying recognition of the existence of the interests of shareholders or beneficial owners of shares in a foreign company or prohibiting their protection by their national State or States by diplomatic intervention or recourse to international adjudication. On the contrary, there was evidence of the implicit existence of a rule recognizing such a right of protection, irrespective of whether the national State of the shareholders was the national State of the company.

Per Judge Bustamante: Before deciding to join the objection to the merits the Court should have ascertained that no more direct means existed for resolving the objection at the preliminary stage of the proceedings by putting certain questions to the Parties regarding the position of Canada with regard to the judicial and diplomatic protection of Barcelona Traction in the future.

46 ILR

Per Judge Morelli: The Court should have declared the third preliminary objection inadmissible as a preliminary objection, as being neither of a preliminary character nor capable of joinder to the merits in terms of Article 62 (5) of the Rules of Court.

Per Judge Armand-Ugon: The Court can resort to the joining of a preliminary objection to the merits only (a ) when the parties themselves request it, or (b ) when the question raised as a preliminary objection is so bound up with the question which constituted the merits of the case that it is manifestly impossible to decide the one without deciding the other at the same time. The question of the Belgian Government's lack of jus standi could be decided without going into the merits, which consisted of the question whether or not a Canadian company had suffered a denial of justice in Spain, and the objection should not be joined to the merits.

(4) (By ten votes to six) the Court held that the fourth preliminary objection should be joined to the merits.

The Court gave the same reasons for joinder as it gave regarding the third objection. The allegation of failure to exhaust local remedies was inextricably interwoven with the issues of denial of justice which constituted the major part of the merits, since the Applicant contended that it was precisely in the attempt to exhaust local remedies that the alleged denial of justice was suffered.

Per Judge Morelli (dissenting): The fourth objection should have been declared inadmissible as a preliminary objection. The local remedies rule, as a rule of general international law, was substantive, not procedural, being supplementary to the substantive rules concerning the treatment of foreigners.

Per Judge Armand-Ugon (dissenting): The fourth objection should not have been joined to the merits. Whether or not the adjudication in bankrupcty of Barcelona Traction and its consequences constituted a denial of justice could not alter the fact that the company was able and bound to make use in due time of the remedies which the Spanish legal system made available to it for the purpose of challenging the adjudication in bankruptcy. The company did not do so and had therefore lost the right to complain at the international level of a denial of justice which could have been cured at the municipal level but for its own negligence.

Second Phase (Judgment of 5 February 1970 )

Held (by fifteen votes to one, twelve votes of the majority being based on the reasons set out in the Judgment of the Court): that the Belgian Government's claim must be rejected. The Belgian Government had not established that it possessed a right of protection, or jus standi before the Court, in respect of its nationals shareholders in Barcelona Traction.

A distinction must be drawn between obligations of a State towards the international community as a whole (obligations erga omnes ) and those arising vis-à-vis another State in the field of diplomatic protection. The former, deriving e.g. from the outlawing of acts of aggression, genocide and the principles

and rules concerning the basic rights of the human person, including protection from slavery and racial discrimination, by their very nature concerned all States: in view of the importance of the rights involved, all States could be held to have a legal interest in their protection. The right of diplomatic protection depended on the suppositions that the defendant State had broken an obligation towards the national State in respect of its nationals, and that only the party to whom an international obligation was due could bring a claim in respect of its breach. It must therefore be established whether a right of Belgium had been violated by reason of its nationals having suffered infringement of their rights as shareholders in a company not of Belgian nationality. The same question was determinant in respect of Spain's


responsibility towards Belgium. Responsibility was the necessary corollary of a right.

In the absence of any treaty on the subject between the Parties, the issue must be decided in the light of the general rules of diplomatic protection. In this field international law was called upon to recognize institutions of municipal law with an important and extensive role in the international field, i.e. the corporate entity as an institution created by States in a domain essentially within their domestic jurisdiction. Thus, whenever legal issues arose concerning the rights of States with regard to the treatment of companies and shareholders, as to which international law had not established its own rules, it had to refer to the relevant rules of municipal law—in the present case, the nature and interrelation of the rights of the corporate entity and its shareholders under municipal law.

After examining the position regarding a legal entity of the type of Barcelona Traction (a limited liability company whose capital was represented by shares), the Court concluded that in general the company alone could take action in respect of matters of a corporate character. Ordinarily, no individual shareholder could take legal steps either in the name of the company or in his own name, except when the act complained of was aimed at the direct rights of the shareholder as such (e.g. the right to a declared dividend, to vote and to attend general meetings, and to share in the residual assets of the company on liquidation). A distinction must be drawn between an injury in respect of a right and an injury in respect of a simple interest (e.g. financial losses as the result of the situation of the company). The legal issue in the present case was whether it was legitimate to identify an attack on company rights, resulting in damage to shareholders, with the violation of their direct rights. On the international level, the company against which allegedly unlawful acts were directed was expressly vested with a right under rules of municipal and international law. While the shareholder had certain rights expressly provided for in municipal law, in the circumstances of this case appeal could only be made to the silence of international law which did not admit of interpretation in his favor. There was no analogy with the admission of concurrent claims where one person was in possession of two separate bases of protection each of which was valid. The process of ‘lifting the corporate veil’ had been found justified and equitable in certain circumstances and for certain purposes in municipal law in the interests of the shareholders, and it would be admissible in international law in special circumstances also.

The Court did not accept the validity of analogies drawn from the treatment of enemy and Allied property during and after the First and Second World Wars in peace treaties and other international instruments, or from the treatment of foreign property consequent on nationalizations. The arbitral

jurisprudence relied upon rested in most cases on the terms of instruments establishing the jurisdiction of the tribunal, and could not therefore admit of generalization. Other decisions allowing or disallowing claims by way of exception were not, in view of the particular facts concerned, directly relevant to the present case.

The Court considered two sets of circumstances—the case of the company having ceased to exist and the case of the company's national State lacking capacity to take action on its behalf—in which the general rule might not take effect. It concluded, however, that the corporate entity of Barcelona Traction had not ceased to exist and neither had its capacity to take corporate action, in spite of its loss of assets. Only in the event of the legal demise of a company arc the shareholders deprived of the possibility of a remedy available through the company, and only in that event could an independent right of action for them and their Government arise.

Barcelona Traction's national State was Canada. The traditional rule attributed the right of diplomatic protection of a corporate entity to the

46 ILR

State under the laws of which it was incorporated and in whose territory it had its registered office (siège ). No absolute test of genuine connection (lien effectif ) had found general acceptance; there was no analogy in the present case with the issues raised or the decision given in the Nottebohm Case1 (based on seat [siège social ], management [direction ] or centre of control, or shareholding). Barcelona Traction's links with Canada were manifold—it had been incorporated under Canadian law, it remained under that law for over fifty years, and it maintained its registered office, accounts and share registers there. Board meetings were held there for many years, and it was listed in the records of the Canadian tax authorities. Moreover, the Canadian nationality of the company had received general recognition in particular by the United Kingdom, the United States and Belgium in the representations and proceedings taken regarding the alleged denial of justice by these Governments. Diplomatic protection by the Canadian Government had been exercised on Barcelona Traction's behalf and had neither been refused nor remained in the sphere of fiction. Although it had in fact discontinued this action, it nevertheless retained its capacity to exercise diplomatic protection; no legal impediment had prevented it from doing so, and no fact had arisen to render its protection impossible. Within the limits prescribed by international law, a State might exercise diplomatic protection by whatever means and to whatever extent it thought fit, for it was its own right that the State was asserting. Should the persons on whose behalf it was acting consider that their rights were not adequately protected, they had no remedy in international law. A failure to exercise protection could not in itself constitute a justification for the exercise of diplomatic protection by another Government. The Court noted that the lack of a link of compulsory jurisdiction could not be regarded as entailing the non-existence of a right of diplomatic protection, international judicial proceedings being but one of the means available to States in pursuit of their right to exercise diplomatic protection. The Canadian Government's right of protection of BarcelonaTraction remained unaffected by the present proceedings. The Spanish Government had not questioned Canada's right to protect the company.

With regard to the argument that since, in inter-State relations, whether claims are made on behalf of a State's national or on behalf of the State itself, they are always the claims of the State and, therefore, a


claim might be made when investments by a State's nationals abroad were prejudicially affected, and that, since such investments were part of a State's national economic resources, any prejudice to them directly involved the economic interests of the State, the Court distanguished intervention in such circumstances from diplomatic protection. A State admitting foreign investments into its territory was bound to extend to them the protection of the law, but it did not thereby become an insurer of that part of another State's wealth which those investments represented. It must in that case be established that the investment effectively belonged to a particular economy, which might be very difficult in the case of complex undertakings and lead to a situation where no diplomatic protection could be exercised.

The general rule of international law authorized the national State of the company alone to make a claim. The protection of shareholders required that recourse be had to treaty stipulations or a special agreement directly concluded between the private investor and the State in which the investment was placed.

Although human rights included protection against denial of justice on the universal level, the instruments which embodied human rights did not confer on States the capacity to protect the victims of infringements of such rights irrespective of their nationality.

1 Preliminary Objection: I.C.J. Reports 1953 , p. 111; International Law Reports , 20 (1953), P. 567.


The Court then considered whether considerations of equity required that the Belgian Government be held to possess a right of protection—as might be the case when the State whose responsibility was invoked was the national State of the company. However, considerations of equity could not require more than the possibility for some protector State to intervene; account must also be taken of the practical effects of deducing from considerations of equity any broader right of protection of the shareholders by the national State—it would be difficult to make distinctions according to any quantitative test of percentage shareholding. The adoption of the theory of diplomatic protection of shareholders as such, by opening the door to competing diplomatic claims, could create an atmosphere of confusion and insecurity in international economic relations, particularly as shares of companies with international activities were widely scattered and frequently changed hands. Nor could a secondary right of protection of shareholders be admitted, since the essence of a secondary right was that it only came into existence at the time when the original right ceased to exist. Cases of dual protection in the case of dual nationals and persons in the service of an international organization were recognized by international law, but were distanguished on the ground that the number of possible protectors was small and their identity not normally difficult to determine. Moreover, persons establishing a company in a foreign country were normally impelled by particular advantages (e.g. in respect of taxation), and it was not inequitable that this be balanced by the risks arising from the fact that the protection of the company and therefore of its shareholders was entrusted to a State other than the national State of the shareholders.

Thus, in the particular circumstances of the case, Jus standi was not conferred on the Belgian Government by considerations of equity.

Judges Petrén and Onyeama made a Joint Declaration, and Judge Lachs also made a Declaration. President Bustamante y Rivero, Judges Fitzmaurice, Tanaka, Jessup, Morelli, Padilla Nervo, Gros and Ammoun appended Separate Opinions. Judge ad hoc Riphagen appended a Dissenting Opinion.

Per Judges Petrén and Onyeama: Canada's right of protection of Barcelona Traction had been recognized by both Parties. It was therefore unnecessary for the Court to consider the question whether the geniune connection principle considered in the Nottebohm Case was applicable to the diplomatic protection of juristic persons, and still less to speculate whether, if it were, valid objections could have been raised against the exercise by Canada of diplomatic protection of Barcelona Traction.

Per Judge Lachs: The existence of the Canadian Government's right of protection of Barcelona Traction was an essential premise of the Court's reasoning, and its importance was emphasized by the seriousness of the claim and the particular nature of the unlawful acts with which it charged certain authorities of the Spanish State.

Per President Bustamante y Rivero: In the almost total absence of specific rules of general international law applicable to transnational holding companies—regarding issues of jurisdiction, responsibility and diplomatic protection—such disputes should be submitted to municipal courts. The Court should have examined the fourth Spanish preliminary objection, regarding the exhaustion of local remedies. Barcelona Traction had failed to exhaust local remedies, and its omissions were opposable to the shareholders also.

Per Judge Fitzmaurice: If in respect of general international law obligations regarding the treatment of foreigners a State acted illicitly, it was in breach of international law irrespective of whether any other State was qualified to take the matter up. The issue in the present case was who or what entity, if any, was entitled to claim in respect of damage accruing to shareholders in consequence of illicit treatment of the company. Although international law must have regard to the concept and structure of corporations

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under municipal law, its consequences should not be transposed to the international level without regard for the various protections for the shareholders in municipal law. In international law, ‘piercing the veil’ was admissible when the corporation ceased to possess an effective personality (whether or not corporate personality subsisted according to municipal law), when the corporation possessed the nationality of the defendant State, but not when, as in the case of Barcelona Traction, it possessed the nationality of a third State. In this respect the law was unsatisfactory. In view of the possible applicability of the Nottebohm decision to the protection of BarcelonaTraction by Canada, the Parties should have been asked to present full arguments on the matter, and the intervention of the Canadian Government under Article 62 should have been sought. It should also have been considered whether the ‘nationality’ of Barcelona Traction was not in fact Belgian. The inadequacies and rigidities of international law required that equitable considerations be taken into account and a system of equity established.

Examining the dealings in the relevant shareholdings and the need for continuity of nationality of the shareholding through the critical period, Judge Fitzmaurice concluded that on the critical date of the

bankruptcy judgment the shares were Belgian owned, and the claim then became once and for all indelibly impressed with Belgian national character; any subsequent dealings in the shares were immaterial, affecting only the quantum of the damages eventually payable or the identity of the persons whom the Belgian Government might have eventually selected to become the recipients of a due share of any damages recovered.

Regarding the fourth preliminary objection: on the international level, the declaration of bankruptcy of Barcelona Traction probably involved an excess of Spanish jurisdiction, and the bankruptcy proceedings were internationally null and void ab initio and without effect on the international plane. In such a case, there would be no obligation to exhaust local remedies. Moreover, Barcelona Traction had not been effectively notified of the proceedings.

It was emphasized that no inference could be drawn, regarding the probable decision of the Court, from the joinder of preliminary objections to the merits; nor could any inference be drawn as to the attitude of the Court to the merits from a declaration that a claim was inadmissible.

It was also noted that delays in proceedings before the Court should not be ascribed to the Court when the responsibility lay with the Parties.

Per Judge Tanaka: Although concurring in the Court's dismissal of the Belgian claim, he did so for different reasons, dismissing the third and fourth Spanish preliminary objections and dismissing the Belgian claim on its merits. He expressed the view that under Article 57 of the Statute of the Court, a Separate Opinion was not restricted in scope by the framework of the majority opinion. In his opinion:—

1. The third preliminary objection should be rejected. The Belgian Government possessed jus standi . No rule of international law prohibited the double diplomatic protection of shareholders and company. This lacuna in the law must be filled by interpreting the customary rule of diplomatic protection with regard to its spirit and purpose and without being bound by municipal and private law concepts which were valid in the municipal but not necessarily in the international sphere. International law looked to the substance, not to the form, and sought to ascertain where the real interest lay, disregarding legal concepts. The national State of the company might be unable, unwilling or not entitled to secure adequate redress, and it would then be unjust and inequitable to deny a right of diplomatic protection to the shareholders' national State. In principle, the right of protection did not depend on the percentage of shares held—although this might affect the use of the national State's discretion to exercise the right. The existence of


concurrent rights to claim in several States would not be unprecedented, and had analogies in municipal law. If the claim of one State was realized, that of others would be extanguished pro tanto . Company and shareholders shared a community of destiny or substantial economic identity, so that prejudicial acts committed against the company were detrimental to the interests of the shareholders. Beneficial ownership was the criterion for determining the nationality of shareholding, since the right of diplomatic protection was dependent on the location of the real interest. Belgian shareholding

in Barcelona Traction had been established. In the case of a corporate shareholder, it was sufficient to establish its nationality in terms of its place of incorporation and seat. Continuity of nationality had been established.

2. The fourth preliminary objection should be rejected. The local remedies rule was procedural in character. Its raison d'être was respect for and confidence in the sovereign jurisdiction of States. It should be interpreted in a spirit of flexibility. It should be sufficient that the main means of redress be taken into consideration; only the diligence of a bonus paterfamilias was required. This had been satisfied by Barcelona Traction.

3. As to the merits, the Belgian Government's claims should be dismissed. By reason of the independence of the judiciary, the State, in principle, is immune from responsibility regarding the acts of judicial organs except in grave circumstances. Even the broad definition of a denial of justice did not include an erroneous or even unjust judgment of a court. The judicial act and omissions complained of, so far as they were concerned with incorrectness of interpretation and application of municipal law, could not constitute a denial of justice. Nor had circumstances sufficiently grave to constitute bad faith been proved, and bad faith could not be presumed.

Per Judge Jessup: Although concurring in the Court's dismissal of the Belgian claim, he did so for different reasons and recorded his regret that the Court had not considered it appropriate to include in its judgment a wider range of legal considerations, particularly in view of the influence of the Court's decisions beyond the parties and the particular case. In his opinion:—

1. Canada had no right to claim on behalf of Barcelona Traction. In general, under international law, a State has the right to extend its diplomatic protection to a corporation which has its national character. There was no single rule determining the nationality of a corporation for all purposes. Moreover, national character must be real and effective, as shown by the link between the corporation and the State—which might be constituted by ‘control’. This was not satisfied in the case of Barcelona Traction.

2. A State had, in certain circumstances, a right to present a diplomatic claim on behalf of shareholders who were its nationals. This was widely accepted in three situations: where the corporation was incorporated in the State which had allegedly injured it, and the shareholders were of another nationality; where the State of incorporation had liquidated or wound up the corporation after the injury had been inflicted by a third State; where the injury was inflicted directly on the shareholders. No rule of international law precluded protection in a different situation. The fundamental principle underlying the right of diplomatic protection was that a State took up a claim against another State when it considered that its own interests had been affected, and foreign investments possessed national economic importance as State interests. Dual protection was not unprecedented in international law and the problems raised by international corporations were not insuperable.

3. Belgium had failed to establish the Belgian nationality between the critical dates of those natural and juristic persons on whose behalf it sought to claim. The burden of proof was on the Applicant to prove the nationality of the shareholders, and it must also establish the necessary real and effective

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link. The rule of continuity demanded that nationality remain unchanged between the date on which the injury was inflicted (in this case, the date of the bankruptcy judgment in 1948) and the date of the Application to the Court (in this case, the new Application in 1962). Belgium had failed to establish the Belgian character of any substantial number of shares throughout that period.

Per Judge Morelli: Between the 1958 and 1962 Belgian claims there was identity of petitum (reparation sought) and of casa petendi (the allegedly unlawful conduct of the Spanish authorities). There was, however, a difference in the way in which Belgium sought to prove that the measures complained of constituted a wrong done by Spain to Belgium: Belgium now based its claim on the allegation that the measures taken in respect ofBarcelona Traction indirectly injured its Belgian shareholders.

Two different meanings of the term ‘capacity’ (qualité pour agir, jus standi ) must be distinguished: procedural capacity relating to the right to apply to the Court, which was not now in issue since the 1964 judgment upheld the Court's jurisdiction and thereby Belgium's power to institute proceedings—and substantive capacity, i.e. the vesting in one State rather than in another of the substantive right invoked. The latter concerned the merits of the case, not the issue of admissibility. There was no logical necessity to resolve it before considering other questions concerning the merits. It was open to a judge, therefore, (as had the Court) to find that the claim should be dismissed on the ground that the obligation asserted by the Applicant did not exist on the part of the Respondent vis-à-vis any State at all—i.e. that the legal rule invoked did not exist. Inasmuch as the Spanish argument related to the nationality of Barcelona Traction shareholders, it raised the issue of the nationality of the claim—i.e. Belgium's substantive capacity—and inasmuch as the existence of an obligation towards the national State of the shareholders was denied it raised not an issue of capacity but the very existence of the rule of law invoked by Belgium.

Rules of international law governing the treatment of foreigners were concerned to ensure the protection of certain interests proper to individuals or collective entities. They fell into two categories: (1) rules directly specifying the interests (of individuals, not of collective entities) which they sought to protect, regardless of the prevailing attitude of the municipal legal order (e.g. life and liberty—but not purely economic interests); (2) rules protecting a wider range of interests, including the purely economic, of both individuals and collective entities, enjoining a course of conduct on States in their municipal legal orders. With regard to this second category, international law referred to the municipal legal order to determine the interests subject to protection since the obligations involved presupposed rights conferred on foreigners by the municipal legal order of individual States. Thus international law protected solely such interests of shareholders in a company as already enjoyed protection within the municipal legal order of the State in question. In the case of Spain and the shareholders of BarcelonaTraction, the interests in issue were not rights under the Spanish legal order. Consequently, there was no international responsibility on the part of Spain for such damage as measures taken by its authorities might have caused to the interests of foreign shareholders. Damage caused in respect of the rights of Barcelona Traction could, if internationally unlawful, have constituted an international wrong only vis-à-vis Canada, which therefore alone had capacity to claim reparation. In this context a distinction between direct and indirect damage served no useful purpose, and was, indeed, only a different way of

stating the distinction between injury in respect of a right and injury to a simple interest. Diplomatic protection was the exercise by a State of a right bestowed by the rules of international law concerning the treatment of foreigners, not a procedure independent of the existence of a right.


Per Judge Padilla Nervo: International law did not recognize the right of diplomatic protection of shareholders as such if their rights stricto sensu had not been violated. Nor was a double diplomatic protection of shareholders and corporation admissible. He emphasized the political and economic background to the question of State responsibility for injury to the economic interests of aliens, and the prevailing international trends in that field. In his view, international law lays upon States in whose territory foreign natural or juristic persons reside, remain, operate or even simply possess property, an obligation towards the State of which such persons are nationals to afford them certain treatment, the minimum requirements of which are laid down by customary international law. They consisted essentially in the respect of certain personal or corporate rights and access to appropriate judicial or administrative remedies. Correlative with this obligation was the right of diplomatic protection: but all that could be required was respect for those rights accorded to the aliens concerned under the national legal system as they were defined by that system. In the present case, these did not include the damage allegedly caused to shareholders in Barcelona Traction. In general, it was only the actual legal death of the company which could give rise to fresh rights in shareholders as successors of the company. The national State of the shareholders was not entitled to exercise protection either on the ground that the company was ‘practically defunct’ or when the act complained of was done by the national State of the company, nor when the national State of the company did not exercise its right of protection. It was difficult to imagine a case in which it would be impossible to apply the general rule that the right of diplomatic protection of a company belonged to its national State; in consequence, there was unlikely to be scope for the application or considerations of equity.

Local remedies had not been exhausted.

With regard to the existence of a denial of justice, there was no evidence that a miscarriage of justice took place. There were no legal bases for the contention that Spain was responsible internationally for the standard of its laws or for the quality of justice administered in its courts.

There was no convincing evidence of a predominant Belgian interest in natural or juristic Belgian persons, shareholders of Barcelona Traction, at the critical dates, whether or not these were taken to be 1948 and 1962. Defence of national wealth could not be a basis for a claim of diplomatic protection.

Per Judge Gros: Although concurring in the operative part of the decision of the Court, his reasoning was entirely different. In modern economic conditions of planned investment, the formula that in defending its nationals a State is asserting its own rights at the international level had acquired a reality going further than the procedural justification of its origin. In this context, the distinction between rights and interests of the shareholders did not correspond to the facts. A renvoi to municipal law regarding the relationship between shareholders and the limited company was unacceptable: it led to the establishment

of a superiority of municipal over international law constituting a negation of the latter. The rules of municipal law were nothing more than facts in evidence. Referring to modern French law, he noted that there was no generally established rule denying the shareholder the right to act in place or on behalf of a limited company. In international law, as between two European States such as Belgium and Spain, a total loss of assets resulting from acts described as unlawful and which was wholly unindemnified, amounting to confiscation, constituted a grievance justifying proceedings to establish international responsibility. Damage to shareholders and damage to the company could be distanguished for purposes of reparation. It was incorrect to assume that in case of the disappearance of the company, the national State of the company could not act. Investments

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may be defended by the State whose national economy is adversely affected (excluding ephemeral transactions in securities), provided there had been an unlawful act involving the responsibility of a State. The company's bare link of nationality, however, might not reflect any substantial bond. The protection of investments must conform to the reality of the connection. In the case of Barcelona Traction, the theory of genuine connection implied comparison between Canada, Belgium and Spain—and perhaps other States—and inquiry into the concentration of the undertaking in Spain, the problem as to whether the real control lay with the organs of Barcelona Tractionor elsewhere, and the reality of the Belgian investment. Groups of companies should not be treated as stateless: rather the genuine connection of the group with a particular economy must be determined. The existence of a genuine connection for the protection of a corporate person was a necessary condition for the protection of a corporate person no less than for that of an individual. Proof of Barcelona Traction's appurtenance to the Belgian economy had not been produced, and therefore the claim must be dismissed. Moreover, Barcelona Traction had failed to exhaust local remedies in Spain by not entering a plea of opposition to the bankruptcy judgment within the legal time-limit.

Per Judge Ammoun: Concurring with the conclusions of the Judgment of the Court, he examined at length the arbitral jurisprudence, teachings of publicists and the practice of States and emphasized the need to keep in mind the overall problem of the development of international law. With regard to equity, he distanguished that ‘justice and equity’ equivalent to an authorization to adjudicate ex aequo et bono—which the United States-Mexico General Claims Commission had been authorized to apply—from the equity praeter legem referred to in the North Sea Continental Shelf Cases .1 The latter was admissible to fill a logical lacuna in the law; the former was a legislative act to fill a social lacuna.

Per Judge ad hoc Riphagen (dissenting): International responsibility is a responsibility of State to State, and consequently the conditions under which the international responsibility of a State arises, together with the conditions under which another State is entitled to require reparation for an injury caused to it, are in principle independent of the content of the municipal law of the States in question. A State has a real interest in the development of its international commerce, including investment in foreign undertakings and establishment of undertakings in foreign countries: the public interest of the receiving State is similarly affected. Consequently, there was a need to ensure a proper balance between the interests of the States. There could in the present case be no renvoi to municipal law since what was in issue were the rules of general customary international law and whether decisions of the Spanish


authorities constituted a denial of justice. The distinction drawn in the Judgment between different categories of obligations of States was artificial and could not justify the essential legal consequences drawn from them. A distinction between ‘rights’ and ‘mere interests’ was only meaningful within the framework of a concrete body of known and undisputed rules of law. The body of rules of customary public international law concerning the treatment of aliens drew its inspiration from the real interest of the international community in respect for the fundamental freedoms of the human person and the freedom of international commerce. In order to describe a concrete activity in international commerce as forming part of the international commerce of a specific State, there must be a link between that activity and that State. This was normally found in the bond of nationality. In the case of limited companies, the differences between three types should be taken into account: (1) where legal personality corresponded to the

1I.C.J. Reports 1969 , p. 3; International Law Reports , 41, p. 29.


economic independence of the undertaking; (2) where the company was in reality a form of organization for co-operation by shareholders who furnished the capital, administered the undertaking and drew the profits; (3) where the undertaking was integrated into a more extensive undertaking belonging to another company. A true bond of nationality is inconceivable for juristic persons as such: recourse must be had to other connecting factors—the nationality of the natural persons to whom the company ‘belongs’; the fact that juristic personality was ‘conferred’ on the company by the authorities of a particular State; the fact that the company, as an economic entity, is ‘implanted’ in the territory of a particular State. In the practice of States and international jurisprudence, each of these connecting factors had been' adopted, or each combined and balanced; each criterion corresponded more or less to the different types of companies and shareholders. Moreover, the relative importance of the three connecting factors should be judged in relation to the injury which the conduct complained of is alleged to have done to the international commercial activity. Barcelona Traction belonged to the third type of company—its undertaking was integrated into the Sidro company, the chief shareholder in which was Sofina. The connecting factors between both companies and Belgium were such that a sufficient bond existed between the undertaking and the Belgian State to justify a legally protected interest on the part of the Belgian State in Barcelona Traction's undertaking. This bond was not broken on the plane of international law by the contracts entered into on account of the Second World War by Sidro under which Securitas acted as custodian or trustee of its BarcelonaTraction shares.

The limits imposed by international law on the jurisdiction of States were related to Belgium's jus standi , to the application of the local remedies rule, and to the responsibility of a State for the acts of its judicial authorities, and therefore the Court should have examined these questions.

The text of the judgments follows:

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JUDGMENT OF 24 JULY 1964

PRELIMINARY OBJECTIONS

Present: President Sir Percy SPENDER ; Vice-PresidentWELLINGTON KOO ; JudgesWINIARSKI,

BADAWI, SPIROPOULOS , Sir Gerald FITZMAURICE, KORETSKY, TANAKA, BUSTAMANTE Y RIVERO,

JESSUP, MORELLI, PADILLA NERVO, FORSTER, GROS ; Judges ad hoc ARMAND-UGON, GANSHOF VAN

DER MEERSCH ; RegistrarGARNIER-COIGNET .

In the case concerning the Barcelona Traction, Light and Power Company, Limited,

between

the Kingdom of Belgium,

represented by

M. Yves Devadder, Legal Adviser to the Ministry of Foreign Affairs and External Trade,

as Agent,

assisted by

Mme Suzanne Bastid, Professor at the Paris Faculty of Law and Economics,

M. Henri Rolin, Professor emeritus at the Law Faculty of the Free University of Brussels

and professeur associé at the Strasbourg Law Faculty, Advocate at the Brussels Court of Appeal,

M. Georges Sauser-Hall, Professor emeritus of the Universities of Geneva and Neuchâtel,

M. Jean Van Ryn, Professor at the Law Faculty of the Free University of Brussels and Advocate at

the Belgian Court of Cassation,

M. Angelo Piero Sereni, Professor at the Bologna Faculty of Law, Advocate at the Italian Court of

Cassation, Member of the New York State and Federal Bars,

Sir John Foster, Q.C., Member of the English Bar,

Mr. Elihu Lauterpacht, Member of the English Bar and Lecturer at Cambridge University,

as Counsel,

M. Michel Waelbroeck, Lecturer at the Free University of Brussels,

as Assistant Counsel and Secretary,

and

M. Leonardo Prieto Castro, Professor at the Madrid Law Faculty,

M. José Girón Tena, Professor at the Valladolid Law Faculty,

as Expert-Counsel in Spanish law,


[8]and

the Spanish State,

represented by

M. Juan M. Castro-Rial, Legal Adviser to the Ministry of Foreign Affairs,

as Agent,

assisted by

M. Roberto Ago, Professor of International Law at the University of Rome,

M. Paul Guggenheim, Professor of International Law at the University of Geneva,

M. Antonio Malintoppi, Professor of International Law at the University of Camerino,

M. Paul Reuter, Professor of International Law at the University of Paris,

Sir Humphrey Waldock, C.M.G., O.B.E., Q.C., Chichele Professor of Public International Law,

University of Oxford,

as Advocates and Counsel,

M. Maarten Bos, Professor of International Law at the University of Utrecht,

M. Jorge Carreras, Professor of Procedural Law at the University of Pamplona,

M. Eduardo G. de Enterría, Professor of Administrative Law at the University of Madrid, Maître des

requêtes, Conseil d'Etat ,

M. Federico de Castro y Bravo, Professor of Civil Law at the University of Madrid, Legal Adviser,

Ministry of Foreign Affairs,

M. Antonio de Luna García, Professor of International Law at the University of Madrid, Legal

Adviser, Ministry of Foreign Affairs,

M. José María Trías de Bes, Professor emeritus of International Law at the University of Barcelona,

Legal Adviser, Ministry of Foreign Affairs,

as Counsel,

and

M. Mariano Baselga y Mantecón, First Secretary at the Spanish Embassy at The Hague,

as Secretary,

THE COURT ,

composed as above,

delivers the following Judgment :

[9] On 19 June 1962, the Belgian Ambassador to the Netherlands handed to the Registrar an

Application instituting ‘new proceedings in the dispute between the Belgian Government and the Spanish

Government

46 ILR

concerning the Barcelona Traction, Light and Power Company, Limited’. The Application refers to an

earlier Application by the Belgian Government against the Spanish Government, dated 15 September

1958 and concerning the said company. The latter Application, which was filed on 23 September 1958,

was followed by the filing by the Parties of a Memorial and Preliminary Objections, and, subsequently,

by a discontinuance referring to Article 69 of the Rules of Court, a discontinuance which the Respondent

stated, in accordance with the same Article, that it did not oppose. By an Order of 10 April 1961 the Court

directed that the case be removed from the Court's list.

The Application of the Belgian Government of 19 June 1962 seeks reparation for damage claimed to

have been caused to a number of Belgian nationals, said to be shareholders in the Barcelona Traction,

Light and Power Company, Limited, a company under Canadian law, by the conduct, alleged to have

been contrary to international law, of various organs of the Spanish State in relation to that company and

to other companies of its group. To found the jurisdiction of the Court the Application relies on Article 17

of the Treaty of Conciliation, Judicial Settlement and Arbitration between Belgium and Spain, signed on

19 July 1927, and on Article 37 of the Statute of the Court.

In accordance with Article 40, paragraph 2, of the Statute of the Court, the Application was

communicated to the Spanish Government. In accordance with paragraph 3 of the same Article, the other

Members of the United Nations and the non-Member States entitled to appear before the Court were

notified.

Time-limits for the filing of the Memorial and the Counter-Memorial were fixed by an Order of 7

August 1962. The Memorial was filed within the time-limit fixed. Within the time-limit fixed for the

filing of the Counter-Memorial, which expired on 15 March 1963, the Spanish Government filed

Preliminary Objections submitting that the Court was without jurisdiction and that the claim was

inadmissible. Accordingly, an Order of 16 March 1963, which recited that by virtue of Article 62,

paragraph 3, of the Rules the proceedings on the merits were suspended, fixed a time-limit for the

presentation by the Belgian Government of a written statement of its Observations and Submissions on

the Objections. That statement was presented within the time-limit thus fixed, which expired on 15

August 1963. The case then became ready for hearing in respect of the Preliminary Objections.

M. W. J. Ganshof van der Meersch, Professor at the Brussels Faculty of Law, Avocat général to the

Belgian Court of Cassation, and M. Enrique C. Armand-Ugon, former President of the Supreme Court of

Justice of Uruguay and a former Member of the International Court of Justice, were respectively chosen

by the Belgian Government and the Spanish Government, in accordance with Article 31, paragraph 3, of

the Statute, to sit as Judgesad hoc in the present case.

[10] On 11 to 25 March, 1 to 23 and 27 to 29 April, and 4 to 15 and 19 May 1964, hearings were

held in the course of which the Court


heard the oral arguments and replies of M. Castro-Rial, Agent, M. Reuter, Sir Humphrey Waldock, MM.

Guggenheim, Ago, Malintoppi, Counsel, on behalf of the Spanish Government; and of M. Devadder,

Agent, MM. Rolin, Van Ryn, Sereni, Mme Bastid, Mr. Lauterpacht, M. Sauser-Hall, Counsel, on behalf

of the Belgian Government.

In the written proceedings, the following Submissions were presented by the Parties:

On behalf of the Government of Belgium ,

in the Application:

‘May it please the Court:

1. to adjudge and declare that the measures, acts, decisions and omissions of the organs of the

Spanish State described in the present Application are contrary to international law and that the Spanish

State is under an obligation towards Belgium to make reparation for the consequential damage suffered

by Belgian nationals, individuals or legal persons, being shareholders of Barcelona Traction;

2. to adjudge and declare that this reparation should, as far as possible, annul all the consequences

which these acts contrary to international law have had for the said nationals, and that the Spanish State is

therefore under an obligation to secure, if possible, the annulment of the adjudication in bankruptcy and

of the judicial and other acts resulting therefrom, obtaining for the injured Belgian nationals all the legal

effects which should result for them from this annulment; further, to determine the amount of the

compensation to be paid by the Spanish State to the Belgian State by reason of all the incidental damage

sustained by Belgian nationals as a result of the acts complained of, including the deprivation of

enjoyment of rights and the expenses incurred in the defence of their rights;

3. to adjudge and declare, in the event of the annulment of the consequences of the acts complained

of proving impossible, that the Spanish State shall be under an obligation to pay to the Belgian State, by

way of compensation, a sum equivalent to 88 per cent. of the net value of the business on 12 February

1948; this compensation to be increased by an amount corresponding to all the incidental damage suffered

by the Belgian nationals as the result of the acts complained of, including the deprivation of enjoyment of

rights and the expenses incurred in the defence of their rights’;

in the Memorial:


[11] I. to adjudge and declare that the measures, acts, decisions and omissions of the organs of the

Spanish State described in the

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present Memorial are contrary to international law and that the Spanish State is under an obligation

towards Belgium to make reparation for the consequential damage suffered by Belgian nationals,

individuals or legal persons, being shareholders of Barcelona Traction;

II. to adjudge and declare that this reparation should, as far as possible, annul all the consequences

which these acts contrary to international law have had for the said nationals, and that the Spanish State is

therefore under an obligation to secure, if possible, the annulment by administrative means of the

adjudication in bankruptcy and of the judicial and other acts resulting therefrom, obtaining for the said

injured Belgian nationals all the legal effects which should result for them from this annulment; further, to

determine the amount of the compensation to be paid by the Spanish State to the Belgian State by reason

of all the incidental damage sustained by Belgian nationals as a result of the acts complained of, including

the deprivation of enjoyment of rights and the expenses incurred in the defence of their rights;

III. to adjudge and declare, in the event of the annulment of the consequences of the acts complained

of proving impossible, that the Spanish State shall be under an obligation to pay to the Belgian State, by

way of compensation, a sum equivalent to 88 per cent. of the sum of $88,600,000 arrived at in paragraph

379 of the present Memorial, this compensation to be increased by an amount corresponding to all the

incidental damage suffered by the said Belgian nationals as the result of the acts complained of, including

the deprivation of enjoyment of rights, the expenses incurred in the defence of their rights and the

equivalent in capital and interest of the amount of Barcelona Traction bonds held by Belgian nationals

and of their other claims on companies in the group which it was not possible to recover owing to the acts

complained of.’

On behalf of the Government of Spain ,

in the Preliminary Objections,

on the first Preliminary Objection:

‘May it please the Court,

to adjudge and declare:

that it has no jurisdiction to admit or adjudicate upon the claim made in the Belgian Application of

1962, all jurisdiction on the part of the Court to decide questions relating to that claim, whether with

regard to jurisdiction, admissibility or the merits, having come to an end by the letters of the Belgian and

Spanish Governments respectively dated 23 March and 5 April 1961 which the Court placed on record in

its Order of 10 April 1961’;


[12] on the principal second Preliminary Objection:



that it has no jurisdiction to entertain or decide the claims advanced in the Application and the

Memorial of the Belgian Government, Article 17 of the Treaty of Conciliation, Judicial Settlement and

Arbitration not having created between Spain and Belgium a bond of compulsory jurisdiction in respect

of the International Court of Justice which could enable the Belgian Government to submit an Application

to that Court’;

on the alternative second Preliminary Objection:



that it has no jurisdiction to entertain or decide the claims advanced in the Belgian Application and

Memorial, the dispute raised by Belgium having arisen from and relating to situations and facts prior to

the date on which the jurisdiction of the Court could have produced its effects in relations between Spain

and Belgium (14 December 1955)’;

on the third Preliminary Objection:



that the claim advanced by the Belgian Government in its Application and Memorial, in each and

every one of the three submissions in which it is expressed, is definitively inadmissible for want of

capacity on the part of the Belgian Government in the present case, in view of the fact that

the Barcelona company does not possess Belgian nationality and that in the case in point it is not possible

to allow diplomatic action or international judicial proceedings on behalf of the alleged Belgian

shareholders of the company on account of the damage which the company asserts it has suffered’;

on the fourth Preliminary Objection:



that the Application filed by the Belgian Government concerning the alleged damage caused

to Barcelona Traction by the measures of which it has been the object on the part of the organs of the

Spanish State is definitively inadmissible for want of utilization of the local remedies.’

46 ILR

[13]On behalf of the Government of Belgium ,

in the Observations and Submissions in reply to the Preliminary Objections,

on the first Preliminary Objection:


to adjudge and declare that the arguments put forward by the Spanish Government are inadmissible

in so far as that Government relies on alleged ambiguities which it did not remove as it was in duty bound

and able to do;

that these arguments are in any case unfounded and that the discontinuance of the proceedings

instituted by the Application of 15 September 1958 is no bar to the institution of a new application, the

dispute between the Parties not having been the subject of any settlement and persisting to the present

day’;

on the principal second Preliminary Objection:


to adjudge and declare that the Preliminary Objection No. 2 is inadmissible;

in the alternative, that it has jurisdiction to hear and determine the claims put forward by the Belgian

Government in its Application founded on Article 17, paragraph 4, of the Spanish-Belgian Treaty of 1927

and Article 37 of the Statute of the International Court of Justice’;

on the alternative second Preliminary Objection:


to dismiss the alternative Preliminary Objection No. 2 raised by the Spanish Government and

declare that it has jurisdiction to deal with the dispute submitted to it by the Belgian Government's

Application’;

on the third Preliminary Objection:


to dismiss the Preliminary Objection No. 3 raised by the Spanish Government and declare that the

claim of the Belgian Government is admissible;

in the alternative, to defer a decision on this Objection No. 3 and join it to the merits’;


[14] on the fourth Preliminary Objection:


to declare Objection No. 4 to be unfounded, or if not to join it to the merits and defer a decision on it

in so far as it applies to certain of the complaints against the decisions of the Spanish judicial authorities

made in the Belgian Government's claim.’

In the oral proceedings the following Submissions were presented by the Parties:

On behalf of the Government of Belgium ,

at the closure of the hearing on 23 April 1964:

‘May it please the Court

to adjudge and declare that the arguments put forward by the Spanish Government in support of

Preliminary Objection No. 1 are inadmissible in so far as that Government relies on alleged ambiguities

which it did not remove as it was in duty bound and able to do;

that these arguments are in any case unfounded and that the discontinuance of the proceedings

instituted by the Application of 15 September 1958 is no bar to the institution of a new application, the

dispute between the Parties still persisting today;

to adjudge and declare that the principal Preliminary Objection No. 2 is inadmissible;

in the alternative, to declare that it is not well-founded and to adjudge and declare that the Court has

jurisdiction to hear and determine the claims put forward by the Belgian Government by an Application

relying on Article 17, paragraph 4, of the Spanish-Belgian Treaty of 19 July 1927 and Article 37 of the

Statute of the International Court of Justice;

to dismiss the alternative Preliminary Objection No. 2 raised by the Spanish Government;

to adjudge and declare that the Court has jurisdiction to hear and determine the claims put forward

by the Belgian Government by an Application relying on Article 17, paragraph 4, of the Spanish-Belgian

Treaty of 19 July 1927 and Article 37 of the Statute of the International Court of Justice, there being

no ratione temporis restriction which can be validly advanced to deny such jurisdiction;

to dismiss as irrelevant in the present proceedings Preliminary Objection No. 3 in so far as it is

based on alleged protection by the Applicant Government of the Barcelona Traction Company

incorporated under the laws of Canada;

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[15] furthermore, to dismiss the said objection in so far as it seeks to deny the Applicant

Government the right in the present case to take up the case of its nationals, natural and juristic persons,

who are shareholders of Barcelona Traction;

in the alternative, to join the third Objection to the merits;

to dismiss Preliminary Objection No. 4;

in the alternative, should the Court consider in respect of certain complaints that it cannot find that

sufficient use has been made of the local means of redress relating to them without examining the content

and validity of the Spanish judicial decisions by which the remedies in fact sought were disposed of, to

join the objection to the merits.’

On behalf of the Government of Spain ,

at the closure of the hearing on 8 May 1964:


For any of these reasons, and all others set out in the written and oral proceedings, or for all of these

reasons,

Firstly , since any jurisdiction of the Court to decide issues relating to the claim formulated in the

new Belgian Application of 1962, either to competence, to admissibility or to the merits, came to an end

as a result of the letters of the Belgian and Spanish Governments, respectively dated 23 March and 5

April 1961, which the Court placed on record in its Order of 10 April 1961;

Secondly , since the Court is without jurisdiction to deal with the present case, the jurisdictional

clause of Article 17 of the Treaty of Conciliation, Judicial Settlement and Arbitration of 19 July 1927 not

having created between Spain and Belgium a jurisdictional nexus enabling the Belgian Government to

submit the Barcelona Traction dispute to the International Court of Justice;

Thirdly , since the Belgian Government is without capacity in the present case, having regard to the

fact that the Barcelona Traction company, which is still the object of the claim referred to the Court,

does not possess Belgian nationality; and having regard also to the fact that no claim whatsoever can be

recognized in the present case on the basis of the protection of Belgian nationals, being shareholders

of BarcelonaTraction, as the principal of these nationals lacks the legal status of a shareholder

of Barcelona Traction, and as international law does not recognize, in respect of injury caused by a State

to a foreign company, any diplomatic protection of shareholders exercised by a State other than the

national State of the company;


[16]Fourthly , since the local remedies and procedures were not used by Barcelona Traction, as

required by international law;


that the Application filed by the Belgian Government on 14 June 1962 and the final Submissions

presented by it are definitively inadmissible.’

In the present case, the Applicant Government alleges injury and damage to Belgian interests in a

Canadian registered company, known as the Barcelona Traction, Light and Power Company, Limited,

resulting from treatment of the company in Spain said to engage the international responsibility of the

Respondent Government. In opposition to the Belgian Application, the Respondent Government has

advanced four objections as being objections in respect of the competence of the Court or the

admissibility of the claim, and as having a preliminary character. Briefly summarized, these objections

are:

(1) that the discontinuance, under Article 69, paragraph 2, of the Court's Rules, of previous

proceedings relative to the same events in Spain, disentitled the Applicant Government from bringing the

present proceedings;

(2) that even if this was not the case, the Court is not competent, because the necessary jurisdictional

basis requiring Spain to submit to the jurisdiction of the Court does not exist;

(3) that even if the Court is competent, the claim is inadmissible because the Applicant Government

lacks any jus standi to intervene or make a claim on behalf of Belgian interests in a Canadian company,

assuming that the Belgian character of such interests were established; and

(4) that even if the Applicant Government has the necessary jus standi , the claim still remains

inadmissible because local remedies in respect of the alleged wrongs and damage were not exhausted.

