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[p5] [Majority Opinion]
[Procedural History]
[1] The Government of the Greek Republic, by an Application instituting
proceedings filed with the Registry of the Court on May 28th, 1927, in
conformity with Article 40 of the Statute and Article 35 of the Rules of
Court, has submitted to the Permanent Court of International Justice a suit
concerning the readaptation of the concessions granted to M. Mavrommatis, a
Greek national, under agreements signed between him and the City of
Jerusalem on January 27th, 1914, respecting certain works to be carried out
at Jerusalem, which concessions the Court had, by Judgment No. 5, recognized
as valid and as falling under the terms of Article 4 (and not of Article 6)
of the Protocol signed at Lausanne on July 23rd, 1923, relating to certain
concessions granted in the Ottoman Empire (hereinafter referred to as the
Protocol of Lausanne).
[2] In the Application it is submitted:
"That by delaying, regardless of the undertakings of the High Commissioner
for Palestine, until the month of December, 1926, the approval, which should
have been given in August, of the plans deposited by M. Mavrommatis on the
preceding May 5th, and by thus preventing the putting into execution of the
concessionary contracts concluded on February 25th, 1926, in substitution
for those of 1914 (the validity of which the Court recognized by Judgment
No. 5 and the readaptation of which in accordance with the Protocol of
Lausanne it prescribed), the British Government has not complied with the
terms of the Court's judgment and consequently, in its capacity as Mandatory
for Palestine, has violated its international obligations within the meaning
of Article 11 of the Mandate, as this article has been construed by the
Court;
"That the delays above mentioned and the hostility displayed towards him by
certain British authorities, by rendering it materially and morally
impossible for M. Mavrommatis to obtain the financial assistance
indispensable for the formation of the company for the operation of his
concessions, which he had undertaken to form before February 25th, 1927,
have done him irreparable injury the responsibility for which rests entirely
on the British Government; [p6]
"That the British Government is, consequently, bound to make adequate
reparation for this injury, which is estimated on this date at a total sum
of �217,000, with interest at 6% per annum from the date of filing of this
Application until the date of payment."
[3] In the Case filed with the Court on June 4th, 1927, the Applicant
formulates his submissions as follows:
"(1) That by delaying, regardless of the undertakings of the High
Commissioner for Palestine, until the month of December, 1926, the approval,
which should have been given in August, of the plans deposited by M.
Mavrommatis on the preceding May 5th, and by thus preventing the putting
into execution of the concessionary contracts concluded on February 25th,
1926, the British Government, in its capacity as Mandatory for Palestine,
has not complied with its international obligations under Article 11 of the
Mandate;
"(2) That by these delays and by the hostility displayed towards him by
certain British authorities - which delays and hostility were due to Mr.
Rutenberg's opposition - it was rendered materially and morally impossible
for M. Mavrommatis to obtain the financing of his concessions and that he
has thus unjustly suffered damage, for the reparation of which the British
Government must pay him compensation;
"(3) That having regard to the whole of the damage sustained by M.
Mavrommatis, he should be awarded just and equitable compensation, namely,
the sum of �217,000, together with interest at 6 % from the filing of the
Application until the date of payment."
[4] These submissions have not been amended in the course of the oral
proceedings.
[5] The Application instituting proceedings was, in accordance with Article
40 of the Statute, communicated to the British Government on May 28th, 1927.
On August 9th, 1927, that Government, which as from June 7th, 1927, had had
at its disposal the Greek Case in the suit, filed with the Registry of the
Court, in conformity with Articles 34 and 38 of the Statute, a Preliminary
Objection to the Court's jurisdiction, in which it submitted that the Court
had no jurisdiction and "asked the Court to dismiss the claim of the Greek
Government upon this ground".
[6] Under Article 38 of the Rules of Court, the Greek Government was invited
to submit by August 26th, 1927, a written [p7] statement of its observations
and conclusions in regard to the objection to the jurisdiction taken by the
British Government. In the Reply which was accordingly filed by it to that
objection, the Greek Government, "being convinced that the stand-point of
the British Government is inadmissible in every respect", asks the Court to
"declare the objection to the jurisdiction to be ill-founded", to "dismiss
it" and to "reserve the case for judgment on the merits".
