The Chorzow Factory case

The Chorzow Factory case

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The Chorzow Factory Case (Germany v Polland)

Citation- Factory at Chorzow (Germ. v. Pol.), 1927 P.C.I.J. (ser. A) No. 9 (July 26)

Jurisdiction- PCIJ.

Facts-

  • After the First World War due to a bipartite agreement between Germany and Poland; Germany agreed to transfer the control of Upper Silesia area to Poland. On an agreement that Poland would not forfeit any property of Germany, but thereafter Poland forfeited two of German Companies situated at that area.

                Issue – 

  • Whether the court has its jurisdiction over the matter or not?
  • Whether there was any violation of the agreement between Germany and Poland or not?
  • Whether there was an international obligation on Poland due to the breach of the bipartite agreement between Germany and Poland?

                 

            

Judgement

  • The Permanent Court of International Justice has its jurisdiction to try the case.
  • Poland had violated the international agreement between Germany and Poland.
  • Poland would be liable to repair any loss suffered by Germany due to the forfeit of that two company as they violated that international agreement.
  • The rule of Permanent Court of International Justice was very appropriate, which was given in favour of Germany as the attitude of Polish Government towards two German companies was not in conformity with the articles of Convention concerning Upper Silesia, concluded at Geneva on May 15th, 1922 (hereinafter referred as Geneva Convention), thus violating the international agreement by unlawful expropriation of the said companies infering the state responsibility on Poland for reparation for such violation.
  • It is a general principle of International law that every violation of an engagement involves an obligation to make reparation, adopted form municipal law, which is applied in this case along with the principle of state responsibility as a state is considered as an individual entity when comes to an international dispute.
  • The PCIJ adequately justified its reasoning by suo moto bringing all the disputed matters and argument presented before it. 
  • At first, it had justified its jurisdiction which was under question by Poland as raised in respect of res judicata showing Article 23 of Geneva Convention, but the court justified its jurisdiction by referring Article 36 of the Statute of the Court. In order to reason the compensation declared was also justified by Article 6 -22, special by Article 7 of Geneva Convention and by its interpretation.
  • It also interpreted the municipal laws as well as customary international laws with a new view of International law concerning the subject matter of international law.
  • The appropriate interpretation was made by PCIJ in every point, such as the interpretation of Article 36 of the Statute of the Court to justify its jurisdiction. The Article said the parties can go to the court in all or any of the classes of a legal dispute concerning
  • the interpretation of a Treaty;
  • the existence of any fact which, if established, would constitute a breach of an international obligation
  • the nature or extent of the reparation to be made for the breach of an international obligation
  • It brings the general concept of law that every violation of an engagement involves an obligation of reparation and the violation was clarified as Poland violated Article 7 of Geneva convention and illegally expropriate two of German factories. 
  • In this case, the court further interpreted that the expropriating state must, in addition to paying the compensation due in respect of a lawful expropriation, pay also damages for any loss sustained by the injured party.
  • The reasoning that the PCIJ has given is logical and consistent to me. First of all, the court acted interpreting the Geneva Convention, where the parties agreed to come before the court on any violation of the convention.
  • Secondly, as one party denied the jurisdiction of the court citing the concerning law, the court clarified the ambiguity of that matter and the shadow over the jurisdiction became clear.
  • Thirdly, when the court saw the violation of Geneva convention Articles 6 -22, the court ordered indemnity referring the principle of international law, as mentioned by the court, “It is a principle of international law that the reparation of wrong may consist in an indemnity corresponding to the damage which the nationals of the injured State have suffered as a result of the act which is contrary to international law.”
  • Fourthly, It was a question who would indemnify as therefore the court held, in a different plane” to private law, with the claimant State being the one entitled to claim damages.
  • It also noted that it was open for states to create private tribunals to adjudicate private claimants’ claims for breach of international law, but that nothing in Article 23 of the Geneva Convention affected Germany’s entitlement to claim damages in this case”. So the state (Poland) was made liable to indemnify Germany.
  • In the question of whether the expropriation was legal or illegal, the PCIJ held that” this was not a situation where a governmental seizure would have been made “lawful” by simply paying “fair compensation”; it was a seizure of a kind that was banned outright under the 1922 Geneva Convention and would only have been lawful had the treaty’s “exceptional” procedures been followed. Which is the fifth reasoning with adequate logic.
  • Where the indemnity amount is concerned the court gave its reasoning, is the sixth consistent point. The court held “The essential principle contained in the actual notion of an illegal act-a principle which seems to be established by international practice and in particular by the decisions of arbitral tribunals-is that reparation must, as far as possible, wipe out all the consequences of the illegal act and re-establish the situation which would, in all probability, have existed if that act had not been committed. Restitution in kind, or, if this is not possible, payment of a sum corresponding to the value which restitution in kind would bear; the award, if need be, of damages for loss sustained which would not be covered by restitution in kind or payment in place of it-such are the principles which should serve to determine the amount of compensation due for an act contrary to international law”
  • Though the liability, indemnity or reparation, as well as state responsibility, was not questioned but M. EHRLICH, Advocate of Poland has raised some point on his dissenting opinion that the court had ignored some issues as well as some arguments regarding the jurisdiction of the PCIJ, but as far the documents are concerned it is evident in my prospect; the court had considered his arguments with explanations. 
  • So it can be concluded on the question of consideration, that the court did not omit any issues or arguments. Therefore the decision was neither questioned nor weakened. Moreover, it was highly appreciated by jurists all over the world.

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