FIRST PRELIMINARY OBJECTION

[17] The original Belgian Application to the Court in respect of the events said to engage the

responsibility of the Respondent Government and to entitle the Applicant Government to intervene, was

filed on 23 September

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1958, and was followed in due course by the deposit of a Belgian Memorial, and of a set of Spanish

preliminary objections having the same character as the second, third and fourth Preliminary Objections

in the present case. Before the Belgian observations on these objections were received however (the

proceedings on the merits having been suspended under Article 62, paragraph 3, of the Rules), the

representatives of the private Belgian and Spanish interests concerned decided to engage in negotiations

for a settlement. In connection with this decision, and in circumstances which will be more fully stated

later, the Applicant Government informed the Court on 23 March 1961 that ‘at the request of Belgian

nationals the protection of whom was the reason for the filing of the Application in the case [and] availing

itself of the right conferred upon it by Article 69 of the Rules of Court [it was] not going on with the

proceedings instituted by that Application’. Nothing more was stated in the notice as to the motives for

the discontinuance, and nothing as to the Applicant's future intentions. Since the case fell under paragraph

2 of Article 69 of the Rules (the Respondent having taken a step in the proceedings) the discontinuance

could not become final unless, within a time-limit to be indicated by the Court, no objection should be

received from the Respondent Government. Within the time-limit so fixed, however, a notification was in

fact received from that Government stating that it ‘had no objection to the discontinuance’. No motivation

or condition was attached to this notification, and on 10 April 1961 the Court made an Order in the terms

of Article 69, paragraph 2, ‘recording the discontinuance of the proceedings and directing the removal of

the case from the list’. In due course discussions between representatives of the private interests

concerned took place but, no agreement being reached, the Application introducing the present

proceedings was filed on 19 June 1962.

The Applicant Government maintains that the discontinuance recorded by the Court's Order of 10

April 1961 was no more than a termination of the then current proceedings before the Court; and that the

negotiations in view of which it was made having broken down, the Applicant was fully entitled to bring

new proceedings in regard to the same matters of complaint. The Respondent Government, on the other

hand, contends that, both in principle and in the light of the circumstances obtaining, this discontinuance

precluded the Applicant Government from bringing any further proceedings, and in particular the present

ones.

The main arguments advanced by the Respondent in support of its contention are as follows:

[18]Firstly , that a discontinuance of proceedings under Article 69 of the Rules is in itself a purely

procedural act, the real import of which can


only be established by reference to the surrounding circumstances—the fact that it does not contain an

express renunciation of any further right of action not being conclusive;

secondly , that in principle however, a discontinuance must be taken to involve such a renunciation

unless the contrary is stated, or the right to take further action is expressly reserved;

thirdly , that in the present case there was an understanding between the Parties that the

discontinuance did involve such a renunciation and would be final, not only as regards the current

proceedings but also for the future;

fourthly , that even if there was no such understanding, the Applicant Government conducted itself

in such a way as to lead the Respondent to believe that the discontinuance would be, in the above-

mentioned sense, final, but for which the Respondent would not have agreed to it, and in consequence of

which the Respondent suffered prejudice;

finally—a contention of a somewhat different order—that the introduction of new proceedings in

regard to the same matters of complaint was incompatible with the spirit and economy of the treaty under

which the Applicant sought to found the jurisdiction of the Court.

Before examining these various contentions, the Court will deal with certain preliminary matters.

The present case is one in which the Court is called upon for the first time to consider the effect of a

discontinuance followed by new proceedings. This is because, ordinarily, discontinuances have been final

in fact, whether or not they would have proved to be so in law had an attempt to bring further proceedings

been made. Sometimes a discontinuance, though in form unilateral, and therefore notified under Article

69 of the Rules, has been consequent on a settlement of the dispute; in other cases the claimant State has

had reasons, which appeared to it to be of a final character, for not continuing to attempt to prosecute its

claim before the Court; in others yet, it might well have been that, the current proceedings once

discontinued, the jurisdictional basis for instituting new ones would no longer have been available.

[19] But, in the opinion of the Court, these various considerations are essentially fortuitous in

character; and the fact that past discontinuances have in practice proved ‘final’ cannot of itself justify the

conclusion that any a priori element of finality inherently attaches to them. This can readily be

demonstrated by reference to circumstances in which the Court considers that no question could arise as

to the right to institute further proceedings following upon a discontinuance, quite

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irrespective of whether any reasons for it were given, or any right of further action reserved. That this

might be the case was indeed expressly recognized in the Respondent's written Preliminary Objections

where, in discussing possible motives for a discontinuance, it was stated that—

‘For example, it may be that an applicant discontinues proceedings begun by him only because he

finds that he has committed an error of procedure and intends to institute a new action right away.’

Similar possibilities are that the claimant State might have failed to give certain notices which,

under an applicable treaty, had to be given before any valid application to the Court could be made; or the

claimant State might discover that although it thought local remedies had been exhausted, this was not in

fact the case. Again, in a claim on behalf of an individual, evidence might come to light indicating that he

was not, after all, a national of the claimant State, leading to a discontinuance; but subsequently it might

be found that this evidence was inaccurate. There are many other possibilities. It is, moreover, clear that

in certain of these cases, the discontinuing party could have no foreknowledge of whether the defect or

disability leading to the discontinuance would subsequently be cured, in such a way as to remove the

obstacle to the renewal of the suit.

The existence of these possibilities suffices in itself to show that the question of the nature of a

discontinuance cannot be determined on any a priori basis, but must be considered in close relationship

with the circumstances of the particular case. In consequence, each case of discontinuance must be

approached individually in order to determine its real character. There would therefore be little object in

the Court's entering upon any exhaustive discussion of the theory of discontinuance as it is provided for

by Articles 68 and 69 of the Court's Rules. But certain points may be noticed by way of clarification.

Both the inherent character of these provisions and their drafting records show that the main object

which they have in view is to provide a procedural facility, or rather—since it would in any event never

be practicable to compel a claimant State to continue prosecuting its case—to reduce the process of

discontinuance to order. But these provisions are concerned solely with the ‘how’, not with the ‘why’, of

the matter. They impose no conditions as to the basis on which a discontinuance may be effected other

than (in cases coming under Article 68) that the parties shall be in agreement about it, or (in those coming

under Article 69, paragraph 2) that the respondent party has no objection; for it is clear that there are few

limits to the motives that might inspire a discontinuance, and these two Articles are not concerned with

that aspect of the matter.


[20] One difference between the two provisions is, however, significant. Whereas Article 68

contemplates a discontinuance which not only is (in effect) an agreed one, but also takes the form of an

agreed communication to the Court, Article 69 on the other hand contemplates a notification to the Court

which, whether it results from an agreed settlement of the dispute or from some other cause, always takes

the form of a unilateral communication from the applicant or claimant party, which is either immediately

effective, if the case comes under paragraph 1 of Article 69 (the respondent party having taken no step in

the proceedings), or which (if such a step has been taken) becomes effective in the absence of any

objections from the respondent party within the time-limit fixed by the Court. The respondent can of

course signify expressly its non-objection, but is in no way obliged to do so. Thus, whereas in cases

coming under Article 68 the act of discontinuance is to all intents and purposes a joint act, in those

coming under Article 69 it is an essentially unilateral act, whatever may underlie it, and even though

acquiescence is necessary before it can actually take effect. Under Article 69, any notifications, whether

of intention to discontinue, or in acceptance of discontinuance, are notifications made to the Court and not

passing between the parties, so that any understandings between them (and such may certainly exist) must

precede and be sought for outside the act of discontinuance itself.

The right of objection given to a respondent State which has taken a step in the proceedings is

protective, to enable it to insist on the case continuing, with a view to bringing about a situation of res

judicata ; or in other words (perhaps more pertinent for the present case), to enable it to ensure that the

matter is finally disposed of for good.

The role of the Court, there being no objection to the discontinuance, is simply to record it and to

remove the case from its list. In connection with the discontinuance itself, the Court is not called upon to

enquire into the motives either of the discontinuing or of the respondent party: Article 69 does not impose

any obligation on the parties to give reasons either for the wish to effect the discontinuance, or for not

objecting to it.

One further element regarding the process of discontinuance which may be noticed, is that the

evidence of the drafting records of Articles 68 and 69 goes to show that in addition to making provision

for what was an evidently necessary procedural faculty, the aim was to facilitate as much as possible the

settlement of disputes—or at any rate their non-prosecution in cases where the claimant party was for any

reason indisposed to discontinue. This aim would scarcely be furthered however, if litigants felt that

solely by reason of a discontinuance on their part they would be precluded from returning to the judicial

process before the Court, even if they should otherwise be fully in a position to do so.

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[21] It is against this background that the Court must now consider the contentions advanced by the

Respondent Government in the present case.

In the light of what has been said about the nature of the process of discontinuance, the Court can

accept the first of these contentions, which is to the effect that giving notice of discontinuance is a

procedural and, so to speak, ‘neutral’ act, the real significance of which must be sought in the attendant

circumstances, and that the absence of express renunciation of any further right of action is inconclusive,

and does not establish in itself that there has not been such a renunciation, or that the discontinuance is

not being made in circumstances which must preclude any further proceedings.

But for the very reason that the Court thinks this to be a correct statement of the legal position, it

cannot accept the Respondent's second principal contention, namely that a discontinuance must always

and in principle be taken as signifying a renunciation, unless the contrary is indicated or unless the right

to start new proceedings is expressly reserved. The two conceptions are mutually contradictory: a notice

of discontinuance of proceedings cannot both be in itself a purely procedural and ‘neutral’ act, and at the

same time be, prima facie and in principle, a renunciation of the claim. There is no need to discuss this

contention any further, except to say that, in view of the reasonable and legitimate circumstances which,

as has already been seen, may motivate a discontinuance, without it being possible to question the right of

further action, the Court would, if any presumption governed the matter, be obliged to conclude that it

was in the opposite sense to that contended for by the Respondent; and that a discontinuance must be

taken to be no bar to further action, unless the contrary clearly appeared or could be established. The

problem is however incorrectly formulated if it is asked (as it constantly has been in the present case)

what the ‘effect’ of a discontinuance is; for the effect of a discontinuance must always and necessarily be

the same—to put and end to the current set of proceedings. In this, precisely, lies its essentially

procedural character. The real question is not what the discontinuance does—which is obvious—but what

it implies, results from or is based on. This must be independently established, except in those cases

where, because the notice itself gives reasons, or refers to acts or undertakings of the parties, or to other

circumstances, its import is clear and apparent.

[22] In the present case, the notice of discontinuance given by the Applicant Government, contained

no motivation apart from such implications (and they could be various) as might be drawn from the

statement that it was made at the request of the Belgian nationals whose protection had led to the

presentation of the original Application in the case. On the other hand, the notice was very clearly related,

and


confined, to that Application, the date and character of which were specified. It was ‘the proceedings

instituted by that Application’ to which the notice referred, and nothing else.

In these circumstances, the Court considers that, if the notice itself left it open whether or not it

involved or was consequent on a renunciation of all further right of action, its terms are nevertheless such

as to place upon the Respondent Government the onus of establishing that it meant or was based upon

something more than appeared on the face of it, namely a decision to terminate the then current

proceedings before the Court, subject to the Respondent's assent.

In seeking to discharge this onus the Respondent has put forward two contentions:

The first is to the effect that there was an understanding between the Parties about the

discontinuance; and the foundation for it lies in the fact that when, after the original proceedings had been

started, the representatives of the Belgian interests concerned approached the representatives of the

Spanish interests with a view to re-opening negotiations, they were met with a firm refusal to do so unless

the case before the Court were first brought to a definite end; that a Belgian offer for a suspension of the

proceedings was rejected as insufficient, and a ‘final withdrawal of the claim’ was demanded; that the

Belgian representatives thereupon undertook to request their Government to effect a final discontinuance

of the proceedings; that it was perfectly well understood on the Belgian side that the Spanish side meant

and assumed that the discontinuance would operate as putting a final end to the claim, or at any rate to

any further right of action; and that the Spanish representatives would not have agreed to negotiate on any

other basis, nor the Respondent Government to refrain from objecting to the discontinuance under Article

69, paragraph 2, of the Rules of Court.

On the Belgian side, it was denied that anything more was intended or could reasonably be inferred

from the Belgian statements, or from the terms of the notice of discontinuance itself (which was before

the Respondent Government when it signified its non-objection), than a simple, though final, termination

of the then current proceedings—particularly having regard to the prospective negotiations about to be

embarked upon.

[23] The Court notes that, although there were various contacts at the governmental level, the

exchanges relied on took place initially almost entirely between the representatives of the private interests

concerned. In so far as the Governments were privy to these exchanges, it was evidently, at that stage,

only on an unofficial basis. In order that the

46 ILR

Governments on either side should in any way be committed by these exchanges, it would be necessary to

show that the representatives of the private interests acted in such a manner as to bind their Governments.

Of this there is no evidence: indeed on the Spanish side the apparently very cautious nature of the

contacts between the authorities and the private interests negatives the possibility. In this connection the

Court recalls that at one stage of the oral hearing, the Parties were invited by the Court to clarify the

situation by indicating how far the acts of the representatives of the private interests were adduced as

engaging the responsibility of the Governments; but no really clear light was thrown on the matter.

In the circumstances, the Court sees no reason to depart from the general rule that, in relation to an

understanding said to exist between States parties to a litigation before it, and to affect their rights in that

litigation, it can only take account of the acts and attitudes of governments or of the authorized agents of

governments; and, in the present case, the Court can, at the governmental level, find no evidence of any

such understanding as is alleged by the Respondent. Indeed it seems to have been above all on the part of

the latter that the greatest reluctance to become involved in any understanding over the discontinuance

was manifested.

Quite apart from these considerations however, the Court finds the various exchanges wholly

inconclusive. It seems that the Parties were deliberately avoiding a problem they were unwilling to come

to grips with, lest by doing so they should shatter the foundation of their interchanges. The Respondent

Government must have realized that an immediate refusal would result from any official request that the

Applicant Government, in discontinuing the current proceedings, should definitely renounce, or undertake

that it did renounce, all further right of action. As far as the Applicant was concerned, if it did not intimate

that it reserved the right to bring further proceedings, should the negotiations fail, it equally avoided

suggesting that it renounced that right. The desire felt on the Spanish side not to negotiate whilst

proceedings were actually in progress before the Court, involving injurious charges against Spanish

authorities and nationals, was fully met by the discontinuance effected, and nothing more was needed for

that purpose. Furthermore, it does not appear reasonable to suppose that on the eve of difficult

negotiations, the success of which must be uncertain, there could have been any intention on the Belgian

side to forgo the advantage represented by the possibility of renewed proceedings. In the face of this, only

very clear proof of the understanding alleged by the Respondent would suffice, and none is forthcoming.

[24] The Court considers that in any case, and whatever ambiguities may have existed in the private

and official exchanges involved, the onus of making its position clear necessarily lay on the Respondent

Government; for it was that Government which had the right of objection to


the discontinuance, under Article 69, paragraph 2, of the Rules—a right expressly given to respondent

parties for their protection, and for the purpose, inter alia , of enabling them to prevent what has occurred

in the present case. There is nothing to prohibit conditions being attached to any abstention from

exercising this right, but the Respondent Government attached no conditions other than, implicitly, the

one already satisfied by the notice of discontinuance, that the proceedings begun by the Belgian

Application of September 1958 should be brought to an end—as they were.

A second contention, having the character of a plea of estoppel, was advanced by the Respondent

Government in seeking to discharge the onus of proof referred to above. This was to the effect that,

independently of the existence of any understanding, the Applicant Government by its conduct misled the

Respondent about the import of the discontinuance, but for which the Respondent would not have agreed

to it, and as a result of agreeing to which, it had suffered prejudice. Accordingly, it is contended, the

Applicant is now estopped or precluded from denying that by, or in consequence of, the discontinuance, it

renounced all further right of action.

This plea meets at the outset with two difficulties. In the first place, it is not clear whether the

alleged misleading conduct was on the part of the Applicant Government itself or of private Belgian

parties, or in the latter event, how far it is contended that the complicity or responsibility of the Applicant

Government is involved. In the second place, the Court does not consider that the alleged misleading

Belgian representations have been established, any more than was the alleged understanding between the

Parties about the implications of the discontinuance. Nevertheless, since this aspect of its first Preliminary

Objection has been more strongly insisted upon by the Respondent Party than perhaps any other, the

Court will consider it.

[25] Without doubt, the Respondent is worse off now than if the present proceedings had not been

brought. But that obviously is not the point, and it has never been clear why, had it known that these

proceedings would be brought if the negotiations failed, the Respondent would not have agreed to the

discontinuance of the earlier proceedings in order to facilitate the negotiations (the professed object);

since it must not be overlooked that if the Respondent had not so agreed, the previous proceedings would

simply have continued, whereas negotiations offered a possibility of finally settling the whole dispute.

Given that without the Respondent's consent to the discontinuance of the original proceedings, these

would have continued, what has to be considered now is not the present position of the Respondent, as

compared with what it would have been if the current proceedings had never been brought,

46 ILR

but what its position is in the current proceedings, as compared with what it would have been in the event

of a continuation of the old ones.

In making this comparison, the essential point is that the Respondent Government had entered

certain preliminary objections in the earlier proceedings which, if successful (and it was presumably

hoped to succeed on them), would necessarily have brought the case to an end, and have prevented not

only a decision about, but even any discussion at all of the allegations made against Spanish nationals and

authorities. But so equally would successful negotiations have prevented this. At the same time, the

Respondent Government ran no risk, for if the negotiations were not successful, and the case started

again, it would still be possible once more to put forward the previous preliminary objections.

Consequently, irrespective of whether the case would begin again or not, it cannot be seen what the

Respondent stood to lose by agreeing to negotiate on the basis of a simple discontinuance, or why it

would not have agreed had it realized that this alone, without a substantive renunciation, was involved.

The explanations given seem to the Court unconvincing.

As to the prejudice alleged, the only point that appears to require examination arises from the fact

that in bringing the new proceedings the Applicant Government had the advantage of being able to frame

its Application and ensuing Memorial with a foreknowledge of the probable nature of the Respondent's

reply—a foreknowledge which a claimant State might not, at that stage of the proceedings, ordinarily

possess, even though, normally, previous negotiations and diplomatic exchanges would have given it

considerable information about the opposing legal position. The scope of the Court's process is however

such as, in the long run, to neutralize any initial advantage that might be obtained by either side. As

regards the substance, in so far as the Applicant Government was, for the purposes of its Application in

the present proceedings, able to modify the presentation of its claim in order to take account of objections

advanced by the Respondent in the original proceedings, it appears to the Court that the Applicant could,

in the light of those objections, have done exactly the same thing for the purposes of its final submissions

in those proceedings themselves, which would have continued. The Applicant is always free to modify its

submissions and, in fact, the final submissions of a party frequently vary from those found in the written

pleadings. Consequently the Court is not able to hold that any true prejudice was suffered by the

Respondent.

[26] A final, though different order of contention advanced by the Respondent in support of its first

Preliminary Objection, was that the present proceedings were contrary to the spirit and economy of the


Hispano-Belgian Treaty of 19 July 1927, the jurisdictional clauses of which are relied on by the Applicant

as conferring competence on the Court. The character of this Treaty is fully considered in connection with

the second Preliminary Objection, and it will suffice to say here that according to its terms, before a

dispute can be submitted to adjudication, various preliminary stages have to be gone through. These

stages were in fact gone through in connection with the original and discontinued proceedings, and they

were repeated in connection with the present proceedings. The contention now advanced is that it cannot

have been the intention of the Treaty that the same processes should be gone through twice in relation to

the same claim, and that the present proceedings are consequently out of order, on the basis of the very

instrument on which the Applicant founds the jurisdiction of the Court.

The Court is sensible of the element of artificiality involved in the repetition of the Treaty processes

in regard to the same matters of complaint. But if the right to bring new proceedings exists, apart from

this, it would seem difficult to hold that precisely because it does, the jurisdictional basis for its exercise

is thereby destroyed.

It has been argued that the first set of proceedings ‘exhausted’ the Treaty processes in regard to the

particular matters of complaint, the subject of those proceedings, and that the jurisdiction of the Court

having once been invoked, and the Court having been duly seised in respect of them, the Treaty cannot be

invoked a second time in order to seise the Court of the same complaints. As against this, it can be said

that the Treaty processes are not in the final sense exhausted in respect of any one complaint until the case

has been either prosecuted to judgment, or discontinued in circumstances involving its final renunciation

—neither of which constitutes the position here. If, for instance, to recall an illustration given earlier (and

other instances are possible) proceedings brought under the Treaty were discontinued because it was

found that local remedies had not been exhausted (and it is of course at the moment of the application to

the Court that they require to be), it would be difficult to contend that (this deficiency being remedied) a

new application could not be made in the case, merely because it would have to be preceded by a

repetition of the Treaty processes. This contention therefore cannot be accepted.

For all of the foregoing reasons, the Court holds that the first Preliminary Objection must be

rejected.

SECOND PRELIMINARY OBJECTION (PRINCIPAL ASPECT )

[27] Although, for the reasons given in connection with the first Preliminary Objection, the

discontinuance of the action in the original proceedings before the Court did not disentitle the Belgian

Government

46 ILR

from commencing the present proceedings, it is nevertheless essential that a valid jurisdictional basis for

these should exist. In order to establish this, the Applicant Government relies on the combined effect of

Article 37 of the Statute of the Court and the fourth paragraph of Article 17 of the Hispano-Belgian

Treaty of Conciliation, Judicial Settlement and Arbitration, signed on 19 July 1927, and kept in force by

means of tacit renewals taking place at ten-yearly intervals, the latest having occurred in 1957. This

Treaty, which will henceforth be called the 1927 Treaty, provided by its Article 2 for a reference to

adjudication of all disputes between the parties, involving a disagreement about their legal rights. For this

purpose, and if the methods of conciliation also provided for by the Treaty failed, or were not utilized, the

parties were in each case to draw up a compromis . If, however, agreement could not be reached upon the

terms of a compromis within a certain period, then the fourth paragraph of Article 17 of the Treaty, now

invoked by the Applicant Government, provided that:

[Translation]

‘… either Party may, on the expiry of one month's notice, bring the question direct before the

Permanent Court of International Justice by means of an application’.

In combination with this provision, the Applicant invoked Article 37 of the Statute of the Court, the

relevant portion of which in the English text, reads as follows:

‘Whenever a treaty or convention in force provides for reference of a matter … to the Permanent

Court of International Justice, the matter shall, as between the parties to the present Statute, be referred to

the International Court of Justice.’

In the light of this provision, it was contended by the Applicant that, the 1927 Treaty being ‘a treaty

… in force’, and both the Parties in dispute being parties to the Statute of the International Court of

Justice, that Court must, by virtue of Article 37, be deemed to have replaced the Permanent Court in the

relations between the Parties, for the purposes of such a provision as the fourth paragraph of Article 17 of

the Treaty—henceforth to be called Article 17 (4); and accordingly that (the necessary time-limits having

expired) this provision gave the Applicant the right to bring the case unilaterally before the Court.

[28] This view was contested by the Respondent Government, on the ground that although the 1927

Treaty might as such still be in force, the jurisdictional obligation represented by Article 17 (4) had

necessarily lapsed on the dissolution of the former Permanent Court on 18 April 1946, since this brought

about the disappearance of the judicial organ to which Article 17 (4) referred; that no previous

substitution


of the present for the former Court had been effected by virtue of Article 37 before that date, Spain not

being then a party to the Statute; and that, in consequence, the 1927 Treaty had ceased to contain any

valid jurisdictional clause by the time Spain did become a party to the Statute upon admission to the

United Nations in December 1955. Thus, even if Spain would then in principle have become bound by

Article 37, there did not in the instant case, so it was contended, exist at that date any clause of

compulsory jurisdiction in respect of which that provision could operate to confer jurisdiction on the

present Court, and since Article 37 could only apply to jurisdictional clauses already in force, it could not

operate to bring a former clause into force again, which occurrence would require for its realization the

express consent of both parties, given de novo .

Another way of stating what was basically the same contention, was to say that Article 37 only

applied in the relations between parties to the Statute which had become such through original

membership of the United Nations, or at least by acquiring membership (or by otherwise becoming a

party to the Statute), previous to the dissolution of the Permanent Court in April 1946; for only in their

case had the substitution of the present Court for the Permanent Court been able to take place at a time

when the jurisdictional clauses in respect of which this was to occur were themselves still in force. Once

any such clause had lapsed by reason of the disappearance of the Permanent Court, there could be no

substitution of forum; or rather, any question of substitution became pointless, since the basic obligation

of compulsory adjudication itself no longer existed. Moreover, only those States which had already

become parties to the Statute before the dissolution of the Permanent Court could be regarded as having

given a true consent to the process involved—that is a consent directly given in respect of jurisdictional

clauses still indubitably in force. Anything else, it was contended, would be a fiction.

There were other ways in which the Spanish contention was or could be put, some of which will be

noticed later; but however it might be put, it always involved at bottom the same basic contention, that the

dissolution of the Permanent Court brought about the final extinction of all jurisdictional clauses

providing for recourse to that Court, unless they had already, previous to this dissolution, been

transformed by the operation of Article 37 of the Statute into clauses providing for recourse to the present

Court; and that in respect of any jurisdictional clause not thus transformed previous to the dissolution of

the Permanent Court, Article 37 was, thereafter, powerless to effect the transformation.

[29] This line of reasoning was not put forward by the Respondent Government in the original

diplomatic exchanges between the Parties.

46 ILR

It was first advanced after the decision given by the Court on 26 May 1959, in the case concerning

the Aerial Incident of 27 July 1955 (Israel v. Bulgaria) (I.C.J. Reports 1959 , p. 127). This case had

reference, not to Article 37 but to Article 36, paragraph 5, of the Statute; and not to a treaty, such as the

Hispano-Belgian Treaty of 1927, but to a unilateral declaration in acceptance of the compulsory

jurisdiction of the former Permanent Court, made under the ‘optional clause’ of its Statute (paragraph 2 of

Article 36). It was however contended by the Respondent that the legal considerations applicable in that

case were applicable also in the present one; and the arguments advanced by the Respondent

were, mutatis mutandis , similar in character to those advanced on behalf of Bulgaria in that case. The

Court will therefore consider this matter.

The Court notes in the first place that the decision in the Israel v. Bulgaria case was confined

entirely to the question of the applicability of Article 36, paragraph 5, in a somewhat unusual situation;

that it made only one passing and routine reference to Article 37 and noticeably avoided any finding on,

or even consideration of the case of that provision, the position of which it was evidently intended to

leave quite open. The Court moreover considers that there are differences between the two cases which

require that the present one should be dealt with independently and on its merits. Not only is a different

category of instrument involved—an instrument having a conventional form, not that of a unilateral

declaration—but the essential requirement of being ‘in force’, which in the cases contemplated by Article

36, paragraph 5, bore directly on the jurisdictional clause—the unilateral declaration itself—is, in Article

37, formally related not to the clause as such, but to the instrument—the treaty or convention—containing

it, from which follow certain consequences to be noticed later.

[30] Nor can the Court be oblivious to other differences which cannot but affect the question of the

need for the Court to make an independent approach to the present case. The case of Israel v.

Bulgaria was in a certain sense sui generis . As some of the separate but concurring opinions show (and

as is evident in other ways), it might have been decided—and still in favor of Bulgaria—on grounds

which would not have involved the particular issue of the effect of the dissolution of the Permanent Court

on the continued existence and validity of a declaration not previously ‘transformed’ into an acceptance

of the compulsory jurisdiction of the present Court. Moreover, any decision of the Court, relative to

Article 37, must affect a considerable number of surviving treaties and conventions providing for recourse

to the Permanent Court, including instruments of a political or technical character, and certain general

multilateral conventions of great importance that seem likely to continue in force. It is thus clear that the

decision of the Court in the present case, whatever it might be, would be liable to have far-reaching

effects. This is in no way a factor which should be


allowed to influence the legal character of that decision: but it does constitute a reason why the decision

should not be regarded as already predetermined by that which was given in the different circumstances

of the Israel v. Bulgaria case.

It will be convenient at this point to mention briefly the question of the other cases cited in the

course of the proceedings, in which Article 36, paragraph 5, or 37, of the Statute have been involved.

None is directly in point; for, with the exception of the declaration of Thailand in the case concerning

the Temple of Preah Vihear , Preliminary Objections (I.C.J. Reports 1961 , p. 17), all the jurisdictional

clauses concerned related to countries which were original Members of the United Nations and parties to

the Statute, so that the various processes provided for by the Statute had already been completed as

regards these clauses before the extinction of the Permanent Court. In the Temple of Preah Vihear case,

Thailand had deposited a declaration purporting to accept the present Court's compulsory jurisdiction, by

means of a ‘renewal’ of a previous declaration of 1940, accepting that of the former Permanent Court. As

Thailand had only become a Member of the United Nations and a party to the Statute after the

disappearance of that Court, it was argued, in the light of the Israel v. Bulgaria decision, that the 1940

declaration had ipso facto lapsed and become extinguished, and was consequently incapable of ‘renewal’,

so that the 1950 declaration purporting to effect such a renewal was without legal validity. The Court

however decided the matter on a different basis, holding that, in sending in its notice of renewal, Thailand

must have intended to accept the jurisdiction of a court of some kind—and this could only have been the

present one since, as Thailand knew, the former Court no longer existed. Hence, despite the language of

‘renewal’, the notice (on its correct interpretation) operated as a direct acceptance of the compulsory

jurisdiction, made in relation to the present Court. Consequently, irrespective of whether or not the

previous declaration relative to the Permanent Court had lapsed, Thailand had accepted the compulsory

jurisdiction of the present Court. It is clear that this case has no relevance whatever to the present one.

In the light of the foregoing considerations therefore, the Court must decide the present case

independently and without further reference to Article 36, paragraph 5, or to the previous cases which

have, in one way or another, involved that provision or Article 37 of the Statute—even though in three of

them, the Court did actually apply Article 37.

46 ILR

[31] Although it will be necessary to revert to the matter at a later stage, it is desirable at this point

to say something about what appear to have been the objects and purposes of Article 37 at the time when

the Statute was being drafted in the period April-June 1945.

Historically, two main considerations appear to have moved the drafters. In the first place, owing to

the decision to create an international court of justice which would in law be a new entity, and not a

continuation of the existing Permanent Court, the dissolution of the latter became essential, for it would

not have been a tolerable situation for two such Courts to be co-existing. The disappearance of the

Permanent Court was in any event certain to occur in fact, for lack of machinery to replace its Judges, but

it was not known precisely when this disappearance, either as a fact or as the result of a formal

dissolution, would come about. At the same time, there were then in existence a very large number of

treaties, conventions and other instruments, bilateral and multilateral, containing jurisdictional clauses

providing for recourse to that Court. If therefore nothing had been inserted in the new Statute to meet this

situation, and to meet it automatically and in advance, the preservation of these clauses would have been

left to the uncertain action of the individual parties to the various instruments concerned.

It was this situation that Article 37 was designed to meet, and the governing concept evidently was

to preserve as many jurisdictional clauses as possible from becoming inoperative by reason of the

prospective dissolution of the Permanent Court; and moreover, to do this by a process which would

automatically substitute the new Court for the Permanent Court in the jurisdictional treaty relations

between all Members of the United Nations and other parties to the Statute, thus avoiding the necessity

for piecemeal action by special agreement between the parties to the various instruments. The intention

therefore was to create a special regime which, as between the parties to the Statute, would automatically

transform references to the Permanent Court in these jurisdictional clauses, into references to the present

Court.

In these circumstances it is difficult to suppose that those who framed Article 37 would willingly

have contemplated, and would not have intended to avoid, a situation in which the nullification of the

jurisdictional clauses whose continuation it was desired to preserve, would be brought about by the very

event—the disappearance of the Permanent Court—the effects of which Article 37 both foresaw and was

intended to parry; or that they would have viewed with equanimity the possibility that, although the

Article would preserve many jurisdictional clauses, there might be many others which it would not; thus

creating that very situation of diversification and imbalance which it was desired to avoid.

[32] Whether Article 37 was aptly framed to carry out these objectives remains for consideration;

but that such were the objectives, and the


motives influencing the drafting, the Court can hardly doubt. This conclusion finds strong support in a

second historical consideration. As is well known, Article 37 represented, so far as treaties and

conventions were concerned, a compromise between two extreme and opposed schools of jurisdictional

thought. There were, on the one hand, those who wanted to insert in the Statute of the new Court a clause

of universal compulsory jurisdiction, automatically applicable to all disputes between parties to the

Statute, of whatever kind and howsoever arising. Such a clause would have rendered the insertion of

jurisdictional clauses in particular treaties or conventions unnecessary except for any special purpose, and

would have rendered a provision such as Article 37 unnecessary also, or caused it to be differently

drafted. On the other hand, there were those who were opposed to the idea of compulsory jurisdiction in

any form, and considered that the Court should only be competent in cases brought before it with the

express consent of the parties, given ad hoc .

The compromise between these two points of view which Article 37 represented (so far as

jurisdictional clauses in treaties and conventions were concerned) involved the rejection of the notion of a

universal compulsory jurisdiction; but on the other hand (and for that very reason) it also involved the

preservation at least of the already existing field of conventional compulsory jurisdiction. It was a natural

element of this compromise that the maximum, and not some merely quasi optimum preservation of this

field should be aimed at.

[33] With this background in mind, the Court will now consider the text of Article 37. Looking

simply at its actual language, the Court sees it primarily as a provision conferring jurisdiction upon the

International Court of Justice in respect of a certain category of disputes, and which mentions the

Permanent Court for one purpose and one only—namely that of defining or identifying the category of

dispute covered. Only three conditions are actually stated in the Article. They are that there should be a

treaty or convention in force; that it should provide (i.e., make provision) for the reference of a ‘matter’

(i.e., the matter in litigation) to the Permanent Court; and that the dispute should be between States both

or all of which are parties to the Statute. No condition that the Permanent Court should still be in

existence at any given moment is expressed in the Article. The conclusion, in so far as it is to be based on

the actual language of Article 37 must be that the 1927 Treaty being in force; it being a treaty which

contains a provision for a reference of the matter in dispute to the Permanent Court; and the Parties to the

dispute both being parties to the Statute—then, as between them, the matter is to be (‘shall be’) referred to

the International

46 ILR

national Court of Justice, or (according to the French text) that Court is to be the competent forum.

Two central issues evidently arise here. One, which will be considered later, is whether, although the

words ‘in force’ are directly related to the treaty or Convention as such, they must nevertheless be

regarded as relating also, and independently, to the jurisdictional clause as such. The other main issue is,

what is the meaning to be ascribed to the phrase ‘provides for’. Clearly this cannot mean ‘provides for’

operationally, here and now, for the Permanent Court no longer being in existence, no treaty could still

provide for that. It follows that to impart rationality to the term ‘provides for’ in its context, it must be

read in a figurative sense, almost as if it had been put between inverted commas, and as denoting a treaty

or convention still in force as such, containing a clause providing, or making provision for, a reference to

the Permanent Court, this being simply a convenient method of defining or identifying the category of

dispute in respect of which jurisdiction is conferred upon the International Court of Justice.

It was however argued that since Article 37, wherever it was applicable, transferred jurisdiction

from the Permanent Court to the present Court, it was necessary that the former Court should still be in

existence at the moment of the transfer; for otherwise there would no longer exist any jurisdiction to be

transferred. But the Court considers that Article 37 did not in fact operate to effect any ‘transfer’ of

jurisdiction as such. What was created was a new Court, with a separate and independent jurisdiction to

apply in the relations between the parties to the Statute of that new Court. In the field of the jurisdictional

clauses of treaties and conventions already in force, referring to the Permanent Court, the modus

operandi could, technically, have been to annex to the Statute a list of all such instruments. Such a

listing eo nomine would have left no doubt that any listed treaty was covered, so long as it remained in

force, irrespective of the date at which the parties became parties to the Statute, and independently of the

continued existence of the Permanent Court. Instead of any such cumbrous procedure, the same result was

achieved by resort to the common factor involved in all these jurisdictional clauses, namely the provision

they contained for reference to the Permanent Court. By mentioning this, Article 37 identified and defined

the category involved, and nothing else was needed.

[34] The Court will now turn to the question of the scope to be given to the words ‘in force’ in

Article 37. According to the actual text, this phrase relates solely to the treaties and conventions in

question, and as such. But this cannot be considered as finally conclusive in itself, because it is necessary

to take into consideration not only what


this provision was intended to do, but also what it was not intended to do. It was intended to preserve a

conventional jurisdictional field from a particular threat, namely the extinction which would otherwise

follow from the dissolution of the Permanent Court. But that was all it was intended to do. It was not

intended to create any new obligatory jurisdiction that had not existed before that dissolution. Nor, in

preserving the existing conventional jurisdiction, was it intended to prevent the operation of causes of

extinction other than the disappearance of the Permanent Court. In this sense but, however, in this sense

only, is it correct to say that regard must be had not only to whether the treaty or convention is still in

force, but also to whether the jurisdictional clause it contains is itself, equally, still in force. And precisely

because it was the sole object of Article 37 to prevent extinction resulting from the particular cause which

the disappearance of the Permanent Court would represent, it cannot be admitted that this extinction

should in fact proceed to follow from this very event itself. Such a possibility would not only involve a

contradiction in terms, but would run counter to the whole intention and purpose of the Article.

The argument to the contrary is based on seeking to draw a distinction between those States which

became parties to the Statute previous to the dissolution of the Permanent Court, and those which became

parties afterwards. But that is not an independent argument, for the alleged distinction is itself only a part,

or another aspect, of the same fundamental question, namely the effect of that dissolution on the status of

these jurisdictional clauses—since the sole relevance of the date of admission to the United Nations, if it

was subsequent to the dissolution, is whether there still remained in existence any jurisdictional clause in

respect of which Article 37 could take effect. It is in this way alone that any distinction between different

parties to the Statute could be introduced; for otherwise it must be entirely arbitrary, and it is not

recognized by Article 37 itself which, on the contrary, speaks of the ‘parties to the present Statute’, not

the ‘present parties to the Statute’. Except for the supposed effects of the dissolution, therefore, the

ordinary rule of treaty law must apply, that unless the treaty or provision concerned expressly indicates

some difference or distinction, such phrases as ‘the parties to the Statute’, or ‘the parties to the present

convention’, or ‘the contracting parties’, or ‘the Members of the Organization’, apply equally and

indifferently to cover all those States which at any given time are participants, whatever the date of their

several ratifications, accessions or admissions, etc.

Consequently, since the Court cannot, for reasons already stated, accept the dissolution of the

Permanent Court as a cause of lapse or abrogation of any of the jurisdictional clauses concerned, it must

hold that the date at which the Respondent became a party to the Statute is irrelevant.

46 ILR

[35] Certain other considerations serve to reinforce this view; for if it is clear from what was said

earlier about the origins of Article 37, that the aim was to be comprehensive, it is equally clear that to

admit what may for convenience be called the ‘dissolution’ argument, would not only be to make serious

inroads upon that objective, but quite possibly—for all that those who were drafting Article 37 could tell

at the time—to defeat almost entirely its intended purpose.

In the period April-June 1945, it was impossible to forecast when the Permanent Court would be

dissolved, or when—or on the basis of how many ratifications—the Charter of the United Nations would

come into force. Circumstances delaying the latter event, or causing it to occur on the basis of only a

relatively small number of ratifications, might have given rise to a situation in which, if the ‘dissolution’

argument were correct, many, or possibly even most, of the jurisdictional clauses concerned would have

fallen outside the scope of Article 37, a result which must have been contrary to what those who framed

this provision intended. It was suggested in the course of the oral hearing that these possibilities, had they

threatened to materialize, could and would have been avoided by taking steps to postpone the dissolution

of the Permanent Court. This however serves only to show what the real intentions of Article 37 must

have been—namely to make any such postponement unnecessary because, whatever the date of the

coming into force of the Charter, or of the dissolution of the Permanent Court, and whatever the date at

which a State became a party to the Statute, Article 37 would ensure in advance the preservation of the

relevant jurisdictional clauses, by causing them to confer competence on the present Court, as between

parties to its Statute. This was its purpose.

It has been objected that the view set forth above leads, in such a case as that of the Respondent

Government, to a situation in which the jurisdictional clause concerned, even if in existence, is

necessarily inoperative and cannot be invoked by the other party to the treaty containing it; and then, after

a gap of years, suddenly it becomes operative again, and can be invoked as a clause of compulsory

jurisdiction to found proceedings before the Court. It is asked whether, in these circumstances, any true

consent can be said to have been given by the Respondent Government to the exercise of jurisdiction by

the Court in this class of case.

[36] Noting in passing that this situation results from the act of the Respondent itself in applying for

membership of the United Nations


which, upon admission, entailed, by virtue of Article 93, paragraph 1, of the Charter of the United

Nations, becoming a party to the Statute, the Court would observe that the notion of rights and obligations

that are in abeyance, but not extinguished, is perfectly familiar to the law and represents a common

feature of certain fields.

In this connection, and as regards the whole question of consent, the Court considers the case of the

reactivation of a jurisdictional clause by virtue of Article 37 to be no more than a particular case of the

familiar principle of consent given generally and in advance, in respect of a certain class of jurisdictional

clause. Consent to an obligation of compulsory jurisdiction must be regarded as given ipso facto by

joining an international organization, membership of which involves such an obligation, and irrespective

of the date of joining. In consequence, States joining the United Nations or otherwise becoming parties to

the Statute, at whatever date, knew in advance (or must be taken to have known) that, by reason of Article

37, one of the results of doing so would, as between themselves and other parties to the Statute, be the

reactivation in relation to the present Court, of any jurisdictional clauses referring to the Permanent Court,

in treaties still in force, by which they were bound. It is the position maintained by the Respondent

Government which would create inequality, and discriminate in favor of those entering the United

Nations, or otherwise becoming parties to the Statute, after April 1946, particularly as regards the

obligations contained in the jurisdictional clauses of important general multilateral conventions, thus

giving rise to just the kind of anomaly Article 37 was intended to avoid.

The Respondent Government, in the course of the diplomatic correspondence preceding the original

proceedings before the Court, and in particular in the Notes exchanged in the period May 1957 to

February 1958, implicitly recognized the competence of the Court for the purposes of Article 17 (4) of the

1927 Treaty, and challenged the right of the Applicant Government to resort to the Court only on grounds

connected with the third and fourth Preliminary Objections in the present case. It did not demur when the

Applicant stated that the International Court of Justice had been substituted for the Permanent Court in

Article 17 (4) of the Treaty. It did not even broach the possibility that there might be a question as to the

competence of the Court qua forum. If this attitude was based on the assumption that Article 37 of the

Statute—by which the Respondent had by then become bound—conferred jurisdiction on the Court (an

assumption the correctness of which the reasoning of the decision in the Israel v. Bulgaria case might

appear to call in question), then the present finding of the Court, that this assumption was in fact correct,

operates to restore the basis on which the Respondent itself appears originally to have recognized the

same thing.

46 ILR

[37] The Court has thought it desirable to base itself up to this point wholly on considerations

relating to Article 37 of the Statute which, in its opinion, would (in the absence of any relevant special

factor) be applicable to the case of all the jurisdictional clauses in the treaties and conventions to which

Article 37 applies. In the case of treaties having the character of the Hispano-Belgian Treaty of 1927,

however, there are special features which afford additional support for the conclusions arrived at on the

basis of Article 37 alone.

Article 17 (4) of the Treaty was discussed between the Parties in the course of the written and oral

proceedings, largely in relation to the question of its ‘severability’ from the rest of the Treaty. Into this

question, which has implications reaching far beyond the scope of the present case, the Court does not

consider it necessary to go. What must be true, on any view of the matter, is that Article 17 (4) is an

integral part of the Treaty as a whole; and its judicial fate cannot be considered in isolation.

It is at this point necessary to note that Article 17 (4), the relevant terms of which are cited above,

had as its primary object in the scheme of the 1927 Treaty, what was more a matter of mechanics—

namely to indicate in what circumstances, and at what precise point in the attempt to dispose of the

dispute, either party would have the right to take the matter to the Court. This right was to be exercisable

if the (optional) conciliation procedure provided for by the Treaty had not been made use of, or had

failed; and if agreement had not been reached within a certain period on the terms of a compromis for the

submission of the dispute by mutual consent to the Court or to arbitration; and if, thereupon, a month's

notice was given of the intention to take the matter to the Court unilaterally.

The basic obligation to submit to compulsory adjudication, however, was and is carried by two other

provisions of the Treaty, namely Article 2, and the first paragraph of Article 17. The relevant paragraph

of Article 2 reads as follows:

[Translation]

‘All disputes of every kind between the High Contracting Parties with regard to which the Parties

are in conflict as to their respective rights, and which it may not have been possible to settle amicably by

the normal methods of diplomacy, shall be submitted for decision to an arbitral tribunal or to the

Permanent Court of International Justice.’

The Treaty then goes on to provide for the conciliation procedure, and continues in Article 17 (1) to

reaffirm the essence of Article 2 as follows:


[38][Translation]

‘In the event of no amicable agreement being reached before the Permanent Conciliation

Commission, the dispute shall be submitted either to an Arbitral Tribunal or to the Permanent Court of

International Justice, as provided in Article 2 of the present Treaty.’