[7] Since, under Article 38 of the Rules, the remainder of the proceedings
must be oral, the Court has, in the course of public sittings held on
September 8th, 9th and 10th, 1927, heard the statements of Sir Douglas Hogg,
His Britannic Majesty's Attorney-General, and of Counsel for the Greek
Government, Professor Gidel and Mr. Purchase, and the reply made by the
former, the Agent for the Greek Government having abandoned the right to
submit an oral rejoinder.
The Facts
[8] The Court has previously had on two occasions to give judgment on
questions concerning the concessions for the supply of water and electricity
at Jerusalem, granted in January, 1914, to M. Mavrommatis by the Ottoman
authorities, that is to say, in Judgment No. 2, of August 30th, 1924, and
Judgment No. 5, of March 26th, 1925. In the first of these judgments the
Court affirmed its jurisdiction to entertain a suit, brought on March 13th,
1924, by the Greek. Government and based on Article 26 of the Mandate for
Palestine, against the British Government, in so far as that suit, which
also related to other concessions which it was alleged that M. Mavrommatis
had obtained in Palestine under the Ottoman r�gime, related to the aforesaid
concessions for works at Jerusalem.
[9] By the second judgment, the Court, in the exercise of the jurisdiction
thus established, decided amongst other things that the concessions in
question were valid, and, in virtue of special jurisdiction conferred upon
it by agreement between the Parties, decided that these concessions fell
within the scope of Article 4 of the Protocol of Lausanne, that is to say,
that the [p8] concessionnaire was entitled to have them put into conformity
with the new economic conditions prevailing in Palestine.
[10] These judgments, which will be analysed later, in so far as they are
relevant to the decision of the preliminary question which is now before the
Court, set out in detail the facts in regard to the Mavrommatis concessions
leading up to the submission to the Court of the Application of March 13th,
1924. In so far as these facts are relevant for the purposes of the present
case, the Court refers to those judgments. The following subsequent facts
have been taken from the documents annexed to the Greek Government's Case:
[11] Following the judgment of March 26th, 1925, the two Governments
concerned took certain steps, commencing in the following May, with a view
to putting the Mavrommatis concessions into conformity with ("readapting")
the new economic conditions. In July, 1925, the experts provided for under
the Lausanne Protocol who were to arrange the terms of readaptation, had
been appointed by the two Parties. It had already at an earlier date become
clear that whereas M. Mavrommatis conceived "readaptation" to mean the
readjustment of the various clauses of the existing concessions, the British
authorities thought that it should take the form of the substitution for the
concessionary contracts obtained in1914 of new contracts, to be signed by
the concessionnaire and by the new authorities of the country.
[12] After lengthy negotiations, the two experts, on December 15th, 1925,
were able to announce that they had successfully completed the work of
bringing the old Mavrommatis concessions into conformity with the new
economic conditions by means of substituting new contracts for the old ones.
The new contracts were duly signed on February 25th, 1926, by M. Mavrommatis
and by the Crown Agents for the Colonies acting for and on behalf of the
High Commissioner for Palestine. The contracts, which were two in number,
related respectively to the water concession and to the electricity
concession. To these agreements was added another, on February 26th, 1926,
authorizing the concessionnaire, notwithstanding the terms of the contracts
of the previous day, to form a single company for the exploitation of the
two concessions.
[13] The contracts of February 25th, 1926, both contain clauses to the
following effect: The concessionnaire absolutely and [p9] irrevocably
surrenders and renounces all rights and benefits in and under the agreements
of 1914, which are henceforth cancelled and annulled; in consideration of
this renunciation the High Commissioner grants the new concessions, provided
always that, within certain specified times, the concessionnaire forms the
companies for the carrying out of the concessions, arranges for the
subscription of a fixed portion of the share capital and submits the plans
for the works; within three months after the receipt of these plans, the
High Commissioner is to notify his approval or disapproval or objections; in
the event of disapproval, a special procedure before experts is provided for
to prevent the possibility of a deadlock.