In the light of these provisions, it would be difficult either to deny the seriousness of the intention to

create an obligation to have recourse to compulsory adjudication—all other means of settlement failing—

or to assert that this obligation was exclusively dependent on the existence of a particular forum, in such a

way that it would become totally abrogated and extanguished by the disappearance of that forum. The

error of such an assertion would lie in a confusion of ends with means—the end being obligatory judicial

settlement, the means an indicated forum, but not necessarily the only possible one.

This double aspect appears particularly clearly on the basis of the several jurisdictional clauses of

the 1927 Treaty, taken as a whole; and these considerations furnish the answer to the contention that the

obligation of compulsory adjudication in the Treaty was so indissolubly bound up with the indication of

the Permanent Court as the forum, as to be inseparable from it, and incapable of continued existence in

the absence of that Court. On the very language of Articles 2 and 17 (1), this is not the case. An

obligation of recourse to judicial settlement will, it is true, normally find its expression in terms of

recourse to a particular forum. But it does not follow that this is the essence of the obligation. It was this

fallacy which underlay the contention advanced during the hearings, that the alleged lapse of Article 17

(4) was due to the disappearance of the ‘object’ of that clause, namely the Permanent Court. But that

Court was never the substantive ‘object’ of the clause. The substantive object was compulsory

adjudication, and the Permanent Court was merely a means for achieving that object. It was not the

primary purpose to specify one tribunal rather than another, but to create an obligation of compulsory

adjudication. Such an obligation naturally entailed that a forum would be indicated; but this was

consequential.

[39] If the obligation exists independently of the particular forum (a fact implicitly recognized in the

course of the proceedings, inasmuch as the alleged extinction was related to Article 17 (4) rather than to

Articles 2 or 17 (1)), then if it subsequently happens that the forum goes out of existence, and no

provision is made by the parties, or otherwise, for remedying the deficiency, it will follow that the clause

containing the obligation will for the time being become (and perhaps remain indefinitely) inoperative,

i.e., without possibility of effective application. But if the obligation remains substantively in existence,

46 ILR

though not functionally capable of being implemented, it can always be rendered operative once more, if

for instance the parties agree on another tribunal, or if another is supplied by the automatic operation of

some other instrument by which both parties are bound. The Statute is such an instrument, and its Article

37 has precisely that effect.

Accordingly, ‘International Court of Justice’ must now be read for ‘Permanent Court of

International Justice’ in Articles 2 and 17 of the Treaty. The same applies in respect of Article 23, under

which the Court is made competent to determine any disputed question of interpretation or application

arising in regard to the Treaty; and similar substitutions in Articles 21 and 22 would follow

consequentially.

SECOND PRELIMINARY OBJECTION (SUBSIDIARY ASPECT )

The Respondent Government also advanced a subsidiary plea in relation to its second Preliminary

Objection, which requires to be considered only if the Court should reject the objection in its principal

aspect. Since the Court does reject it, it must now consider this subsidiary plea. This was to the effect that

the dissolution of the Permanent Court having extanguished Article 17 (4) of the 1927 Treaty, or at any

rate deprived it of its force, then if (contrary to the principal contention of the Respondent) Article 37 of

the Statute operated to re-activate this clause upon Spain's admission to the United Nations in December

1955, what in consequence came into existence at that date was a new or revised obligation between the

Parties; and that just as the original obligation only applied to disputes arising after the Treaty date, so the

new or revised obligation could only apply to disputes arising after the date of Spain's admission to the

United Nations, creative of that obligation. Since the dispute had in fact arisen previous to that date, it

was accordingly not covered; or could only be regarded as covered by a retroactive application of the

obligation which its terms, as they must now be deemed to stand, excluded.

[40] In the Respondent's written Preliminary Objections, what was postulated as emerging in 1955

was not merely a new jurisdictional obligation but a whole new ‘treaty’. In the Respondent's Final

Submissions, however, as lodged at the end of the oral hearing, what was referred to was a ‘revised’

Article 17 (4) of the 1927 Treaty. It is in fact clear that no new Treaty as such could have emerged in

1955, because it was common ground in the case that, apart from the question of Article 17 (4), the Treaty

of 1927 had never ceased to be in force, and had been operative throughout. At the most, therefore, what

might have happened in 1955 was that the Treaty was amended by the inclusion in it of a new or revised

jurisdictional clause, providing


for a reference to the International Court of Justice instead of to the former Permanent Court. However, as

the Respondent's Submissions recognize, the limitation ratione temporis regarding the cases which were

justiciable under the Treaty was contained in, or arose from Articles 1 and 2, and from the Final Protocol

to the Treaty. As these provisions had ex hypothesi never ceased to be in force, they would have applied

automatically to any new or revised obligation when the latter arose. This must have been so, for

otherwise the revised Treaty would have contained two independent and incompatible sets of

requirements ratione temporis ; but in truth, it continued to contain only one set, since the ‘revised’

obligation (as stated in the Respondent's Final Submissions) related to Article 17 (4), which itself

contained no requirement ratione temporis , while the ‘revision’ related only to the substitution of the

present for the former Court. It follows that any new or revised obligation could only operate ratione

temporis in the same way as the original one, and therefore it must cover all disputes arising after the

Treaty date.

However, it is not necessary to rely on this conclusion, for in the opinion of the Court, the grounds

on which the second Preliminary Objection has been rejected in its principal aspect, necessarily entail its

rejection in its subsidiary aspect also. These grounds are that the basic obligation to submit to compulsory

adjudication was never extanguished by the disappearance of the Permanent Court, but was merely

rendered functionally inoperative by the lack of a forum through which it could be implemented. What

therefore happened in 1955, when this lacuna was made good by Spain's admission to the United Nations,

was that the operation of the obligation revived, because the means of implementing it had once more

become available; but there was neither any new creation of, nor revision of the basic obligation. Its

operation having revived, by virtue of Article 37 of the Statute, this obligation could only function in

accordance with the terms of the Treaty providing for it, as the Parties must be deemed to have intended,

and it consequently continued to relate (as it always had done) to any disputes arising after the Treaty

date.

Alternatively, to refer to another part of the grounds on which the objection in its principal aspect

was rejected, once Article 37 was applicable, the Court became, in the language of that provision,

competent as between parties to the Statute to adjudicate on any matter which, under a treaty or

convention in force, would have fallen to be referred to the Permanent Court had it still existed and had

Article 37 never been framed. The present case is such a matter.

For the reasons given, therefore, the Court rejects the second Preliminary Objection both in its

principal and in its subsidiary aspects.

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[41]THIRD AND FOURTH PRELIMINARY OBJECTIONS

Having decided, in rejecting the first Preliminary Objection, that the discontinuance of the original

proceedings did not bar the Applicant Government from reintroducing its claim, and having determined,

in rejecting the second Preliminary Objection, that the Court has jurisdiction to entertain the Application,

the Court has now to consider the third and fourth Preliminary Objections which involve the question of

whether the claim is admissible.

In considering whether these Preliminary Objections should be upheld, the Court recalls the fact that

the Applicant has submitted alternative pleas that these objections, unless rejected by the Court, should be

joined to the merits. It will therefore be appropriate at this point to make some general observations about

such joinders. These are effected under Article 62, paragraph 5, of the Rules of Court, which reads as

follows:

‘After hearing the parties the Court shall give its decision on the objection or shall join the objection

to the merits. If the Court overrules the objection or joins it to the merits, it shall once more fix time-

limits for the further proceedings.’

Since this paragraph repeats verbatim the like provision in the 1936 Rules of the Permanent Court of

International Justice, it is pertinent to take note of the various reasons which that Court gave for deciding

to join a preliminary objection to the merits.

In the Pajzs, Csáky, Esterházy case ( Hungary v. Yugoslavia ), the Court, on 23 May 1936, issued

an Order joining the Yugoslav objections to the merits because ‘the questions raised by the first of these

objections and those arising out of the appeal as set forth in the Hungarian Government's submissions on

the merits are too intimately related and too closely interconnected for the Court to be able to adjudicate

upon the former without prejudging the latter’; and because ‘the further proceedings on the merits … will

place the Court in a better position to adjudicate with a full knowledge of the facts upon the second

objection’ (P.C.I.J., Series A/B, No. 66 , p. 9).

Shortly after this, in the Losinger case, the Court, in an Order dated 27 June 1936, stated with

reference to a plea to the jurisdiction made in that case, that such a plea ‘may be regarded … as a …

defence on the merits, or at any rate as being founded on arguments which might be employed for the

purposes of that defence’. Consequently,

‘the Court might be in danger, were it to adjudicate now upon the plea to the jurisdiction, of passing

upon questions which appertain to the merits of the case, or of prejudging their solution’.


[42] Therefore, the Court concluded, the objection to the jurisdiction should be joined to the merits,

so that ‘the Court will give its decision upon it, and if need be, on the merits, in one and the same

judgment’. The Court went on to say in regard to another objection, relating to the admissibility of the

suit, that ‘the facts and arguments adduced for or against the two objections are largely interconnected

and even, in some respects, indistinguishable’. Accordingly, this objection also was joined to the merits

(P.C.I.J., Series A/B, No. 67 , pp. 23–24).

In the Panevezys-Saldutiskis Railway case, the Court, in its Order of 30 June 1938, joining two

preliminary objections to the merits, said that—

‘at the present stage of the proceedings, a decision cannot be taken either as to the preliminary

character of the objections or on the question whether they are well-founded; any such decision would

raise questions of fact and law in regard to which the Parties are in several respects in disagreement and

which are too closely linked to the merits for the Court to adjudicate upon them at the present stage’.

Two further reasons which were given were that—

‘if it were now to pass upon these objections, the Court would run the risk of adjudicating on

questions which appertain to the merits of the case or of prejudging their solution’

and that—

‘the Court may order the joinder of preliminary objections to the merits, whenever the interests of

the good administration of justice require it’ (P.C.I.J., Series A/B, No. 75 , pp. 55–56).

The present Court has been guided by like considerations in the two cases in which it has had

occasion to join the preliminary objections to the merits. In the case of Certain Norwegian Loans , the

Court, on the basis of an understanding between the Parties to that effect, joined the preliminary

objections to the merits ‘in order that it may adjudicate in one and the same judgment upon these

Objections and, if need be, on the merits’ (I.C.J. Reports 1956 , p. 74).

[43] In the case concerning Right of Passage over Indian Territory , the Court found that both the

elucidation of the facts, and the legal effect or significance of certain practices and circumstances, would

be involved in pronouncing on one of the preliminary objections, and that the Court could therefore not

pronounce upon it ‘without prejudging the merits’. In regard to another objection, the Court said that

‘having

46 ILR

heard conflicting arguments’ it was ‘not in a position to determine at this stage’ certain issues which had

been raised. It further found that in regard to certain other questions, it was not ‘in possession of sufficient

evidence to enable it to pronounce on these questions’, and that to attempt an evaluation of certain factors

involved, ‘although limited to the purposes of the Sixth Preliminary Objection, would entail the risk of

prejudging some of the issues closely connected with the merits’ (I.C.J. Reports 1957 , pp. 150–152).

The Permanent Court of International Justice drew attention to an important aspect of the matter

when, as mentioned above, it said that ‘the Court may order the joinder of preliminary objections to the

merits, whenever the interests of the good administration of justice require it’. But the safeguarding of the

rights of respondent States is equally an essential part of ‘the good administration of justice’, and it is in

the interests of the respondents that the Rules of Court should contain Article 62 permitting the filing of

preliminary objections. It must not be overlooked however, that respondents are given broad powers by

this provision, since merely by labelling and filing a plea as a preliminary objection they automatically

bring about the suspension of the proceedings on the merits (paragraph 3 of Article 62). This assures the

respondent State that the Court will give consideration to its objection before requiring it to respond on

the merits; the Court takes no further step until after hearing the parties (paragraph 5 of Article 62—see

the discussion on this point by the Permanent Court in 1936, P.C.I.J., Series D, Third Addendum to No.

2 , pp. 646–649). The attitude of the respondent State is however only one of the elements that the Court

may take into consideration; and paragraph 5 of the Article simply provides that, after the hearing, ‘the

Court shall give its decision on the objection or shall join the objection to the merits’.

[44] In reaching its conclusion, the Court may decide that the objection does not in fact have a

preliminary character, and that therefore, without prejudice to the right of the respondent State to raise the

same question at another stage of the proceedings, if such there be, the objection cannot be entertained as

a ‘preliminary objection’. Again, the Court may find that the objection is properly a preliminary one as,

for example, to the jurisdiction of the Court, and it may dispose of it forthwith, either upholding it or

rejecting it. In other situations, of which examples are given in the cases referred to above, the Court may

find that the objection is so related to the merits, or to questions of fact or law touching the merits, that it

cannot be considered separately without going into the merits (which the Court cannot do while

proceedings on the merits stand suspended under Article 62), or without prejudging the merits before

these have been fully argued. In these latter situations, the Court will join the preliminary objection to the


merits. It will not do so except for good cause, seeing that the object of a preliminary objection is to avoid

not merely a decision on, but even any discussion of the merits. On the other hand, a joinder does not in

any respect indicate that the objection has been ignored. Indeed, as happened in the case of Certain

Norwegian Loans , the Court, at the stage of the merits, to which the objections had been joined, upheld

an objection to the jurisdiction, and therefore did not adjudicate upon the merits at all.

The Court will proceed to consider the third and fourth Preliminary Objections with these

considerations in mind.

By its third Preliminary Objection the Respondent Government denies the jus standi of the

Applicant Government in the present proceedings, and its legal capacity to protect the Belgian interests

on behalf of which it claims, the Belgian national character of most of these being also contested. The

grounds of the objection can be stated in various ways, but briefly its main basis is that the acts

complained of, said to engage the international responsibility of the Respondent Government, took place

not in relation to any Belgian natural or juristic person but to the Barcelona Traction company, which is

a juristic entity registered in Canada, the Belgian interests concerned being in the nature of shareholding

interests in that company. In these circumstances, it is contended that (citing a passage from the

Respondent's final Submissions) ‘international law does not recognize, in respect of injury caused by a

State to a foreign company, any diplomatic protection of shareholders exercised by a State other than the

national State of the company’. Hence, it is said, no claim can be made by the Applicant Government.

The latter, for its part, contests the view of international law thus put forward, and asserts its right to

intervene on behalf of Belgian nationals, shareholders in the company.

[45] Put as stated above, the objection evidently has a preliminary character or aspect. But it can

also be put in another way, which does not directly raise the question of the Applicant Government's jus

standi—or does so only at one remove. It can be asked whether international law recognizes for the

shareholders in a company a separate and independent right or interest in respect of damage done to the

company by a foreign government; and if so to what extent and in what circumstances and, in particular,

whether those circumstances (if they exist) would include those of the present case. Put in this way, the

question appears as one not simply of the admissibility of the claim, but of substantive legal rights

pertaining to the merits which are not confined solely to such matters as whether the acts complained of

took place, and if so what their legal effect was, internationally:

46 ILR

or rather, this latter question itself constitutes the greater part of the real issue in this case, and pertains to

the substantive legal merits. In short, the question of the jus standi of a government to protect the interests

of shareholders as such, is itself merely a reflection, or consequence, of the antecedent question of what is

the juridical situation in respect of shareholding interests, as recognized by international law. Where, in a

case such as the present one, a government is not merely purporting to exercise diplomatic protection, but

to make a claim before an international tribunal, it necessarily invokes rights which, so it contends, are

conferred on it in respect of its nationals by. the rules of international law concerning the treatment of

foreigners. Hence the question whether international law does or does not confer those rights is of the

essence of the matter. In short, a finding by the Court that the Applicant Government has no jus standi ,

would be tantamount to a finding that these rights did not exist, and that the claim was, for that reason,

not well-founded in substance.

If the Court were to take the view that the issues raised by the Respondent's third Preliminary

Objection had no other character than that of substantive issues relating to the merits, it would have to

declare the objection irreceivable as such, and the issues it involved as being part of the merits. Since

however the objection clearly has certain aspects which are of a preliminary character, or involves

elements which have hitherto tended to be regarded in that light, the Court will content itself with joining

the objection to the merits.

By way of illustration of the sort of situation which the Court considers to exist here, in regard to the

question of joinder—and it is not suggested that there are any other analogies—it may be recalled that

when in the Panevezys-Saldutiskis Railway case the Permanent Court joined two preliminary objections

to the merits, it said in its Order of 30 June 1938 that at the preliminary stage it could not even decide ‘as

to the preliminary character of the objections’ (P.C.I. J., Series A/B, No. 75 , P. 56); and subsequently on

the merits said that:

‘Though it is true that an objection disputing the national character of a claim is in principle of a

preliminary character, this is not so in the actual case before the Court’ (P.C.I.J., Series A /B, No. 76 , p.

17).

[46] It is evident that certain kinds of objections (of which the second Objection in the present case

affords an example) are so unconnected with the merits that their wholly preliminary character can never

be in doubt. They could arise in connection with almost any set of facts imaginable, and the Court could

have neither reason nor justification for not deciding them at once, by way either of acceptance or

rejection. Any such clear cut situation is, however, far from existing as regards


the third Preliminary Objection in the present case, and the same thing is even more true of the fourth

Objection.

The third Objection involves a number of closely interwoven strands of mixed law, fact and status,

to a degree such that the Court could not pronounce upon it at this stage in full confidence that it was in

possession of all the elements that might have a bearing on its decision. The existence of this situation

received an implicit recognition from the Parties, by the extent to which, even at this stage, they went into

questions of merits, in the course of their written and oral pleadings. Moreover, it was particularly on

behalf of the Respondent that it was sought to justify the process of discussing questions of merits, as

involving matters pertinent to or connected with the third and fourth Objections, which the Respondent

had itself advanced.

The Court is not called upon to specify which particular points, relative to the questions of fact and

law involved by the third Objection, it considers an examination of the merits might help to clarify, or for

what reason it might do so. The Court will therefore content itself by saying that it decides to join this

objection to the merits because—to quote the Permanent Court in the Pajzs, Csáky, Esterházy case

(P.C.I.J., Series A/B, No. 66 , at p. 9)—‘the … proceedings on the merits … will place the Court in a

better position to adjudicate with a full knowledge of the facts’; and because ‘the questions raised by …

these objections and those arising … on the merits are too intimately related and too closely

interconnected for the Court to be able to adjudicate upon the former without prejudging the latter’.

As regards the fourth Preliminary Objection, the foregoing considerations apply a fortiori for the

purpose of requiring it to be joined to the merits; for this is not a case where the allegation of failure to

exhaust local remedies stands out as a clear-cut issue of a preliminary character that can be determined on

its own. It is inextricably interwoven with the issues of denial of justice which constitute the major part of

the merits. The objection of the Respondent that local remedies were not exhausted is met all along the

line by the Applicant's contention that it was, inter alia , precisely in the attempt to exhaust local remedies

that the alleged denials of justice were suffered. This is so obvious on the face of the pleadings, both

written and oral, that the Court does not think it necessary to justify it further at this stage, by any

statement or consideration of the events in question, which can be left until the merits are heard.

Accordingly, the Court decides to join the third and fourth Preliminary Objections to the merits.

46 ILR

[47] For these reasons,

THE COURT ,

by twelve votes to four,

rejects the first Preliminary Objection;

by ten votes to six,

rejects the second Preliminary Objection;

by nine votes to seven,

joins the third Preliminary Objection to the merits;

by ten votes to six,

joins the fourth Preliminary Objection to the merits.

Done in English and French, the English text being authoritative, at the Peace Palace, The Hague,

this twenty-fourth day of July, one thousand nine hundred and sixty-four, in three copies, one of which

will be placed in the archives of the Court and the others transmitted to the Government of the Kingdom

of Belgium and to the Government of the Spanish State respectively.

(Signed) Percy C. SPENDER ,

President.

(Signed) GARNIER-COIGNET ,

Registrar.

President Sir Percy SPENDER makes the following declaration:

I concur in the Judgment of the Court. I wish, however, to say a few words on the second

Preliminary Objection of the Government of Spain.

Whilst the text of Article 37 of the Court's Statute is quite different to that of Article 36 (5), which

was the subject of examination in Israel v. Bulgaria , and its terms are, in my view, so clear as to admit

of no doubt as to their meaning, it is difficult to discern any decisive distinction in principle between

Article 36 (5) and Article 37 in relation to the cardinal questions raised by the second Preliminary

Objection.

For my part, for reasons which appear in the Joint Dissenting Opinion in Israel v. Bulgaria , to

which I continue to adhere, I would, apart from other considerations referred to in the Court's Judgment,

be compelled to reject this Preliminary Objection.


[48] Judge SPIROPOULOS makes the following declaration:

I regret that I am unable to share the view of the Court in regard to the second, third and fourth

Preliminary Objections.

As to the second Preliminary Objection, my position is determined by the Court's Judgment in the

case concerning the Aerial Incident (Israel v. Bulgaria) . Starting from the concept that the purpose of

Article 37 of the Statute of the Court is the same as that of Article 36, paragraph 5, and basing myself on

the considerations of the Judgment in question, I consider that the Court should have found that it is

without jurisdiction.

As to the third Preliminary Objection, I think the Court should have considered as relevant the

arguments on which the Spanish Government founds its third Preliminary Objection.

Judge KORETSKY makes the following declaration:

I agree with the Judgment and its reasoning. I venture to make some additional observations as

regards the first Preliminary Objection.

Much has been said in the written documents and in the oral proceedings about discontinuance of

the action (désistement d'action ) and discontinuance of the proceedings (désistement d'instance ). But

this dichotomy is unknown to the Rules of Court. Articles 68 and 69 know only discontinuance of the

proceedings in its two possible forms—either by mutual agreement of the parties (Article 68), or by

unilateral declaration of the applicant (Article 69).

Under Article 68 the parties inform the Court in writing either that they have concluded an

agreement as to the settlement of the dispute or that they are not going on with the proceedings, whilst

under Article 69 the applicant informs the Court that it is not going on with the proceedings. In either case

the Court directs the removal of the case from its list. Under Article 68 however it officially records the

conclusion of the settlement or the mutual agreement to discontinue, whilst under Article 69 it officially

records the discontinuance of the proceedings.

The conclusion of a settlement is not the discontinuance of an action (if one tried to understand the

latter expression as the abandonment of a substantive right), for a settlement is usually the realization of a

right which was in dispute. A dispute may subsequently arise in connection with the implementation of

this settlement giving rise (possibly) to new proceedings.

[49] It is to be recalled that the heading for Articles 68 and 69 is ‘Settlement and Discontinuance’.

At the time of the deliberations on the Rules of Court in 1935 Judge Fromageot (P.C.I.J., Series D, Acts

and

46 ILR

Documents concerning the Organization of the Court, Third Addendum to No. 2 , pp. 313 et seq. ) said

that he ‘wished to change the heading of the whole section. The word “agreement” was not sufficiently

explicit as an indication of its contents.’ He was of the opinion that the section should have been headed:

‘Settlement and abandonment of proceedings.’

The emphasis on the settlement of the dispute in Article 68 and in the heading of the section was to

all appearances not accidental. Generally speaking, the main task of the Court is to settle disputes

between States. Article 33 of the Charter in the section headed ‘Pacific settlement of disputes’ provides

that ‘the parties to any dispute … shall … seek a solution by [among the peaceful means mentioned there]

judicial settlement’.

In Article 68 settlement occupies the first position. In the light of the Court's task in the settlement

of disputes, we have to resolve the procedural questions in this case, especially the question of the

consequences of the discontinuance of the proceedings, the question of the permissibility of a reinstitution

of the proceedings after discontinuance.

The discontinuance of the proceedings in this case was in a sense a conditional one. Though the

Belgian Government made no reservation of its substantive rights the conditionality of the discontinuance

is evident. One may consider this conditionality as tacit (from a formal point of view), implied, but the

documents show that a withdrawal of the proceedings instituted before the Court was demanded of

Belgium as a precondition for the opening of negotiations proper (Preliminary Objections, Introduction,

paragraph 4, and Observations, paragraph 25); it was then evident that the demand was related to

Belgium's Application to the Court, but not to the substantive right, about which the proceedings were

instituted. About what then was it intended to carry on negotiations if it be considered that the Belgian

Government, by the withdrawal of its Application, decided not to remove an obstacle to promising

negotiations but to abandon even its (and its nationals') substantive rights? If no substantive rights existed

there would be no subject for negotiations. And we may conclude that discontinuance of the proceedings

does not involve an abandonment of a corresponding substantive right. Discontinuance even by mutual

agreement is not necessarily a pactum de non petendo , which supposes not only discontinuance of a

given action but an obligation not to sue at all, which is tantamount to the abandonment of the claim. And

it has not been proved in this case that the renunciation of a substantive right has taken place.

Judge JESSUP makes the following declaration:

[50] I am in full agreement with the Court that no one of the Preliminary Objections could be upheld

at this stage, and that the first two must


be rejected now for reasons stated in the Judgment. I am also in accord with what the Court has to say

about the general considerations which govern a decision to join a preliminary objection to the merits. I

agree that those general considerations require that the third and fourth Preliminary Objections should be

joined to the merits. Consequently, in order to be consistent with those general considerations,

conclusions of law applicable to arguments involved in those two objections, even though I would find

them capable of formulation now, may appropriately be deferred until a subsequent stage of the case.

Vice-President WELLINGTON KOO and Judges TANAKA and BUSTAMANTE Y RIVERO append

Separate Opinions to the Judgment of the Court.

Judge MORELLI and Judge ad hocARMAND-UGON append Dissenting Opinions to the Judgment of

the Court.

(Initialled) P.S.

(Initialled) G.-C

46 ILR

SEPARATE OPINION OF VICE-PRESIDENT WELLINGTON KOO

1. I am in complete agreement with the Court's findings on the first, second and fourth Preliminary

Objections and with the general line of reasoning which has led up to them, except on one point in

connection with the second Objection which calls for some elucidation on my part. As regards the third

Preliminary Objection, I regret to be unable to concur in the Court's conclusion in favour of a joinder to

the merits. It is my view that this objection should have been rejected. Accordingly, I propose to state the

reasons for my opinion in the two respects.

I

2. The Judgment in referring to the reliance of the Respondent upon the decision of the Court in

the Israel v. Bulgaria case in support of the second Preliminary Objection points out a number of

differences between that case and the present one. In so far as this is done for the purpose of making an

independent approach to the instant case on its merits, it can be easily understood. But, as I look at it,

calling attention to these differences does not imply, nor do they themselves justify an implication of, any

justification of the decision in the former case, concerning which my views remain the same as stated in

the Joint Dissenting Opinion appended to the Judgment in that case.

[52] 3. The differences which have been noted in the present Judgment on the second Preliminary

Objection are, in my view, only of an incidental character as regards the point in issue. The two situations

arising from Article 36 (5) of the Statute in relation to the Bulgarian declaration of acceptance under

Article 36 and from Article 17 (4) of the Hispano-Belgian Treaty of 1927 in relation to Article 37 are

basically similar, if not identical, so far as the question of the transfer of the compulsory jurisdiction from

the old Court to the new Court is concerned. Both depend upon the factor of being ‘still in force’,

independently of the disappearance of the Permanent Court, which was taken for granted. This term,

which, as regards declarations of acceptance mentioned in Article 36 (5), was originally drafted in

English and rendered in French as ‘pour une durée qui n'est pas encore expirée’, constitutes the requisite

condition for the said transfer. As regards Article 37, the condition is in fact the same for it calls for ‘a

treaty or convention in force [which] provides for reference of a matter to a tribunal to have been

instituted by the League of Nations, or to the


Permanent Court of International Justice’. The dissolution of both the League and the Court had been

known and they were expected to be on their way to disappearance. The purpose of Article 37 and Article

36 (5) is the same: it is to preserve as far as possible the compulsory jurisdiction arrangements in force

apart from the expected dissolution of the League and the Court. The form of the instrument in which the

compulsory jurisdiction provision is embodied is immaterial. Whether this provision forms the whole

subject-matter of a given instrument or is only one of the provisions of a treaty or convention for pacific

settlement of disputes by specified bodies, or whether it constitutes a special provision in a general treaty

or convention on other matters, is of no decisive importance as regards the transfer of the jurisdiction

under Article 37. What matters is that the treaty or convention should in such case continue to be in force.

This continuation of validity refers to the instrument as a whole; so long as the instrument itself remains

in force, so long does the provision for compulsory jurisdiction, just as under Article 36 (5) of the new

Statute, the declarations of acceptance made under Article 36 of the old Statute, are considered to remain

in force so long as the period for which they were made has not expired. Article 17 (4) of the 1927 Treaty,

like the Bulgarian declaration of acceptance, may have been temporarily inoperative due to the

dissolution of the Permanent Court of International Justice, but this transient factor of inapplicability had

been taken for granted and had been the very reason for the provisions of Article 37 just as it had been, in

respect of declarations of acceptance under Article 36, for those of Article 36 (5). In other words the

whole purpose of both provisions was intended to discount the effect of the dissolution of the old Court

and make possible the effective transfer of its compulsory jurisdiction to the new Court.

[53] 4. Moreover, on closer examination it will be found that the argument of differentiation

between the Aerial Incident case and the present case does not explain away the former decision. From

the juridical point of view there is really no distinction as regards the principle of transfer from the old

Court to the new Court. Only the two sources of the obligation to submit to compulsory jurisdiction are

different. In the case of the declarations of acceptance made under Article 36, paragraph 2, of the old

Statute, like similar declarations made under the identically numbered provision of the new Statute, their

effectiveness depended upon the extent of concordance of the terms between any two given acceptances,

having due regard to the respective reservations and limitations on the principle of reciprocity, whereas

the jurisdictional clauses, to which Article 37 is applicable, derive from the mutual consent and agreement

of the contracting parties in bilateral or multilateral instruments. But the process of the transfer itself and

the legal

46 ILR

effect of the transfer once consummated, are the same in both situations, just as the purpose of the two

provisions in the Statute in question is identical. Only, in the instant case, as the Judgment has rightly

pointed out, the basic obligation of submitting to compulsory adjudication is clearly stipulated in Articles

2 and 17 (1) of the 1927 Treaty just as in Article 23 in respect of ‘any disputes arising as to the

interpretation of execution of the present Treaty’, while the provision of Article 17 (4) is of a functional

character as regards the tribunal for such adjudication, as is also the case in respect of the tribunal

mentioned in Articles 21 and 22 for the determination of certain matters.

5. Such being the situation in the instant case, the difference in legal effect, if any, is one of degree

as regards the validity or strength of the source of the obligation and not one of kind. For this reason there

is even greater justification to uphold the validity of the transfer of the compulsory jurisdiction under

Article 37 than under Article 36, paragraph 5. It does not warrant any implication that the decision in

the Aerial Incident case was equally justifiable in law.

II

6. The third Preliminary Objection undoubtedly raises important questions of law and fact. In

principle I fully endorse judicial caution as a sound policy in the interest of good administration of justice

and the Court certainly has full discretionary power to decide on a joinder for good reasons, as the Court

has affirmed in the present Judgment.

7. In the instant case I am, however, of the opinion that this objection could and should have been

adjudicated upon. The elaborate written pleadings and the lengthy oral hearing have brought out clearly

and almost exhaustively the various issues involved and the searching, though conflicting, arguments of

the two Parties. While the Applicant has asked the Court, as the alternative to dismissal, to join the third

Preliminary Objection to the merits, the Respondent has urged that the issue raised by it ‘is wholly ripe

for decision’ and that the alternative Belgian request for the joinder of this objection to the merits cannot

be justified.

[54] 8. In the light of the submissions of the Parties on the third Preliminary Objection, two

principal questions are involved at the outset:(a) one of law and (b) one of fact, the other issues raised

being subordinate to and dependent upon the answers to the two questions for their solution. The question

of law can be stated thus: does international law recognize the right of a State to protect its nationals,


natural or juristic persons, being shareholders in a foreign company, for damage or injury to them through

an internationally illicit act done to the company by a third State? And the question of fact centring on

two crucial points: are the shares in Barcelona Traction registered on its books in the name of nominees

of American nationality and claimed by the Applicant as belonging to natural and juristic persons of

Belgian nationality found prima facie to be owned by them, and have these persons sustained damage

through damage caused to the said company by internationally wrongful acts, measures or omissions of

the organs of the Respondent Government?

9. If the answer to the question of law is found to be in the negative and nevertheless the facts and

circumstances of the case appear to be weighty and serious, judicial caution and sound administration of

justice would dictate a joinder to the merits in order to make two determinations at the second phase of

the proceedings, if it should finally take place. First, to determine whether the facts and circumstances of

the instant case are juridically adequate to constitute a valid ground for recognizing the Applicant's

capacity or jus standi before the Court. If they are found to be inadequate for the purpose, the claim of the

Applicant must be held to be inadmissible and the third Preliminary Objection must be sustained. If they

are found to be adequate, it would then be in order to make the second determination, namely whether the

facts and circumstances of the instant case are of such a particular character as to warrant the finding by

the Court of another exception to the existing recognized rule of protection of a company only by its

national State.

10. If, on the other hand, the answer to the same question of law is found to be in the affirmative and

the essential facts alleged by the Applicant constitute prima facie a valid ground for recognizing its

capacity, a jus standiin the instant case, the said objection must be rejected at the present stage of the

proceedings. Such a finding, however, would still leave it open to the Respondent at the later phase of the

proceedings on the merits, if it should finally take place, to refute and disprove the alleged facts by

counter-evidence. If the Respondent, in the opinion of the Court, succeeds in the task, a finding will of

course be made to reject the Applicant's claim on the merits.

[55] 11. In brief, the primary question of law raised by the third Preliminary Objection consists in

determining first of all whether under modern international law there exists a general right on the part of a

State to protect its nationals, shareholders in a foreign company, vis-à-vis a third State independently of

the general rule of protection by States of their national companies and of the recognized exception to it

as noted above. It centres on the point whether modern international

46 ILR

law sanctions such a general right of intervention as claimed by the Applicant on behalf of Belgian

shareholders. I propose now to consider this question.

A

12. The introduction of the concept of private legal entities in international law in the form of

corporate bodies is a natural sequel to its emergence in municipal law. Since there are almost as many

different kinds of corporate entities as there are different systems of municipal law under which they are

constituted and since their activities have been growing in complexity as well as in kind, the problem of

protecting their legitimate interests in international law has been assuming increasing importance as well

as endless complexity.

13. This idea of protection is fundamental and appears to be common ground between the two

schools of advocates on the subject. Their difference of view relates to the manner and extent of its

implementation in international law. What is pertinent to the question under consideration, however, is to

determine which is the more reasonable and practical view as regards protection of the shareholders by

their national State in a foreign company. Should this protection be confined to the shareholders in a

foreign company which is of the nationality of the ‘offending State’? Should it be limited again to such a

case where the said foreign company has been dissolved or is practically defunct? Should there be an

additional requirement that the said shareholders must be owners of a majority of the total number of

shares of the company or at least a substantial proportion of them? What is the criterion for constituting a

substantial proportion? Or what is the bearing and effect of the attitude of the State, the nationality of

which is possessed by the company, upon the right of the national State of its shareholders to protect their

interests? Has it intervened or has its intervention been energetic or not?

14. I am inclined to think that while the positive answers to them may be interesting or useful, they

do not constitute essential elements to a general rule of protection of the national shareholders of the

intervening State (still less to the particular issue under consideration).

[56] 15. Foreign investments constitute one form of property, rights or interests, and as such are in

principle entitled to the protection of international law. Since the kinds and methods of such investment

are numerous and varied, and since they are still in the process of expansion and development, it is

inevitable that at the present stage of their evolution new circumstances and unfamiliar features will be

encountered in the protection of such rights and interests in the international


field. But in essence they all fall within the compass of the general rule of diplomatic and judicial

protection of international law. What is really involved is the basic principle of protection, which has

been so clearly affirmed by the Permanent Court of International Justice in the Mavrommatis case when

it declared:

‘It is an elementary principle of international law that a State is entitled to protect its subjects, when

injured by acts contrary to international law committed by another State, from whom they have been

unable to obtain satisfaction through the ordinary channels1 .’

Moreover, international law, which is primarily founded on the generally recognized principles of

law and justice, attaches less importance to form and appearance than municipal law. Where it is a

question of protection of property, rights and interests, it is the proper function of international law to

ascertain where and to what extent they exist, and to accord recognition to realities rather than to forms

and appearance. As stated by this Court in the Reparation for Injuries Suffered in the Service of the

United Nations , Advisory Opinion of 11 April 1949‘throughout its history, the development of

international law has been influenced by the requirements of international life …2’. Max Huber,

Rapporteur on British claims against Spain in the Spanish Zone of Morocco, observed:



‘… Malgré le fait que beaucoup de systèmes de droit admettent l'existence indépendante de sociétés

en nom collectif, la jurisprudence prépondérante des tribunaux reconnaît la possibilité de distinguer entre

les parts contributives des sociétaires, d'un côté et la société même de l'autre. Le droit international qui,

dans ce domaine, s'inspire essentiellement des principes de l'équité, n'a établi aucun critère formel pour

accorder ou refuser la protection diplomatique à des intérêts appartenant à des personnes de nationalité

différente…3’

16. The right of a State to protect a company which possesses its nationality by diplomatic

intervention or by recourse to international judicial settlement against another State for wrongful acts

toward the company involving its international liability is generally recognized by international law. This

rule is evidently derived by analogy from the principle that—

1 P.C.I.J., Series A, No. 2 , p. 12.

2 I.C.J. Reports 1949 , p. 178.

3 Quoted by John Thomas Miller Jr., Du traitement par les gouvernements des intérêts étrangers dits substantiels des sociétés , 1950, p. 82.

46 ILR

[57]‘By taking up the case of one of its subjects and by resorting to diplomatic action or

international judicial proceedings on his behalf, a State is in reality asserting its own rights—its right to

ensure in the person of its subjects, respect for the rules of international law1 .’

But this analogy, by the very nature of the corporate personality, is only approximate and cannot be

pushed too far. It has been generally accepted because it facilitates protection abroad by its so-called

national State. But it could not have been, and was obviously not intended to be, an all-in-all prescription

for the protection of the various categories of rights and interests embodied in a corporate entity, the

owners of which often have several different nationalities. Moreover, as a matter of fact, even in

municipal law the shareholders are entitled, in certain circumstances, to take action in their own names in

respect of injuries to a corporate entity. This principle is not only to be found in the decisions of the

English and United States courts but is also recognized in the jurisprudence and law of associations under

the Continental system2 .




17. As the concept of corporate personality has become more complex and the activities of modern

private corporations of different kinds have rapidly grown in variety and range, often extending to the

territories of many States with different municipal law systems, their organization has taken on many

forms of structure with an increasing number of constituent and associated elements. They often have

subsidiaries with varying degrees of ownership and different classes of shareholders with differentiated

rights of voting and sharing in the profits or dividends. Because of this fact of rapid growth and

development of modern joint stock companies and corporations, the problem of their protection has

likewise become more complex.

18. In my view the foregoing general considerations are useful to keep in mind when examining the

points at issue in respect of the third Preliminary Objection.

[58] 19. It may be true, as contended by counsel for the Respondent, that international jurisprudence

provides no precedent to support the Applicant's claim of the right of protection of the interests of its

nationals, shareholders in a foreign company, against the wrongful acts of a third State done to the

company. But it is to be noted that the cases of arbitral awards examined by the Parties were mostly

decided several

1P.C.I.J., Series A, No. 2 , p. 12.

2 J. Mervyn Jones, ‘Claims on Behalf of Nationals who Are Shareholders in Foreign Companies’, in British Yearbook of International Law , 1949, Vol. XXVI, pp. 232–234.


decades ago whereas the progress and development of corporate organization and activities in

international commerce and finance have overtaken their applicability and have created new and

unprecedented conditions which in turn constantly give rise to hitherto unknown problems in international

law for fair and equitable solution.

20. For this reason, the original simple rule of protection of a company by its national State has been

found inadequate and State practice, treaty regulation and international arbitral decisions have come to

recognize the right of a State to intervene on behalf of its nationals, shareholders of a company which has

been injured by the State of its own nationality, that is to say, a State where it has been incorporated

according to its laws and therefore is regarded as having assumed its nationality.

21. Whether this recognition may be regarded as an exception to the rule of protection of a company

by its own national State or as a supplementary rule of protection of the shareholders of a company is

immaterial; nor, in my view, is it a point of great consequence that this recognition is sometimes qualified

by the requirement that such protection must be conditioned by the extinction or the practically defunct

state of the company in question. The important point to note is that the national State of the shareholders

is recognized to have the right to protect them irrespective of whether they are to be regarded merely as

beneficial owners of the rights, property and interests of the company or as virtual successors to the

defunct or practically defunct company.

[59] 22. It is true, as has been contended by the Respondent, that this right of protection has been

recognized because the wrongdoing State being the national State of the particular company, there would

otherwise be no possibility of redress under international law. But it is equally true that the raison

d'être of this recognition is to secure redress for the damage caused to the shareholders, and the particular

rule allowing only the national State of the company to exercise its protection is set aside, precisely for

this predominant purpose of effective protection of the legitimate interests of the shareholders of the

company who are nationals of the intervening State. If this is true, it follows that the original rule

authorizing only the national State of the company to exercise diplomatic protection of its property, rights

and interests is more of the nature of a particular rule for the protection of the company as such rather

than a general rule to apply to the protection of all kinds of rights and interests, both individual and

corporate, grouped within the juridical entity of the company. This being so,

46 ILR

the national State of the shareholders of a foreign company is a fortiori , entitled to exercise protection on

their behalf.

23. For convenience sake or as a matter of policy, the national State of the shareholders of a foreign

company may leave their protection to the national State of the foreign company to exercise the right of

protection on its behalf as a first step. But this right is neither an exclusive right nor a preferential right.

There is no fundamental reason why the national State of the shareholders of the company should be

denied the right to undertake their protection vis-à-vis the third State having caused damage to the

company and consequently to its shareholders. This protection may be undertaken, for the purpose of

obtaining redress, either jointly with the national State of the company or simultaneously with and

independently of it. It is for the shareholders' national State to determine as a matter of policy what step is

to be taken and when it is to be taken for the purpose. It may well be that the action taken by the

company's own State is effective in securing redress for the company and therefore also for the

shareholders from the State causing the damage to it; and in that event, the State of the shareholders will

see no need to intervene on their behalf. But if the action of the national State of the company is fruitless

or if it is disinclined to take steps to protect the company or discontinues its intervention without securing

the desired result, there is no good reason why the national State of the shareholders should be precluded

from exercising its own right to intervene on their behalf for effective protection.

[60] 24. Perhaps in one instance the interests of the shareholders may not be protectable in

international law; that is, if the wrongdoing State is one of which the shareholders of a foreign company

so injured are nationals. In such a case it is not only impossible to conceive of an international claim to

protect the interests of the shareholders as such against their own State, if they own all the shares of the

company, but the said State can also justifiably disclaim international responsibility toward the national

State of the injured company on the same ground as that on which the national State of a company injured

by itself declines responsibility by affirming that under international law a State cannot, at least in theory,

injure itself or claim against itself. For possible protection, the interests of the shareholders would have to

depend upon the attitude and effort of the national State of the company in asserting its right of

diplomatic intervention in favour of the company as such. For, on the principle stated by the Court in

the Mavrommatis case in claiming for redress of an injury caused to its nationals by a foreign State, a

State is really asserting its own right to ensure respect for international law by the foreign State in the

person of its nationals, the national State of the company in question could perhaps insist upon redress

being accorded to the injured company so as to repair also the losses to the shareholders by the

wrongdoing


national State of the shareholders, but it would be confronted by the argument of lack of genuine interests

on its part, to which international law attaches primary importance.

25. However, if there are other shareholders of a different nationality or nationalities from that of the

shareholders of the wrongdoing State, the claims of their national States obviously cannot be met with the

same refusal to acknowledge international responsibility for its wrongful act.

26. What I have said above shows that the rule of protection of a company by its national State and

the rule of protection of its shareholders by their national State are really not, and cannot be, exclusive of

each other. These two rights are based on different concepts; they are different and independent of each

other. They co-exist. They are complementary and equally necessary from the standpoint of international

law, though the right of a State to protect a company incorporated under its laws is limited to the needs

arising from the nature of the corporate personality only1 .

27. The so-called exception, mentioned above, in favour of protection of the shareholders by their

national State, to the general rule of protection of a company by its national State, in my view is not an

exception. On examination it will be found to be of the nature of a separate rule for the protection of the

interests of the shareholders in a foreign company by their national State. It is independent of the first rule

and co-exists with it. It is only incidentally by circumstances connected with it. It is different from the

right of the national State of the foreign company. Like the latter it flows indirectly from the general right

of a State to protect its nationals and their property, rights and interests on the territory of a foreign State.

It is a natural corollary of the principles of international law regarding fair treatment by a State of aliens

on its territory and diplomatic protection by their national State for redress of wrongful acts committed by

the foreign State in breach of its international obligations.

[61] 28. For if the rule of protection of a company only by its national State even in respect of the

interests of its shareholders were of the nature of a general and absolute rule, then in the case of the injury

to a company with foreign shareholders having been caused by its own

1 See De Visscher (Ch.), ‘De la protection diplomatique des actionnaires d'une société contre I'Etat sous la législation duquel cette société s'est constitutée’, in Revue de droit international et de législation comparée , 1934, pp. 641–642.

46 ILR

national State, that should be the end of the matter, since it is affirmed that a State cannot incur

international liability toward itself. Yet the Respondent admits and agrees that in such a case international

liability attaches to the national State of the company for having caused damage to its foreign

shareholders through the corporate body, though the wrongful act has been directed to the company only.

This recognition of the right of diplomatic protection of a State of its nationals, shareholders in a foreign

company, already sanctioned by State practice, international arbitral awards and treaty stipulations,

constitutes in fact a rule in application of the general principle of diplomatic protection of nationals by


their own State in international law. In other words, the interests of shareholders are recognized by

international law as entitled to protection by their national State in the same way as the other property,

rights and interests of its nationals are protected.

29. The Respondent has also argued that such dual or multiple protection by the national State of the

company and the national State or States of the shareholders will cause inconvenience and even confusion

internationally. It is pertinent to cite as an appropriate answer what this Court has stated in

the Reparation for Injuries , Advisory Opinion , of 1949 when referring to the possibility of competition

between the State's right of diplomatic protection and the Organization's right of functional protection, as

follows:

‘In such a case, there is no rule of law which assigns priority to the one or to the other, or which

compels either the State or the Organization to refrain from bringing an international claim. The Court

sees no reason why the parties concerned should not find solutions inspired by goodwill and common

sense. …

Although the bases of the two claims are different, that does not mean that the defendant State can

be compelled to pay the reparation due in respect of the damage twice over1 .’

The argument of confusing multiple protection therefore has no merit.

[62] 30. In the present case it will also be relevant to recall that in the early years following the

declaration of bankruptcy of Barcelona Traction by the Reus court on 12 February 1948, Canada, the

national State of the company, intervened actively to protect its interests. The efforts of the Canadian

Government, however, showed a change

1I.C.J. Reports 1949 , pp. 185–186.


of attitude as time went on. By late 1951 the Canadian Secretary of State for External Affairs told the

Spanish Consul in Canada that ‘Canadian interests in this case are so slight that it is of little interest to

us’1 . In a letter of 19 July 1955 replying to Mr. Arthur Dean, attorney for Sidro, who had urged that ‘a

vigorous inquiry’ from several ambassadors in Madrid, including the Canadian Ambassador, ‘would be

most helpful in bringing about a favourable result’, the Canadian Secretary of State for External Affairs



declined to accept the suggestion and stated: ‘The Canadian Government has not been prepared actually

to intervene in this matter to make representations to the Spanish Government as to the measures which

ought to be taken toward a settlement2 .’

31. In connection with the issue of the right of a State under international law to protect its nationals,

shareholders in a foreign company, against a third State, an incidental question of law has been debated

by the Parties in the present case as to whether this right, if it exists, is not limited to legal shareholders

but extends to beneficial owners of shares. The question relates to the system of registering the shares of a

particular company in its books in the names of the nominees. This is usually authorized by statutory law

or sanctioned by commercial practice in the economically more advanced countries where capital for

investment abroad as well as at home is more abundant. Technically the registered shareholders are legal

owners of the shares so registered, but it would be obviously unjust and incorrect, in the light of the intent

and purpose of the municipal law which provides for such a system of registration, which recognizes the

equitable title of the beneficial owner, and which as a fact must be taken into consideration by

international law, to disregard the interests of the beneficial or real owners, if in the event of the particular

company having suffered damage caused by the wrongful acts of a foreign State, the national State of the

real owners of the shares in question should be denied the right of protecting them on the international

plane, even if the national State of the nominees, who are the registered owners, should decline, for

considerations of policy or expediency, to intervene with the wrongdoing State to protect its own

nationals, the registered owners of the shares in a given case.

[63] 32. International law, being primarily based upon the general principles of law and justice, is

unfettered by technicalities and formalistic considerations which are often given importance in municipal

1 Letter, dated 12 February 1952 from the Belgian Ambassador in Madrid to the Belgian Minister of External Trade, document filed by the Belgian Government on 5 May 1964.

2 Document filed by the Belgian Government on 5 May 1964.

46 ILR

law. As has already been stated above, the fundamental right of diplomatic intervention of a State to

protect its nationals against another State and to seek redress for them for any wrongful act on its part

aims generally to protect the genuine interests of its nationals. It is the reality which counts more than the

appearance. It is the equitable interest which matters rather than the legal interest. In other words it is the

substance which carried weight on the international plane rather than the form.


33. The salient issue of the whole question, from the point of view of international law, is the right

of protection of a State of the legitimate interests of its nationals, shareholders in a foreign company,

against a wrongdoing third State. In regard to the evolution of a rule of customary international law there

always exists the possibility of a difference of opinion as to the degree of uniformity of the facts and the

regularity of their occurrence necessary to warrant, on this basis of reasoning, an affirmation of its

existence. This is obviously because, in the absence of a generally accepted norm for evaluating the

factors, it must depend, to a certain extent, upon a subjective appreciation, both of the recurrence of the

same facts and of the rapid development of foreign investments in the international community, in

arriving at a conclusion1 . In my view the evidence placed before the Court has not established the

existence of any rule denying recognition of the existence of the interests of shareholders or beneficial

owners of shares in a foreign company or prohibiting their protection by their national State or States by

diplomatic intervention or recourse to international adjudication. On the contrary there is seen a

substantial body of evidence of State practice2 , treaty arrangements3 and arbitral decisions4 to warrant the

affirmation of the inexplicit existence of a rule under international law recognizing such a right of

protection on the part of any State of its nationals, shareholders in a foreign company, against another

wrongdoing State, irrespective of whether that other State is the national State of the company or not, for

injury sustained by them through the injury it has caused to the company.

1 See De Visscher, Interprétation judiciaire , pp. 219–251.

2 For cases see Alexandre-Charles Kiss, ‘La protection diplomatique des actionnaires dans la jurisprudence et la pratique internationales’, in Travaux et Recherches de I'Institut de Droit comparé de l'Université de Paris , 1960, Vol. XVIII. pp. 178–210.

3 For treaty arrangements, see Daniel Vignes, ‘La protection des actionnaires dans les conventions internationales bilatérales’, ibid. , pp. 211–241.

4 For a review of cases see J. Mervyn Jones, ‘Claims on Behalf of Nationals who Are Shareholders in Foreign Companies’, in British Yearbook of International Law , 1949, Vol. XXVI, pp. 237–254.


[64] B

34. Having determined the general question of law as above, it remains now to consider the question

of fact, namely whether the evidence placed before the Court justifies a conclusion that the Applicant has

established itsjus standi in the instant case. The main facts alleged by the Applicant consist of the





following: (1) ownership by Belgian nationals of shares in Barcelona Traction and their holding of the

capital of the company amounting to 88 per cent., both on 12 February 1948, the date on

which Barcelona Traction was declared bankrupt, and on 14 June 1962, the date of the Application filed

on 19 June 1962 instituting the present proceedings; (2) the order of the Reus court of 12 February 1948

declaring Barcelona Traction bankrupt; (3) the seizure of the property and other assets of Ebro,

Barcelonesa and other subsidiaries of the company; (4) the mediata y civilíssima seizure of the shares of

the subsidiaries belonging to Barcelona Traction kept in Toronto; (5) the printing and issuance of new

shares in substitution of them; (6) the holding of a general shareholders' meeting on the basis of their

possession by the bankruptcy organs; (7) the replacement of the originally appointed legal representatives

before the Spanish courts; (8) the appointment of new boards of directors for the subsidiaries; (9) the

holding of a private meeting of creditors and the appointment of the trustees for the liquidation of the

capital of Barcelona Traction; and (10) the sale of the subsidiaries through the newly created shares to

Fecsa, belonging to the March group on 4 January 1952.

35. Whether the foregoing facts are all true as alleged; or what is the precise character or actual

amount or value of the interests owned by Belgian nationals, both natural and juristic persons; or how the

damage has been caused to them; or to what extent it has been actually sustained by them—these are all

questions which essentially belong to the merits. At the present stage of the proceedings it is sufficient, in

my view, to note that the facts alleged by the Applicant have not been denied by the Respondent. This

being so, and in the light of the question of law determined above, it is proper to conclude that prima

facie the Applicant has established its jus standi and that the third Preliminary Objection should have

been rejected.

(Signed) WELLINGTON KOO .

46 ILR

SEPARATE OPINION OF JUDGE TANAKA

The following observations are limited to the Court's opinion on the second principal Preliminary

Objection raised by the Respondent Government.

I can completely agree with the conclusion of the Court in rejecting this objection. Furthermore, I

cannot deny the well-foundedness of the reasons by which the Court reached this conclusion. Nor do I

hesitate to say that these reasons in general are in themselves sufficient to overrule this Preliminary

Objection.

However, to my regret, I cannot agree with the Court's choice of reasons. To reach a conclusion

there may be found many concurrent reasons upon which a decision of the Court can be based. Some of

them may be more immediate, essential and straightforward than others which are of indirect and

subsidiary importance and serve simply to corroborate the principal reasons.

The choice of reasons as grounds for a decision, however, is necessarily subject to a limitation

which is required by the nature of judicial activities. I am well aware that some consideration should be

given to the existence of precedents in regard to a case which the Court is called upon to decide. Respect

for precedents and maintenance of the continuity of jurisprudence are without the slightest doubt highly

desirable from the viewpoint of the certainty of law which is equally required in international law and in

municipal law. The same kind of cases must be decided in the same way and possibly by the same

reasoning. This limitation is inherent in the judicial activities as distinct from purely academic activities.

On the other hand, the requirement of the consistency of jurisprudence is never absolute. It cannot

be maintained at the sacrifice of the requirements of justice and reason. The Court should not hesitate to

overrule the precedents and should not be too preoccupied with the authority of its past decisions. The

formal authority of the Court's decision must not be maintained to the detriment of its substantive

authority. Therefore, it is quite inevitable that, from the point- of view of the conclusion or reasoning, the

minority in one case should become the majority in another case of the same kind within a comparatively

short space of time.

[66] What I want particularly to emphasize is not only the concrete appropriateness of the

conclusion, namely the operative part of each decision, but the reasoning upon which the conclusion is

based. The more important function of the Court as the principal judicial organ of the United Nations is to

be found not only in the settlement of concrete disputes, but also in its reasoning, through which it may

contribute to the development of international law. It seems hardly necessary to


say that the real life of a decision should be found in the reasoning rather than in the conclusion.

Therefore, the above-mentioned choice of reasons by which the Court disposes of a matter in issue

becomes important. It affects the intrinsic value and weight of a reason on the basis of which a concrete

issue is dealt with.

In the light of these short preliminary remarks I shall consider the matter at issue as regards the

choice of reasons by which the Court has disposed of the second Preliminary Objection raised by the

Respondent Government.

There is not the slightest doubt that this objection denying the Court's jurisdiction in the present case

has been motivated and inspired by the existence of two precedents, namely the Judgments in the Aerial

Incident case of 26 May 1959 (I.C.J. Reports 1959 , p. 127), and the Temple of Preah Vihear case of 26

May 1961 (I.C.J. Reports 1961 , p. 17).

First I shall consider the Court's Judgment in the Aerial Incident case, which marked the starting

point of the subsequent history of the jurisdictional matter with which we are concerned.

In this case the Bulgarian Government raised a preliminary objection denying the validity of the

Declaration of 12 August 1921, by which Bulgaria accepted the compulsory jurisdiction of the Permanent

Court of International Justice. This Declaration, the Bulgarian Government insisted, ‘ceased to be in force

on the dissolution of the Permanent Court’ of International Justice on 18 April 1946 and therefore ‘cannot

accordingly be regarded as constituting an acceptance of the compulsory jurisdiction of the International

Court of Justice, by virtue of Article 36, paragraph 5, of the Statute of that Court’. The Government of

Israel, on the other hand, to establish the jurisdiction of the Court in that case, invoked the Bulgarian

Declaration of 1921 and Article 36, paragraph 5, of the Statute and the fact that Bulgaria became a

Member of the United Nations on 14 December 1955 and accordingly a party to the Statute.

The Court upheld this objection and ruled that it had no jurisdiction in the case.

I quote a passage of the Judgment which seems most clearly to indicate its essential reasons:

[67]‘At that date [namely, 14 December 1955], however, the Bulgarian Declaration of 1921 was no

longer in force in consequence of the dissolution of the Permanent Court of International Justice in 1946.

The acceptance set out in the Declaration of the compulsory jurisdiction of the Permanent Court of

International

46 ILR

Justice was thereafter devoid of object since that Court was no longer in existence. The legal basis for that

acceptance in Article 36, paragraph 2, of the Statute of the Permanent Court of International Justice,

ceased to exist with the disappearance of that Statute. Thus, the Bulgarian Declaration had lapsed and was

no longer in force’ (I.C.J. Reports 1959 , p. 143).

This ruling of the Court was based on two main reasons which were concerned with the

interpretation of Article 36, paragraph 5. The one was the recognition of the destructive effect of the

dissolution of the Permanent Court on 18 April 1946 upon the Bulgarian Declaration of 1921. The other

was the distinction made between original and non-original Members of the United Nations concerning

the interpretation of Article 36, paragraph 5, of the Statute.

Although this Judgment was given in consideration of the particular circumstances of the case and

its binding force was limited to the parties and to this particular case (Article 59 of the Statute), it has

exercised tremendous influence upon the subsequent course of the Court's jurisprudence and the attitude

of parties vis-à-vis the jurisdictional issues relative to this Court.

The first repercussion of the Judgment in the Aerial Incident case may be seen in the Judgment in

the Temple of Preah Vihear case delivered on 26 May 1961, precisely two years after the delivery of the

Judgment in the Aerial Incident case.

It is to be noted that the repercussion is found not in the conclusion of the Judgment itself, but in the

argument of the party raising a preliminary objection to the Court's jurisdiction, and in the reasoning of

the Court in disposing of this objection.

The question at issue was concerned with the effect of the Thai Declaration of 20 May 1950 which

renewed for a period of ten years the Declaration of 3 May 1940, constituting the ten-year renewal of a

Declaration dated 20 September 1929, accepting the compulsory jurisdiction of the Permanent Court of

International Justice. The question was whether the 1950 Declaration of Thailand was valid by the

operation of Article 36, paragraph 5, notwithstanding the dissolution of the Permanent Court on 18 April

1946 and the fact that Thailand became a Member of the United Nations and thus a party to the Statute on

16 December 1946, eight months after the dissolution of the Permanent Court.

[68] One may recognize that Thailand was legally in an analogous position with Bulgaria in regard

to the application of Article 36, paragraph 5, except that, while the Bulgarian Declaration was made for

an indefinite period, the Thai Declaration covered a period of ten years with the possibility of renewal.

Accordingly, it was quite natural that, when the Thai Government raised a preliminary objection denying

the jurisdiction of the Court by excluding the application of Article 36,


paragraph 5, to that declaration, it did not fail to refer to the Judgment in the Aerial Incident case.

The Preliminary Objection and Submissions of Thailand on this point read as follows:

‘(i) that the Siamese declaration of the 20th September, 1929 lapsed on the dissolution of the

Permanent Court of International Justice on the 19th April, 1946, and thereafter could not be renewed;

(ii) that the Thai declaration of the 20th May, 1950 purported to do no more than renew the said

declaration of the 20th September, 1929, and so was ineffective ab initio ;

(iii) that consequently Thailand has never accepted the compulsory jurisdiction of the

International Court of Justice under Article 36, paragraph 2, of the Statute’.

It is not unreasonable to suppose that this objection of Thailand was encouraged by the Judgment in

the Aerial Incident case. However, differently from that case, the objection was not successful for the

cause of Thailand. The Court, although it recognized its jurisdiction in the case, reached its conclusion not

by way of the application of Article 36, paragraph 5, but by recognizing the validity of the Thai

Declaration of 1950 as made independently under Article 36, paragraphs 2 to 4 (I.C.J. Reports 1961 , p.

29).

It is to be noted that in the Temple of Preah Vihear case the Court did not establish its jurisdiction

by considering the question whether or not the dissolution of the Permanent Court resulted in the lapse of

the Thai Declaration of 1940, renewed in 1950. This question was left untouched and the matter was

decided by stressing the particularity of the case, which was different from the Aerial Incident case.

Furthermore, the Court's interpretation that the Thai Declaration of 1950 should be considered as

independent from that of 1940 does not seem quite in conformity with the text of the declaration which

renewed the previous declaration, and with the real intention of Thailand from which the historical

continuity between the two declarations is undeniable. From this viewpoint the solution presented by the

Judgment does not seem quite satisfactory.

The question of the effect of the dissolution of the Permanent Court in the light of an interpretation

of Article 36, paragraph 5, upon which the preliminary objection was based, should have been

reconsidered by the Court.

There remained for the Court the following alternatives: either the Court would comply with the

principle enunciated by the Judgment in the Aerial Incident case and uphold this objection, or it would

overrule this principle and reject the objection.

46 ILR

[69] In the case of the second alternative the Joint Dissenting Opinion of Judges Sir Hersch

Lauterpacht, Wellington Koo and Sir Percy Spender appended to the Judgment in the Aerial

Incident case (I.C.J. Reports l959 , PP. 156 et seq. ) might naturally have much importance in deciding

this issue.

This Joint Dissenting Opinion, different from the Court's opinion, firstly denied the lapsing effect of

the dissolution of the Permanent Court upon the Bulgarian Declaration of 1921 by the interpretation and

application of Article 36, paragraph 5, and secondly, it did not distinguish between original and non-

original Members of the United Nations regarding the matter of transfer of compulsory jurisdiction. The

fundamental idea upon which this opinion rested was nothing but the substantial identity of the old and

the new Court and the continuity of their jurisdiction notwithstanding the dissolution of the old Court.

Whether the conclusion was negative or positive, the Court should have tackled and solved this essential

question without confining itself to reasons of a subsidiary character.

That the Court's attitude vis-à-vis the Temple of Preah Vihear case was influenced by the

preoccupation of not impairing the authority of the Judgment in the Aerial Incident case is very

probable. Respect for precedents and maintenance of jurisprudence are important considerations required

in judicial activities. But the choice of reasons for a decision is no less important, as I said above. From

this viewpoint the Court should have chosen in the Temple case more essential, more immediate reasons

in deciding the matter at issue.

This is one reason why Judge Sir Gerald Fitzmaurice and myself appended a Declaration to the

Judgment in the Temple of Preah Vihear case (I.C.J. Reports 1961 , pp. 36 et seq. ; cf. Declaration of

Judge Wellington Koo,ibid. , p. 36).

Thus the doctrine of lapse by dissolution which was incorporated in the Judgment in the Aerial

Incident case has remained intact. It has offered a powerful tool to those States which were not inclined

to submit to the compulsory jurisdiction of the Court by the application either of Article 36, paragraph 5,

or of Article 37 of the Statute. It has become an indirect obstacle to the Court in choosing reasons.

[70] The thesis of lapse by dissolution has appeared for the third time in the second principal

Preliminary Objection put forward by the Respondent Government in the present case. The Judgment in

the Aerial Incident case has become the core of the argument of the Respondent Government in denying

the validity of the jurisdictional clause contained in the Treaty of Conciliation, Judicial Settlement and

Arbitration of 19 July 1927 between Belgium and Spain. The position


of the Respondent Government is to deny the jurisdiction of the Court by referring to the principles

enunciated by the Judgment in the Aerial Incident case regarding the interpretation of Article 36,

paragraph 5, of the Statute. The attitude of the Applicant Government vis-à-vis the Judgment in

the Aerial Incident case, on the other hand, seems to be that it avoids challenging this Judgment openly

and tries to attain the same purpose, namely justification of the jurisdiction of the Court, by another

means. This means is to emphasize the difference between the two cases. The difference is found in the

fact that, whereas a declaration referred to in Article 36, paragraph 5, is of a unilateral character and

simply aims at the acceptance of the compulsory jurisdiction, and is furthermore intimately connected

with the Statute of the Permanent Court, the jurisdictional clause with which Article 37 is concerned, is of

a bilateral character and is incorporated in a treaty or convention which has a wider purpose than a

declaration under the optional clause. Therefore, the jurisdictional clause in the Treaty of 1927, unlike the

Bulgarian declaration of 1921, would not be subject to the annihilating effect of the dissolution of the

Permanent Court.

On the other hand, the validity of the Treaty of 1927 as a whole is not denied by the Parties.

The result thereof is that the Parties have gone into the question of the severability of the provisions

of a treaty: the Spanish Government is in favour of severability provided this does not come into conflict

with the validity of the remaining parts of the treaty, namely the parts relative to conciliation and

arbitration; the Belgian Government is in favour of inseverability of the treaty in order to save the validity

of the jurisdictional clause as an integral part of the Treaty of 1927.

Thus the discussions deviated in the wrong direction by dealing with a question which does not

seem to be relevant to the interpretation of Article 37 of the Statute, the main legal issue in the second

principal Preliminary Objection.

The Court's viewpoint seems to support, in general, the contention of the Belgian Government

resting upon the emphasis of a difference between Article 36, paragraph 5, and Article 37 of the Statute in

so far as the interpretation of these two provisions is concerned.

I shall now consider the question whether Article 37 can be interpreted differently from Article 36,

paragraph 5, in regard to the effect of the dissolution of the Permanent Court. The question is concerned

with the identity or divergence of these provisions.

[71] It is quite true that there exist many points of difference between Article 36, paragraph 5, and

Article 37 of the Statute, for example, the wording, the source of compulsory jurisdiction, the unilateral

character of the declaration and the bilateral character of the jurisdictional clause incorporated in a treaty,

etc. The question, however, is whether these differences are relevant to a decision of the matter at issue,

namely the effect of the dissolution of the Permanent Court on the fate of

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declarations made under the optional clause and jurisdictional clauses in treaties.

In a matter of this kind we cannot assert absolutely that one thing is identical with or different from

the other. There may be found many elements of similarity and difference. What matters is from what

viewpoint they are identical or different. The decision as to whether one thing is identical or not with the

other depends upon the position from which one regards the matter. Therefore, the decision is relative to

the viewpoint one adopts.

Concerning the matter at issue, namely the question of identity or diversity between Article 36,

paragraph 5, and Article 37 of the Statute, the criterion should be sought in the viewpoint of the essential

purpose Of both provisions, i.e., the continuity of the acceptance of compulsory jurisdiction. If these

provisions are identical in this fundamental purpose, they may be considered as identical notwithstanding

the possible difference in many other respects which are not related to the purpose itself.

Now, nobody would dare deny the fact that the above-mentioned purpose is common to Articles 36,

paragraph 5, and 37. Consequently, the Court, called upon to give an interpretation on Article 37 in regard

to the second principal Preliminary Objection, could not have ignored the existence of the Judgment in

the Aerial Incident case, whatever the conclusion of the Court might be: either to follow or to overrule

this precedent. The Court should have met the question which is common to Articles 36, paragraph 5, and

37, instead of dealing with the present case independently of the Aerial Incident case.

The Court should have made its position clear on the jurisdictional matter, vis-à-vis the Judgment in

the Aerial Incident case as involving an issue which is of the same legal nature as the present case. That

is what is dictated by the value and importance of the matter at issue.

I am not unaware of the fact that, while there now exists no optional clause declaration which needs

to be saved by the operation of Article 36, paragraph 5, a large number of treaties and conventions

containing a jurisdictional clause are still in existence. In the former case this issue, namely the question

of the interpretation of Article 36, paragraph 5, may have lost all practical value; accordingly, the

Judgment in the Aerial Incident case would do no harm to the interpretation of Article 36, paragraph 5,

even if it should be overruled.

[72] However, consideration should be given not only to the practical significance of the Court's

decisions but also to their theoretical meaning and value. I consider that the Court should have dealt

primarily with the Judgment in the Aerial Incident case as this involved the same legal question as the

present issue rather than evade it because it was an inconvenient obstacle. General international law might

have benefited by such an attitude of the Court by finding a common solution


to the jurisdictional question which has arisen or might arise concerning Articles 36, paragraph 5, and 37.

So far as my view on the interpretation of Article 36, paragraph 5, is concerned, I agree

fundamentally with the view put forward in the above-mentioned Joint Dissenting Opinion appended to

the Judgment in the Aerial Incident case. Not only do I share the view of this Opinion as an

interpretation of Article 36, paragraph 5, but I agree with the view of its authors which does not make a

distinction between the interpretation of Article 36, paragraph 5, and Article 37 (I.C.J. Reports 1959 , pp.

180–182) so far as the effect of compulsory jurisdiction is concerned.

It is unnecessary to describe the content of this Opinion in detail. I would rather limit myself to

stressing some of its essential points from my own viewpoint.

What I have to say below is concerned with the interpretation of Article 36, paragraph 5, which

constitutes the subject of that Opinion, but this can be applied mutatis mutandis to the interpretation of

Article 37.

The principal question we are confronted with is the effect of the dissolution of the Permanent Court

of International Justice upon the compulsory jurisdiction accepted by a unilateral declaration under

Article 36, paragraphs 2 to 4 of the Statute. It has a bearing on the interpretation of Article 36, paragraph

5, which stipulates:

‘Declarations made under Article 36 of the Statute of the Permanent Court of International Justice

and which are still in force shall be deemed, as between the parties to the present Statute, to be

acceptances of the compulsory jurisdiction of the International Court of Justice for the period which they

still have to run and in accordance with their terms.’

Nobody can deny that the purpose of this provision is the preservation of the effect of compulsory

jurisdiction accepted in regard to the old Court under the régime of the new Court. The alleged effect of

the lapse of declarations by the dissolution of the Permanent Court shall be considered from this point of

view, namely the purpose of Article 36, paragraph 5.

[73] The theory of ‘lapse’ advanced by the Bulgarian Government and supported by the Judgment in

the Aerial Incident case is based on the great significance attached to the fact of the dissolution of the

Permanent Court. It presupposes the existence of some difference between the old and new Courts. If

some differences between the two Courts, either fundamental or in detail, exist then declarations made

46 ILR

under the old Court could not be expected to continue the same effect in regard to the new Court. In this

case the dissolution of the Permanent Court might have a serious effect upon the fate of the said

declarations.

Now there is no doubt that not only in their fundamental purpose but in every detail, namely from

the viewpoint of organization, composition and procedure, the old and the new Court are identical with

each other; the latter being the exact counterpart or copy of the former. They do not differ except in name.

The continuance of substantially the same Court, differing only in name, has never been contested, even

by those who sought to deny the compulsory jurisdiction of the International Court.

The continuity between the two Courts under a different name guaranteed the subsistence of the

same jurisdictional rights and obligations of the declarant States. There would seem to be no

inconvenience or disadvantage to the parties concerned. Presumably if when the switchover from one

Court to the other was carried out no change of name had been effected, no one, in this case, would

contend for the lapse of an already existing declaration.

Furthermore, it should be noted that the dissolution of the Permanent Court did not occur suddenly

but had been anticipated and that there was no temporal gap between the dissolution of the old Court and

the creation of the new one.

Consequently, the real circumstances are not so much the transfer of jurisdiction from the old Court

to the new one as the replacement of the former by the latter. The acceptances by the declarant States of

the compulsory jurisdiction remain unchanged. Accordingly there did not occur the ‘transfer of

jurisdiction’ nor the ‘automatic succession’ (in the proper sense of the terms). The circumstances

concerning the dissolution of the Permanent Court being such, it does not seem to be in conformity with

the true intention of the parties or with a commonsense conclusion to attach the lapsing effect to the fact

of the dissolution of the Permanent Court. Nor does there exist here any material change in the

compulsory jurisdiction originally accepted. It matters only that declarations are ‘still in force’ or ‘faites

… pour une durée qui n'est pas encore expirée’ (Article 36, paragraph 5).

From what is indicated above, I may conclude that Article 36, paragraph 5, simply affirms the true

and reasonable intention of declarant States and does not impose any new obligations upon them. This

provision is nothing but the expression of what is required by logic and reason. This provision may be

conceived as an authentic interpretation concerning the law on jurisdictional matters.

[74] If the dissolution of the Permanent Court could have so important an effect upon declarations

accepting the compulsory jurisdiction, the legislators of this provision would have expressly mentioned

this matter. However, the term ‘dissolution’ does not appear in Article 36, paragraph 5. It is certain that

they did not approve the destructive effect of dissolution. What they contemplated must have been, on


the contrary, to save the effect of declarations accepting the compulsory jurisdiction by excluding the

possible erroneous construction of the effect of the dissolution. Such construction is radically opposed to

the purpose inherent in Article 36, paragraph 5.

The real and only obstacle to the continuance of the compulsory jurisdiction existing with regard to

some States is the fact that they did not become Members of the United Nations and accordingly parties

to the Statute of the International Court before the dissolution of the Permanent Court. In this case one of

the most important conditions required for acceptance of compulsory jurisdiction is lacking. But this

condition can be fulfilled by admission to the United Nations and ipso facto becoming a party to the

Statute of the International Court of Justice.

Thus, upon the basis of the already existing objective condition, namely declarations accepting the

compulsory jurisdiction of the Permanent Court, the compulsory jurisdiction can become effective, being

completed by the fulfilment of a subjective condition, namely membership of the United Nations and

party to the Statute.

So long as this subjective condition is unrealized, the declaration remains inoperative or ‘dormant’;

it has not become null and void by the effect of the dissolution of the Permanent Court. The cause of the

fact that temporarily the declaration remains inoperative, is found not in the effect of the dissolution, but

in the lack of the capacity of the declarant State.

From what has been stated above, it is clear that the dissolution of the Permanent Court cannot have

such an important effect as to decide the fate of declarations having accepted the compulsory jurisdiction

of the Permanent Court by those States which were not original Members of the United Nations, or did

not become Members before the dissolution of the Permanent Court. Therefore the doctrine of the ‘lapse’

first put forward by the Bulgarian Government in the Aerial Incident case, and reiterated by the Thai

Government in the Temple of Preah Vihear case regarding Article 36, paragraph 5, of the Statute (and

finally invoked by the Spanish Government regarding Article 37) is quite illusory and unsound. This

doctrine, I am inclined to consider, might have been artificially devised by those parties who, in concrete

cases, did not want to submit themselves to the compulsory jurisdiction which they had accepted and the

effective continuance of which they had never doubted before.

[75] The logical fallacy of this doctrine is clear. As is indicated above, the replacement of the

Permanent Court by the International Court in itself does not possess any negative effect on the

continuance of the declaration accepting the compulsory jurisdiction, owing to the existence of exact

identity between these two juridical organs. This is a sociological fact underlying the legal issue.

However, these organs

46 ILR

have a distinct legal existence. Accordingly, to carry out smoothly the ‘transfer of jurisdiction’ or the

‘automatic succession’ between the old and the new Court a legislative measure or technique had to be

adopted. This is precisely the purpose which was intended to be realized by Article 36, paragraph 5, and

which is in conformity with the presumed intention of reasonable declarant States. It is evidently a

contradiction to invoke the lapsing effect of dissolution and to deny the application of this provision,

because its principal aim, undoubtedly, is nothing but the exclusion of such invocation.

The objective of the preservation of the effect of declarations under the old Court, as much as

possible in regard to the new Court, must govern the interpretation of Article 36, paragraph 5, of the

Statute. This objective is related to the institution of compulsory jurisdiction and, thereby, linked with the

ideals of justice and peace which are to prevail in the international community. Those who advocate the

doctrine of the ‘lapse’ seem to view the concept of ‘dissolution’ as if it presents an obstacle interrupting

the continuity of the natural process of cause and effect. We should beware of falling into the excess of

the legal formalism of so-called ‘conceptual jurisprudence’ of which the doctrine of the ‘lapse’ presents a

conspicuous example. Sociological and teleological approaches, I consider, are particularly needed in the

field of international law.

What I have stated above is limited to the question of the effect of the dissolution of the Permanent

Court upon the existing declarations in the light of the interpretation of Article 36, paragraph 5. With

regard to another question, namely whether or not ‘the parties to the present Statute’ within the meaning

of the said Article is limited to original members of the United Nations, and therefore the signatories of

the Statute, I need only refer to the above-mentioned Joint Dissenting Opinion and will not go further into

the matter.

These fundamental arguments relative to the interpretation of Article 36, paragraph 5, can be applied

unchanged to that of Article 37, since, as I mentioned above, so far as the fundamental objective is

concerned, these provisions are exactly identical and there is no room for different interpretations of these

two provisions. Accordingly, the Joint Dissenting Opinion which originally related to the interpretation of

Article 36, paragraph 5, can be naturally extended to the interpretation of Article 37, in so far as common

questions are concerned.

[76] Briefly, I can agree with the opinion of the Court on the second principal Preliminary

Objection, in its conclusion as well as in its reasoning. Next, it seems that the Court's view on Article 37,

namely the question of the effect of the dissolution of the Permanent Court, is not essentially very

different from that of the Dissenting Opinion on Article 36, paragraph 5, regarding the same question,

except with regard to some points


which are derived from the particularity of a jurisdictional clause incorporated in a treaty. So far as the

question of the effect of the dissolution of the Permanent Court on the compulsory jurisdiction is

concerned, there should be no different answer or reasons as regards an independent unilateral declaration

under the optional clause or a jurisdictional clause in a treaty. What can be said is that the reasons based

on the particularity of the latter could be invoked a fortiori for the effective subsistence of the clause.

The following reasoning of the Court at the closing part of its consideration of the second principal

Preliminary Objection is very convincing:

‘It was this fallacy which underlay the contention advanced during the hearings that the alleged

lapse of Article 17 (4) was due to the disappearance of the “object” of that clause, namely the Permanent

Court. But that Court was never the substantive “object” of the clause. The substantive object was

compulsory adjudication and the Permanent Court was merely a means for achieving that object.’

This reasoning can be very precisely applied to the interpretation of Article 36, paragraph 5.

The Aerial Incident case, the Temple of Preah Vihear case, and the present case, each of them

possessing some particular aspect distinguishing the one from the others, involve an important legal issue

which is common to them, namely the question of the effect of the dissolution of the Permanent Court

upon the fate of the compulsory jurisdiction based on the optional clause of Article 36, paragraph 2, or the

jurisdictional clause incorporated in a treaty. This common question was for the first time raised by the

objection advanced by the Bulgarian Government in the Aerial Incident case. The Judgment in that case

upheld the objection by recognizing the lapsing effect of the dissolution upon the compulsory declaration

accepted by the optional clause. Although Article 36, paragraph 5, became obsolete, the Court's reasoning

in that Judgment remains, unless it should be overruled by a subsequent judgment. Although the decision

of the Court has no force of res judicata except between the parties, and in respect of that particular case,

its reasoning should de facto exercise lasting influence upon matters involving the same kind of question.

Accordingly, the attitude of the Thai Government and the Spanish Government, each invoking the

Judgment in the Aerial Incident case, respectively in the Temple of Preah Vihear case and in the

present case, is quite natural, so long as the reasoning of the Judgment in the Aerial Incident case has

survived without being overruled by subsequent practice.

46 ILR

[77] As one who shares the view of the Joint Dissenting Opinion concerning the interpretation of

Article 36, paragraph 5, I consider that the Court should have overruled the Judgment of 1959 in

the Aerial Incident case by the Judgment of 1961 in the Temple of Preah Vihear case. But as I pointed

out above, the Court avoided meeting that Judgment directly and dealt with the matter in a different way.

Now the Court has faced the same question for the second time. It should have made its standpoint on the

interpretation of Article 36, paragraph 5, clear. But the Court has refrained from doing so from the

viewpoint of stressing the difference between Article 37 and Article 36, paragraph 5, and has disposed of

the issue quite independently of the interpretation of the Judgment of 1959. Thus, the Court has again lost

the chance of rectifying the view adopted by that Judgment.

Whereas Article 36, paragraph 5, and Article 37 are as regards their fundamental objective quite

identical and their differences are unessential, the matter involved in the second principal Preliminary

Objection should have been disposed of in the light of the common principle underlying these two

provisions, namely the preservation under the new Court of the compulsory jurisdiction accepted during

the period of the old Court.

The Court's opinion, although it rests on the difference between the two provisions, is not limited to

points peculiar to the interpretation of Article 37. Its essential reason can be mutatis mutandis applied to

the interpretation of Article 36, paragraph 5. Furthermore, I assume that the Court's opinion is, in its

fundamental reasoning, not very far from that of the Joint Dissenting Opinion in the Aerial

Incident case. The above-cited passage from the Court's reasoning may be regarded as precisely the

antithesis or refutation of what was declared in the essential part of the reasoning in the Judgment in

the Aerial Incident case.

I consider that the Court's emphasis upon the difference between Article 36, paragraph 5, and

Article 37 is more apparent than real. The Court has been careful not to deal directly with the 1959

Judgment, but the viewpoint adopted by the Court in 1959 is substantially overruled by the present

Judgment.

(Signed) Kotaro TANAKA .


SEPARATE OPINION OF JUDGE BUSTAMANTE

[Translation]

INTRODUCTION

This opinion expresses certain views which differ from those of the Court on the first Preliminary

Objection. It also contains an expression of individual views on the third Objection, although the

conclusion reached is that of the majority.

FIRST OBJECTION

Although I share the views of the Court so far as concerns certain doctrinal aspects relating to the

first Preliminary Objection, the same does not apply to the facts and conclusions. This leads me to state

separately the reasons for my dissent.

There does not seem to be any doubt that Articles 68 and 69 of the Rules of Court, in conformity

with Article 30 of the Statute, contemplate only the procedural aspects of discontinuance. In accordance

with their purpose, the Rules do not decide substantive rights, and consequently no rule is to be found

concerning the nature of discontinuance, so as to characterizing and distinguishing substantive

discontinuance or abandonment of the right from discontinuance or abandonment of the proceedings.

Having regard to the fact that this is the juridical framework adopted, an investigation will be necessary in

each particular case into the reasons and circumstances of the discontinuance submitted to the Court in

order to decide its true scope and to define its legal consequences.

In the present case, Belgium's reasons for discontinuing the first Application of 1958 had their origin

in an approach by the Belgian group of shareholders in the Barcelona Traction, Light and Power

Company, Limited, to the Belgian Government, such discontinuance being the prior condition imposed

by M. Juan March, the head of the Spanish group of share- and bondholders in the said company, for

opening private negotiations intended to settle the dispute by extrajudicial means. The Belgian group well

knew that M. March was demanding a final and irrevocable discontinuance, the manifest intention of

which was that the case should no longer be a matter for international adjudication.

Certainly no provision was made for what would happen in the case of the failure of the

negotiations. For M. March's part, the only condition envisaged was that the Court should no longer be

seised. Nevertheless, there is no reason not to suppose that, in the event of failure, some other solution

might have been adopted, for example arbitration.

46 ILR

[79] This was a matter for the private discussions. But there is no doubt that as from the moment

when the private controversy between the two Barcelona Traction groups was brought into the field of

international law through the intervention of the Belgian and Spanish States, it was for the States and not

for the private groups to assume the capacity of the real parties concerned. It was for them, consequently,

to define in accordance with their own judgment the scope of the discontinuance by either accepting or

modifying the bases proposed by the private groups.

The versions given by each State Party are in the present case mutually contradictory. Belgium

maintains that it was never its intention when discontinuing the proceedings already instituted to abandon

the right to reinstitute new proceedings if the private negotiations did not succeed. Spain asserts, for its

part, that it would have opposed a discontinuance which was not final, as the reinstitution of proceedings,

apart from not being in accordance with March's conditions, would have placed the Spanish Government

in an unfavourable position morally and legally.

But in the face of these versions of the Parties, a number of questions arise which demonstrate the

complexity of the case.

(a) If Belgium had rejected M. March's condition, why did it formalize its discontinuance instead

of first officially negotiating an amendment of that condition with the Spanish Government?

(b) Although Belgium, in effecting its discontinuance, used the normal procedural formula for

unilateral discontinuance contained in Article 69 (2) of the Rules, did the fact that this proceeding was not

accompanied by any official reservation as to the scope of the discontinuance lead Spain wrongly to

suppose that M. March's condition had purely and simply been accepted?

(c) Ought, on the other hand, the hesitations shown by Belgium during the negotiations prior to

the discontinuance (for example, the proposal for a mere suspension of the proceedings, the suggestion

that Spain should not express its ‘non-objection’ to the discontinuance until the end of the time-limit of

six weeks to be fixed by the Court, the fact that the official letter giving notice of discontinuance speaks

only of a discontinuance of the proceedings), ought such hesitations, I repeat, to have led Spain to ask

Belgium beforehand for a precise explanation of the true scope of the discontinuance?

(d) Did Spain's omission to take this step imply a certainty in good faith on its part that Belgium,

despite its precautions, was abiding by the agreements reached between the private groups? Or did it on

the contrary imply culpable negligence or, indeed, acceptance by the Spanish Government of a merely

procedural discontinuance of the proceedings already instituted?

[80] (e ) To sum up, are we confronted with an erroneous interpretation by Spain of the scope of

the discontinuance? If so, was this mistake, this misunderstanding, due to Belgium's own action in

maintaining silence as to the true meaning of its discontinuance, one not in accordance with that proposed

by M. March? Was any such mistake by Spain due, on the contrary, to the fault of its own Government, to

an interpretation of the text of Belgium's notice of discontinuance running counter to its actual wording?

Sufficient tangible evidence to elucidate these uncertainties is, in my view, lacking in these

proceedings. Contrary to what the Court has decided, I do not feel able to express any categorical

judgment on this objection. I admit that it might perhaps be possible to arrive at a conclusion on the basis

merely of inferences or deductions forming part of a logical process, but not on the basis of duly proven

facts. The records of the interviews between the Belgian Ambassador and the Spanish Minister for

Foreign Affairs on the eve of the discontinuance are vague and incomplete. It would not be surprising if

there were more explicit documentary evidence which has not yet been submitted to the Court. In

addition, it is reasonable to suppose that more definite representations on all these matters may have

passed between the two Governments. Accordingly, it does not seem to me to be unlikely that if the

Court, in the exercise of its powers, were proprio motu to ask the Parties to furnish it with any relevant

document or piece of information—a suitable questionnaire would be drawn up for this purpose—it might

be found possible to throw light on one or more of the questions raised above. I naturally accept that in

each case the onus of proof is placed on one of the parties, but it is also true that the overriding interests

of justice give the Court the faculty of taking such steps as are possible to induce the parties to clarify

what is not sufficiently clear.

Seeing that, for other reasons, which I shall set out elsewhere, the first Objection cannot, in my

view, be decided at this preliminary stage of the proceedings without the risk of encroaching on the merits

of the case, I had thought that, were the Court so to wish, it could have taken advantage of a joinder of the

objection to the merits to seek proprio motu at the second stage of the proceedings to obtain further

evidence of the circumstances surrounding the negotiation of the discontinuance between the Parties.

There would thus perhaps be a better chance—at the time of the final judgment—for deciding the first

Objection raised by the Respondent Party with full knowledge of the facts.

[81] In the course of its argument the Spanish Government referred to the fact that the Belgian

Government had availed itself of the discontinuance

46 ILR

in order to introduce various changes in the text of its second Application by comparison with the first

one, with a view to improving its legal position, after studying the Preliminary Objections raised by Spain

in the first proceedings; the result of this being to upset the balance between the Parties to the detriment of

the position of Spain, since no prior notice was given by Belgium that its discontinuance of itself signified

a reservation, that of its right subsequently to reinstitute proceedings (Preliminary Objections, first

Objection, para. 107).

During the hearings, Sir Humphrey Waldock, Counsel for Spain, replying to a question put by one

of the Judges of the Court (hearing of 27 April) referred to the moral and material prejudice which the

Spanish State felt that it had suffered through the reinstitution of the Application after the discontinuance

(hearing of 4 May).

It was no doubt with such considerations in mind that the Spanish Government, in the 14th recital

concerning the first Objection in the Submissions which it filed at the closure of the hearing on 8 May

1964, maintained that—

‘the discontinuance of the Belgian Government in the proceedings started by its Application of 15

September 1958, without that discontinuance having been accompanied by any reservation concerning its

right to reinstitute the claim which had been the subject of that Application, necessarily supposed that it

waived its arguments in defence against the Spanish Preliminary Objections and agreed to arrest in limine

litis the proceedings which it had instituted’.

Moreover, recitals 15 to 17 of the Spanish Submissions on the first Objection deny that a second

application is compatible with the system of peaceful settlement stipulated by the Hispano-Belgian Treaty

of 1927, the first proceedings—closed by virtue of the discontinuance—having exhausted the remedies

provided for in that Treaty (hearing of 4 May). In reality, all these allegations imply a denial of Belgium's

right after its discontinuance again to take up the protection of the shareholders whom it considers as its

nationals; this brings the subject of the first Preliminary Objection close to that of the third, which

concerns Belgium's jus standi . (See recitals 2 to 6 of the Submissions of the Spanish Government on the

third Objection, hearing of 8 May.)

[82] In order for the Court to. be able to reach a decision on these points the nature of the Belgian

discontinuance would inevitably have to be defined and, moreover, certain matters would have to be

passed upon which touch on the merits. In fact, in order to conclude that the application of the Treaty of

1927 must be held as finally closed or exhausted with regard to the new Application, a finding with

respect to the substantive nature of the discontinuance would first be necessary,


in the sense that the discontinuance by Belgium involved an abandonment of the disputed right. But such

a finding could not be made at the moment, as I have already said, so long as sufficient additional

information has not been gathered to supplement the so far insufficient evidence of the facts alleged.

Moreover, the denial by Spain of the right of the Belgian State to rely on the 1927 Treaty in order to

reinstitute proceedings after the discontinuance cannot be separated from the question of Belgium's jus

standi , which forms the subject of the third Objection. In reality, in this first Objection Belgium's jus

standi to reintroduce the action in regard to which the discontinuance was filed is denied. The Court

cannot consequently pass on the present applicability of Article 17 (4) of the 1927 Treaty without first

passing on the legitimacy of Belgium's intervention as the national State of its shareholders(jus standi) .