[14] Before the signature of the concessionary contracts M. Mavrommatis had,
on February 22nd, 1926, already concluded with the Right Honourable Baron
Gisborough an agreement according to which he (M. Mavrommatis) transferred
to the latter, in the capacity of trustee for the company to be formed by M.
Mavrommatis for the exploitation of his future concessions, his rights and
benefits in and under those concessions.
[15] The plans referred to by the contracts of February 25th, 1926, were
despatched to the High Commissioner by Lord Gisborough on the following
April 19th; the High Commissioner acknowledged receipt on May 5th, 1926.
[16] Meantime, the Palestine authorities had on March 5th, 1926, finally
granted to Mr. Pinhas Rutenberg a concession for the supply of electricity
by the utilization of the waters of the Jordan and Yarmouk; this concession
of March 5th, 1926, to which Mr. Rutenberg was entitled under an agreement
of September 21st, 1921, contains a clause (20) which corresponds to the
clause (29) of the draft concession annexed to the aforesaid agreement,
which clause was, according to the Court's Judgment No. 5 of March 26th,
1925, incompatible with M. Mavrommatis' rights; but clause 20 of the final
concession to some extent modifies the scope of clause 29 of the draft, and
the concession of March 5th, 1926, also contains a clause (3 в) reserving
the rights and privileges granted by, amongst others, the concessions
granted in 1914 by the Jerusalem Municipality for electric supply and
electric tramways, and it has not been denied that this reservation refers
to M. Mavrommatis' electricity concession. It should also be mentioned that
[p10] Mr. Rutenberg was the holder of a concession, dated September 12th,
1921, for the utilization of the waters of the river El-Audja for the
generation of electric power and for irrigation works. Relying on this
concession, Mr. Rutenberg objected to permission being given to M.
Mavrommatis to take from this river the water required for the water supply
of the city of Jerusalem. It has, however, been admitted, in the course of
the present proceedings, by both Governments concerned, that this concession
did not confer on the holder the right, should the contingency arise, to
prevent M. Mavrommatis from using the same source for the purposes of his
water concession.
[17] On July 21st, 1926, M. Mavrommatis was informed that his contract with
Lord Gisborough was regarded as an absolute assignment of his concessions, -
an assignment unwarranted under the terms of the contracts, - and that
therefore the deposit of the plans by Lord Gisborough was not accepted as
valid. Having in the meantime - August 31st - determined his agreement with
Lord Gisborough, M. Mavrommatis, on September 4th, requested the High
Commissioner to retain the plans in question as deposited on his, M.
Mavrommatis', behalf. The High Commissioner accepted them as so deposited on
September 5th. Subsequently the plans for the electricity concession were
approved on September 23rd, with certain modifications which were accepted
by M. Mavrommatis on October 7th; on the other hand, the plans for the water
concession were not approved until December 2nd, 1926.
[18] On the previous day, however, December 1st, M. Mavrommatis had notified
the British Government that his plans for the water concession, which he
regarded as deposited on May 5th, should have been approved before August
5th; that the failure to approve the plans within the time fixed constituted
a breach of the agreements for which he would seek damages; and that with
this object in view he was putting himself in communication with his
Government. He confirmed this-communication by a further letter on December
24th, 1926.
[19] Subsequently, as from January 17th, 1927, the Greek Legation in London,
on the instructions of the Greek Government, intervened on behalf of M.
Mavrommatis, expressing the earnest hope that His Majesty's Government would
examine the matter in a conciliatory spirit. On February 19th, 1927, [p11]
however, the Legation hinted at the possibility - failing an amicable
settlement - of again instituting proceedings before the Permanent Court of
International Justice. The negotiations thus begun did not however lead to
an agreement, and on May 23rd, 1927, the Greek Minister in London informed
the Foreign Office of his Government's decision once more to have recourse
to the Court and to submit to it "the differences which had arisen in the
execution of the judgment ... of March 26th, 1925".