But such a decision also requires that other questions contained in the third Objection be settled first, such

as that of the precise position of the Canadian Government and that of whether exceptional circumstances

really deprived the Canadian Barcelona Traction Company of all possibility of exercising its right of

taking legal action to defend the interests of the Belgian shareholders. As these problems touch upon the

very merits of the Application, they could not be settled at a preliminary stage of the proceedings without

prejudging the merits; and it is no doubt for this reason that the Court has decided in favour of joining the

third Objection to the merits.

This very close relationship between the first and the third Objections decided me to take the view

that the first Objection should be joined to the merits, its examination and an endeavour to obtain

additional evidence on the facts being reserved for the second stage of the proceedings, with a view to a

decision on this objection in the final judgment. Consequently I voted against the rejection of the first

Objection at this preliminary stage of the proceedings.

THIRD OBJECTION

The examination of the third Preliminary Objection made it clear to the Court that a decision could

not be taken in respect of it during this preliminary stage of the proceedings because the existence or non-

existence of Belgium's jus standi in this case cannot be properly considered without at the same time

prejudging the merits of the Application.

Nevertheless, I am of the opinion that before deciding to join the objection to the merits it should

have been ascertained that no more direct means existed for resolving the third Objection straight away at

the preliminary stage of the proceedings.

46 ILR

[83] The following is my reasoning: the two Parties have shown that they agree on the fact that a

general rule of international law exists with regard to the diplomatic and judicial protection of commercial

limited liability companies which have been injured by the State in which they conduct their business, this

rule being that the exercise of the right of protection belongs preferentially to the national State of the

company. Since in the present case Barcelona Traction is a company incorporated under Canadian law,

its protection ought in principle to be exercised by the State of Canada.

The record shows (Preliminary Objections, Preliminary Objection No. 3, heads 4 and 8; Belgian

Observations, para. 129) that from 1948 to 1955 the Canadian Government to a certain extent exercised

such protection as against the Spanish Government, either independently or through the British

Government. But official interventions by the Canadian Government ceased at a certain moment and were

not thereafter resumed. Moreover, Canada did not react in any way at the time of the Belgian Application

of 1958 nor at the time of the new Application of 1962.

Taking these circumstances into account, can it be said that they are sufficient to conclude that

intervention by Canada has definitely come to an end? In my view, no; because at no time was there any

explicit or official statement by the Canadian Government in this connection and because its protection

of Barcelona Traction was limited to the diplomatic field and international judicial means were not

resorted to.

There are, certainly, reasons for presuming that Canada might not perhaps have had the intention of

continuing its representations to Spain on behalf of Barcelona Traction; but this mere presumption is not

in my view sufficient grounds for abandoning the general rule of international law which has been

mentioned and holding that a third State—Belgium—has a supplementary right of protection on behalf of

the shareholders in the company.

[84] It is true that during the hearings a question was put to the Parties by one of the Judges of the

Court as to whether they could supply any information concerning the attitude of the Canadian

Government subsequent to the dates of certain communications which appear in the record. However, this

enquiry produced no appreciable result (hearing of 27 April). I think that further steps should be taken

and concrete questions put to the Parties, who should be asked to supply any relevant document or

information concerning Canada's final decision. It seems to me that the Parties, as the sovereign States

concerned, can find means to inform themselves more or less directly on this subject. The advantage of

such further clarification would be to provide a final answer to the question of whether or not the specific

rule of international law concerning the diplomatic and judicial protection of companies is susceptible of

application in the present case. In the event of a negative result, the joinder of the third Objection to the

merits would be


inevitable in order to ascertain to what extent the intervention of the Belgian State, taking the

circumstances into account, may emerge as well-founded, with a view to the establishment of its jus

standi to exercise, either in an alternative capacity or—as Belgium claims—independently in its own

right, the protection of its national shareholders in a foreign company.

On the basis of the foregoing, I would have been in favour, before this preliminary stage of the

proceedings was closed, of the Court's making an order putting certain questions, to which the Parties

would have had to reply, in which they would have been asked to supply the Court with any relevant

document or information which would help to establish the position of the Canadian State with regard to

the judicial and diplomatic protection of the Canadian Barcelona Traction Company in the future. But

since the majority of the Court has decided in favour of immediate joinder to the merits and since the

further clarification to which I have referred will still be possible in the course of the second stage of the

proceedings, I subscribe to the decision of the Court so far as concerns the joinder of the third Objection

to the merits in order that it may be resolved in the final judgment, since I share the view that any

decision with regard to the third Objection, taken as a whole, must involve passing on the actual merits of

the dispute.

(Signed) J. L. BUSTAMANTE R.

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DISSENTING OPINION OF JUDGE MORELLI

[Translation]

It is my opinion that of the four objections presented by the Spanish Government as preliminary

objections, it is solely on the second that it was open to the Court to take a decision at the present stage of

the proceedings. The Court should have upheld this objection and declared that it has no jurisdiction.

The other objections, although presented by the Spanish Government as preliminary objections, do

not really possess the character of preliminary objections, because they all raise questions which directly

and solely concern the merits of the case. This being so, it was not in my opinion open to the Court to

take a decision on those objections, as it has done on the first by dismissing it. Nor was it open to the

Court to do what it has done in connection with the third and fourth objections in deciding to join those

two objections to the merits. For joinder to the merits, within the meaning of Article 62, paragraph 5, of

the Rules of Court, implies the preliminary nature of the objection, and in my opinion this condition is not

met in respect of the so-called preliminary objections in question.

I consider that the first, third and fourth objections should have been declared inadmissible as

preliminary objections. This would have left it open to Spain to raise the same questions once again, as

questions which in fact relate to the merits, in the further proceedings.

It is quite true that the Court's decision to join the third and fourth objections to the merits is not in

respect of its practical consequences very far removed from what in my view would have been a more

correct decision by the Court declaring those two objections inadmissible as preliminary objections.

There is, however, a fundamental distinction between joinder to the merits and a declaration of

inadmissibility, and this distinction will I hope clearly emerge from the considerations I propose to devote

to the subject of preliminary objections in general.

[86] I shall begin my Dissenting Opinion with a first part dealing with the question of the Court's

jurisdiction. I shall first of all describe what I consider to be the operation of Article 37 of the Statute and

then go on to show that this Article did not operate in respect of the fourth paragraph of Article 17 of the

Hispano-Belgian Treaty of 19 July 1927. In the second part I shall pass on to the above-mentioned

general considerations on the subject of preliminary objections. The third part will be devoted to

discontinuance in general and to the application in respect of the first Spanish Preliminary Objection,

which relates to the discontinuance, of the general considerations on the subject of preliminary objections.

The application of those considerations to the


third and fourth Spanish Preliminary Objections will be dealt with in the fourth and fifth parts.

I. ON THE JURISDICTION OF THE COURT (SECOND PRELIMINARY OBJECTION)

1. Article 37 of the Statute of the International Court of Justice has a relationship which might be

called both historical and verbal with Article 37 of the Statute of the Permanent Court, some of the terms

of that Article being used by Article 37 of the Statute of the present Court. In spite of this there is a

radical difference between the two provisions in respect of their functions.

Article 37 of the Statute of the Permanent Court is of the nature of a provision serving purely to

interpret other provisions, namely clauses in treaties which provide for reference to a tribunal to be

established by the League of Nations. It is a provision which may be regarded as supplementary to other

provisions which themselves, on the other hand, possess the character of principal provisions. Jurisdiction

is created by these latter provisions, that is to say by the treaty clauses providing for reference to a

tribunal to be established by the League of Nations. By the operation of Article 37 of the Statute of the

Permanent Court, and for the parties to that Statute, jurisdiction thus created is to be deemed jurisdiction

conferred upon the Permanent Court.

Unlike Article 37 of the Statute of the Permanent Court, which, as already stated, is a provision

supplementing other provisions which had already—though only partially—created a certain jurisdiction,

Article 37 of the Statute of the International Court has importance in itself, and serves an independent

purpose. Article 37 of itself creates new jurisdictional rules, namely rules conferring a certain jurisdiction

upon the International Court of Justice, although it refers back to other provisions to determine the

conditions of its own operation and the content of the jurisdictional rules it seeks to create.

2. Article 37 of the present Statute speaks of two categories of provisions: (a ) provisions for

reference of a matter to a tribunal to have been instituted by the League of Nations; and (b ) provisions for

reference of a matter to the Permanent Court.

By its mention of the latter, Article 37 effects what is called the ‘transfer’ of the Permanent Court's

jurisdiction to the International Court of Justice.

[87] The transfer formula is short and convenient, and there is no objection to its use provided its

meaning is defined. It must be borne in mind that jurisdiction is conceivable only in relation to the organ

on which it is conferred; this means that it is not possible to consider the

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jurisdiction of one organ as capable of being actually transferred to another. In fact new jurisdiction is

conferred on a particular organ by means of a reference to the provisions governing the jurisdiction

pertaining to another.

Now it is perfectly possible to conceive of the creation of jurisdiction by means of a reference to

provisions which are no longer in force, or even by means of a reference to formulae which never had any

legal validity. However, when the term transfer is used what is meant is that there is a certain relationship

between two different jurisdictions, from two points of view. In the first place there is a relationship in

respect of the content of the provisions governing the two jurisdictions and the conditions of their

application. These provisions are identical except as regards the specification of the organ on which

jurisdiction is conferred. Secondly, transfer denotes a chronological relationship between the two

jurisdictions. A new jurisdiction is created, linking up with another jurisdiction which still exists at the

time when the new one is created, but which is abolished as from that moment, by the very fact of the

creation of the new jurisdiction.

It is not only by its reference to treaties or conventions explicitly providing for reference of a matter

to the Permanent Court that Article 37 creates new jurisdictional rules. The same operation is effected by

the reference to treaties or conventions providing for reference of a matter to a tribunal to have been

instituted by the League of Nations. Even in respect of this latter reference, Article 37 does not have the

purely interpretative character of the similarly worded provision in Article 37 of the Statute of the

Permanent Court. It might be said that by this reference also Article 37 of the present Statute effected the

transfer to the International Court of jurisdiction already conferred upon the Permanent Court, in view of

the fact that treaties providing for reference to a tribunal to have been established by the League of

Nations had, by the operation of Article 37 of the Statute of the Permanent Court, to be interpreted as

referring to the jurisdiction of that Court.

3. Thus, Article 37 of the present Statute lays down autonomous rules creating the Court's

jurisdiction, although for this purpose it refers back, in a certain fashion, to other provisions. As I have

said already, it is quite possible, in general, for a jurisdictional rule, or more generally any legal rule at all,

to refer back to provisions which are no longer in force; and it is even possible for a legal rule to refer to

formulae which never had legal validity. But that is not the case with Article 37, since this refers to

treaties or conventions and adds that such treaty or convention must be ‘in force’. We thus have to

determine the meaning to be attributed to this term, particularly with regard to the time at which such

treaty or convention must be in force.

[88] This term is found in other provisions of the Statute of the Court,


such as Article 35, paragraph 2, and Article 36, paragraph 1. The same term was also to be found in

Article 37 of the Statute of the Permanent Court. But this obviously does not mean that the expression ‘in

force’ in Article 37 of the present Statute must necessarily have the same significance and scope as in the

other provisions I have just mentioned. It is necessary to have regard to the character and content of the

different provisions in which the term is used.

4. Article 35, paragraph 2, of the Statute confers on the Security Council the function of laying

down the conditions under which the Court shall be open to the States not parties to the Statute, but

‘subject to the special provisions contained in treaties in force’. These are provisions by which the

subject-matter is already governed, independently of the reference made to such provisions in Article 35,

paragraph 2, which confines itself to reserving them. As provisions which govern the subject-matter,

independently, they must, of course, be provisions which are in force with relation to the date which is

regarded as decisive for that purpose and which is not specified at all in Article 35, paragraph 2. The

expression ‘in force’ used in that paragraph may therefore be considered as quite superfluous.

The same observation may be made concerning the term ‘in force’ used in Article 36, paragraph 1,

of the Statute, which states that the jurisdiction of the Court comprises, inter alia , all matters specially

provided for ‘in treaties and conventions in force’. Far from itself creating jurisdiction for the Court, the

provision contained in Article 36, paragraph 1, in fact merely makes reference to other sources of

jurisdiction, separate from the Statute, namely to special or general agreements, among which treaties and

conventions are mentioned. It is perfectly clear, even were it not specified in Article 36, paragraph 1, that

by this must be meant treaties and conventions in force: in force at the time when such treaty or

convention has to be applied, namely at the time of the proceedings. The questions of the more precise

determination of the point in time which is decisive for this purpose (application or judgment) is left open

by the term ‘in force’. The fact is that in using the term, Article 36, paragraph 1, does not specify any

particular point in time when stating that the treaties and conventions to which it refers must be in force.

The term is therefore superfluous.

As regards Article 37 of the Statute of the Permanent Court I have already said that it is a provision

that is purely interpretative of other treaty provisions. It was by these provisions (interpreted, of course, in

accordance with Article 37) that jurisdiction was created. To speak in this connection, as did Article 37,

of a treaty or convention ‘in force’ added nothing whatsoever and in no way influenced the manner in

which Article 37, as an interpretative rule, had to operate.

46 ILR

[89] Unlike Articles 35, paragraph 2, and 36, paragraph 1, of the Statute of the International Court,

and Article 37 of the Statute of the Permanent Court, where the term ‘in force’ refers to provisions which

themselves govern the subject, Article 37 of the present Statute uses this term in relation to provisions

which do not govern the subject in question. The subject in question is the jurisdiction of the International

Court of Justice. That jurisdiction derives from rules which Article 37 itself creates, by means of a

reference to provisions concerning a completely different subject, namely the jurisdiction of the

Permanent Court. Thus, the indication that these latter provisions must be in force is by no means

superfluous or redundant, but is of substantive importance for the operation of Article 37.

5. It might be considered that, by referring to treaties or conventions ‘in force’, the intention of

Article 37 is to make some particular specification concerning the actual substance of the rules it seeks to

create—to the effect that these rules, concerning the jurisdiction of the present Court, would have validity

in point of time identical to that of the provisions concerning the jurisdiction of the Permanent Court to

which Article 37 refers. According to this interpretation, the meaning of the expression ‘in force’ in

Article 37 would be very close to that of the same expression in Article 36, paragraph 1. Just as Article

36, paragraph 1, provides that the International Court may be seised on the basis of a treaty only if that

treaty is in force, Article 37 would mean that the International Court may be seised on the basis of a rule

created by Article 37 only if a treaty concerning the jurisdiction of the Permanent Court is in force. Thus

neither of the provisions just mentioned would be understood to refer to any particular point in time in its

specification as to the treaty concerned being in force.

This interpretation is not tenable, however. Its logical consequence would be that the jurisdictional

rules created by Article 37 would have operated only over a very brief period—namely until 18 April

1946, the date when the Permanent Court was dissolved: taking into account the principle of perpetuatio

jurisdictionis , they would have applied solely to proceedings instituted prior to that date. This would be

so unless the term ‘in force’ were to be understood in a very special sense—namely as meaning that a

provision concerning the jurisdiction of the Permanent Court did not cease to be in force as a result of the

dissolution of that Court; or unless the term ‘in force’ were applied not specifically to the clause relating

to the jurisdiction of the Permanent Court, but to the treaty as a whole in which the clause is contained.

[90] But this is not all. According to the interpretation which I have been considering, the

jurisdictional rules created by Article 37 would not, in reality, have operated even during the brief period

I mentioned,


for the very simple reason that Article 37, by the very fact of prescribing the transfer of the jurisdiction of

the Permanent Court to the International Court, automatically entailed the extinction of the treaty clauses

relating to the jurisdiction of the Permanent Court. This excludes the simultaneity of jurisdiction on the

part of both Courts which is required by the interpretation under consideration. In order to give meaning

to Article 37 it would be necessary to assume, for the purposes of that Article, that there was in force, not

a clause which was really in force, but a clause which would have been in force had Article 37 not

operated.

6. All this makes it necessary to put an entirely different construction upon the term ‘in force’ in

Article 37 of the Statute. This term does not relate to the content of the jurisdictional rules created by

Article 37, but rather to the technical process by which those rules are created, namely to the actual

operation of Article 37.

Article 37 hinges the creation of certain jurisdictional rules (rules conferring jurisdiction upon the

International Court) on the existence of treaties or conventions concerning the jurisdiction of the

Permanent Court, which must be in force in order for Article 37 to produce its intended effect.

The treaties and conventions referred to by Article 37 must be in force in relation to a particular

point of time. That is, at the time of the entry into force of the Statute, the time when the legal operation

for which the Statute provides in Article 37 is effected.

This follows from the actual terms of Article 37. That Article predicates a treaty or convention in

force which ‘provides’ for reference of a matter to a tribunal to have been instituted by the League of

Nations, or to the Permanent Court of International Justice. To specify the contingency it covers, Article

37 uses the verb ‘provides’ in the present tense, whereas it uses the future in going on to stipulate that the

matter ‘shall’ be referred to the International Court of Justice. The last part of this sentence refers to the

(future) time in which the jurisdictional rules created by the legal operation for which Article 37 makes

provision are to have effect; while on the contrary the condition necessary for this operation to take place

is indicated in the first part of the sentence by a reference to the present time. It must be concluded from

this that the treaties and conventions referred to in Article 37 cannot be other than treaties and

conventions in force at the time of the entry into force of the Statute.

[91] A similar observation might be made with regard to Article 36, paragraph 5, which deals with

the contingency of declarations made under Article 36 of the Statute of the Permanent Court ‘which are

still in force’ (pour une durée qui n'est pas encore expirée , in the French text), while on the contrary the

future tense is used (‘shall be deemed’) to indicate the legal effect conferred by Article 36, paragraph 5,

on the declarations concerned. The reference to a given point in time in

46 ILR

order to indicate the duration of the declaration is further strengthened, in Article 36, paragraph 5, by the

use of the word ‘still’.

It may be noted on the other hand that in Article 37 of the present Statute, the term ‘in force’ has a

different effect from that of Article 37 of the Statute of the Permanent Court; this is so even with regard to

the treaties and conventions also covered by this latter provision, namely treaties and conventions which

provide for reference to a tribunal to have been instituted by the League of Nations. Unlike Article 37 of

the Statute of the Permanent Court, Article 37 of the Statute of the present Court uses the term ‘in force’

in relation to a particular point in time, namely the entry into force of the Statute. The difference is due to

the difference in the functions of two provisions: Article 37 of the Statute of the Permanent Court simply

interpreted existing jurisdictional rules, whereas Article 37 of the present Statute in itself creates new

jurisdictional rules, even where it refers back to treaties providing for reference of a matter to a tribunal to

have been instituted by the League of Nations.

7. I have said that Article 37 of the present Statute refers to treaties or conventions in force at the

time of the entry into force of the Statute, at the point in time when the legal operation for which Article

37 makes provision takes place. It must be made clear that if regard is had only to the terms of Article 37,

the entry into force of the Statute is to be taken to mean either its initial entry into force or, in respect of a

particular State, its entry into force for that State as a result of the admission of that State to the United

Nations. This is of course so on the basis of the wording of Article 37 alone, which makes no distinction

between original Members and Members admitted later. It is another matter to ascertain whether, among

the admissions which have actually taken place, there have been some which, in the light of the

conditions required by Article 37, have given rise to the legal effect for which that Article makes

provision.

Now the basic condition laid down by Article 37 is that the treaty or convention providing for

reference to the Permanent Court shall be a treaty or convention in force. I have already said that the

treaty or convention must be in force at the time of entry into force of the Statute. It must be added,

however, that it is not enough for the treaty or convention to be in force in respect of any of its provisions

indiscriminately. On the contrary, it is necessary for the treaty or convention to be in force specifically in

respect of its clause conferring jurisdiction on the Permanent Court. Should that clause have lapsed, the

treaty containing it, though possibly still in force so far as its other provisions are concerned, is no longer

a treaty in force providing for reference to the Permanent Court of International Justice. It follows that the

contingency covered by Article 37 fails to materialize, because of the very terms of that Article.


[92] In my opinion, there can be no doubt that the dissolution of the Permanent Court entailed the

lapse of all the clauses, more generally speaking of all the jurisdictional rules, conferring jurisdiction

upon that Court, since by this very fact those rules became devoid of object. Hence the consequence that

the legal operation for which Article 37 makes provision became impossible as from 18 April 1946, the

date of the dissolution of the Permanent Court. Since it is a historical fact that before that date there were

no admissions to the United Nations, it is permissible to conclude that the legal operation provided for by

Article 37 occurred once only, namely when the Statute first entered into force, and consequently solely

in respect of the original Members of the United Nations. But this is no more than a statement of fact, not

a restriction to be considered as inherent in the functioning of Article 37.

8. If the conditions laid down in Article 37 are present, and more particularly if, at the time of the

entry into force of the Statute, a treaty or convention providing for reference to the Permanent Court was

in force, the operation for which Article 37 makes provision was effected by the creation of a

corresponding jurisdictional rule relating to the International Court of Justice. By the effect of Article 37

itself, the creation of that rule was accompanied by the simultaneous extinction of the rule relating to the

Permanent Court. This has no influence on the condition laid down in Article 37 by the use of the term ‘in

force’, that requirement being a condition for the operation of Article 37, not a condition for the

subsistence of the rule created by that Article.

[93] The jurisdictional rules created by the legal operation provided for by Article 37 are rules the

content and conditions of application of which (except as regards the indication of the organ on which

jurisdiction is conferred) are determined by the reference back to the treaties relating to the Permanent

Court. That reference also applies to the treaty clauses governing the duration of the jurisdictional rule

relating to the Permanent Court. Obviously if the expiry of the time-limit governing the jurisdictional rule

relating to the Permanent Court occurred before the entry into force of the present Statute, this prevented

the operation for which Article 37 makes provision taking place, because no treaty was then in force

under the terms of the Article. If, on the contrary, the time-limit expires after the entry into force of the

Statute, and consequently after Article 37 has already operated to create a jurisdictional rule relating to

the International Court, that rule expires at the same time as the time-limit in question expires. But this

has nothing to do with the fact that Article 37 explicitly refers to treaties or conventions ‘in force’,

because, as has been said, that term relates solely to the time when the operation contemplated in the

Article is carried out. On the contrary, it is merely a consequence of that Article's reference back to the

treaty concerning the jurisdiction of the

46 ILR

Permanent Court for the purpose of determining the content and provisions of application of the

jurisdictional rules concerning the present Court which Article 37 seeks to create.

If Article 37 is compared with Article 36, paragraph 5, it is seen that, unlike Article 37, this latter

provision explicitly specifies the consequence of the expiry of the period laid down for a declaration

relating to the Permanent Court as regards the extinction of the jurisdictional rule concerning the present

Court created by the means provided for in Article 36, paragraph 5. That consequence is specified by the

words ‘for the period which they still have to run and in accordance with their terms’, whereas the words

‘and which are still in force’, used in the first part of the provision, refer to the fact of the declaration

being in force at the time of the entry into force of the Statute and consequently at the time of the

operation of Article 36, paragraph 5 (this reference corresponds to the explicit reference to a treaty in

force in Article 37).

There is no need to add that after the accomplishment of the legal operation provided for in Article

37 by the creation of a jurisdictional rule relating to the present Court, the validity of that rule was in no

way affected by the subsequent dissolution of the Permanent Court. This is so for the very simple reason

that this was an event not foreseen by the treaty to which Article 37 refers.

9. My observations concerning the extinction of the jurisdictional provision concerning the

Permanent Court, brought about by the very effect of the operation of Article 37, prevents me from

subscribing to a statement frequently made by the Spanish Government. According to that Government,

for the jurisdiction of the International Court to be able to be asserted on the basis of Article 37 of the

Statute, an additional requirement would have to be fulfilled, namely that the clause providing for the

jurisdiction of the Permanent Court should be in force at the time of the filing of the Application with the

International Court.

This condition would however be quite incapable of fulfilment. This is because, as has been said, in

every case where Article 37 has operated, that same Article, by stipulating the transfer of jurisdiction

from the Permanent to the International Court, caused, by the very fact of the transfer, the extinction of

the clause relating to the jurisdiction of the Permanent Court; hence this extinction occurred

independently from the dissolution of the Permanent Court and well before that event.

[94] In reality, for the International Court to be able to exercise jurisdiction on the basis of Article

37 of the Statute, it is necessary that there should be in force at the time of the filing of the Application

not the jurisdictional provision relating to the Permanent Court but rather the jurisdictional provision

relating to the International Court created by


means of the legal operation provided for in Article 37, and whose status as a provision in force remained

completely unaffected by the extinction of the provision relating to the Permanent Court pursuant to that

Court's dissolution.

For the same reasons I am unable to subscribe to a phrase in the reasoning of the Advisory Opinion

of 11 July 1950 concerning the International Status of South West Africa , in which the Court states that

Article 7 of the Mandate ‘is still in force’ (I.C.J. Reports 1950 , p. 138). If my conception of the operation

of Article 37 of the Statute is correct, in order to support the conclusion reached by the Court in the

operative provisions of the Opinion, to the effect that the reference to the Permanent Court of

International Justice is to be replaced by a reference to the International Court of Justice, it would have

been sufficient to find that Article 7 of the Mandate was in force at the time of the entry into force of the

Statute. At that time Article 7 of the Mandate as such was extinguished by the very operation of Article

37 of the Statute, precisely because it was replaced by a new corresponding provision relating to the

jurisdiction of the International Court of Justice.

10. The Statute of the Court, including Article 37, did not come into force for Spain until 14

December 1955, as a result of the admission of that State to the United Nations. On that date, Article 37

had no possibility of application, because at that date there was no treaty or convention providing for

reference to the Permanent Court which could be considered, as such, as being in force within the

meaning of Article 37.

In particular, Article 17 (4) of the Hispano-Belgian Treaty of 19 July 1927 had lapsed on 18 April

1946, as a result of the dissolution of the Permanent Court. That provision did not decide that the parties

were subject to some generic or abstract jurisdiction, quite inconceivable as such. On the contrary, it

provided for the jurisdiction of a particular organ, specifically named. That organ was the Permanent

Court of International Justice. The dissolution of that Court necessarily entailed the lapse of the treaty

clause relating to the jurisdiction of that Court, which thereby became devoid of object.

11. This result cannot in my view be set aside by arguing, as does the Belgian Government, the

inseparability of the provisions of the 1927 Treaty. It is difficult to find any reason why this alleged

inseparability should have the effect of keeping Article 17 (4) in force, rather than the contrary effect of

entailing the lapse of the entire treaty.

[95] In my opinion there can be no doubt that Article 17 (4) lapsed, for lack of object, as a result of

the dissolution of the Permanent Court. This is the only conclusion which is relevant for the purpose of

the operation of Article 37 of the Statute. The fate of the other provisions

46 ILR

of the 1927 Treaty is of no interest. But if it is desired also to consider the question of the preservation in

force of the other provisions of that Treaty, what consequence must be drawn, for the solution of that

problem, from the assertion that the Treaty constitutes an inseparable whole? If it is considered, as does

the Belgian Government, that ‘resort to adjudication is an essential part of the economy of the treaty’ that

‘the various methods of settlement were carefully combined, so that to remove those which concern the

Court amounts to dismantling the whole system’ and that Article 17 (4) ‘was an essential condition for the

consent of the parties to the treaty as a whole’ the inevitable result, assuming the impossibility, thus

affirmed, of separability of the provisions of the Hispano-Belgian Treaty, would simply be that the entire

treaty has lapsed.

12. Against the lapse of Article 17 (4) of the 1927 Treaty, the Belgian Government also argued that

the sole consequence of the dissolution of the Permanent Court was the temporary impossibility of

performance of that provision, which is said to have been suspended in its effects without ceasing to be in

force. In this connection the Belgian Government relied on the concept of the suspension of international

obligations. It observed that impossibility of performance of an obligation entails the extinction of the

obligation only if the impossibility is permanent; in the case of temporary impossibility, on the other

hand, the obligation is not extinguished, but is merely suspended.

However it is not correct in my view to apply to Article 17 (4) of the 1927 Treaty the various

concepts used by Belgium, namely performance of the obligation, impossibility of performance, and

extinction or suspension of the obligation as a consequence of permanent or temporary impossibility of

performance. This is because strictly speaking that provision of the 1927 Treaty did not create a true

obligation for the contracting States, that of adopting a certain course of conduct, which might

subsequently have become impossible with the consequences considered to attach to such impossibility,

namely impossibility of performance of the obligation (extinction or suspension of the obligation

depending on the permanent or temporary nature of the impossibility).

[96] Article 17 (4) of the 1927 Treaty created for each of the contracting States not an obligation,

but rather a situation of subjection to particular legal powers, they also being created by the same

provision. Those powers consist on the one hand of the power of jurisdiction conferred on a certain organ,

the Permanent Court, and on the other hand the power for the other contracting State to seise that Court.

Since these are legal powers conferred either on a particular organ or on a State with reference to a

particular organ, the disappearance of that organ, the Permanent Court, necessarily entailed the extinction

of those powers


and, at the same time, the extinction of the corresponding situation of subjection to those powers. Those

powers were extinguished and not simply suspended, because the organ provided for, namely the

Permanent Court, was definitively abolished and not merely suspended in its operation for a certain

period.

13. If regard is had to the true significance of Article 17 (4) of the 1927 Treaty, it becomes clear that

it is not correct, as Belgium has done, to assimilate the question of the preservation in force or lapse of

that provision to the question of the effects of the disappearance of an international agency on the treaties

conferring certain functions on that agency.

If a treaty creates obligations for the contracting States and at the same time provides for the

intervention of a certain organ in connection with the performance of those obligations, the obligations

may well continue to exist despite the disappearance of the organ which is not necessarily bound to entail

more than the extinction of the powers of the organ and of the subjection of the States to it. But this has

nothing to do with the question of the preservation in force or lapse of Article 17 (4) of the 1927 Treaty or

even less with the operation of Article 37 of the Statute. That Article requires the existence, at the time of

its entry into force, of the jurisdiction of the Permanent Court. But that jurisdiction, created by Article 17

of the 1927 Treaty, had ceased to exist when the Statute came into force for Spain on 14 December 1955.

14. Nor is it possible, as is sought by the Belgian Government, to find any analogy between the case

of the disappearance of the organ on which jurisdiction is conferred by a treaty and the case of a treaty

conferring jurisdiction on an organ yet to be established, as in the case of the clauses in the Treaty of

Versailles which refer to a tribunal to be instituted by the League of Nations.

In this latter case there were provisions in connection with which no problem of lapse arose at all;

these were provisions which looked to the future institution of a particular organ and which therefore

made their own attribution of jurisdiction dependent on that event. Those provisions can readily be held to

have been in force before the organ instituted by the League of Nations, to which they referred, was in a

position to operate. But this has nothing to do with the term ‘in force’ in Article 37 of the Statute of the

Permanent Court, which relates to a point in time which is that of the proceedings and not to the point in

time of the entry into force of the Statute, as is the case, on the contrary, in respect of the identical term in

Article 37 of the present Statute.

[97] 15. I have said that the effect of Article 37 of the Statute is to create new rules concerning the

jurisdiction of the present Court, those

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rules having come into existence at the time of the operation of Article 37. This effect of Article 37 is,

however, subject to the condition that there is a treaty or convention ‘in force’ concerning the jurisdiction

of the Permanent Court, and that condition must be present at the time of the entry into force of the

Statute. But Article 17 (4) of the Hispano-Belgian Treaty had lapsed before the Statute came into force

for Spain, which leads to the conclusion that the condition laid down in Article 37 has not been fulfilled.

The question may well arise, however (and this appears to be a question raised by the Spanish

Government in terms which are neither uniform nor completely clear), whether Article 17 (4) of the 1927

Treaty was not revived by Article 37 of the Statute. This would of course be a revival having no other

effect than the fulfilment of the condition laid down by Article 37 for its own operation.

This observation forbids an affirmative reply to the question. If Article 37 requires, as a necessary

condition for its own operation, that the clauses providing for reference to the Permanent Court should be

in force at the time of the entry into force of the Statute, it would be quite absurd to conceive of Article 37

completely destroying this requirement by providing that the clauses relating to the jurisdiction of the

Permanent Court, which lapsed as a result of the dissolution of that Court, are revived merely for the sake

of the operation of Article 37.

Moreover, this would be contrary to the very concept of the transfer of the jurisdiction of the

Permanent Court to the International Court of Justice. That transfer was intended to ensure continuity

between two jurisdictions—a jurisdiction which actually existed at the time when the transfer took place,

and a new jurisdiction, intended to replace it. But that continuity would have in no way been achieved if

the jurisdiction of the Permanent Court had lapsed before the entry into force of the Statute and

consequently before the jurisdiction of the present Court came into existence. The assumed revival of the

first jurisdiction would be a pure fiction and quite incapable of ensuring such continuity.

II. ON PRELIMINARY OBJECTIONS IN GENERAL

1. In referring to preliminary objections, Article 62 of the Rules of Court attaches to these objections

the effect of suspending the ‘proceedings on the merits’ and, at the same time, of initiating a phase in the

proceedings in which the only task the Court has to perform is to give its decision on the objection in

question. The Court may, however, refrain from discharging this task in this phase and may decide to join

the objection to the merits.

The term ‘preliminary’ in the expression ‘preliminary objection’ may be understood in two senses.


[98] On the one hand, this term is used to denote the effect produced by an objection that is

presented as a preliminary objection, this effect being precisely the initiation of a phase in the proceedings

which also might be called preliminary.

It is in this sense that Article 62 speaks of preliminary objections when it says, in paragraph 1, that

‘a preliminary objection must be filed’ within a certain time-limit. Indeed, far from prescribing the means

by which certain objections must be presented, Article 62 merely provides a party with a faculty which it

is free not to exercise, In other words, an objection which might be filed in the way specified in Article 62

can be presented also in the pleadings mentioned in Article 41. It is only if the party chooses the course

made available by Article 62 that it must file the objection within the time-limit fixed in paragraph 1 of

that Article, complying also with the other stipulations specified in paragraph 2.

It follows that, when Article 62 (1) refers to an objection that is described as ‘preliminary’, it

indicates, by that term, not so much a certain possible character of the objections raised by the parties, as

a certain means by which the objections may be presented.

2. It is quite certain, however, that the means provided in Article 62 can be utilized, not for all

objections or all pleas advanced by the parties, but only for objections possessing a certain character. It is

quite certain that a party cannot, merely by presenting an objection or a plea according to the procedure

indicated in Article 62, compel the Court to give a prior decision on a certain question, regardless of any

relationship between that question and the other questions that have to be decided in the case.

Thus an objection may be presented by the means indicated in Article 62 only if it possesses a

certain character; and that character relates to the actual content of the objection and consists precisely in

a certain relationship that must exist between the question that is raised by the objection and the other

questions that have to be decided. The necessity for such a character is only impliedly prescribed by

Article 62. The character of the objection may very well be indicated by the same term ‘preliminary’

which Article 62 employs with a different object, namely to denote the means by which the objection may

be presented. This is the other sense in which the word ‘preliminary’ in the term ‘preliminary objection’

may be understood.

A question can constitute the subject of a preliminary objection within the meaning of Article 62 of

the Rules of Court only if a decision on that question is logically necessary before proceeding with the

consideration of the other questions. There must be, between the different questions, an order that is

imposed by a logical necessity and not merely one. inspired by considerations of expediency or economy.

46 ILR

[99] If a certain order is not imposed by any logical necessity, it is for the Court to determine the

order that may most suitably be followed. In this connection, the Court may be guided by various criteria

and these, as I have said, might even be criteria of economy. Thus the Court might find it desirable to start

by considering a question of law that is so presented that it is easy to settle, before entering upon the

consideration of a complicated question of fact, if it appears that a possible decision of the question of law

might obviate the necessity for considering the question of fact.

The Court's freedom to determine the order to be followed, when the order between the different

questions is not imposed by any logical necessity, cannot be removed or restricted by the attitude of the

parties, still less by the attitude of one of the parties. It would be inconceivable that, by making use of the

means provided by Article 62 or of any other means, one of the parties should be able to compel the Court

to give a prior decision on a certain question, when such prior decision is not called for by any logical

necessity.

3. It is quite obvious that the question whether a decision on the merits is or is not possible must

necessarily be settled before the merits are considered. There can therefore be no doubt that procedural

objections (on the ground of lack of jurisdiction or on any other grounds) aimed at preventing

consideration of the merits can be presented as preliminary objections under Article 62 of the Rules of

Court. What has to be determined is whether this possibility exists solely for the objections I have just

mentioned or whether the same possibility can be admitted in respect of certain questions relating to the

merits.

The answer to the question I have just raised must be in the negative. This follows from the fact that

there is no necessary logical order between the various questions all relating to the merits in a case. This

is tantamount to saying that there are no questions relating to the merits the prior decision of which is

called for by logical necessity. It follows that there are no questions relating to the merits that can be

presented as preliminary questions under Article 62 of the Rules of Court.

[100] The conclusion I have reached is confirmed by the actual terms of Article 62. This Article

stipulates, in paragraph 3, that, upon receipt by the Registrar of a preliminary objection filed by a party,

the proceedings ‘on the merits’ shall be suspended. In paragraph 5, the same Article gives the Court the

faculty of joining the preliminary objection ‘to the merits’. There emerges from the provisions of Article

62 which I have just recalled a clear distinction between consideration of the preliminary objection and

consideration of the merits. This precludes any idea of it being possible to raise a question relating to the

merits by means of a preliminary objection under Article 62. It is indeed obvious that, if proceedings on

the merits are suspended, it is not possible, during such suspension, to decide any question which


relates to those merits. It is equally obvious that it would not be correct to say that a particular objection

may be joined to the merits in the case of an objection which itself concerns the merits.

4. Consequently, if a party presents as a preliminary objection an objection that concerns the merits,

the Court cannot do otherwise than declare the objection inadmissible as a preliminary objection. This

does not of course preclude the party in question from presenting the same objection, like all other

objections concerning the merits, in any further proceedings.

An objection relating to the merits which is presented by a party as a preliminary objection must be

declared to be inadmissible as a preliminary objection. It must not be joined to the merits under paragraph

5 of Article 62. A decision by the Court joining an objection to the merits presupposes the admissibility of

the objection as a preliminary objection. The objection must be one that is intended to prevent

consideration of the merits, but one on which the Court cannot give a decision without considering certain

matters which are also connected with the merits. In the hypothesis I have stated the question is, on the

contrary, one that directly concerns the merits.

The declaration of inadmissibility is obligatory for the Court and not discretionary like the joinder of

a preliminary objection to the merits. Furthermore, the declaration of inadmissibility is something quite

apart from any attitude which may be adopted by the party against which the objection is raised. The

objection must be declared inadmissible even if that party does not object to the question which is raised

by the objection presented as a preliminary objection being decided prior to the other questions which

also relate to the merits, in a preliminary phase of the proceedings. It is not possible for one of the parties

or the two parties in mutual agreement to limit the Court's freedom to determine the order to be followed

in the examination of the different questions relating to the merits, by compelling the Court to give a prior

decision on one of those questions.

5. Consideration must, however, be given to an argument that might be advanced to set aside the

conclusion I have reached.

[101] It might be argued that it is quite possible for the Court to be seised for the purpose of

deciding, not a dispute in its entirety, but solely a question a decision on which is necessary for the

settlement of the dispute. Proceedings of this kind can be instituted either by mutual consent of the

parties, that is to say, by a special agreement, or by a unilateral application, as is shown by Article 36 of

the Statute, according to which acceptance of the compulsory jurisdiction of the Court may relate to no

more than questions of law or of fact. From the possibility of proceedings before the Court confined to the

subject of a specific question of law or of fact, it might be inferred that, at any rate if there is an explicit or

tacit agreement between the parties to this effect, it is also possible to utilize a special phase in the

proceedings for

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the determination of some particular question, that phase in the proceedings being precisely the one

provided for by Article 62 of the Rules of Court.

But such a conclusion would not be correct. Indeed, it is one thing to confine the subject of

proceedings to a particular question; in other words, it is one thing to confine to one question the task

which is entrusted to the Court and which the Court discharges fully by deciding that question. It would

be another thing to detach a particular question from the whole body of questions all requiring decision by

the Court for the purpose of the decision which the Court is required to give on the dispute, so that there

might be devoted to this question a preliminary phase of the proceedings which, as such, would be

followed by a subsequent phase in which the other questions would be considered and the dispute decided

by the Court. In this latter case, unlike the former, there would be a restriction, not of the task entrusted to

the Court, but rather of the freedom which the Court must enjoy in determining the order to be followed

in the examination of the different questions concerning the merits which will all have to be decided by

the Court. No such restriction is, in my view, permissible.

III. ON DISCONTINUANCE (FIRST PRELIMINARY OBJECTION)

1. Articles 68 and 69 of the Rules of Court are concerned with facts that differ in character but they

ascribe to those facts identical legal consequences. These legal consequences always take the form of the

extinction or termination of the proceedings, that is to say, they put an end to the proceedings.

Article 68 deals first with settlement, that is to say, the contingency in which ‘the parties conclude

an agreement as to the settlement of the dispute’.

Settlement produces, on the basis of general international law, the effect that the dispute is resolved

in a certain way (this effect does not always consist of extinction of the right at issue, as is stated by

Belgium). The particular rule of Article 68 of the Rules of Court, taking account of the effect produced by

a settlement on the basis of general international law and of the fact that the specific purpose of the

proceedings, that is to say, the resolution of the dispute, is achieved by another means, namely by means

of settlement, ascribes to that settlement, where the parties inform the Court thereof in writing, the

consequence of putting an end to the proceedings. Article 68 provides that, in the situation just described,

the Court, or the President if the Court is not sitting, makes an order officially recording the conclusion of

the settlement and directing the removal of the case from the list.

[102] It must be observed that it is not true, as stated by Belgium, that a settlement is a bar to new

proceedings. Settlement, if the conditions


specified in Article 68 of the Rules of Court are fulfilled, and on the basis of that Article, does indeed

produce the consequence of putting an end to the proceedings in the course of which it is concluded. But

it does not affect any right of action conferred on the parties or any jurisdiction the Court may possess.

The dispute which is resolved by the settlement may well arise again. In that event, each of the parties

may exercise any action to which it is entitled, by means of an application which would have to be

considered fully admissible; and the Court if it possesses jurisdiction may exercise it by giving a decision

on the merits. It is clear, however, that, in giving such a decision, the Court must take account of the

settlement concluded between the parties.

2. The effect of putting an end to the proceedings is ascribed by Article 68 and Article 69 not only to

a settlement notified by the parties to the Court but also to a declaration of intention made specifically for

the purpose of producing such an effect, namely a declaration of intention known as ‘discontinuance’.

Article 68 deals with the discontinuance effected by the parties by mutual agreement. Article 69 deals

with the discontinuance effected by the applicant in the course of proceedings instituted by means of an

application.

Discontinuance has, in any case, the effect of putting an end to the proceedings. This is evident from

the actual terms in which the content of the notice of discontinuance is indicated in Articles 68 and 69.

Article 68 deals with cases in which the parties, by mutual agreement, inform the Court ‘that they are not

going on with the proceedings’. Article 69 deals with cases in which ‘the applicant informs the Court in

writing that it is not going on with the proceedings’. This means that, after the discontinuance, the

proceedings (in French the two terms instance and procédure can only have the same meaning) cannot be

pursued. Thus, Article 69, paragraph 2, referring to the case in which, because of the objection of the

respondent, acquiescence in the discontinuance is not presumed, states that ‘the proceedings shall

continue’. Both in the case dealt with in Article 68 and in that dealt with in Article 69 (provided that, in

the latter case, acquiescence in the discontinuance is presumed, in accordance with paragraph 2), the

order recording the discontinuance of the proceedings directs the removal of the case from the list.

[103] The reasons for which either the parties by mutual agreement under Article 68, or the

applicant alone under Article 69, may decide to give notice of discontinuance, can be of the most varied

character. And these reasons need not be stated in the notice of discontinuance. Discontinuance may be

due, inter alia , to the possibility or the probability of a settlement. But it may be due also to a settlement

that has already been concluded between the parties; and this may be so both in the circumstances to

which Article 68 refers and also in the circumstances to which Article 69 refers. If the parties have

concluded a

46 ILR

settlement, they may, instead of notifying the Court of it in accordance with Article 68, use the other

means offered by the same Article. They may also inform the Court in writing that they are not going on

with the proceedings, and they may do this even without stating the reason for such discontinuance, that is

to say, without mentioning the settlement arrived at between the parties. It may also be that, once the

settlement has been concluded, the applicant alone may give notice of discontinuance in accordance with

the terms of Article 69 (provided, of course, in the hypothesis of paragraph 2 of that Article, that the

respondent does not oppose the discontinuance).

3. The discontinuance referred to both in Article 69, as in the present case, and also in Article 68 of

the Rules of Court (and similarly, on the basis of the last-named Article, a settlement notified by the

parties to the Court, naturally leaving aside the effects produced by a settlement on the basis of general

international law) therefore produces no other legal consequences than that of extinguishing the effects of

the application filed with the Court, that is to say, other than that of putting an end to the proceedings in

the course of which the discontinuance was effected.

Thus, discontinuance as such does not affect, in the first place, the actual existence of the dispute

between the parties. Notwithstanding the discontinuance (whether effected by the parties by mutual

agreement or by the applicant alone, accompanied, if such be the case, by the non-opposition of the

respondent) the parties may maintain their respective attitudes in relation to the conflict of interests at

issue. In that case, the dispute which had been submitted to the Court continues to subsist even after the

discontinuance.

Furthermore, the discontinuance, as such, does not affect either any right of action possessed by the

party and the jurisdiction of the Court, or the substantive right on which the claim was based. It follows

that, in the case of a discontinuance pure and simple, the dispute can be submitted to the Court by means

of a new application and that the Court must deliver judgment upon it on the same legal basis that existed

before the discontinuance.

4. Once the discontinuance has been perfected, it produces its effects in a final manner. In view of

the fact that, as has been said, the effect of the discontinuance is merely to put an end to the proceedings,

this means that, after the discontinuance, the proceedings in the course of which the discontinuance was

effected are finally terminated. For the reasons already given, however, this does not preclude the

possibility of new proceedings in respect of the same dispute.

[104] In the discussions which led up to the discontinuance by Belgium, the term ‘final’ was very

frequently employed to indicate the character which, according to the Spanish nationals concerned and

the Spanish Government itself, the discontinuance or withdrawal of the claim had


to possess. For instance, the ‘basic memorandum’ drawn up by M. March says that ‘the final withdrawal

of the claim is a prior condition for entering into negotiations’. However, the adjective by which the

discontinuance is qualified does not in any way change the nature of the discontinuance. This adjective

does not in any way of itself indicate, as Spain claims in its arguments, that the discontinuance was bound

to produce effects which are not the effects pertaining to discontinuance as such, or that it was bound to

produce other effects in addition to those effects.

The ‘final’ character which, according to the Spanish nationals concerned and the Spanish

Government, the discontinuance had to possess, can be understood in two different ways.

In the first place, the term ‘final’ has been used in regard to the perfected character of the

discontinuance. Since the contingency envisaged was that of paragraph 2 of Article 69, it was intended to

indicate in this way a discontinuance capable of a presumption of acquiescence under paragraph 2 in the

absence of any objection by the respondent within the prescribed time-limit. It is in this sense that the

term ‘final’ is understood by Spain itself in paragraphs 39, 54, 55, 56, 60, 119 and 125 of its first

Preliminary Objection. This interpretation of the ‘final’ character of the discontinuance is in line, on the

Belgian side, with the passage in the Application (paragraph (5)) in which it is stated that ‘the Spanish

group had intimated that it did not wish to negotiate so long as the case before the International Court of

Justice was proceeding’. It is in the same sense that the Belgian Government understands the final

character of the discontinuance when, in paragraph 25 of its Observations, it refers to its proposal of

March 1961 ‘that the discontinuance should become effective through acceptance by the Spanish

Government only after an agreement had been arrived at between the private parties’.

But the term ‘final’ is also applied to the Belgian discontinuance in another sense, namely to

indicate that the Spanish nationals concerned and the Spanish Government required true discontinuance

and that true discontinuance was effected by Belgium; true discontinuance as opposed to a different

concept, namely mere suspension of the proceedings.

Suspension of the proceedings is not explicitly contemplated in the Rules of Court although it is

admitted by certain systems of municipal law. It consists of a pause in the course of proceedings which

nevertheless remain open, a pause during which no step in the proceedings may be taken. Once the

suspension has come to an end, the proceedings resume their course without there being any need for the

institution of new proceedings.

[105] Now, as is stated in paragraph (5) of the Application, the Belgian Government had in fact said

that it was ‘prepared to ask the Court for a suspension of the proceedings’. This proposal, and also the

other proposal concerning an extension of the time-limit fixed for the filing

46 ILR

of the Belgian reply to the Spanish Preliminary Objections, was considered to be insufficient by M.

March. This led the Belgian Government, as is stated in the same paragraph of the Application, to effect a

real discontinuance, that is to say, a discontinuance which, precisely in order to distinguish it from a mere

suspension was, on many occasions, described as ‘final’. It is in this sense that the term ‘definitive’ is

employed in paragraphs 70 and 71 of the first Preliminary Objection of the Spanish Government, whereas

the paragraphs immediately following use it in an entirely different sense. Similarly, the ‘final withdrawal

of the claim’ is the term used as opposed to a mere suspension of the proceedings, inter alia , in

paragraphs 122 and 123 of the same Spanish Preliminary Objection.

5. If it is recognized (as, in my opinion, it must be recognized) that, on the basis of Articles 68 and

69 of the Rules of Court, the discontinuance produces no other effects than that of putting an end to the

proceedings in the course of which the discontinuance is effected, it follows that it is quite possible, after

the discontinuance and the ending of the proceedings resulting therefrom, to file a new application for the

purpose of instituting new proceedings.

Such a possibility is in no way dependent on the need for any reservation whatsoever. The need for a

reservation could be upheld only on the basis of the, in my view erroneous, concept that discontinuance,

as such, produces in addition to the effect of putting an end to the proceedings, other effects and it is those

other effects that the reservation would in fact be intended to obviate.

If discontinuance as such, that is to say, as the step referred to in Articles 68 and 69 of the Rules of

Court, produces only the effect of putting an end to the proceedings, it is quite possible that a

discontinuance—more particularly a discontinuance effected by the applicant in accordance with the

terms of Article 69—could be accompanied by another act of will of the same party producing

independent effects of its own on the basis of general international law or of other particular rules. It is,

however, quite certain that the existence of such an act, in any particular case, would have to be proved

by the party concerned. The existence of this act, contemporaneous with the discontinuance but distinct

from it, could not be presumed. Nor could it be inferred from the absence of any reservation in the notice

of discontinuance.

6. If it is recognized, in general, that discontinuance may be accompanied by other acts of the

applicant party and that those acts may produce independent effects of their own, it may be convenient to

refer here, again in a quite general way, to the different cases that may arise.

The first case is that of discontinuance pure and simple, not accompanied by any other expressions

of intention and, consequently, producing the sole effect pertaining to discontinuance, namely that of

putting an end to the proceedings.


[106] A second case occurs when there is, on the part of the applicant, not only a discontinuance of

the proceedings, but also the abandonment of its claim or of its protest as a constituent element of the

dispute which had been submitted to the Court, with the consequence that the dispute is extinguished. It is

possible that the abandonment of the claim or of the protest may not be accompanied by abandonment

either of the right of action before the Court or of the substantive right on which the claim or the protest

was based. In that case, if the dispute arises again or, more precisely, if a new dispute arises

corresponding, to a greater or lesser degree, to the extinct dispute, the Court may well be seised for the

settlement of such a dispute and, if so, that dispute will have to be decided on the basis of the substantive

right which the applicant party had invoked before the discontinuance.

It is possible, on the other hand (and here we are confronted with a third case), that the

discontinuance may be accompanied by the abandonment of the right of action before the Court. In this

case, the right of action is extinguished and this results in the extinction also of the jurisdiction of the

Court. In view of the fact that the abandonment of the right of action does not necessarily imply the

abandonment of the substantive right, the latter right may very well be invoked subsequently, either quite

apart from any legal proceedings, or in the course of proceedings instituted before some authority other

than the Court, or even before the Court, by some means other than the exercise of the right of action

which was abandoned (for means of a special agreement).

Lastly, there is a fourth possible case. This is the case in which the applicant party which

discontinues the proceedings abandons also its substantive right or recognizes that such substantive right

does not exist. Such abandonment or admission produces effects going to the actual merits of the dispute.

The substantive right that is abandoned or is recognized to be non-existent can no longer be invoked

either apart from legal proceedings or in the course of any possible proceedings, such proceedings being

quite possible, even before the Court, seeing that the abandonment or admission in respect of the

substantive right do not, of themselves, affect the right of action before the Court.

[107] The distinction between the last two cases mentioned is clearer in international law than in

municipal law. Having regard to the fact that, in international law, the right of action and the

corresponding jurisdiction are not, as in municipal law, of a general character but, on the contrary, are

derived from certain particular rules, it is easy to conceive of an abandonment of the right of action

deriving from a given rule which would not in any way affect the substantive right. The abandonment

which is contemplated in municipal law, on the contrary, is usually not an abandonment of the right of

action as such, but rather of the substantive right. It is this abandonment, in fact, which constitutes the

situation which has been opposed to a mere

46 ILR

abandonment of the proceedings. While this latter form of abandonment is described as a discontinuance

of proceedings , the term discontinuance of the action is used to indicate something that does not exactly

correspond to such a term, namely the abandonment, not of the procedural right of action, but rather of

the substantive right. This is the terminology which is employed by both the Parties in the present case. It

will suffice, in this connection, to recall that, in paragraph 294 of its Memorial, the Belgian Government

states than in most countries on the European Continent ‘by discontinuance of the action is meant the

abandonment by the plaintiff of his action, thus of his right’. The same terminology, which reveals a

certain confusion between the procedural right of action and the substantive right, is used in the Spanish

arguments.

At all events, so far as concerns the terminology and in regard to the hypothesis which is usually

contemplated in municipal law, it is necessary, for the purposes with which we are concerned, to

determine which hypothesis is, according to the Spanish Government, the one that applies in this

particular case as a result of the Belgian discontinuance.

7. In the Submissions in the Preliminary Objections the Spanish Government asked the Court to

declare that it has no jurisdiction to admit or adjudicate upon the claim made in the new Belgian

Application, ‘all jurisdiction on the part of the Court to decide questions relating to that claim, whether

with regard to jurisdiction, admissibility or the merits, having come to an end’ pursuant to the Belgian

discontinuance. In the Submissions filed after the hearing on 8 May 1964 the Spanish Government asked,

for the reason set out above and for the reasons given in support of the other Preliminary Objections, that

the Belgian Application be declared definitively inadmissible.

If regard is had only to the way in which the Spanish Government's Submissions are formulated, the

first Preliminary Objection might be understood in a purely procedural sense, namely that it was

specifically and solely designed to deny the jurisdiction of the Court to decide the dispute. Since the

Court's jurisdiction in the present case was founded by Belgium on the 1927 Treaty and Article 37 of the

Statute, the first Preliminary Objection would according to this construction be understood in the sense

that Spain thereby asserted that Belgium had abandoned any right of action before the Court which might

derive from those provisions.

[108] It must however be observed that the contention that Belgium abandoned its right of action as

such is not developed or even clearly outlined in the Spanish arguments. It is moreover a contention

which does not fit in with the formula of ‘definitive’ inadmissibility used by Spain in its final

Submissions. For the only possible subject of a declaration of inadmissibility would be the application

instituting the


proceedings in which the declaration of inadmissibility is made. But by asking that the Belgian

Application be declared ‘definitively’ inadmissible, Spain has on the contrary asked the Court for a

judgment relating not specifically to the Application of 19 June 1962, but also relating to any other

applications which, pursuant to the judgment asked for by Spain, would likewise have to be deemed to be

‘inadmissible’. In substance Spain has asked for a judgment producing the effect of res judicata in the

material sense, and such a judgment could, as such, only be a judgment on the merits.

8. In order to define the true scope of the first Preliminary Objection, it is necessary to construe the

Spanish Submissions in the light of the arguments developed by Spain both in the written and in the oral

proceedings.

It must be observed in the first place that in the circular sent to its diplomatic missions abroad on 13

April 1961, after the Order of the Court directing the removal of the case from the list, the Spanish

Government, while it describes the Belgian discontinuance as a ‘discontinuance of the action’, says that

the Belgian Government was led ‘to discontinue the protection of certain private interests whose defence

was not possible within the ambit of international law’. The Spanish Government then comes to the

conclusion that ‘Belgium's not going on with the proceedings therefore constitutes a definitive recognition

that the position taken by Spain is well-founded’. But the first Preliminary Objection refers to this circular

in paragraph 62, stating that it demonstrates ‘as clearly as possible that the Spanish Government

considered the international dispute between the two governments as having definitively come to an end’.

[109] But there are also other passages in the first Preliminary Objection which show the meaning

which the Spanish Government attaches to the Belgian discontinuance. Although described as a

‘discontinuance of the action’, that discontinuance is said to have as its subject, in reality, a substantive

right, namely the right of diplomatic protection. For instance in paragraph 98 the Spanish Government

refers to the definition given in theDictionnaire de la terminologie du Droit international , according to

which the term ‘discontinuance’ can ‘be used to designate the renunciation of a claim or of a right’. After

this, the Spanish Government repeats precisely that the word can be ‘used in connection with the

renunciation of a claim or of a right’. Similarly, in paragraph 101 the term ‘discontinuance of the action’

is used to denote ‘the intention of the parties concerning their rights as to the merits of the case’. Again, in

paragraph 102 it is said that ‘in most cases in which discontinuance occurs after agreement between the

States the notice of discontinuance will reflect an agreement the purpose of which

46 ILR

is to settle the dispute once and for all’. It may be recalled finally that, in paragraph 103, with reference to

the Belgian discontinuance in the Borchgrave case, mention is made of the Belgian Government's

intention ‘of abandoning once and for all its right to appear before the Court’. This is said to be precisely

the consequence of the fact that the same Government had recognized ‘that the responsibility of the

Spanish Government was not at all involved’.

The real significance of the first Preliminary Objection can be seen also from the arguments

presented in support of it at the hearing. A relationship was inferred between the Belgian discontinuance

and the Preliminary Objections advanced by Spain against the first Application and, more particularly, the

Preliminary Objection relating to lack of capacity, and it was asserted that the discontinuance implied the

abandonment by Belgium of its arguments against the Spanish Preliminary Objections. Having regard to

the fact that the question of capacity, as we shall see later (Part IV below) is concerned with a substantive

right, namely the right of diplomatic protection, it is seen very clearly that, according to the contention

advanced by Spain in its first Preliminary Objection, Belgium, when, through its discontinuance, it

abandoned its arguments in this connection, disposed of the said substantive right. It is claimed that

Belgium either abandoned that right or recognized its non-existence.

Thus if account is taken of the way in which the first Preliminary Objection is presented and if the

Spanish Submissions are understood in the light of the arguments developed both in the written

proceedings and also in the course of the hearing, it becomes in my view very clear that by this objection

Spain denies, as a consequence of the Belgian Government's discontinuance, that it is possible for that

Government to exercise the right of diplomatic protection in any way whatsoever in respect

of Barcelona Traction. Henceforward, from the Spanish Government's point of view, such a right could

no longer be invoked by Belgium, not only before the Court but also in any proceedings that might be

instituted before any other jurisdiction whatsoever, or even quite apart from any legal proceedings.

9. If this is the significance of the first Preliminary Objection, it is quite certain that this objection

raises a problem that is concerned, not with the possibility or impossibility of a judgment on the merits,

but, on the contrary, with the very way in which the merits of the case should be judged by the Court. But,

for the reasons I have given in Part II above, such a question, as a question relating directly and

exclusively to the merits, could not be considered by the Court at the present stage of the proceedings.

Consequently the Court should in my view have declared the first Objection inadmissible as a preliminary

objection.


[110] IV. ON THE THIRD PRELIMINARY OBJECTION

1. In the third Preliminary Objection, Spain denies that Belgium has the capacity to exercise

diplomatic protection in favour of the Barcelona Traction Company, or in favour of the Belgian

shareholders in that company in respect of the damage suffered by it.

In my opinion, diplomatic protection is nothing other than the exercise by a State of its right to claim

from another State a certain treatment for its nationals (whether natural or juristic persons). When a State

demands, through the diplomatic channel, that one of its nationals shall be treated by another State in the

manner prescribed by the international rules on the subject, or when it claims compensation because that

treatment has not been afforded, the first State is merely exercising the right conferred upon it by those

international rules. These are substantive rules conferring a right which has the character of a substantive

right. It is simply because of the means by which that right is usually exercised that it is known as the

right of diplomatic protection. There is no reason to consider that a right of diplomatic protection exists

independently of the substantive right established by the rules relating to the treatment of foreigners.

The Spanish Government appears to have adopted an entirely different concept, which considers

diplomatic protection as an institution the purpose of which is to guarantee the international rules relating

to the treatment of foreigners. The Spanish Government appears to make a distinction between the right

of a State to demand a certain treatment for its nationals and, as a corollary of that right, the same State's

faculty of intervention through the exercise of diplomatic protection.

In my opinion, this differentiation is neither necessary nor even conceivable. In any event it is quite

certain that when a State acts not through the diplomatic channel but by use of the judicial method, the

right it invokes as the basis of its claim is simply the substantive right conferred by the rules concerning

the treatment of foreigners. No account at all could be taken in judicial proceedings of the other right, or

other faculty sought to be conceived of (wrongly, in my opinion) as something apart from the said

substantive right in order to provide an explanation for the basis of diplomatic intervention.

[111] 2. In proceedings instituted by an application based on a right deriving from a rule concerning

the treatment of foreigners (which may be called the right of diplomatic protection, subject to the above

qualifications), the question of whether or not such a right exists is obviously one which directly concerns

the merits of the case. Consequently, a judgment deciding this question is a judgment on the merits,

producing the effect of res judicatain the material sense. Thus a judgment

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finding that the right of diplomatic protection does not exist in a particular case is a judgment on the

merits of the claim, not a judgment declaring that the substance of the claim cannot be considered or in

other words a judgment declaring the claim inadmissible.

There are various reasons why in a particular case a right of diplomatic protection may be deemed to

be non-existent. One possible reason is lack of capacity on the part of the State which relies on a would-

be right of diplomatic protection. By capacity, in this instance, is meant nothing other than that the

substantive right relied on in the proceedings pertains to one State rather than to another; it is thus

substantive and not procedural capacity. Since the right of diplomatic protection, like any other right, can

be conceived of only as a right possessed by a particular State as against another particular State, denial

that the right of diplomatic protection in respect of a certain private person pertains to the State which

advances it as the basis of the claim made by that State to the Court is equivalent to a finding that the

claim is, for this reason, not well-founded. This is so irrespective of whether or not the respondent State

has committed any breach of an obligation, such obligation possibly existing towards a State other than

the applicant. We thus see that a judgment declaring that the applicant State lacks capacity to exercise the

right of diplomatic protection to which it lays claim, is a judgment dismissing the claim on the merits and

not one declaring it to be inadmissible.

3. What are the merits in the present case? Belgium claims compensation from Spain for the alleged

breach of an international obligation owed by Spain to Belgium. Spain refuses compensation, and denies

that it has committed a breach of any obligation towards Belgium. Spain denies the existence of such

breach on various grounds. One consists of a denial of the existence of the obligation alleged to have been

violated: naturally, the existence of an obligation towards Belgium. Spain maintains that even were it

possible to speak of an international obligation and of a breach of that obligation, the obligation in

question would be owed by Spain to a State other than Belgium, and Belgium would thus have no claim

in the matter.

[112] Hence, the question of whether Belgium does or does not possess the capacity to bring the

claim it has brought against Spain is nothing other than an aspect of the merits of the case. A judgment on

this question would not be a judgment on the admissibility of the claim, it would on the contrary be a

judgment on the merits. Thus a judgment by the Court deciding this question in the manner desired by

Spain would not be a judgment declaring the claim inadmissible, but rather a judgment deciding the

merits of the claim to the effect that Belgium's claim is without foundation. The effect of such a judgment

would


not be limited to the present proceedings, preventing the pursuance of those proceedings before the Court.

As a judgment on the merits, it would produce the effect of res judicata in the material sense. The

judgment would be binding upon the parties, and upon any tribunal (the Court itself or any other tribunal)

which might be called upon to give a decision on the same subject between the same parties. As a result

of such a judgment, it would not be open to Belgium to make any further claim upon Spain in respect of

the measures taken by the latter with regard to Barcelona Traction.

4. It is not possible to follow the Spanish Government in its attempt to separate from the merits of

the case the question of the Applicant State's capacity to intervene for the purpose of diplomatic

protection (hearing of 7 May 1964) for the very simple reason, already indicated, that capacity in this

instance is nothing other than the possession by the Applicant State of the substantive right relied on as

the basis of its claim.

The Spanish Government itself explicitly recognizes that the determination of the existence or

otherwise of an international obligation, the breach of which a State alleges, is a matter of the merits.

Such an obligation could be declared existent or non-existent only as an obligation owed by a particular

State to another particular State. Consequently if the question of whether or not the Respondent State has

committed a breach of an international obligation owed to the Applicant State by taking a certain measure

in respect of a private person is a matter of the merits, the establishment of whether the obligation which

is alleged to have been breached by the Respondent State is owed to the Applicant State—namely

whether the right (the right of diplomatic protection) corresponding to the obligation pertains to the

Applicant State—is also a matter for the merits, being only one aspect of the same question.

The answer to this question depends on the resolution of a number of points. Not only is it necessary

to determine the identity of the private person affected by the measure of which the Respondent State is

accused, but it is also necessary to ascertain whether or not that person is linked to the Applicant State by

a bond of nationality. These are all points relating to the very existence of an obligation on the part of the

Respondent State towards the Applicant State, hence the existence of a breach of such obligation, and

hence the international liability asserted by the Applicant State. All these points thus concern the merits of

the case.

[113] 5. The question raised by Spain as its third Preliminary Objection is therefore by no means of

a preliminary character, since the answer to it is inseparable from an actual decision on the merits of the

case. This is why this question was not open to consideration by the Court at the present stage of the

proceedings, which was confined to questions

46 ILR

which really, and not simply because they are so qualified by a party, have the character of preliminary

questions.

The bar on the Court's considering at the present stage of the proceedings the question of Belgium's

capacity to exercise diplomatic protection was an absolute bar. There could be no question of a possible

exercise of the discretionary power to join the objection to the merits, which presupposes the preliminary

character of the objection. On the contrary, in the present case the question of capacity was a question

directly and exclusively concerning the merits, not a preliminary question arising as linked to the merits

in such a way as to justify the Court in joining it to the merits.

Nor were there any grounds for making a distinction, within the ambit of what has been called

Preliminary Objection No. 3—as did the Belgian Government (hearing of 23 April 1964)—between

questions ripe for decision and questions which were not. This distinction could apply only in respect of

questions which all possessed the character of genuine preliminary questions; it would then be a matter of

the greater or lesser degree of relationship between each question and the merits of the case. In this case

the questions concerned were not separate questions, but rather different points all relating to the same

question, namely the question of the capacity of the Belgian State. Now as I said before, that capacity

derives from the substantive right; and the question of whether or not it exists is a question which is not

merely connected with the merits, but rather which directly and exclusively concerns the merits.

I need hardly point out that the argument which appeared to exist between the parties, concerning

the possibility of deciding at this stage certain points considered by both as ripe for decision, was one

which could have no influence on the powers of the Court. Such an agreement not only did not oblige the

Court, but did not even give it authority to consider the question of capacity at the present stage of the

proceedings, either as a whole or in respect of certain of the points on which it arises.

6. The question of capacity could therefore definitely not be one arising for consideration at the

present stage of the proceedings. Nor was the objection relating to it capable of being joined to the merits

under Article 62 (5) of the Rules of Court. It ought on the contrary to have been declared inadmissible as

a preliminary objection.

[114] Whether the question of capacity should be considered before the other questions which also

concern the merits, and the order in which the different points on which that question arises should be

taken, are of course matters which may arise for consideration. It rests exclusively with the Court and not

with the parties (either with the respondent party or with both parties acting in agreement) to decide such

matters. The decision depends not upon logical reasons, but simply upon reasons


of convenience and economy. It is only on the basis of a comprehensive view of all the questions

concerning the merits, and consequently only in the phase of the proceedings in which such questions

arise for decision, that the Court could embark upon an examination of such matters.

It suffices to observe in this connection that it is quite possible, in a particular case, for a question

other than that of capacity (for example, the question of the actual content of the rule of law on which the

claim relies) to appear to lend itself more readily to decision than the question of capacity. In such case,

the Court may well think fit to begin by considering that question and, on the basis of the conclusion

reached on that question, possibly to decide to reject the claim on the merits without dealing with the

question of capacity at all.

V. ON THE FOURTH PRELIMINARY OBJECTION

1. In the fourth Preliminary Objection Spain asserted that the remedies provided by Spanish

municipal law had not been exhausted and submitted that the Court should for this reason declare the

Belgian claim to be ‘definitively inadmissible’.

The preliminary character of this objection and hence its admissibility as a preliminary objection

depend on what is held to be the nature of the rule on which the objection is based. It must be observed in

this connection that the Spanish Government did not base its fourth Preliminary Objection directly on

Article 3 of the Hispano-Belgian Treaty of 1927. On the contrary, the Spanish Government relied on a

rule of general international law, the local remedies rule which, according to the Spanish Government, is

only confirmed by Article 3 of the 1927 Treaty.

However, the local remedies rule, as a rule of general international law, is in my view substantive

and not procedural. It is indeed a rule which is supplementary to other rules which also themselves

possess the character of substantive rules, namely the rules concerning the treatment of foreigners.

Those rules require from the States to which they are directed a particular final result in respect of

the treatment of foreign nationals, leaving the State which is under the obligation free as regards the

means to be used. Consequently, if an organ of the State which is under the obligation performs an act

contrary to the desired result, the existence of an internationally unlawful act and of the international

responsibility of the State cannot be asserted so long as the foreign national has a possibility of securing,

through the means provided by the municipal legal system, the result required by the international rule.

46 ILR

[115] 2. It follows that if in international proceedings instituted, like the present proceedings, by a

claim based on damage to a national of the applicant State by an organ of the respondent State, it is found

that the remedies made available by the municipal law of the respondent State have not been exhausted,

the conclusion which must be drawn from this finding is not the inadmissibility of the claim, but rather

the dismissal of the claim on the merits. In the eventuality I have described what is in fact found is that

the alleged violation of the substantive international right of the applicant State has not been

accomplished.

The consequence of such a finding can only be a denial of the responsibility of the respondent State

and hence dismissal of the claim on the merits. A judgment to this effect is thus a judgment on the merits

and produces as such res judicata in the material sense. It is just such a judgment, although incorrectly

and contradictorily worded in the form of definitive inadmissibility, that is asked for by Spain in its fourth

Preliminary Objection. But it was not open to the Court to give such a judgment in the present phase of

the proceedings.

It must be concluded that the fourth Preliminary Objection also ought to be, not joined to the merits,

but rather declared inadmissible as a preliminary objection.

(Signed) Gaetano MORELLI .


DISSENTING OPINION OF JUDGE ARMAND-UGON

[Translation]

FIRST PRELIMINARY OBJECTION

I much regret that I am unable to associate myself with the conclusions at which the Court has

arrived in the present Judgment and I avail myself of the right to set out the reasons for my dissent.

The first Preliminary Objection relates to the discontinuance which occurred in the proceedings on

the first Application. The Belgian Government asked for such discontinuance, invoking paragraph 2 of

Article 69 of the Rules of Court. This discontinuance was agreed to by the Spanish Government at the

express request of the Belgian Government, and the Court ordered that the case should be removed from

its list.

The two Parties dispute the effect of the discontinuance. The Belgian Government contends that it

was a mere discontinuance of the proceedings, while the Spanish Government maintains that the

discontinuance put an end to the right to bring the case before the Court.

It is for the Court to construe this legal act. It is proper that this act should be interpreted by the

organ from which it emanates.

The discontinuance in question is a judicial contract the subject of which must be determined with

precision. It exists only in respect of the point which formed the subject of the agreement between the

parties. Its scope must remain limited to what they intended. The proposal to discontinue was agreed to by

the Respondent Party. An agreement between the Parties thus came into being. Paragraph 2 of Article 69

of the Rules of Court implies the reaching of an agreement and, in the act effected, there must be seen a

judicial contract which, of course, is binding on the two Parties.

The question which this contract raises is that of determining its nature, its extent and its effects.

Article 30 of the Statute of the Court authorizes the Court to frame rules for carrying out its

functions and, in particular, to lay down rules of procedure.

An international organ is given the power of creating rules of law, in full independence. If

international law is based on the agreement of States, either express or tacit, in the case of Article 30 of

the Statute a new creative source has arisen. The Permanent Court and the International Court, which

were created by States, have the capacity to lay down mandatory rules of law in the same way as any

national legislature.

46 ILR

[117] It has been rightly held that the Rules of Court have the force of an international convention

binding upon all States but that, by the will of the same States, these Rules can be modified or abrogated

by the Court. In Article 31 of the Rules the Court provides that the parties may jointly ask it to make

particular modifications or additions to Sections 1, 2 and 4 of heading II of the Rules. The

heading Settlement and Discontinuance is to be found in Section 1 and Articles 68 and 69 could therefore

have been modified or supplemented by agreement between the Parties to the present case, with the

Court's consent. The Parties did not take advantage of this possibility.

To understand the scope and significance of Articles 68 and 69 of the Rules, it is indispensable to

examine the sources of these two provisions.

Article 68 is a remodelling of Article 61 of the 1922 Rules. The origin of that Article 61 is to be

found in the work of the Permanent Court between January and March 1922, when it was drawing up the

first Rules of that Court.

The Permanent Court first examined a questionnaire on the points to be dealt with in the draft of the

first Rules. One of the points in that questionnaire was the following: Can the parties remove a case from

the Court, once they have submitted it? (P.C.I.J., Series D, No. 2 , p. 291.) A first Article, numbered 44

(given in Annex 21 (b) , at p. 304), gave, in its first and second paragraphs, an answer to that question.

This text, which relates to numbers 63 and 64, was adopted (p. 154) and appeared finally in the first Rules

as Article 61.

The discussion of the questionnaire (pp. 83 and 84) made it clear, according to Judge Anzilotti, that

the Court's jurisdiction was based entirely on the will of the parties and that for that reason the wishes of

the parties should in all circumstances prevail. Lord Finlay added that it was agreed that the parties should

have the right to withdraw, by common consent, a suit which they had brought before the Court.

The original Article 61, now Article 68, covered two cases: that of an agreement between the parties

as to the settlement of the dispute and that of an agreement between the parties not to go on with the

proceedings, that is to say, to withdraw the case from the Court. In both events, it was laid down that the

case should be removed from the list. For the authors of that original Article 61, if discontinuance was

effected by common consent of the parties, the withdrawal of the case from the Court was concluded.

This decision not to go on with the proceedings was equivalent to withdrawing the case from the Court.

At the time of the preparation of the Rules of 22 March 1936, there was given as footnote 2 on page

318 of P.C.I.J., Series D, No. 2 (Third Addendum) , an extract from the report of a discussion regarding

Article 61 of the first Rules. It is an extract from the minutes of 12 May 1933.

[118] Baron Rolin-Jaequemyns is reported in these minutes as thinking


that if ‘a government had noted the other government's declaration of withdrawal, the result of this was to

constitute an agreement between the parties, so that Article 61 was applicable’. The Registrar then

recalled that Article 68 had been applied in two cases submitted by unilateral application, the Sino-

Belgian and Chorzów cases.

The discussion ended with a statement by Sir Cecil Hurst to the effect that:

‘if the parties were agreed to remove a case from the Court, the latter's jurisdiction ceased and there

was not even anything to make an order upon, since the Court's jurisdiction was derived exclusively from

the agreement between the parties’.

In his view,

‘withdrawal by the applicant did not suffice by itself to put an end to the jurisdiction of the Court;

for that purpose it must be accompanied by the consent of the other party. He thought that Article 61 of

the Rules, which only dealt with the case of an agreement between the parties, did not cover the present

case.’

The aim of the 1936 reform, in framing paragraph 2 of Article 69, was to introduce unilateral

discontinuance and to supplement the concepts embodied in Article 61. Hitherto, said Jonkheer van

Eysinga,

‘the Court had only been agreed as to the possibility of the joint abandonment of proceedings by

both parties. The Commission's intention was now by means of Article [69, paragraph 2] definitely to

provide for unilateral discontinuance.’

In Judge Fromageot's view the proposed text did not make provision for a possibility which had not

previously existed. As a matter of fact it had existed, and the best proof of that was that there had been

several instances of such possibilities. The point, according to him, seemed really to be one of drafting.

These antecedents make it possible to affirm that the sole aim of paragraph 2 of Article 69 was to

embody a previously existing practice in a provision of the Rules.

Far from making provision for discontinuance of the proceedings, it adopted a discontinuance

which, if accepted by the other party, creates an agreement to put an end to the proceedings. In such a

case, paragraph 2 of Article 69 has the same legal content as the discontinuance by mutual agreement

provided for in Article 68, formerly Article 61 of the old Rules, which, according to Sir Cecil Hurst, had

the final result of bringing jurisdiction to an end.

46 ILR

[119] Paragraph 2 of Article 69, moreover, did not introduce the right to re-submit the application;

jurisdiction having come to an end, such a right was inconceivable. In order that such a right might be

exercised, it would have had to be based on a provision of the Rules which they do not contain.

When the Court is seised of a dispute, such dispute may be terminated by a judgment, but there are

other means for putting an end to suits before the Court. It is provided in Article 20, paragraph 2, of the

Rules, under heading XVIII, that the nature of the result of a suit shall be stated and its immediate effect

can only be its removal from the list. As soon as an order has been made removing a case from the list,

this means that the case has a final result.

Discontinuance, as provided for in Articles 68 and 69 of the Rules1 , opens another possibility for

obtaining the removal of a case from the list. These two Articles come together under the

heading Settlement and Discontinuance ; these two situations are related to each other.

[120] Under Article 68, parties can agree as to the resolution of the dispute, either by means of a

settlement or by not going on with the proceedings. In both cases, the will of the parties puts an end to the

suit, and the Court places on record the agreement or the discontinuance and orders the case to be

removed from the list on a mere communication from

1Article 68

If at any time before judgment has been delivered, the parties conclude an agreement as to the settlement of the dispute and so inform the Court in writing, or by mutual agreement inform the Court in writing that they are not going on with the proceedings, the Court, or the President if the Court is not sitting, shall make an order officially recording the conclusion of the settlement or the discontinuance of the proceedings; in either case the order shall direct the removal of the case from the list.

Article 69

1. If in the course of proceedings instituted by means of an application, the applicant informs the Court in writing that it is not going on with the proceedings, and if, at the date on which this communication is received by the Registry, the respondent has not yet taken any step in the proceedings, the Court, or the President if the Court is not sitting, will make an order officially recording the discontinuance of the proceedings and directing the removal of the case from the list. A copy of this order shall be sent by the Registrar to the respondent.

2. If, at the time when the notice of discontinuance is received, the respondent has already taken some step in the proceedings, the Court, or the President if the Court is not sitting, shall fix a time-limit within which the respondent must state whether it opposes the discontinuance of the proceedings. If no objection is made to the discontinuance before the expiration of the time-limit, acquiescence will be presumed and the Court, or the President if the Court is not sitting, will


make an order officially recording the discontinuance of the proceedings and directing the removal of the case from the list. If objection is made, the proceedings shall continue.


the litigants. It is obvious that the parties cannot go back on what they have said concerning their

agreement. In either event the case is finally and definitively removed from the Court's jurisdiction.

Paragraph 2 of Article 69 envisages a discontinuance which also requires the agreement of the

parties, though that of the respondent party may be implied. In the present case, agreement was explicitly

given at the request of the Applicant Party. Discontinuance thus became a fact. The Court placed the

communications thus received from the two Governments on record and ordered that the case should be

removed from the list, the suit having come to an end.

This provision does not specify whether it provides for a discontinuance of the action or for a

discontinuance of the proceedings, this distinction being made in the municipal law of certain States. The

Belgian Government bases its argument on a dogmatic notion of discontinuance which it derives, by

analogy, from municipal law. It asserts that discontinuance presupposes the abandonment of the

proceedings and that for it to comprehend abandonment of the action renunciation thereof is necessary.

The vulnerability of this argument lies precisely in the fact that it is based upon analogy, in so far as it

applies the principles of municipal procedural law to the procedure of the Court. The Rules have laid

down the Court's own system for discontinuance and this is independent of the systems of municipal law,

which can neither supplement nor interpret the system of the Rules. It is not in an argument by way of

analogy that the concept which underlay the adoption of paragraph 2 of Article 69 must be sought. It is

the rules and the procedure which are applicable in the International Court of Justice which apply in the

present case and not the municipal law of certain States.

The Rules do not make any reference to these two kinds of discontinuance.

At the time of the 1936 revision of the Rules, the Members of the Permanent Court did not, at any

point in their discussions, consider the substance of the discontinuances for which provision is made in

Articles 68 and 69. The Members of the Court knew quite well that the municipal law of some States and

the rules of some Mixed Arbitral Tribunals allowed discontinuance of proceedings and also

discontinuance of the action; but, on the occasion of the revision of the Rules, no allusion was made to

this distinction. The Rules were devised to achieve only one purpose, namely to institute a means of

putting an end to the proceedings. If the subject of the discontinuance was simply the proceedings, the

party concerned was required to express this quite clearly, as the jurisdiction of the Court is consensual. If

the texts concerning discontinuance filed by the parties contained no indication, there arose a problem of

interpretation according to the rules of international law which the Permanent Court had laid down.

[121] Paragraph 2 of Article 69 is a provision which partakes of the nature of a treaty and which

allows parties to do only what it makes provision

46 ILR

for. What the governments are entitled to do cannot be extended to situations for which this text makes no

provision. Declarations of human rights authorize man to do everything which the law does not prohibit

him from doing but, in public law, the powers of the organs created by such law can be exercised only

within the limits assigned to them. They are only entitled to do what is provided for in the relevant texts

or what is absolutely necessary in order to carry out what is provided for in those texts. Paragraph 2 does

not make provision for the re-submission, by means of a new application, of a case which has been

discontinued. Nor can any presumption in favour of such a right be drawn therefrom. Furthermore, there

is no general principle of law in favour of the possibility of a new application which, in order to be

permissible in municipal law, must generally be based upon actual texts.

There are no precedents in the Court in favour of the existence of such a right of re-submission. This

is the first time that such a claim has come before the Court.

Such a right of re-submission finds no support in the Rules; nor can it be inferred either from the

practice of the Court or from the practice of States in regard to arbitration. Municipal laws on this point

are divergent. This right can result only from an explicit reservation contained in the discontinuance

agreed to by the parties. Such a reservation is lacking in the present case.

The discontinuance to which the Court gave its official approval was expressly agreed to by the

Parties. The private groups had negotiated an agreement which implied a prior discontinuance and that

agreement was recognized by the Belgian Government. The object of the private agreement was the final

and definitive withdrawal of the claim and its raison d'être was that the Sidro and Fecsa groups might

begin negotiations in order to find a solution to their dispute.

The Spanish Government, when replying to the Belgian Government's request that it should agree to

the proposed discontinuance, had to take account of the rules of procedure of the Court. Discontinuance

under paragraph 2 of Article 69 is not in itself a discontinuance of the proceedings unless the party giving

notice thereof wishes to give it this effect only. In such a case it must be clearly indicated. A

consideration of a general nature supports this view: international jurisdiction must not be open to doubt

and the relationship between States on this point must not be imprecise and lend itself to quibbling.

Moreover, the Spanish Government understood that the discontinuance proposed by the Belgian

Government contained something more than a mere discontinuance of proceedings.


[122] The principle of the equality of the parties to a suit is indeed a principle laid down in Article

35, paragraph 2, of the Statute, in the provision of the Rules and in the case-law of the Court. The

International Court of Justice, in its Advisory Opinion on Judgments of the Administrative Tribunal of

the I.L.O. (I.C.J. Reports 1956) said (at p. 86): ‘The principle of equality of the parties follows from the

requirements of good administration of justice.’ Discontinuance of the proceedings, in itself, obviously

favours the applicant, allowing it to correct the mistakes contained in the first application when re-

submitting a new one. This was recognized by the Belgian Government in its Observations. It had to take

account of the criticism which the first Application had given rise to on the part of the Spanish

Government. If the text which notifies the discontinuance does not clearly state that it is a discontinuance

of the proceedings which is involved, the party which wishes to give it such an effect must make clear

without ambiguities its intentions and the purport of its notice of discontinuance. It is in duty bound to do

so. The respondent is thereby informed of the discontinuing party's intention so that it can consent to or

refuse the discontinuance with a full knowledge of what is involved.

The Belgian Government maintains that, if the Spanish Government made a mistake in law by

interpreting its notice of discontinuance as a final and definitive withdrawal of the claim and not as a

discontinuance of the proceedings, it must bear the consequences thereof. It has not been shown that

paragraph 2 of Article 69 of the Rules of Court provided for discontinuance of proceedings nor that that

provision allows for the re-submission of a new application. In order to know whether there has been

an error juris , it is first necessary to ascertain the law. This is precisely the question that is before the

Court.

Though the practice of the Court authorizes modifications in the original Submissions, it does not

permit of a change in the subject of the Application, which must remain the same throughout the

proceedings.

In conclusion, according to paragraph 2 of Article 69 of the Rules of Court, any notice of

discontinuance which is not accompanied by a reservation must be considered as a renunciation of the

right to submit a new application. The right of re-submission does not follow from this provision; it must

follow from the wording of the notice of discontinuance.

[123] If it is for the Court to construe the legal contract of discontinuance which was arrived at, it

must take into consideration the evidence presented by the two Governments which led to its adoption.

The history of the conversations between the two private groups must be

46 ILR

made clear. It is only thereafter that it will be possible to judge the value and the relevance of this

evidence.

The notice of discontinuance cannot be situated in a void. It can be conceived of and understood

only in the context of the conversations and discussions which gave rise to it. It is in the light of these

facts and of the acts of those concerned that it must be read and interpreted. There is a sequence which

links them with their culmination. The relationship which is established between them discloses the

purpose of and the reason for the discontinuance. These various facts and acts, which form the context of

the discontinuance, are bound together by a logical correlation. They explain one another. All these

factors influenced the drafting of the notice of discontinuance, and it must be considered in relation to the

circumstances in which it was filed and submitted for the decision of the other Party. These conversations

started between Sidro and Fecsa, with Count de Motrico as an intermediary chosen by the two groups.

They continued between Sidro and the Belgian Government and, finally, the text of the notice was

communicated to the Spanish Government. The conversations which began in October 1960 ended in

April 1961.

The documents exchanged during these conversations must be taken into consideration by the Court

in order to ascertain the joint intention of the Parties, which must prevail over the literal meaning of the

words. All legal acts are bound up with the real intention of those concerned. The two Governments have

recognized the documents relating to these conversations as evidence and submitted them to careful

examination in their written pleadings and oral arguments.

Before any step was taken in these conversations towards a friendly settlement between the two

groups, M. March, of the Fecsa group, had drawn up a basic memorandum1 . The first paragraph of this

basic memorandum was drafted as follows: ‘From the moral standpoint, the final withdrawal of the claim

is a prior condition for entering into negotiations.’ The Spanish text is as follows: ‘Desde un punto de

vista moral la retirada definitiva de la demanda es condición previa para la apertura de la negociación.’

This memorandum was dated 20 October 1960 and was communicated by Count de Motrico to the

Belgian group. It was at the request of that group that Count de Motrico got into touch with M. March.

[124] Two days later, on 22 October, the representative of Sidro, the engineer M. Hernández,

informed Count de Motrico of his disagreement

1‘1. From the moral standpoint, the final withdrawal of the claim is a prior condition for entering into negotiations.

2. Once this condition has been fulfilled, the other party undertakes to enter in all good faith into immediate negotiations to seek a solution determining compensation for the shareholders.

3. Complete discretion is indispensable for the development of these discussions. No publicity of any kind will be permitted until a final agreement, if such is possible, is reached.’


with the condition of ‘the final withdrawal of the claim’, if it were not accompanied by a final settlement

between the two groups. M. Hernández considered that the ‘final withdrawal of the claim’ involved ‘the

discontinuance of the legal action’ or the ‘withdrawal’ of the legal action (Observations, Annex 6,

Appendix 2, paras. 2 and 3).

The chairman of Sidro, M. Frère, in his letter of 2 December 1960 to M. Hernández, stated that he

could not take the risk of stopping proceedings before an agreement was signed (Observations, Annex 6,

Appendix 4).

M. Hernández wrote to Count de Motrico, in one of the drafts for an exchange of letters, dated 24

January 1961, that, as there was a ‘definite wish to arrive at a … settlement of the dispute relating

to Barcelona Traction’, he accepted, on behalf of Sidro, among other principles, the ‘final withdrawal of


the action brought by the Belgian Government against the Spanish Government before the Court at The

Hague’.

The Permanent Committee of Sidro had agreed—states M. Hernández in the same letter—to ask the

Belgian Government ‘to put an end to the proceedings which are at present started in The Hague, if you

[Count de Motrico] will be good enough to recognize that this letter faithfully represents what was agreed

at our talks’ (Observations, Annex 6, Appendix 5).

The Count de Motrico, being duly authorized by the Fecsa group, in a letter to M. Hernández dated

25 January 1961, manifested his agreement to the preceding draft letter (Observations, Annex 6,

Appendix 5).

In a talk which the chairman of Sidro, M. Frère, had with the Belgian Minister for External Trade on

26 January 1961, he told him of the conversations with Fecsa. The Minister suggested that there should

rather be ‘a suspension of the proceedings … for a period of three months’ (Observations, Annex 4,

Appendix 6).

The Fecsa group and M. March having rejected such a suspension, the chairman of Sidro, at the

instance of Count de Motrico, stated in his letter of 23 February 1961 that he was prepared to get the

Belgian Government to agree to ‘a pure and simple withdrawal of the proceedings before the Court, so as

to fulfil the condition regarded as a precondition for the negotiations proper’ (Observations, Annex 6,

Appendix 6). In answer to this letter Count de Motrico said that ‘it faithfully reflects what was dealt with

in the various talks’ (Observations, Annex 6, Appendix 6).

Two drafts for letters from M. Frère to Count de Motrico, dated 9 March 1961 (Preliminary

Objections, Annex 71, documents 1 and 2) preceded the letter sent by M. Frère to Count de Motrico on

the same day (document No. 3). The contents of the second paragraph of this last letter were as follows:

[125]‘I explained to the Minister that the prior withdrawal of the proceedings pending at The Hague

was, in sum, a sine qua non

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condition for the negotiations on the bases defined in our exchange of letters of 23 and 24 February last to

take place.’