[20] As regards the facts set out above and relating to the question now
before the Court, it should be observed that, in accordance with a statement
made in Court on behalf of the British Government, the latter accepts in a
general way, for the purposes of the proceedings on the plea to the
jurisdiction, the facts as given by the Greek Government in its Case.
The Law
[21] Before beginning the examination of the grounds on which the British
Government disputes the Court's jurisdiction, it will be well to state in
what the submissions of the Greek Government in reality consist -
submissions which, in the contention of the British Government, the Court
has no jurisdiction to entertain.
[22] The Greek Government having in its Case amended the submissions of the
Application, the Court takes as the basis of its examination the submissions
of the Case, which are the submissions made in the last document upon which
the opposite Party has been able to base his objection.
[23] The submissions in question may be summarized as follows.
[24] It is submitted:
(1) that the British Government, by delaying, regardless of the undertakings
of the High Commissioner for Palestine, the approval of the plans submitted
by M. Mavrommatis, and by thus preventing the putting into execution of the
concessionary contracts of February 25th, 1926, has, in its capacity as
Mandatory for Palestine, violated the international obligations incumbent
upon it under Article 11 of the Mandate as [p12] construed by the Court; (2)
that M. Mavrommatis, by reason of the delays and hostility encountered by
him in his dealings with certain British authorities, has unjustly suffered
damage for which the British Government is entirely responsible; and (3)
that the British Government is bound to make adequate reparation, which is
estimated at �217,000, with interest at 6 % from the date of the application
until the date of payment.
[25] The arguments advanced by the British Government in support of its
objection to the Court's jurisdiction are as follows:
[26] In the first place and in so far as concerns the Greek Government's
contention in its Application that the British Government has not complied
with Judgment No. 5 (by which the Court recognized the Mavrommatis
concessions as valid and decided, in accordance with the Protocol of
Lausanne, that they were to be readapted), the British Government objects
that there is no provision giving the Court jurisdiction to decide whether
one of its judgments has or has not been complied with.
[27] In the second place and in so far as concerns the Greek Government's
contention that the British Government, by preventing the putting into
operation of the concessionary contracts concluded between the Palestine
Administration and M. Mavrommatis on February 25th, 1926, has not complied
with the international obligations assumed by the Mandatory, under Article
11 of the Mandate, and consequently has violated the terms of that article,
the British Government objects that, under Article 11 of the Mandate, the
Court only has jurisdiction to deal with an alleged breach of the
international obligations of the Mandatory in so far as such breach results
from the manner in which the Palestine Administration has exercised its full
power to provide for public ownership or control of any of the natural
resources of the country, or of the public works, services or utilities
established or to be established therein. Now, the British Government says,
there has been no exercise of this power, for no right conflicting with
those of M. Mavrommatis has been granted to Mr. Rutenberg, and the fact that
there has been delay in the approval [p13] of the plans, even if such delay
were due, as contended by the Greek Government, to the hostility of Mr.
Rutenberg or of certain British or Palestine officials towards M. Mavromatis,
cannot be regarded as an exercise of this power.
[28] In the third place, and in so far as the violation of Article 11 of the
Mandate, alleged by the Greek Government to have taken place, is said to
arise from the violation of the Protocol of Lausanne, the British Government
objects that this Protocol, in itself, does not confer any jurisdiction upon
the Court, and that, in any case, it does not apply in the present matter,
as it only relates to the concessionary contracts concluded between M.
Mavrommatis and the Turkish authorities in 1914, which contracts have, by
common consent of the Parties, been expressly annulled and replaced by those
concluded by M. Mavrommatis with the Palestine Administration on February
25th, 1926.