On 10 March 1961 M. Frère informed Count de Motrico by letter that the Belgian Government

would take the responsibility of withdrawal after an exchange of letters between the Belgian Ambassador

and the Minister for Foreign Affairs of Spain, which would be communicated to no-one, governing the

procedure for the withdrawal of the proceedings and which would remain outside the knowledge ‘of the

person whom I met in your company’ (document annexed to the Count de Motrico's report dated 4

December 1963).

This proposal produced no results, being contrary to the first requirement in the basic memorandum,

concerning the final withdrawal of the claim.

On 17 March 1961, Count de Motrico informed the Spanish Minister for Foreign Affairs of the state

of the conversations with a view to discontinuance. In a letter dated the following day, Count de Motrico

told the Minister that M. Frère had informed him that the Belgian Government had ‘decided to ask the

International Court of Justice for the definitive withdrawal of its application submitted against our

Government’ and he added that ‘the Belgian Government will draft its notice of withdrawal in terms

similar to those used in connection with a dispute between the United Kingdom and Bulgaria’.

On 21 March, the Spanish Minister for Foreign Affairs telegraphed to Count de Motrico to inform

him of his Government's position in respect of the announcement of the Belgian discontinuance. He stated

that the case must be considered as closed and that the purpose of the discontinuance was to put an end

definitively to the dispute between the two Governments.

There were two contacts, on 22 and 23 March, between the Spanish Minister and the Belgian

Ambassador in Madrid. The Ambassador first tried to associate the Spanish Government with the

discontinuance. On the Minister's refusal, he informed him of the text of the notice of discontinuance filed

with the International Court, which was to fix a time-limit, asking him not to communicate his acceptance

of the discontinuance before the expiry of the time-limit.

The following is the text of the notice of discontinuance:

‘At the request of Belgian nationals the protection of whom was the reason for the filing of the

application … [of] 15 September 1958, I am directed by my Government and I have the honour to request

you to be good enough to inform the Court that, availing itself of the right conferred upon it by Article 69

of the Rules of Court, my Government is not going on with the proceedings instituted by that application.’


[126] Fecsa was opposed to beginning the private negotiations with Sidro for so long as the

discontinuance had not been approved by the Court. The Spanish Government, at the request of the

Belgian Government, agreed, in its letter to the Court of 5 April 1961, not to oppose the discontinuance.

The International Court, in an Order dated 10 April 1961, placed the discontinuance on record and

ordered the case to be removed from the list.

A circular from the Spanish Ministry of Foreign Affairs, dated 13 April 1961, informed its

diplomatic missions abroad that the Belgian Government had ‘indicated its discontinuance of the action’

instituted and that the case had ‘ended in tacit recognition of Spain's good name’.

These are the essential facts and documents which led up to the discontinuance.

Let us now turn to an examination of the evidence in order to establish what conclusions are to be

drawn.

It is not necessary to spend long over determining which of the two groups took the initiative for the

conversations. Fecsa at least did not take the first step. In the first place, it laid down a prior condition for

any negotiations, which it firmly maintained throughout all the phases of the conversations. It would not

allow either the suspension of the proceedings or the extension of the time-limit for the filing of the

Belgian Observations and Submissions. It opposed any suggestion contrary to the final withdrawal of the

claim. It did not wish to be a party to negotiations until the discontinuance had been accepted by the two

Governments and placed on record by the Court. These facts show the obvious interest which Sidro had

in seeking to resolve the dispute.

The significance and meaning of the prior condition stipulated in the basic memorandum, which was

accepted by the Belgian group, must be sought in the documents that preceded the discontinuance which

was finally adopted.

What is the legal purport of the words ‘final withdrawal of the claim’(retirada definitiva de la

demanda) ? Right from the time when, two days later, the Belgian group learned about it from M.

Hernández, the latter understood quite well that this withdrawal meant the ‘final withdrawal of the court

action’. Subsequently, he repeated this view when accepting on behalf of Sidro the principle of the ‘final

withdrawal of the court action brought by the Belgian Government against the Spanish Government’. In

that same letter, he assimilated this withdrawal of the action to the phrase ‘put an end to the proceedings

which are at present started in The Hague’.

46 ILR

[127] These utterances on the part of Sidro leave no room for doubt. It was a question of finally and

definitively renouncing the seising of the Court of the Barcelona Traction case. It was indeed a

renunciation of the bringing of the case before the Court. Such was the opinion of the Fecsa group too.

There was thus from the outset no divergence as to the significance of the prior condition, no divergence

as to the meaning of this phrase.

On 23 February 1961, the chairman of Sidro stated that he was prepared to get the Belgian

Government to agree to the ‘pure and simple withdrawal of the proceedings before the Court so as to

fulfil the condition regarded as a pre-condition for the negotiations proper’. It was in accordance with that

statement that the chairman of Sidro had his first interview with the Belgian Minister for External Trade.

The Minister must have been informed of the demand made by the Spanish group and of the meaning of

the prior condition, as the chairman of Sidro told Count de Motrico in his letter of 9 March, referring to

the letters of the previous 23 and 24 February. But one of the bases of the letter of 23 February was the

pure and simple withdrawal of the proceedings so as to fulfil the condition regarded as a pre-condition.

The pure and simple withdrawal of proceedings signified to the Chairman, M. Frère, the withdrawal of

the Application, so as to comply with the basic memorandum. The Belgians considered the ‘prior

condition’ to be excessive, as is shown by their efforts to attenuate it. The Belgian Minister tried to get

other conditions substituted for it—suspension of the proceedings, extension of the time-limit for the

presentation of the Observations, secret letters, requests for guarantees. It is obvious that, in their view,

this prior condition was something other than a discontinuance of the proceedings.

This same view is confirmed by the letter of 18 March from Count de Motrico to his Minister.

The notice of discontinuance sent to the President of the Court read as follows:

‘At the request of Belgian nationals the protection of whom was the reason for the filing of the

Application … I am directed by my Government … to request you … that, availing itself of the right

conferred upon it by Article 69 … [it] is not going on with the proceedings instituted by that Application.’

This is the same formula for discontinuance as in the Borchgrave case which, however, was a final

discontinuance and it had been used also in another case between the Belgian Government and the

Spanish Government.

[128] This discontinuance was filed at the request of Sidro, the only Belgian national taking part in

the talks. No evidence was brought as to the intervention of any other Belgian nationals with their

Government. The notice of discontinuance establishes a link between the wording


of that document and the agreement negotiated between Sidro and the Fecsa group and accepted by the

Minister for External Trade. Counsel for Belgium said: ‘In making its declaration of discontinuance on 23

March 1961 the Belgian Government was merely intending to meet the preliminary demand made by

Juan March.’ The reason for the discontinuance was an agreement between the two groups that the suit

should be brought to an end so that negotiations with Fecsa could be started. The same Counsel for

Belgium stated that the Belgian Government accepted ‘the final withdrawal of the Application … to

permit of negotiations’.

The two groups having arrived at an agreement on the basic memorandum, that is to say, on the final

withdrawal of the claim, the Belgian group, in order to honour that agreement, asked its Government to

take the necessary measures to that effect. That Government could not avail itself of Article 68 of the

Rules, since no agreement had been reached between the Parties to the action; it therefore had to utilize

the means available under Article 69, paragraph 2, which permits of a unilateral notice of discontinuance,

which must nevertheless receive the express or implicit consent of the other Party. That is what it did. The

Belgian Government notified the Court of a discontinuance based on the agreement between the two

groups, and that agreement provided for the final withdrawal of the claim before the Court. The Belgian

Government's notice of discontinuance endorsed the agreement reached by the two groups.

The Belgian Government must have been informed by the Chairman of Sidro of the meaning of the

phrase in the prior condition ‘final withdrawal of the claim’, just as he had informed Count de Motrico of

it. Sidro consequently asked the Belgian Government for a final withdrawal of the Application filed with

the Court. Sidro had made a promise to the Spanish group, creating an obligation finally to withdraw the

claim of which the Court had been seised. The Belgian Government took over that obligation by

discontinuing, on behalf of Sidro, without any condition. The evidence adduced is therefore conclusive

and decisive; not even the slightest doubt is possible as to the meaning and the scope of the

discontinuance. The discontinuance is the expression of the intentions underlying it and these override the

words actually employed. This act, in the present case, bears the mark of decisive intentions and these

must be conclusive in construing it.

[129] It was maintained in oral argument on behalf of the Belgian Government that the first

condition of the basic memorandum was satisfied when it filed its notice of discontinuance. The basic

memorandum, however, required, for the opening of negotiations between the two groups, the final

withdrawal of the claim, a requirement which presupposed,

46 ILR

as must be inferred from its wording, that no new claim would be brought once the discontinuance had

taken place. Final withdrawal of the claim , in accordance with the first point in the basic memorandum,

meant a final withdrawal and not a mere withdrawal of the claim. The adjective final must be given its

meaning. Words are of value only in so far as they express an idea and it must be supposed that when a

particular notion is chosen something precise is intended.

To admit the Belgian interpretation would lead to holding that the Spanish group merely asked for a

discontinuance of the proceedings. But such an interpretation is not seriously possible and would run

counter to the recognized facts—non-suspension of the proceedings, non-extension of the time-limit for

the presentation of Observations, non-agreement to secret letters. The withdrawal of the claim had to be

final.

In order to establish the meaning of the phrase ‘final withdrawal of the claim’, it must be

emphasized further that such withdrawal had to serve a purpose of a moral nature. The Spanish

Government and M. March had been abused in the Belgian Application and Memorial. M. March was

opposed to any negotiations with Sidro so long as those documents were not finally withdrawn from the

Court. The withdrawal was not to be limited solely to the proceedings then pending, but had to be final.

This adjective has only one accepted meaning—the complete and total abandonment of the assertions

contained in the documents. It was not a provisional abandonment that was asked for but the final

withdrawal of the claim. The word final must be given its full emphasis. According to the undertaking

entered into, these assertions could not be repeated again later. A mere suspension of the proceedings

would have maintained them. The moral aspect could be safeguarded only by the final withdrawal of the

case. A discontinuance of the proceedings would not have this effect.

The meaning of the judicial contract of discontinuance is further confirmed by the conduct of the

two groups and of the Governments, and by the legal analysis of their conduct.

Their acts have not the same importance or the same significance. They are however a source which

enables us to construe the discontinuance. They also imply abandonment of reference of the case to the

Court.

Some of these acts were brought about by private parties seeking the holding of negotiations, whilst

other acts emanate from the actual Parties to the case. They must be examined as a whole, in order to

attribute a precise meaning to them and in order to ascertain the purpose and intention of the act

performed.

[130]‘Cases are known in international practice where it was debated whether the facts alleged

could be interpreted as a renunciation, but no cases are known in which the need for an explicit statement

was affirmed. The intention to abandon a right may be inferred


also from the attitude of the party concerned.’ (Anzilotti, Cours de droit international , Vol. I, p. 350.)

One salient fact emerges from this conduct. The Fecsa group made of the final withdrawal of the

Application a sine qua non condition for any negotiations, as is recognized by the chairman of Sidro. This

condition was reiterated on numerous occasions, each time there was a fresh attempt to get rid of it. The

Fecsa group firmly maintained its position from October 1960 to March 1961. No final withdrawal of the

claim: no negotiations. Such a requirement was known to Sidro and to the Minister for External Trade.

The Belgian Government was thus informed of the nature of the discontinuance insistently demanded by

the Spanish group.

The letter dated 10 March sent by M. Frère to Count de Motrico gives rise to a presumption in

favour of the argument that the Belgian group were aware that M. March's demand referred to a final

withdrawal of the claim brought before the Court. In that letter an attempt was made to give a conditional

character to the withdrawal instead of the unconditional character insisted on in the basic memorandum. It

was suggested in that letter that the Belgian Ambassador should have a talk with the Minister for Foreign

Affairs in Madrid with a view to exchanging letters governing the procedure for the withdrawal of the

proceedings. These letters would be communicated to no-one, not even to M. March. On the conclusion

of the negotiations, they could be returned or destroyed. On this basis—but as an indispensable minimum

—the Belgian Government would take the responsibility for the withdrawal.

This Belgian proposal, which was suggested, as M. Frère says, by the legal adviser to the Ministry

of Foreign Affairs, was obviously intended to modify the requirement of the basic memorandum for the

final withdrawal of the claim. Thus the finality sought by that memorandum would be avoided. This

shows that M. Frère was aware of the meaning of this requirement and of its legal effect. There is in this

letter from M. Frère a recognition by the Belgian Government of the fact that the discontinuance asked

for was not a mere discontinuance of the proceedings, for without such an interpretation, there could be

no reasonable explanation for the letter, and it is difficult to see why the Belgian Government would have

hesitated to commit itself if the discontinuance in question related only to the proceedings.

[131] The proposal by the Minister for External Trade to replace this condition by a suspension of

the proceedings for three months, thereby allowing the Parties concerned to negotiate during this time,

was rejected in limine by the Fecsa group, which considered it incompatible with the basic memorandum.

Other proposals by M. Frère,

46 ILR

made with the knowledge of the Belgian authorities, met the same fate (withdrawal on agreement being

reached by those concerned, an extension of the time-limit for the presentation of the Belgian

Observations and Submissions, the procedure of an exchange of secret letters and guarantees). If the

Belgian Government believed that the withdrawal asked for involved only a discontinuance of the

proceedings which, in the last analysis, would be tantamount to a suspension, why did it submit proposal

after proposal in order to avoid agreeing to the withdrawal asked for? What the Minister for External

Trade, the chairman of Sidro, M. Hernández, Count de Motrico, and the Fecsa group knew was that the

final withdrawal of the claim from the Court's list meant abandonment of the pursuit of the case before

the Court. In the talks, there was accordingly a precise undertaking, with a well-defined subject and

intention, and not a mere exchange of views. An agreement between the private groups was negotiated

and accepted as it stood by the Belgian Government, which proposed it to the Spanish Government.

If the proposal for a suspension was declined on account of its insignificant procedural effect, it is

inconceivable that a mere abandonment of the proceedings would have been preferred. A suspension

would still have had the merit of preserving the Preliminary Objections should the proceedings be

recommenced later, in the event of a breakdown in the negotiations. The refusal of a suspension does not

fit in with the discontinuance of the proceedings as contended for by Belgium. Refusal to accept a

suspension was also a refusal of a discontinuance of the proceedings. The basic memorandum required

something more from the procedural point of view than a mere discontinuance of proceedings.

Sidro's interest in negotiating can be seen clearly throughout the talks. The letter of 23 February

1961 from M. Frère is one example of this. He was convinced—or at least he says he was—that a basis

existed for a settlement favourable to the Barcelona Traction shareholders. The intermediary stated that

negotiations could begin immediately after the withdrawal of the claim and that a solution might be found

within a fortnight. It was, said M. Frère by reason of the foregoing that he was prepared to make a new

effort to induce the Belgian Government purely and simply to withdraw the proceedings then pending. As

soon as this withdrawal of the claim had taken place negotiations would open propitious to the Belgian

interests, which would lead to concrete results. It was with a knowledge of this state of mind that the

Belgian Government decided to agree to the discontinuance asked for by Sidro (Observations, Annex 6,

Appendix 7, p. 108). The Belgian Government took the decision to withdraw the claim, as Sidro asked it

to do, in order that the dispute might be settled by direct negotiations between the two groups of interests.


[132] When agreeing to the discontinuance at the express request of the Belgian Government, the

Spanish Government had before it the following facts: a letter from Count de Motrico informing it of the

final withdrawal of the claim by the Belgian Government and announcing that this discontinuance would

contain the same reservation as that made by the British Government in the case against Bulgaria. On that

occasion the British Government reserved ‘all [its] rights in connection with the claim of the United

Kingdom against Bulgaria’. But the discontinuance proposed to the Spanish Government did not contain

any reservation of this type. The Spanish Government, having regard to the wording of the

discontinuance, could not doubt, when agreeing thereto, that it was a final discontinuance, without any

reservation, and not a discontinuance of the proceedings.

M. Frère's legal adviser had informed Count de Motrico that the notice of discontinuance would

contain the British reservation mentioned above. M. Frère, on behalf of Sidro, had taken the decision to

accept the basic memorandum, which was known to the Belgian Government. The intermediary, being

aware of this position, informed his Government of it at the time when the latter was about to receive

communication of the notice of discontinuance. A party which allows its opponent to believe that it is

taking up a particular legal position—in this instance the final withdrawal of the claim—cannot go back

on its attitude and maintain that it wished for something else, namely a mere discontinuance of the

proceedings. This is an application of the concept of good faith, whereby a party creates a right in favour

of its opponent by following a certain course of conduct.

Moreover, for the Spanish Government, this discontinuance was effected on the basis of paragraph 2

of Article 69 of the Rules of Court, and not with reference to municipal procedural law. But paragraph 2

of Article 69 does not stipulate a discontinuance of proceedings or a right of reinstitution, and such right

is not in accordance with the wording of the Belgian discontinuance, namely ‘is not going on with the

proceedings instituted by that Application’. It is impossible to draw from the use of this formula a

presumption that the intention was not to put an end to the proceedings once and for all. If this formula

had another intention, it was necessary to say so clearly. Good faith required it.

[133] If, according to the argument of Counsel for the Belgian Government, the Spanish

Government was informed by Count de Motrico of the conversations between the two private groups, the

Spanish Minister for Foreign Affairs would have been aware that the discontinuance asked for by the

Spanish group was a discontinuance of the legal action and not merely of the proceedings. In terms of this

contention, it is obvious that the Spanish Minister could not have hesitated for a single moment to give his

consent to the discontinuance for which the Belgian Ambassador

46 ILR

had asked him at the instance of his Government. Thus, the case would be at an end in respect of legal

proceedings before the Court, in order to make way for a solution between the two groups, a position

which the Spanish Government always supported right from the origin of

the Barcelona Traction dispute. Any other attitude on the part of the Spanish Government would seem to

be ruled out. It would never have agreed to a mere discontinuance of proceedings. The Belgian

Government was abandoning judicial settlement in order to obtain a settlement through private

negotiations.

One of the reasons why the Spanish Government could not accept such a discontinuance, and would

not have accepted it, is an important consideration of a moral order which is expressed in paragraph 3 of

its communication to the Court dated 7 July 1962:

‘The Spanish Government would certainly have opposed the discontinuance if it had not had the

certainty that this act entailed in itself the renunciation by the Belgian Government of accusations which

are as defamatory as they are unjust against the judicial, administrative and governmental authorities of

the Spanish State.’

In short, the Spanish Government could not knowingly consent to a temporary discontinuance

without damage to its moral position. This reason is in itself decisive. From the legal point of view, the

Spanish Government, by accepting a temporary discontinuance, also risked compromising its constant

position as to the absence of any Belgian jus standi in the matter. Finally, the Spanish Government was

convinced that its position, judging by the pleadings, was extremely sound. Consequently, if it had not

believed the discontinuance to be final, it would have had to examine with the closest attention the

question whether it ought to go on with the proceedings at the stage which they had reached.

As to the material or moral prejudice actually suffered, Spain was again brought before the Court on

the basis of the same grave accusations, which were automatically communicated to all Members of the

United Nations. Secondly, the other party had the opportunity of revising, in the light of Spain's

arguments, its entire case in respect of the Preliminary Objections and has, indeed, sought to modify its

defence against one of the objections. Thirdly, Spain has had to bear the heavy administrative burden

represented by a second submission of the case to the Court.

The first Objection must therefore be upheld.


[134]SECOND PRELIMINARY OBJECTION

This Preliminary Objection is concerned with the jurisdiction of the Court.

The Application instituting proceedings states that the Treaty of 19 July 1927, which came into

force on 23 May 1928, is binding on Spain and Belgium. Pursuant to Article 17 of that Treaty, these

States may bring direct before the Permanent Court of International Justice, by means of an application,

disputes with regard to which the parties are in conflict as to their respective rights. This Treaty being in

force, according to Article 37 of the Statute of the International Court of Justice it is to this Court that the

jurisdiction provided for in favour of the Permanent Court is transferred. As Belgium and Spain are

parties to the Statute of the International Court it is claimed that this Court possesses jurisdiction to hear

and decide the present dispute.

In its Submissions, the Spanish Government states that the bond of jurisdiction provided for in

Article 17 applies to the submission of disputes, not to the International Court but only to the Permanent

Court. The admission of Spain to the United Nations, in 1955, did not have the effect of substituting the

compulsory jurisdiction of the International Court for that of the Permanent Court, for the Permanent

Court was dissolved before Spain was admitted as a Member of the United Nations. This situation was

not modified by Article 37 of the Statute, which binds only States that were Members of the United

Nations prior to the dissolution of the Permanent Court. The Court is therefore without jurisdiction.

[135] The Belgian Government maintains that the interpretation given in the Judgment of 26 May

1959 in the Aerial Incident case (I.C.J. Reports 1959 , p. 127). although valid and correct in respect of

Article 36, paragraph 51 , is not applicable as an interpretation of Article 372 .

1 Article 36, para. 5:

‘5. Declarations made under Article 36 of the Statute of the Permanent Court of International Justice and which are still in force shall be deemed, as between the parties to the present Statute, to be acceptances of the compulsory jurisdiction of the International Court of Justice for the period which they still have to run and in accordance with their terms.’

2 Article 37:

‘Whenever a treaty or convention in force provides for reference of a matter to a tribunal to have been instituted by the League of Nations, or to the Permanent Court of International Justice, the matter shall, as between the parties to the present Statute, be referred to the International Court of Justice.’

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The interpretation given in this Judgment was followed in the Temple of Preah Vihear Judgment of 26

May 1961 (I.C.J. Reports 1961 , p. 17).



In the Judgment in the Aerial Incident case, the Court made no mention of Article 37 in order not

to prejudge the case on the first Application relating to Barcelona Traction which was then pending.

It must therefore be shown why that interpretation is not applicable with regard to Article 37. For

this purpose, it must be shown that the question raised by Article 36, paragraph 5, is a different question

from that raised by Article 37. In the absence of such proof, the decision in the Aerial Incident case

would be applicable and the Belgian contention must be abandoned. It is only the legal differences

between these two texts that concern us. Factual differences between the present case and that of

the Aerial Incident are of less importance, for they have no bearing on the legal problem concerning the

two texts.

The Belgian Government's central argument is to the effect that, from the legal standpoint, there is a

difference between a declaration under Article 36, paragraph 5, and a declaration of acceptance of

jurisdiction embodied in a treaty or convention (Article 37).

The legal nature of these two undertakings is identical and so is their content. Their purpose is to

make the jurisdiction of the Court compulsory for the States (the same content) and they are also

consensual undertakings (the same nature). They may or may not be subject to time-limits. The form of

the undertaking is unilateral in one case and becomes subsequently, as in the other case, bilateral. It is

therefore difficult to see how there can be any difference between these two undertakings, in respect of

their form, their nature or their content. In both cases compulsory jurisdiction is brought into operation by

means of a unilateral application.

It is true that the declarations were unilateral undertakings. But as those undertakings were

addressed to other States, which had accepted the same obligation, they gave rise to agreements of a

treaty character concerning jurisdiction which were legally equivalent to the jurisdictional clause

embodied in a treaty or convention. The Court confirmed this view in the Right of Passage case:

‘The contractual relation between the Parties and the compulsory jurisdiction of the Court resulting

therefrom are established “ipso facto and without special agreement”.’

These declarations could not be modified without the consent of the parties. Nor could they be

withdrawn unless the right to do so had been explicitly reserved. They had the same force and the same

legal content as a provision in a treaty. That is the point of view of the Belgian Government, as can be

seen from the reservations it made when Paraguay denounced, unilaterally, its declaration of acceptance

of the optional clause and when South Africa withdrew part of its declaration.


[136] The ratio legis , the object, of these two provisions of the Statute is the same, namely the

immediate transfer to the International Court of the jurisdictional obligations in respect of the Permanent

Court—it being understood that these obligations must be ‘in force’.

Article 36, paragraph 5, and Article 37 were both drawn up, discussed and adopted by Commission

IV and the relevant committee at the same time, as dealing with the same legal question, namely that of

the adaptation to the International Court of declarations relating to the jurisdiction of the Permanent

Court.

After explaining, in paragraphs (a) and (b) , the means by which the succession of the new Court to

the jurisdiction of the Permanent Court was to be ensured, on the one hand, by Article 36, paragraph 4

(which later became paragraph 5), and, on the other hand, by Article 37, Committee IV/1 emphasized that

—

‘acceptances of the jurisdiction of the old Court over disputes arising between parties to the new

Statute and other States, or between other States, should also be covered in some way’.

After stating that it seems desirable ‘that negotiations should be initiated with a view to agreement

that such acceptances will apply to the jurisdiction of the new Court’, the above-mentioned report reaches

the conclusion that this matter ‘cannot be dealt with in the Charter or the Statute’, adding that it may later

be possible for the General Assembly to facilitate such negotiations. The terms employed (jurisdiction of

the Court, acceptances of jurisdiction) leave no room for doubt that they relate to the cases referred to in

Article 37 and in paragraph 5 of Article 36.

These two texts therefore deal with the same question, namely that of the transfer of declarations

and jurisdictional clauses from one Court to the other. It therefore follows that the interpretation of one of

these texts must be valid also as the interpretation of the other. In the Nottebohm case the Court said:

‘The same issue is now before the Court: it must be resolved by applying the same principles’ (I.C.J.

Reports 1955 , p. 22).

[137] Of the jurisdictional clauses mentioned, one was incorporated in the Statute of the Permanent

Court and the other in certain provisions of treaties or conventions. These legal undertakings have their

own special purpose in the instrument in which they are embodied and they may be extinguished either

through the expiry of a certain time-limit, or through some external cause. When the time-limit has

expired, the obligation lapses, as it does also in the case in which an external cause affects the very

subject-matter of the obligation. Where the obligation binds a State in regard to the Permanent Court (a

declaration

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or a convention) the object of the obligation becomes impossible of achievement, definitively, if the

organ, i.e., the Permanent Court, has disappeared. The obligation lapses and the lapsing occurs on the date

of the dissolution of the Permanent Court, 18 April 1946, in respect both of declarations and of treaty

clauses.

In order that the operation of the transfer from one Court to the other may be effected, immediately,

validly, it is essential that the jurisdictional clauses should be in force in respect of the two States at the

date on which the two States became parties to the Statute. In the present case, the obligation under the

Spanish-Belgian Treaty was in force for Belgium when that country became a party to the Statute; but this

obligation had lapsed when, in its turn, Spain became a party to the Statute in December 1955.

As already stated, Article 37, which is a transitional provision, had no other purpose than that of

preventing the disappearance in the immediate future of the declarations accepting jurisdiction which

were contained in certain treaties. This is also the purpose of Article 36, paragraph 5. The two provisions

were concerned with declarations, whether bilateral or unilateral. The jurisdictional clauses incorporated

in a treaty or convention were inevitably bound to lapse at the date of the dissolution of the Permanent

Court. The preservation of these clauses could apply only to those that were in force and were included in

a treaty signed by States that were parties to the Statute prior to the dissolution of the Permanent Court.

Clauses not included in this category would lapse irremediably. That is what happened in the case of

Article 17, paragraph 4, of the Treaty, on the dissolution of the Permanent Court. To enable Article 17 to

survive after the dissolution of the Permanent Court, Spain would have had to be a party to the Statute

before the dissolution of that Court.

The purpose of Article 37 was to maintain for the immediate future the jurisdiction that had been

accepted, whilst transforming its object. Its purpose was not at all to resuscitate across the passage of time

an obligation which had lapsed for want of substance and applicability, at the time of the dissolution of

the Permanent Court. Consequently, it cannot be claimed that, between 18 April 1946 and 14 December

1955, owing to the effect of Article 37, Spain was bound to the compulsory jurisdiction of the Permanent

Court, nor to that of the International Court, as Spain was not a party to the Statute at the time of the

substitution effected in the jurisdictional clause. The obligation which had been extinguished could not be

revived on the basis of Article 37.

[138] There was no intention to cover all such jurisdiction, as might, in principle, have been

desirable, but only jurisdiction that had not lapsed before the disappearance of the Permanent Court. The

San Francisco Conference, as will be seen later, did not concern itself with the jurisdictional


clauses in treaties of enemy or neutral States. The intention to maintain all jurisdiction agreed to in

respect of the Permanent Court was not envisaged in Article 37.

To determine the effect of Article 37, it is necessary to consider the situation that would have been

created if it had not been adopted. There can be no doubt that any provisions of treaties accepting the

jurisdiction of the Permanent Court that were in force would have lapsed on the dissolution of that Court.

Article 37 was intended to safeguard these provisions in treaties in force in the case of States parties to the

Statute before that dissolution.

The purpose of Article 37 was, within certain limits, to obviate a hiatus, a lacuna, between the two

Courts and continuity was obtained by giving validity in respect of the new Court to certain declarations

concerning jurisdiction included in treaties and relating to the Permanent Court. This continuity could be

ensured only as between those States that were parties to the Statute prior to the dissolution of the

Permanent Court. Article 17 of the 1927 Treaty could not be used for this purpose, as Spain was not one

of those States.

It is maintained that, although Article 36, paragraph 5, is transitional in character, Article 37 is not

so. This interpretation is based on Article 37 of the Statute of the Permanent Court.

It may be noted, in the first place, that Article 37 of the Statute of the Permanent Court also had a

transitional character. Indeed, once the Permanent Court was established, it became necessary to decide

that that Court was the tribunal referred to in the Peace Treaties. The purpose of Article 37 of the Statute

of the Permanent Court was not, as is contended, to extend the field of compulsory jurisdiction but to

identify an international tribunal. Compulsory jurisdiction was not founded on that Article, but on the

treaties by which it was established, and it could not be related explicitly to a court which had not yet

been created. The treaties had established the compulsory jurisdiction of a tribunal which was to be

instituted. Once its Statute had been drawn up, it became necessary to determine that that Court, and no

other, was the tribunal to which the treaties referred. Article 37 of the Statute of the Permanent Court

determined the organ on which the treaties in question had conferred compulsory jurisdiction.

[139] In the second place, the conclusions to be drawn from Article 37 of the Statute of the

Permanent Court are not applicable to Article 37 of the present Court, since they serve different purposes.

The purpose of Article 37 of the International Court is to transfer a jurisdiction in order to prevent it from

lapsing. When the present Article 37 was drawn up, those who drafted it did not have before them treaties

establishing the compulsory jurisdiction of a Court which had not yet been created and which still

remained to be established. For treaties prior to the institution of the Permanent Court, it had already been

determined, by virtue of Article 37 of the Statute of the Permanent Court, that that Court was the organ on

which jurisdiction had been

46 ILR

conferred. In treaties such as that of 1927, on the contrary, jurisdiction was conferred on a jurisdictional

organ that was specifically determined, namely the Permanent Court. What had to be done was, so far as

was possible, to transfer this compulsory jurisdiction, created under a treaty, from the Permanent Court to

the International Court. It was not, as in the case of the former Article 37, a matter of determining the

organ on which jurisdiction had been conferred by agreements in which it was impossible to specify the

organ. The case of the dissolution of an international tribunal cannot be assimilated to the case of a

tribunal that has not yet been instituted. In the latter situation, it may be considered that there is a

suspension of the undertaking to accept the jurisdiction of a court. In the other case, the existing

jurisdiction is extinguished and it is absolutely impossible for the obligation to be fulfilled. A non-existent

court can no longer have jurisdiction.

The two Articles of the Statute apply to analogous situations and it is impossible to form an opinion

about Article 37 without taking account of the discussion in 1959 about Article 36, paragraph 5. It has

been previously shown that, as between the system of these two Articles, there are no fundamental

differences which would lead to devising different solutions for each case. Neither in the Judgment on

the Aerial Incident case, nor in the Joint Opinion or in the Separate Opinions of individual Judges is it

possible to find reasons of a convincing legal character in favour of the view that a distinction must be

drawn between these two Articles.

The Court must be quite definite about the interpretation of its Statute. Either it is decided that there

is a legal difference or else it is recognized that there is not such a difference.

The Belgian Government's contention is seen to be unconvincing on several points.

It is maintained that in the case of a declaration of acceptance of the jurisdiction of the Court a treaty

position arises only when a specific dispute occurs. But this is also true from the standpoint of the 1927

Treaty which contains no more than an obligation to accept the jurisdiction of the Permanent Court at the

time when a specific dispute arises. The difference alleged therefore does not exist. In both cases there is

a firm obligation to accept jurisdiction and, in both cases, there is a firm obligation to accept jurisdiction

only in respect of one and the same tribunal, namely the Permanent Court. There is no legal basis for the

assertion—which is a mere begging of the question—that the obligation to accept jurisdiction subsists

since the Treaty remains in force, but that it is merely the means for exercising that jurisdiction (the

Permanent Court) which has disappeared. It is not sufficient merely to make such an assertion. It must be

proved, for the 1927 Treaty did not provide for reference to ‘an international tribunal’ but to the

Permanent Court (Articles. 2, 4 and 17).

[140] If an obligation arising from an acceptance by unilateral declaration came to an end because

the Permanent Court disappeared and because


it was bound up with the Statute of that Court, it did not survive after the disappearance of that Statute.

An obligation arising from a clause which relates only to the Permanent Court disappears with that Court

and with its Statute—in just the same way.

The 1927 Treaty must be construed according to the meaning it had in 1927, within the international

context of 1927, and according to the intention of the parties in 1927. This Treaty bears the mark of its

period. If there had been no Permanent Court, there would have been no reference whatsoever to an

international tribunal. The Treaty would have been purely and simply a treaty of arbitration and

conciliation. That is what it became on 18 April 1946. It is too easily forgotten that the 1927 Treaty was

drawn up only five years after the institution of the first permanent international tribunal and that the

treaties which referred to it could relate only to what existed and had only recently come into existence.

This analysis is reached through the application of two elementary rules of international law, namely

that concerning the interpretation of clear texts and that concerning the ‘historical’ interpretation of

treaties according to the meaning they had at the time when they were concluded (case concerning Rights

of Nationals of the United States of America in Morocco , I.C.J. Reports 1952 , pp. 188–189).

It is contended that the provisions of the Charter and those of the Statute form a single mandatory

whole for the States Members of the United Nations. This view is not absolutely correct. It is subject to

derogations in relation to certain of those provisions which are not mandatory, as they do not apply to all

the Members of the United Nations. This is the case with regard to paragraph 5 of Article 36 and Article

37 of the Statute.

The particular legal nature of these two provisions is clear from their actual wording. In the first

place, they are concerned with situations that are quite special and specific, namely the jurisdictional

clauses existing and in force relating to the Permanent Court. Further, these provisions apply only to

certain specific States. Thus, Article 36, paragraph 5, is concerned only with States which had made

declarations that are in force and Article 37 is concerned only with States whose treaties or conventions

contain clauses that are still in force—in both cases at the time when they become parties to the Statute.

This examination shows that these two provisions apply only to certain States, namely those which have

accepted the jurisdiction of the Court, and not all States Members of the United Nations.

These two provisions are transitional and their application must very soon come to an end. Article

36, paragraph 5, as the Court has interpreted it, can no longer be applied. The same will in future be true

of Article 37.

[141] If the Statute had been set out with a more technical presentation, these two provisions would

have been inserted at the end of it, under the heading ‘Transitional Provisions’. This method was not

adopted,

46 ILR

no doubt in order to preserve the same numbering of the articles in the two Statutes. The transitional

provisions mentioned were inserted where they would not entail changes in the numbering.

Furthermore, account must be taken of the effects of the dissolution of the Permanent Court on the

1927 Treaty and on its jurisdictional clause.

The subjection to a judicial settlement provided for in the 1927 Treaty relates specifically to the

Permanent Court, stipulated by name and not in the form of a reference to a generic and undetermined

international tribunal.

The Permanent Court was dissolved with final effect and the International Court of Justice is another

and different Court, as is clear from the preparatory work concerning it.

This being so, the clear impossibility of submitting to the Permanent Court any disputes that may

arise between the Parties after the final dissolution of that Court becomes apparent.

It is precisely because of the disappearance of the Permanent Court and the creation of a new Court

that it was necessary to draft the conditions embodied in Article 37 of the present Statute for the purpose

of transferring, so far as was possible, the jurisdiction conferred upon the Court that it had been decided

to dissolve.

In the light of these considerations and taking account of the general principle that the jurisdiction of

the Court is not to be presumed and that it is founded on the consent of States, an extensive interpretation

of Article 37 would, as a consequence, entail an extensive interpretation also of the 1927 Treaty by means

of which a jurisdictional obligation stated specifically in favour of the Permanent Court would be

transferred to another Court, when such obligation no longer existed legally and Article 37 could no

longer operate.

The Court's task related essentially to the interpretation of Article 37. For the transfer of jurisdiction

from one Court to the other to take effect, this provision requires the fulfilment of two conditions:

(1) that the State party to the jurisdictional clause embodied in the treaty should be a party to the

Statute, and

(2) that this clause should be in force.

[142] These two conditions, which are clearly laid down in Article 37, must be fulfilled

concurrently. Each of them must be fulfilled at the time when the other is fulfilled. If one of them is not

fulfilled, Article 37 does not effect the transfer of jurisdiction. The two conditions prescribed by Article

37 must always be considered with reference


to the same crucial date. It would be contrary to the principle of good faith if the applicability of Article

37 were to be judged, in respect of one condition, with reference to the date of the entry into force of the

Charter and, in respect of the second condition, with reference to the date of the admission of the State in

question to the United Nations. Such an interpretation would, moreover, be contrary to the text of Article

37.

But, when Spain was admitted as a Member of the United Nations, in December 1955, the

jurisdictional clause of the 1927 Treaty was no longer in force, owing to the dissolution of the Permanent

Court on 18 April 1946. At that date there was no treaty with a jurisdictional clause in force. The second

condition was unfulfilled. Consequently, the situation covered by Article 37 does not exist in the case

before the Court.

The acceptance of the jurisdiction of the Permanent Court stated in this clause was henceforth

devoid of object since that Court no longer existed as a means for exercising it. The legal basis for that

acceptance provided by Article 36, paragraph 1, of the Statute of the Permanent Court had ceased to exist

as a result of the disappearance of that Statute. Thus, Article 17, paragraph 4, of the 1927 Treaty had

lapsed and was no longer in force. The terms of that provision are as follows:

‘If the special agreement has not been drawn up within three months from the date on which one of

the Parties was requested to submit the matter for judicial settlement, either Party may, on the expiry of

one month's notice, bring the question direct before the Permanent Court of International Justice by

means of an application.’

The dissolution of the Permanent Court destroyed the jurisdictional clause and the attribution of

jurisdiction to the Court specified therein.

Spain gave its consent only in respect of that Court.

The Treaty continues to be in force in respect of the other means provided for the settlement of

disputes (conciliation and arbitration), but in so far as the means of judicial settlement connected with the

Permanent Court is concerned, it has entirely disappeared through the disappearance of that Court. All the

provisions of the Treaty which referred to the Permanent Court, including Articles 1 and 2, had lapsed

completely. The real importance of the Treaty resides in all the means of settlement for which it made

provision and not exclusively in the means of judicial settlement (Permanent Court).

[143] The admission of Spain to the United Nations resulted in that country being deemed to be a

party to the Statute of the Court (Article 93, para. 1, of the Charter). Spain thus became invested with a

certain procedural capacity in respect of the Court, but this situation is not sufficient to establish the

jurisdiction of the Court in respect of that State. It merely creates a preliminary situation for the

establishment

46 ILR

of that jurisdiction. The source of the jurisdiction of the Court lies in the declarations of the States (Article

36, paras. 1 and 2) and, in exceptional cases , in Article 36, paragraph 5, and Article 37 of the Statute.

The admission of a State as a Member of the United Nations has the immediate consequence of

making that State a party to the Statute of the Court. This admission does not signify any acceptance

whatsoever of the jurisdiction of the Court. But such acceptance is attributed to Spain on the ground of its

admission, through the application of Article 37. This interpretation, as is clear from the foregoing

considerations, is quite indefensible.

The obligation to accept judicial settlement provided for in Article 2 of the 1927 Treaty in the case

of certain disputes relates either ‘to an arbitral tribunal’ or ‘to the Permanent Court of International

Justice’. Although this obligation is general in regard to an arbitral tribunal (it does not refer to the

Permanent Court of Arbitration, for instance) it is particular in regard to the Permanent Court, which it

mentions specifically. In the 1927 Treaty the Permanent Court is both the object and the means for

fulfilling this obligation. There was an intention to accept this means of settlement, but only because it

was indissolubly connected with the Permanent Court and not with any other court. Jurisdiction and the

attribution of it are inseparable from the Permanent Court.

The Parties agree in the view that, according to Article 37, the provision concerning jurisdiction had

to be in force at the time when Spain became a Member of the United Nations and, of course, also at the

time of the filing of the Application instituting proceedings.

It is contended that the 1927 Treaty must be considered to be in force. This Treaty is renewable for

periods of ten years, as from the time of its ratification, failing denunciation by one of the parties. That

was the situation of Spain at the time when that country became a party to the Statute. This renewal every

ten years must, however, be understood as a renewal of the provisions of the Treaty that are still in force.

It is not possible to renew what has lapsed.

[144] Although the 1927 Treaty remains in force in respect of some of its provisions, the conclusion

is inevitable that Article 17, paragraph 4, so far as concerns that part of it which establishes the

jurisdiction of the Permanent Court, had lost all legal force because of the dissolution of that Court on 18

April 1946. This provision was no longer in force in December 1955. The jurisdictional clause can be

detached from the other articles of the Treaty. The ‘reference of a matter’ mentioned in Article 37 is

related to the provisions attributing jurisdiction to the Permanent Court. Those provisions are the specific

object of the reference to the Court. There is no reference to other provisions of


the Treaty. This is clear also from Article 35, paragraph 2, of the Statute which refers to ‘the special

provisions contained in treaties in force’, in a narrow sense.

With regard to Article 37, the report of Committee IV/1 of the San Francisco Conference says:

‘(a) It is provided in Article 37 of the draft Statute that where treaties or conventions in force

contain provisions for the reference of disputes to the old Court such provisions shall be deemed, as

between the members of the Organization, to be applicable to the new Court’ (Conference Documents,

Vol. 13, p. 384).

The provisions referred to can thus only be jurisdictional clauses in force. It is the provision for the

reference of a matter that must be in force, as is quite clear from the text of Article 37.

A treaty may lapse partially even before the expiry of the term for which it is concluded. This is true

also in the case of certain legal instruments, laws and regulations, which may also have lapsed partially.

In an international obligation, a distinction must be made between lapsing as the result of the expiry of the

prescribed term and lapsing as the result of some other fact, also involving a lapse, such as the dissolution

of the Permanent Court. That dissolution also constituted the time-limit for the validity of the

jurisdictional provision in the Treaty. Article 17, paragraph 4, of the Treaty expired on 18 April 1946.

That clause could not come into force again at the time when the Statute came into force in respect of

Spain, in December 1955.

The separation of international obligations as between clauses that are valid and clauses that are not

valid is admitted in the case-law of the Permanent Court. One example is furnished in that Court's

consideration of the Special Agreement in the Free Zones case. In that case, the principle vitiatur et non

vitiat was admitted. In point of fact, the Special Agreement was, in the case of some of its clauses, in

contradiction with the Statute and the Court decided that the Special Agreement was valid but that the

stipulations contrary to the Statute were null and void. The Court took no account of the second paragraph

of Article 1 of the Special Agreement (P.C.I.J., Series C, No. 17–1, Vol. 11 , p. 492).

[145] The Permanent Court refused to consider that the individual provisions of a treaty are

inseparable and indissolubly connected. In the Free Zones case (P.C.I.J., Series A/B, No. 46 , p. 140),

that Court considered that Article 435 of the Treaty of Versailles was ‘a complete whole’ separable from

the rest of the Treaty. It took a similar view

46 ILR

in the Advisory Opinions on the Competence of the I.L.O. (P.C.I.J., Series B, No. 2 , pp. 23–24

and Series B, No. 13 , p. 18), concerning the independence of Part XIII of the Treaty.

The idea of the integral character of a convention has its origin in a notion taken from private law. In

the Opinion of the Court on Reservations , this notion of the absolute integrity of conventions was

rejected as not having been transformed into a rule of international law (I.C.J. Reports 1951 , pp. 24–25).

The Opinion of the Court in the case concerning Reservations to the Convention on the Prevention and

Punishment of the Crime of Genocide indicates certain limits to the notion of the inseparability of treaty

provisions in respect of provisions which are not fundamental to the treaty as a whole. An article which

has lapsed may quite properly be separated from other provisions of the treaty which continue to be in

force where such provisions can apply quite apart from the provision that has lapsed.

International law can envisage various ways in which an international obligation may become

impossible of performance. Such impossibility may be permanent. In the present case, the jurisdictional

clauses of the 1927 Treaty disappeared permanently on the date of the dissolution of the Permanent Court.

This fact inevitably put an end to the obligation to have recourse to that tribunal. This is an example of a

case where it is permanently impossible to perform an international obligation—the latter having

disappeared with the Permanent Court.

So far as general international law is concerned, Article 17, paragraph 4, of the 1927 Treaty is said,

in short, to have been deleted from the Treaty until 1955—this being on the hypothesis that the Permanent

Court did not finally and definitively disappear in April 1946, which distorts the relative position of the

two Courts. Any reference to the continuity of the two Courts is merely a formula describing intentions as

a matter of general policy and is not an assertion of legal succession.

The error in the Belgian contention in its presentation of the rules of international law concerning

suspension is that it supposes that the basic problem has been resolved: the Permanent Court has

disappeared; why should the obligation expressed in the Treaty, namely the obligation to have recourse to

the Permanent Court, be only suspended? This contention presumes, asserts but does not prove, the

original phenomenon: the suspension in this particular case, whereas suspension does not exist in the case

of the permanent disappearance of the subject-matter.

For there to be suspension, it would indeed be necessary to prove that there were two categories of

obligations in the 1927 Treaty and in the intentions of those who drew it up:

—a basic obligation, namely the obligation to have recourse to an international tribunal;


[146]—an obligation concerning the means, namely the choice, amongst possible international

tribunals, of the Permanent Court.

This analysis has an artificial character. In 1927 the parties decided on only one thing, namely

recourse to the Permanent Court. To say today that there is in this Treaty a division into two obligations

one of which, namely the obligation to accept any international tribunal whatsoever, was suspended is

nothing more than a theoretical and ex post facto view of the facts.

This would seem to justify the rejection of the Belgian argument, at all events so far as concerns the

phenomenon of ‘suspension’ over and above the effects proper to Article 37.

It should be noted that the positions taken up by the Belgian Government in regard to Article 17 of

the 1927 Treaty are necessary to it in order that it may put forward the following contention as to the

difference between Article 36, paragraph 5, and Article 37. Article 36, paragraph 5, concerns not only the

tribunal on which jurisdiction is conferred, but also the obligation to accept jurisdiction on the basis of the

pre-existing treaty, the Statute. Article 37, on the contrary, does nothing more than ‘effectively ensure the

performance of the treaty obligations’.

Here again it is therefore presumed that the Treaty remained in force so far as concerns a general

obligation to accept jurisdiction in vague terms, without reference to any specific tribunal. If the existence

of an obligation of this nature in the 1927 Treaty is not admitted, the Belgian argument collapses both in

regard to the 1927 Treaty and in regard to Article 37 since it is all based on the ex post facto invention of

a general jurisdictional obligation in the 1927 Treaty, which does not exist.

Article 37 of the Statute, which creates a very special regime, must be construed restrictively for two

reasons:

(1) It constitutes an exception to the means whereby jurisdiction of the Court is accepted. It is a

provision which constitutes a derogation from the ordinary law in this matter. Any exceptional rule of law

must be construed restrictively. Normal consent to the jurisdiction of the Court can be given only through

a treaty clause (Article 36, para. 1, of the Statute) or through a declaration (para. 2 of the same Article).

Article 37 establishes jurisdiction by the substitution of a new jurisdictional clause for an old one. The

jurisdiction of the Court is optional; this is a principle of the Statute. Article 37 introduces an exception to

this rule by providing for a case of automatic and compulsory jurisdiction.

[147] (2) Article 37 is a legal fiction, a solution that is empirical and more or less arbitrary. It

transfers to the International Court an acceptance

46 ILR

of the jurisdiction of the Permanent Court which is in force. This artificial method of stating the law

requires a restrictive interpretation of the Article in question. The Permanent Court said that it did not

‘dispute the rule … that every Special Agreement, like every clause conferring jurisdiction upon the

Court, must be interpreted strictly’ (P.C.I.J., Series A /B, No. 46 , pp. 138–139). And this is all the more

essential in the case of a system of acceptance of jurisdiction as exceptional as that of Article 37 of the

Statute.

The intention of Article 37 was that the jurisdictional clause in force in treaties and conventions

should be considered, as between parties to the Statute, as an acceptance of the compulsory jurisdiction of

the International Court. If a State was a party to that Statute at the time of the dissolution of the

Permanent Court, it gave explicit and voluntary consent to the transfer from the old Court to the new

Court. If a State was not a party to the Statute at that time, as was the case for Spain, it is said, according

to a certain interpretation, to have given an undeclared and non-voluntary consent to the new jurisdiction.

This interpretation envisages two kinds of consent, according to whether the State in question was a party

to the Statute before or after the dissolution of the Permanent Court. It is claimed that Article 37 would

automatically establish the jurisdiction of the new Court in the case of States that became parties to the

Statute after that dissolution.

Under such an interpretation, an undeclared consent, an automatic consent would be held to proceed

from the Article in question—a consent given in a general way and beforehand. A consent thus given is

not given in the way the Statute requires consent to be given by States if they accept the jurisdiction of the

Court. Such an exceptional manifestation as this form of consent should have been clearly provided for in

the text of Article 37. But that is not the case. As between two interpretations of Article 37, one following

the principle of optional consent and the other accepting the idea of an alleged automatic consent, the

choice must be in favour of the former interpretation. Any extensive interpretation is therefore

inadmissible.

It would be surprising if Article 37 had established compulsory jurisdiction for a certain category of

States when the San Francisco Conference had rejected the principle of compulsory jurisdiction for all

States.

[148] The jurisdiction of the Court is based on the explicit consent of States. Thus no doubt can arise

as to the execution of any judgment it may deliver. No interpretation of texts concerning the acceptance

of jurisdiction should be based on any ambiguous reasoning. It is an essential principle that jurisdiction

must be established by clear manifestations of the will of States. To attempt to force the meaning of texts

relating to the jurisdiction of the Court would be to risk consequences that might affect its authority and

its prestige. The Judgment in the Aerial Incident case is a good demonstration of the fact that the Court

must employ the discretionary power conferred by Article 36,


paragraph 6, of its Statute with the greatest prudence. If there should be lack of jurisdiction, any action

would be ultra vires . A change of jurisprudence on a question of jurisdiction must have a very solid

basis. It is important that decisions should be consistent in order to maintain the authoritative character of

the texts interpreted. The fact that the Court's list is somewhat slender cannot justify any extension of its

jurisdiction.

The jurisdiction of the Court which is derived from Article 37 must be founded on the will of the

parties and it exists only to the extent to which it has been accepted.

The transfer to the International Court of Justice of jurisdiction which a provision in a treaty

provided for in favour of the Permanent Court of International Justice could not be made without the

consent of the States parties to the treaty in question. It is a well-established principle of international law

that only the parties to a treaty can modify its provisions.

By adopting Article 37 which provides for the transfer of jurisdiction from one Court to another, the

San Francisco Conference could not substitute itself for the consent of States which were not present and

did not take part in that Conference. As Spain did not take part in that Conference, Article 17, paragraph

4, cannot be made to apply to it. The States present at San Francisco were not able to modify a treaty

signed by Spain without the consent of that country. Any modification decided upon by the States at the

Conference, in respect of jurisdictional clauses embodied in the provisions of the 1927 Treaty, remained

without effect so far as Spain was concerned in the absence of that State's acceptance of those

modifications, and Spain has not signified its acceptance.

[149] Furthermore, on the occasion of that Conference, Spain was not invited to take part in it. Spain

was not persona grata (resolution 39 (1), of the General Assembly, of 12 December 1946). Spain, being

excluded from the negotiations at San Francisco, had no part in them, and in the Statute which came into

force on 24 October 1945 remained, so far as Spain was concerned, res inter alios acta . The Conference

had excluded ex-enemy and neutral States from its meetings. It is obvious that the States assembled at

that Conference did not concern themselves with the jurisdictional clauses contained in treaties of ex-

enemy or neutral States for the purpose of imposing on them the obligation to agree that certain

jurisdictional clauses should be applicable to the new Court in the possible event of their becoming

Members of the United Nations. Such an interpretation is not reasonable. By making the international

treaty which the Charter and the Statute constitute, the States at the Conference were not able to establish,

by one of the provisions of those instruments, obligations incumbent on third States.

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Provisions of this character are not to be presumed. Article 37 effects a substitution of one obligation for a

previous one and such a substitution must not be presumed. For such a substitution to take place it is

essential that the party concerned should formally and voluntarily express its intention to make the

substitution. Spain, which was absent at the time when Article 37 was drawn up and accepted, had no

opportunity to manifest such an intention.

The report of 22 May 1945 of sub-committee IV/1 /A on the question of continuity of the

International Court, and on related problems, said, amongst other considerations, at the end of

paragraph (d) :

‘In the case of enemy States, it would be possible as part of the conditions of peace to terminate

their rights under the Statute; in the case of other States, this would not be possible unless they were to

agree to it.’

And the report added, in paragraph (e) :

‘From this conclusion it follows that, in the case of certain neutral States at any rate, the exclusion

from participation in the Statute of the Court which is clearly laid down by Chapter VII, paragraph 5, of

the draft Charter could probably not be accomplished without some breach of the accepted rules of

international law’ (U.N.C.I.O., Vol. 13, p. 525).

The relevant documents show that, at the San Francisco Conference, measures of exclusion from the

Statute of the Court were contemplated in respect of enemy States and certain neutral States. That was the

situation with regard to Spain. The sub-committee in question therefore did not concern itself with the

maintenance of the jurisdictional clauses embodied in the declarations or treaties of those States.

When a State has for many years remained—as Spain did—a stranger to the Statute, this being

moreover also by decision of the General Assembly (decision of 12 December 1946), it cannot be

maintained that that State, by the fact of its request for admission to the United Nations, has recognized

the jurisdiction of the International Court of Justice. Consent that is merely presumed is insufficient

(I.C.J. Reports 1959 , p. 142).

The States assembled at the San Francisco Conference, knowing their international obligations in

the matter of the acceptance of the jurisdiction of the Permanent Court, whether through the optional

clause or through a provision in a treaty, were, of course, able properly to assume the responsibility of

transferring them to the new Court. Those States had the power to do this. That power could not be

claimed in respect of States which might subsequently come to be admitted as Members of the United

Nations on the basis of Article 4 of the Charter.


[150] To admit such a power in relation to States not present would quite simply result in making

them subject to a principle which the Conference firmly rejected, namely that the jurisdiction conferred

on the new Court should be in all respects compulsory. The new Members of the United Nations would

have had to accept such jurisdiction imposed on them by the States assembled at San Francisco, if they

happened to be bound by treaties in force under which matters were to be referred to the jurisdiction of

the Permanent Court. The decisions given by that Court and by the International Court have always

maintained that the Court possesses jurisdiction in respect of a State only if that State has given its

voluntary and unequivocal consent.

The jurisdiction of the Court is based on the consent of States. The International Court has said, in

the Monetary Gold case, that it must be careful not to ‘run counter to a well-established principle of

international law embodied in the Court's Statute, namely that the Court can only exercise jurisdiction

over a State with its consent’.

According to a certain view, this consent must be understood to have been given by Spain when that

country became a Member of the United Nations. The States assembled at San Francisco could not, in the

absence of Spain, impose on that country an obligation involving the acceptance of a new jurisdiction,

namely that of the International Court. They had no power to impose on Spain, as a supplementary

condition for Membership of the United Nations, the acceptance of a specific jurisdiction of the

International Court. To admit this would be contrary to the principle of the legal equality of States. The

conditions for admission to membership of the United Nations did not stipulate that certain States would,

in order to be admitted, have to accept obligations of a jurisdictional nature which other States were not

required to accept.

On becoming a Member of the United Nations, Spain could not have been compelled to accept the

jurisdiction of the International Court for certain cases. It is the distinctive feature of this jurisdiction that

it is particular and voluntary and not general and compulsory. The jurisdiction of the Court must be

established by a clear text which does not call for interpretation, so that it cannot come as a surprise.

There is no compulsory jurisdiction of the Court. If any reasonable doubt can exist as to the interpretation

of Article 37, its application also must be reasonable. A restrictive interpretation is absolutely essential.

[151] It is contended that, when it became a Member of the United Nations, in December 1955, the

Spanish Government ratified Article 37 of the Statute and thereby accepted the transfer of jurisdiction.

Article 37 would thus be a clause concerned with accession or adhesion, an offer addressed to States other

than those assembled at San Francisco. The

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International Court has replied to this view, in the Aerial Incident case. The same considerations are

relevant with regard to Article 37.

At the time when Spain became a Member of the United Nations, its acceptance of the jurisdiction

of the Permanent Court under Article 17, paragraph 4, of the 1927 Treaty had lapsed as from the date of

the dissolution of that Court. Article 37 does not revive an obligation which no longer had any legal

effect. This provision could not apply to Spain at the time of its admission to the United Nations. It

follows therefore that Spain's acceptance of this provision does not constitute consent to the jurisdiction

of the International Court of Justice (I.C.J. Reports 1959 , p. 145). And any manifestations of acceptance

attributed to Spain at a later date are unfounded.

It is contended that Article 37 is concerned solely with the validity of jurisdictional clauses in point

of time, of the period which they still have to run within the dontext of the treaties of which they form

part. So long as the term prescribed by the treaty has not expired, these jurisdictional clauses, it is said,

remain in force, though not applicable because of the disappearance of the field of application to which

they relate. There is said to be a suspension of these clauses for the acceptance of the jurisdiction of the

Court until the time comes when the two States signatories of the treaty become parties to the Statute.

This view entails certain difficulties.

In the first place, it takes no account of the very strong argument in the judgment in the Aerial

Incident case, when it admits that the jurisdictional clauses in question lapsed for want of the legal basis

they found in the Statute of the Permanent Court, which had ceased to exist because of its disappearance.

The extinction of such international obligations may be connected with the periods for which they were

concluded, but there may be other causes that bring about their extinction before the expiry of those

periods.

There is nothing in Article 37 to suggest that Article 17, paragraph 4, would continue to be able to

be revived after the expiry of the Statute of the Permanent Court. To bring about this effect, Article 37

would have had to be worded differently. It would at least have been necessary for it to state that the

provisions of treaties accepting the jurisdiction of the Permanent Court should be considered, as between

the States which are parties to the present Statute or which may at any time become parties to the Statute,

as involving acceptance of. the compulsory jurisdiction of the International Court. Article 37 says nothing

of the kind and has no effect upon Article 17, paragraph 4, which is included in a treaty of a State that had

not yet become a party to the Statute.

Furthermore, this theory of the suspension of treaty clauses concerning the acceptance of the

jurisdiction of the Court creates a delicate situation as regards both the duration of the suspension and its

effects.


[152] In order that the effects of this suspension may be brought to an end, an event that is

extraneous to the will of the contracting parties must occur, namely the admission of a particular State to

the United Nations. If the period prior to this admission is prolonged for an undue length of time, the

above interpretation may lead to unreasonable results, which will have to be examined very carefully.

When does such a suspension cease to be reasonable? The difficulty lies in the choice of units of

measurement. What is the unit for what is reasonable? To what bases for comparison or judgment must

resort be made? The frontier between what is reasonable and what is not reasonable must always remain

arbitrary for the reason that between the one situation and the other there is no abrupt transition.

If the suspension begins to run from the date on which the Charter entered into force, Spain would

have remained a stranger to the Statute for more than ten years. Could the suspended clause still have any

effects after that period?

An interpretation in this sense has artificial aspects and gives ground for arbitrary conclusions and

applications which may compromise principles hitherto accepted in the matter of consent to the

jurisdiction of the Court. If some other interpretation of Article 37 does not entail the disadvantages just

mentioned, it should be preferred.

Is it legally admissible that the jurisdictional clauses of treaties or conventions should, in respect of

States that are not parties to the Statute, have potential validity by virtue of Article 37, either as from the

entry into force of the Charter or as from the dissolution of the Permanent Court? There is nothing that

could support this proposition, either in the text of that Article or in the preparatory work, or within the

framework of an interpretation of this provision. To this concept of the potential validity of the clause

there would be added the idea of its suspension pending the admission of a State to the United Nations,

whilst it would be agreed that this suspension, if unduly prolonged, might cause the clause to lapse.

The view must be examined that Article 37 of the Statute could have the effect of reviving Article

17 of the 1927 Treaty. Can this Article, which had created an obligation to accept jurisdiction in respect

only of the Permanent Court, ‘resume’ its effect because of Article 37 of the Statute?

[153] The whole problem centres round the text of this Article. Either it created a special kind of

‘suspension’, not provided for by the general rules of international law, a ‘dormant’ condition, a

temporary ‘paralysis’ of the means of jurisdiction, even in respect of States that are

46 ILR

not yet parties to the Statute, with a ‘resuscitation’ on their becoming parties to that Statute, or else

Article 37 did not create that effect.

As this is a matter of the interpretation of the Statute, there is no obligation to take account of the

arguments presented by the Parties. The Court must seek the solution by its own means.

Even if the view were admitted that Article 37 was intended to extend its effects to all parties to the

Statute, whatever might be the date at which they became parties thereto, the legal problem is not solved

thereby, for the question is whether the Statute could create in international law this new obligation

relating to the ‘resuscitation’ of provisions that had lapsed through the permanent disappearance of the

subject of the obligation.

It is useless to say that this paralysis is the sole purpose of Article 37 and that it has no other

purpose. Such an assertion implies that an obligation could be created in relation to third States,

causing, before they had become parties to the Statute, a clause in a bilateral treaty to become ‘dormant’.

It is no negative proof that is required, but positive proof of the fact that the Statute could legally bring

about such an effect.

It is true that every State which becomes a party to the Statute accepts it as it is. But in December

1955, when Spain became a party to the Statute, was there still in the 1927 Treaty an Article 17 which

could be revived ? Can Article 37 have ‘seized’ the bilateral treaties of a third State, long before that State

became a party to the Statute, for the purpose of ‘preserving’ the jurisdictional clause?

This presupposes a new and complex operation which a priori is contrary to the voluntary character

of the acceptance of the jurisdiction of the Court and which would have to be justified by some means

other than a mere description of it. For it is no proof of the legal existence of an obligation merely to say

that it is ‘dormant’. This would, in fact, be laying down a principle contrary to the generally recognized

principle of the voluntary acceptance of the jurisdiction of the International Court of Justice. Spain did not

give its acceptance of the Statute until December 1955.

Hence follows the need to argue that Spain had itself recognized that the effect of Article 37 was

indeed to revive Article 17 of the 1927 Treaty at the time when Spain became a party to the Statute.

Whether Spain did or did not believe that Article 37 had a certain effect is quite immaterial. It is the Court

alone which is called upon to determine its own jurisdiction according to the Statute , and not according

to the view one of the Parties takes of the Statute.

[154] The fundamental problem is in fact the following. How can Article 37 be given an effect of

preserving the jurisdictional clauses of bilateral treaties between third States? That effect must necessarily

date from the entry into force of the Statute, before the disappearance of the Permanent Court. And how

can Article 37 then be given the effect of automatically transferring jurisdiction to the International


Court of Justice on the day when the third State is admitted to the United Nations? The ‘preservation’

must, of course, apply as from the time when the Statute came into force since it is claimed that Article 37

of the Statute applies to ‘all treaties’ and therefore to treaties binding States which have not yet any

obligation arising from membership of the United Nations and which might, by hypothesis, never have

any such obligation if they did not become Members of the United Nations. Yet it is necessary that

Article 37 should apply without any limitation of time for, if the ‘preservation’ of the jurisdictional clause

of a bilateral treaty has been brought about by the entry into force of the Statute, Article 37 will apply

whatever be the date when the third State is admitted to the United Nations. If the preservation has

occurred, it is ‘potentially’ effective so long as the bilateral treaty is in force.

For it to be otherwise, it would have to be held that Article 37 does not ‘preserve’ the jurisdictional

clause of a bilateral treaty until the day when the third State is admitted. But, in that case, the problem

already mentioned remains. A ‘paralysing’ operation is one that is not known in general international law,

according to which suspension means relief from the obligation. But it has not been proved that Article 37

determined such renewal after paralysis.

This consideration becomes still more conclusive in the examination of the alternative second

objection. If a suspended obligation comes into force again only as from the day on which the obstacle

ceases to exist, there is no jurisdiction during the period of suspension. Otherwise it is not a case of

suspension but of a ‘dormant’ condition or ‘paralysis’, and these descriptions are in fact necessary to

justify the fact that the suspension has had no effect . For if the period of suspension disappears

retrospectively and if the jurisdiction of the International Court of Justice is admitted as if there had been

no interruption in the application of the bilateral treaty, this is no longer a suspension of the obligation, by

definition. Here again it must be held that this was the purpose of Article 37, but without any shadow of

proof to establish it. Now, to prove that the suspension of an obligation has not ‘relieved’ the parties of

the obligation for the whole of the period of suspension, it is necessary to produce something more than a

mere assertion.

Spain and Bulgaria signed a Treaty of Conciliation, Judicial Settlement and Arbitration on 26 June

1931, which was ratified in Sofia on 21 June 1935 (P.C.I.J., Series E, No. 13 , p. 296). Under Article 17

each party may, subject to one month's notice, bring a dispute before the Permanent Court by means of an

application. This Treaty is renewed every five years, unless denounced six months before the expiry of

that period.

[155] Is such a treaty still in force between these two States in regard to the jurisdiction of the

International Court, even after the Judgment

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in the Aerial Incident case? Assuming that one of the passengers in the unfortunate aircraft brought

down by the Bulgarian military forces was a Spaniard, would his Government have had the right to file an

application in the exercise of protection of its national, on the basis of the above-mentioned Article 17?

If Article 37 confers jurisdiction on the International Court, it will also stipulate that Article 17 of

the Spanish-Bulgarian Treaty is in force—a result that seems improbable and that would be contradictory.

The position would be the same in the case of other treaties, of the same kind as the 1927 Treaty,

signed between Spain and Poland, Czechoslovakia and Hungary, to mention only a few of these treaties

with countries that might not maintain diplomatic relations.

International practice with regard to the application of the treaties referred to in Article 37 of the

Statute is only of relative value. The practice that would be of real interest in the case of the present

objection would be practice subsequent to the interpretation given in the judgments in the cases

concerning the Aerial Incident and the Temple of Preah Vihear in which the question was raised on two

occasions.

The signatories to the protocols drawn up for the purpose of adapting clauses in treaties referring to

the Permanent Court had no other object than to apply those jurisdictional clauses included in the treaties

—expressly—to the International Court. But they did not raise the question whether Article 37 covered

Members of the United Nations that were parties to the Statute before the dissolution of the Permanent

Court and also new Members of the United Nations after that date. Those protocols referred to all of these

States. Nevertheless, a doubt subsisted as to the field of application of this Article.

Here, the wisdom of the United Nations concurred with the wisdom of the International Court in its

interpretation in the Aerial Incident case, in limiting the application of Article 37 to those States which

were present at the San Francisco Conference. Thus, it was known what States were really going to be

placed under the obligation, without going into situations the effects of which could not be foreseen in

regard to treaties which conferred jurisdiction on the Permanent Court. If such a cautious attitude was

adopted in regard to the declarations referred to in Article 36, paragraph 5, which were clearly limited and

well known, a similar attitude should a fortiori be observed in regard to the jurisdictional clauses included

in a large number of treaties between States parties to the Statute prior to the dissolution of the Permanent

Court.

The interpretation upheld by the Applicant is not supported by the practice of various organs of the

United Nations.


[156] Two important instances cited by the parties may be mentioned, inter alia.

The General Act: The General Assembly's Resolution 268 A (III) of 28 April 1949 was intended to

restore its original efficacy to the Geneva General Act of 26 September 1928. In paragraph (e) this

resolution states that this Act, with the amendments introduced, would be open to accession by the

Members of the United Nations and by the non-Member States which shall have become parties to the

Statute of the International Court of Justice or to which the General Assembly of the United Nations shall

have communicated a copy for this purpose. Such a provision was necessary as the efficacy of the

General Act had been impaired by the fact that the organs of the League of Nations and the Permanent

Court to which it refers had disappeared. This resolution states that the amendments made to the General

Act will only apply as between States having acceded to that Act as thus amended.

Paragraph (c) mentions the amendments to be made to Articles 17, 18,19, 20, 23, 28, 30, 33, 34, 36, 37

and 41, namely the words ‘Permanent Court of International Justice’ shall be replaced by ‘International

Court of Justice’. This precedent shows, beyond all possible doubt, that the General Assembly did not

think it could apply Article 37 of the Statute of the Court in the case of the provisions of the General Act

relating to the Permanent Court. In order to transfer to the International Court the jurisdiction conferred

on the Permanent Court, a new agreement was essential. This meant that Article 37 did not operate. The

Belgian delegation's intervention in the United Nations in support of this resolution was not without its

importance.

If Article 37 does not operate in the case of the General Act, as was admitted by the General

Assembly's Resolution 268 A (III), how can it logically be maintained that Article 37 must operate in the

case of the Spanish-Belgian Treaty of 1927? This Treaty is nothing other than a General Act on a small

scale between two States. The General Act does, in fact, provide for the settlement of disputes between

States by means of conciliation commissions, arbitration and judicial settlement before the Permanent

Court, and the Spanish-Belgian Treaty of 1927 mentions the same means of settlement in regard to

disputes between the two States. If, in order that the General Act may enter fully into force in respect of

the International Court, it is essential that the States which signed and accepted it should make certain

declarations to that effect, there is no reason why the same thing should not be true in the case of the two

States that signed the Spanish-Belgian Treaty. If Article 37 does not bind the States that were signatories

of the General Act to accept the jurisdiction of the International Court, how could that provision bind the

Spanish Government to accept the jurisdiction of that Court?

[157] The General Act adopted by the Assembly of the League of Nations on 26 September 1928

received the accession of Belgium on 18 May 1929 and of Spain on 16 September 1930. Thus the

following situation

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arises. If Belgium invokes this General Act against Spain, it will only be able to do so when the latter

State has signed the amendments made to that Act (General Assembly Resolution 268 A (III)). But, if

Belgium invokes the 1927 Treaty, which is fundamentally identical with the General Act, it will,

according to a certain interpretation of Article 37, be able to do so apart from any other condition. The

same legal situation would thus be governed in two different ways according to whether it is the General

Act or the Treaty that is invoked. It is difficult to agree with such an interpretation, which leads to

contradictory results.

The Constitution of the I.L.O: The revision of the constitution of the I.L.O. was necessary, after the

dissolution of the Permanent Court, in respect of all the provisions in it which referred to that Court. For

the States which were parties to the Statute of the International Court of Justice before the said

dissolution, the transfer provided for by Article 37 was sufficient but, for other States which were not

Members of the United Nations or which became Members subsequently to that dissolution, amendments

were necessary.

In regard to the Advisory Opinion of 1950 on the International Status of South-West Africa and in

the South West Africa cases, it should be noted that the three States concerned in these cases, namely the

Union of South Africa, Ethiopia and Liberia, were original Members of the United Nations. The situation

was similar in the Ambatielos case, both States parties to which were Members of the United Nations

before 18 April 1946. These precedents are therefore by no means conclusive. They are all in line with

the interpretation given in the Judgments in the cases concerning the Aerial Incident and the Temple of

Preah Vihear . This interpretation was upheld also, indirectly, in the Right of Passage case. At the time

when Portugal filed its new declaration of acceptance of the jurisdiction of the Court, that country was

bound by an earlier declaration to which Article 36, paragraph 5, of the Statute applied. The Court took

account only of the later declaration.

In connection with the revision of many conventions conferring jurisdiction on the Permanent Court,

new agreements or protocols were, in all cases, necessary to effect the transfer of that jurisdiction to the

International Court. It was not considered that Article 37 settled the question. In these protocols the

transfer was explicitly provided for with mention of the International Court, and this is an argument in

favour of the Spanish contention.


[158] The interpretation of Article 37 given by third States in their agreements loses much of its

force, particularly if those agreements are prior to the interpretation which the International Court gave of

paragraph 5 of Article 36 of the Statute, which raises the same question as Article 37. If reference is made

to the Agreement of 9 April 1953 between Sweden and Finland, which modifies a convention of 29

January 1926, it will be seen that it makes valid Article 1 of the 1926 Treaty and that this validity does

not depend on the entry of Finland into the United Nations. Indeed, when that State became a Member of

the United Nations in 1955, it was by reason of that fact a party to the Statute of the International Court

but, at that date, the 1926 Treaty, modified in April 1953, had been binding for two years. It was that

Agreement which effected the transformation of the 1926 Treaty, and not. the fact that Finland had

become a party to the Statute. The fact that the procedure adopted was that of the Agreement, and not the

application of Article 93, paragraph 2, of the Charter, gives rise to the supposition that Finland considered

that Article 37 was not sufficient to render applicable the treaties in which acceptance of the jurisdiction

of the Permanent Court was stipulated.

The Statute has provided two normal methods by which States may accept the jurisdiction of the

International Court. The first method is by treaty or convention and the second by a unilateral declaration.

These are the methods mentioned in Article 36, paragraphs 1 and 2.

According to a certain contention, Spain is said to have accepted the jurisdiction of the Court—

implicitly—at the time when the Belgian Government proposed to the Spanish Government a special

agreement as a preliminary step towards bringing the matter before the Court by means of an application.

When the Spanish Government rejected this proposal, it said that Belgium had no jus standi entitling it to

make such a proposal for the protection of a Canadian company and that local remedies had not been

exhausted. From this it is argued that Spain had implicitly recognized the jurisdiction of the Court in

connection with the special agreement that was proposed or submitted. Such is the contention advanced.

As a starting point, the basis adopted must be that the acceptance of the jurisdiction of the Court,

whether by agreement or by declaration, must be ‘clear and unequivocal’ as has been held in the decisions

consistently given hitherto by the Permanent Court and by the International Court. The instruments by

which such an acceptance of jurisdiction is given must be conclusive, decisive and such as to leave no

room for doubt.

46 ILR

[159] As soon as the Belgian proposal came before the Spanish Government, the latter stated quite

clearly that it could not accept this proposal for the reasons already mentioned. It did this because the

Spanish Government did not think it necessary at that stage to examine the question whether Spain was or

was not bound towards Belgium, under any clause whatsoever, in regard to the submission of the case to

the Court. The proposal made by Belgium was rejected outright because of the absence of a basic

requirement, namely Belgium's right to introduce such a claim. Can it be deduced that Spain gave a ‘clear

and unequivocal’ manifestation of its acceptance of the jurisdiction of the Court? Can such acceptance be

established by implication on the basis of implied reasoning? Moreover, what is the legal situation

attributed—under this view—to Spain? Did Spain conclude a tacit agreement to come before the Court or

is Spain held merely to have expressed willingness to accept the jurisdiction of the Court—also by way of

implication? All these questions run counter to the contention advanced.

Hitherto it was a well-established principle that the jurisdiction of the Court must be accepted as

required by the Statute, by explicit and clear manifestations of intention, and not by arguments founded

on suppositions, on doubtful facts and on silences that have to be interpreted. For jurisdiction to be

established, there must be a voluntary, indisputable and indubitable act on the part of the State to which

such an intention is attributed.

One observation must be made on this contention which is dangerous because it would introduce a

new notion of the acceptance of the jurisdiction of the Court by tacit acquiescence or by tacit agreement

—a situation far from compatible with the principle of the Statute according to which acceptance of

jurisdiction must be established by clear and unequivocal act and consent. The jurisdiction of the Court

must not be founded on ambiguous considerations and arguments.

It is maintained that the present objection is incompatible with the earlier attitude of the Spanish

Government. The conclusion is reached that certain paragraphs in the Spanish Note of 30 September 1957

contain a ‘clear and unequivocal’ declaration of the recognition of the jurisdiction of the Court. That Note

is concerned mainly with the proposal made in the Belgian Note of 8 July 1957 for a special agreement

for the purpose of submitting the dispute to the International Court. The divergence in view, as between

the two Governments, centred round the fact that the Belgian Government had not proved that it was

entitled to grant its diplomatic protection to BarcelonaTraction, a Canadian company, without furnishing

evidence of the Belgian nationality of the shareholders of that company.

The question of the interpretation of Article 37 was not raised either in the Spanish Note or in the

Belgian Note mentioned above.


[160] The reference in the Spanish Note to the existence of a jurisdiction binding on both States

relates to the Belgian silence in regard to the fundamental objection advanced by the Spanish Ministry of

Foreign Affairs, in its Notes of 22 December 1951 and 5 January 1952. It is impossible to see how any

explicit recognition can be deduced from the text of an incidental sentence. The reference to jurisdiction

is connected with the question of the jus standi . It must be considered in its context. No jurisdictional

obligation can be inferred from the statement. There is a definite and unequivocal manifestation of

intention in the final summary of this Note given in paragraph 6, which says textually: ‘The above

mentioned Treaty [of 1927] cannot be relied upon for the settlement of a dispute which, for the reasons

indicated, cannot have arisen.’

Moreover, this Note of 30 September does not, in the sentence that is cited, constitute a declaration

of intention. It is clear from this correspondence that the Spanish Government never agreed to the

intervention of the Court in the present case. This position alone is what is important. Belgium's lack of

capacity was not the sole ground for lack of jurisdiction in the Court. From the point of view of the

Spanish Government, this question of capacity was a preliminary one and the question of the Court's

jurisdiction on the basis of Article 37 was neither discussed nor even touched upon.

If this Note Verbale is examined as a whole, the conclusion must inevitably be reached, in the light

of the circumstances which gave rise to it, the proposals which it rejects and the reasons on which its

attitude is based, that the Spanish Government did not in any way, either explicitly or implicitly, accept

the jurisdiction of the Court.

It was only after the Belgian Application and Memorial that the question of preliminary objections

really arose and Spain immediately put forward the preliminary objection relating to the jurisdiction of

the Court. Before that, it was only the jus standi that was under discussion. The use, in the Spanish Note

of 10 June 1957, of the words ‘an alleged dispute’ shows clearly that Spain did not admit the existence of

a dispute. The problem of whether or not any compulsory jurisdiction existed was not discussed in the

Note. The fact that, in its Note of 30 September 1957, the Spanish Government stated that ‘the Treaty

cannot be relied upon for the settlement of a dispute which, for the reasons indicated, cannot have arisen’

implies that any discussion of preliminary objections in the event of Belgium deciding to bring the

dispute before the Court becomes superfluous.

[161] From the moment when Belgium actually brought the Barcelona Traction case before the

Court, or when that possibility was seriously discussed between the Parties, Spain immediately took up

position by

46 ILR

denying that the Court possessed jurisdiction, thereby anticipating the future Preliminary Objection No. 2.

In the Anglo-Iranian Oil Co. case, the International Court gives rules for the grammatical

interpretation of unilateral declarations. This Judgment says:

‘But the Court cannot base itself on a purely grammatical interpretation of the text. It must seek the

interpretation which is in harmony with a natural and reasonable way of reading the text, having due

regard to the intention of the Government of Iran at the time when it accepted the compulsory jurisdiction

of the Court’ (I.C.J. Reports 1952 , p. 104).

Account should not be taken, in isolation, of the literal meaning of words, without regard to the

object and purpose they serve in the document in which they are employed, for it is from this that they

derive a certain value and significance as the expression of the intention of the author. The jurisdiction of

the Court must result from either an explicit declaration or from acts conclusively establishing it. In the

present case there is no explicit declaration and there are no conclusive acts.

In the diplomatic correspondence, the Respondent has never displayed any wish to obtain a decision

on the merits or to raise the question of jurisdiction. It seems evident that an acceptance of the jurisdiction

of the Court cannot be inferred from such an attitude.

ALTERNATIVE PRELIMINARY OBJECTION

In the event of the Court's finding that it possesses jurisdiction by virtue of Article 37 of its Statute

and of its reviving Article 17, paragraph 4, of the 1927 Treaty together with the other provisions which

are in harmony with that Article, the dispute to which the Belgian Government refers could not be

submitted to the jurisdiction of the Court because it arose and relates to situations and facts prior to the

date on which the Court's jurisdiction could have had effect in the relations between Belgium and Spain.

Until the date at which it was revived, the jurisdictional clause was dormant and, in order to be brought

again into force, consent thereto was required, this consent resulting from Spain's entry into the United

Nations.

The date in question must be fixed as at 14 December 1955, that being the date on which Spain was

admitted as a Member of the United Nations. As the dispute was prior to this crucial date, it could not be

submitted to the Court.

[162] The 1927 Treaty, in fact, in its Articles 1 and 2 and in the Final Protocol, is concerned with

disputes that ‘may arise’ between the two States. It cannot be said that the Spanish-Belgian Treaty

indicates


any clear intention to cover all disputes. The jurisdictional clause of Article 17 of the Treaty—paragraph

4, which Article 37 of the Statute revives—does not apply to any disputes whatsoever, but only to

disputes which are subsequent to the date of 14 December 1955. For disputes prior to that date, there is no

applicable jurisdictional clause. The present dispute arose much earlier than 14 December 1955, as is

admitted by the Belgian Government in its diplomatic Note of 16 May 1957. It is clear therefore that

Article 37 could not make the effect of the jurisdictional clause of Article 17 retrospectively applicable to

disputes that arose prior to its coming into force. The Permanent Court said:

‘Not only are the terms expressing the limitation ratione temporis clear, but the intention which

inspired it seems equally clear: it was inserted with the object of depriving the acceptance of the

compulsory jurisdiction of any retroactive effects’(P.C.I.J., Series A/B, No. 74 , p. 24).

In the Mavrommatis case, the Permanent Court said:

‘The Court is of opinion that, in cases of doubt, jurisdiction based on an international agreement

embraces all disputes referred to it after its establishment . In the present case, this interpretation appears

to be indicated by the terms of Article 26 itself where it is laid down that “any dispute whatsoever …

which may arise” shall be submitted to the Court’ (P.C.I.J., Series A, No. 2 , p. 35).

Article 1 of the 1927 Treaty stipulates:

‘The High Contracting Parties reciprocally undertake to settle by pacific means and in accordance

with the methods provided for in the present Treaty all disputes or conflicts of any nature

whatsoever which may arise between Belgium and Spain and which it may not have been possible to

settle by the normal methods of diplomacy.’

The Judgment of the Permanent Court cited above interpreted the phrase ‘any dispute whatsoever …

which may arise’, which corresponds to the text of Article 1 of the Treaty quoted above ‘all disputes or

conflicts of any nature whatsoever which may arise …’, as referring to all disputes arising after the

establishment of the jurisdiction, and this came into force when Spain became a party to the Statute of the

Court. Earlier disputes are therefore excluded from this jurisdiction.

When Article 17, paragraph 4, came into force again, in 1955, the reservations ratione temporis of

Articles 1 and 2 of the Treaty became applicable once more.

46 ILR

[163] In its declarations of 25 September 1925 and 10 June 1948, the Belgian Government followed

the usual practice of limiting its acceptance of the jurisdiction of the Court by a clause ratione temporis ,

in accordance with general international law. It is not conceivable that that Government intended to

depart from or derogate from that practice when it signed the 1927 Treaty. The declarations in question

admit of a clear presumption of Belgium's intention in this matter.

Certain provisions of the 1927 Treaty which had been dormant were brought into force, more

particularly those provisions which mentioned the Permanent Court. It may be said that certain provisions

of the Treaty were brought into force.

The only exception to non-retroactivity admitted by the Protocol is limited by two conditions,

namely (a) that the dispute should relate to the interpretation of a previous treaty still in force, and (b) that

the application challenged should have been initiated before the signature of the 1927 Treaty and should

continue after its signature. These conditions are not relevant to the case now before the Court.

Article 37 does not establish any reservation ratione temporis . It merely brings into force the part

relating to the compulsory jurisdiction established by the 1927 Treaty. It is in the provisions of that Treaty

that the limitations ratione temporis on the jurisdiction of the Court must be sought. These are the

limitations already mentioned.

ON THE JOINDER OF THE THIRD AND FOURTH PRELIMINARY OBJECTIONS TO THE MERITS

On joinder to the merits four points should be borne in mind:

(1) The basis of international jurisdiction is not, as in municipal law, the will of a law-maker, but the

consent of the parties themselves.

(2) It is in the light of that fundamental observation that the effect of the raising of a preliminary

objection by the respondent State must be judged. The respondent is thus exercising its right to have the

Court ascertain as a preliminary matter whether the case for which the applicant has sought to bring it

before the Court is or is not one of those for which it has agreed that the Court should give a decision

where it is concerned. For that reason, when a preliminary objection is raised, the proceedings on the

merits are stopped and can normally be resumed only when the question raised as a preliminary objection

has been decided.

[164] (3) It is always in the light of the basic observation made above


under (1) that the question of the propriety of joining a preliminary objection to the merits must be

examined. As Judge Anzilotti remarked (P.C.I. J., Series D, Third Addendum to No. 2 , p. 647):

‘The joinder of an objection to the merits, which compelled a State to appear before the Court, in

spite of the fact that it claimed not to have accepted any obligation to do so, was in international

proceedings an entirely different matter to the same step in proceedings at municipal law, in which the

obligation to appear before a Court was not dependent on the will of the party concerned .’

Thus, while it certainly cannot be said that the Court needs the consent of the respondent in order to

be able to join a preliminary objection to the merits, it is none the less true that joinder to the merits may

be decided upon only as an absolutely exceptional step. It runs manifestly counter to the respondent's

right not to have the merits of a case discussed unless it has first of all been established that, in one way or

another, its consent has been given to the Court's deciding the case.

Thus the Court can resort to the joining of a preliminary objection to the merits only:

(a) when the parties themselves request it, or

(b) when the question raised as a preliminary objection is so bound up with the question which

constitutes the merits of the case that it is manifestly impossible to decide the one without deciding the

other at the same time.

(4) As regards the validity of such a conclusion, there can be no difference whatever according to

whether the question raised as a preliminary objection is a purely procedural question or a question which

is in itself a question which touches upon substantive law. What is necessary is that it should be a

question separate from that which constitutes the actual merits of the case. Many questions can be in

themselves questions of substance without on that account touching on the merits of the case.

These four points should be borne particularly in mind when taking a decision on the possibility of

joining to the merits a question raised by the respondent State as a preliminary objection. If joinder to the

merits were decided upon in a case where the question could have been decided independently of the

merits of the case, the Court would be going against the very purpose of the institution of preliminary

objections. It would be compelling the respondent to address itself to the whole merits of a case in

connection with which it might subsequently have to hold that, in the end, the respondent had not at all

been bound to do so.

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[165] In the Barcelona Traction case, there is nothing to warrant the suggestion that the third and

fourth objections should be joined to the merits. The idea advanced during the hearings to the effect that

in the present situation the Court should first explore the circumstances of the case which might affect the

Belgian State's jus standi , and take its decision in relation to those circumstances, would be likely to lead

to an absurd situation. What is first necessary is to establish the rule governing the matter. Consideration

should then be given to the question whether that rule ever contemplates the possibility, where prejudice

has been caused to a company by a foreignState, of diplomatic protection being exercised by a State other

than the national State of the company itself. If the Court comes to a negative conclusion, it should quite

simply declare that the Belgian State has no capacity to exercise diplomatic protection in

the Barcelona Traction case, whether it comes forward as the protector of the allegedly injured company

or whether it seeks to act as the protector of the alleged Belgian shareholders of the company. The

circumstances of the particular case cannot in any way modify this conclusion.

According to its terms of reference the Court must apply international law. It must apply a rule of

international law in order to decide questions which are raised as preliminary objections, whether it be the

question of the Belgian Government's lack of capacity or the question of failure to exhaust local remedies.

The very idea of a decision for a particular case , such as seems to be suggested by the Belgian

Government, is inadmissible. Is it possible to conceive of the Court's refraining from ascertaining the rule

of international law which relates to questions under consideration and deciding those questions in

themselves without troubling to determine beforehand what rules must be applied? Or, again, is it

conceivable that after determining those rules it should not apply them to the particular case? This would

not be deciding according to the circumstances of the particular case but inventing and applying to it a

rule different from that laid down by international law and hence patently violating that rule.

It is moreover quite clear that the question of the Belgian Government's lack of capacity can be

decided without going in any way into the merits of the case. The merits of the case consist of the

question whether or not a Canadian company suffered a denial of justice in Spain. Whether the answer to

that question is in the affirmative or in the negative cannot in any way affect the position to be taken on

the question whether or not the Belgian Government has capacity to intervene in the case, either for the

diplomatic protection of the company or for the diplomatic protection of the company's alleged Belgian

shareholders. Nor can it affect the position on the question whether or not Sidro is a shareholder

of Barcelona Traction.

[166] The Belgian Government agreed, both at the time when it submitted its draft special

agreement to the Spanish Government, and later when, after the Spanish Government's refusal, it notified

it of the filing of


its unilateral application, that the question of the Belgian Government's capacity to take action in the case

could and should be decided prior to any consideration of the merits. It will be recalled that the Belgian

Government had even explicitly excluded that question from among those on which a joinder to the

merits might be contemplated. It is not open to it now to take a view different from the one which it took

then. It cannot now claim that the question of the Belgian Government's capacity to take action cannot be

disentangled from the merits of the case, seeing that it asserted the contrary itself at the time of the filing

of the Application.

The two Governments are in agreement that the Court should decide the question whether the

second Application is similar to the first (both are claimed to be concerned with protection

of Barcelona Traction) and the question whether entry in the company's register is evidence of the status

of shareholder. These points, in the view of both Governments, should not be joined to the merits.

The same applies to the question of the exhaustion of local remedies. Whether or not the

adjudication in bankruptcy of Barcelona Traction and its consequences constituted a denial of justice

towards the company cannot alter the fact that the company itself, and the company alone, was able and

bound to make use in due time of the remedies which the Spanish legal system made available to it for the

purpose of challenging the adjudication in bankruptcy. The company did not do so and has therefore lost

the right to complain, at the international level, of a denial of justice which, if it had really existed, could

have been cured at the municipal level and was not so cured solely because of its own negligence. There

is nothing in this finding which could be modified by investigation of the question whether or not the

alleged denial of justice existed, or whether or not the alleged Belgian shareholders in the company

sustained damage to their own interests as a result of the prejudice sustained by the company. It is to the

company and to its directors who failed to take appropriate steps to safeguard the rights and interests of

the company that the shareholders should address their complaints, and not to the Spanish State which has

never had anything to do with them.

It is impossible to see how the Court could derive from an examination of the merits any element

that might be of use for the purpose of a decision on the preliminary objections concerning the Belgian

Government's lack of capacity and the failure to exhaust local remedies. Might not the joinder of these

objections to the merits, in a case where the questions with which they deal are manifestly separate from

and inde