[29] In the alternative, the British Government argues that even if the
present dispute were covered by an international instrument involving that
Government's consent to the reference of the dispute to the Court, the
application should be rejected by reason of the non-fulfilment of a
necessary condition precedent, namely, the submission by M. Mavrommatis of
his claim to the Courts of England or Palestine which are competent to
adjudicate thereon under the municipal law of both countries.
[30] As regards the first point, it should be observed that the Greek
Government, in its Reply to the Preliminary Objection to the Court's
jurisdiction, contends that it is wrong to say that its claim is mainly and
fundamentally based on the nonfulfilment of the terms of Judgment No. 5 ; it
states that its claim is based solely on the British Government's disregard
- in its capacity as Mandatory for Palestine - of its international
obligations under Article 11 of the Mandate. Moreover, no special conclusion
appears to have been drawn by the Greek Government from the alleged
nonfulfilment of the terms of Judgment No. 5, and this point of view has
been entirely dropped in the oral proceedings. [p14]
[31] In these circumstances, the Court does not find it necessary to
consider the question whether, in certain cases, it might have jurisdiction
to decide disputes concerning the non-compliance with the terms of one of
its judgments.
[32] Before proceeding to examine the other arguments put forward by the
British Government, the Court feels called upon to observe that, although
the present suit at first sight would seem to be a continuation of the case
decided by Judgments Nos.2 and 5, it does not follow from this circumstance
that the jurisdiction accepted by the Court in Judgment No. 2 also exists as
regards the present case. For this case concerns facts which have occurred
since these judgments were given, and the solution of the question now
before the Court depends upon the nature of these facts in relation to the
clauses governing the Court's jurisdiction in the present suit.
[33] As regards the second argument put forward by the British Government in
support of its Preliminary Objection, reference should be made to the
construction already placed by the Court upon Articles 11 and 26 of the
Mandate for Palestine. For that construction, which is to be found in the
Court's Judgments Nos. 2 and 5, already referred to, must undoubtedly be
taken into account in the decision of the present case. The Application of
May 28th, 1927, in fact, reproaches the British Government for having failed
to carry out its international obligations precisely in regard to
concessions which the British or Palestine authorities had granted to M.
Mavrommatis in accordance with Judgment No. 5, and this - in the contention
of the British Government - in order to replace concessions in regard to the
disputes concerning which the Court had, in Judgment No. 2, declared itself
to have jurisdiction. Again, the Court, which in Judgment No. 2 considered
for the first time its jurisdiction under Articles 26 and и of the Mandate,
examined these articles in that judgment from a general point of view. In
the last place, the Parties have in the present [p15] case, and more
especially in the oral proceedings, discussed almost exclusively the
construction placed by the Court on those articles in Judgments Nos. 2 and
5.
[34] The articles in question are as follows:
Article 11. - "The Administration of Palestine shall take all necessary
measures to safeguard the interests of the community in connection with the
development of the country, and, subject to any international obligations
accepted by the Mandatory, shall have full power to pro-vide for public
ownership or control of any of the natural resources of the country or of
the public works, services and utilities established or to be established
therein. It shall introduce a land system appropriate to the needs of the
country, having regard among other things to the desirability of promoting
the close settlement and intensive cultivation of the land.
"The Administration may arrange with the Jewish Agency mentioned in Article
4 to construct or operate, upon fair and equitable terms, any public works,
services and utilities, and to develop any of the natural resources of the
country, in so far as these matters are not directly undertaken by the
Administration. Any such arrangements shall provide that no profits
distributed by such Agency, directly or indirectly, shall exceed a
reasonable rate of interest on the capital, and any further profits shall be
utilized by it for the benefit of the country in a manner approved by the
Administration."
Article 26. - "The Mandatory agrees that, if any dispute whatever should
arise between the Mandatory and another Member of the League of Nations
relating to the interpretation or the application of the provisions of the
Mandate, such dispute, if it cannot be settled by negotiation, shall be
submitted to the Permanent Court of International Justice provided for by
Article 14 of the Covenant of the League of Nations."
[35] The Court, in Judgments Nos. 2 and 5, and on the basis of the
development of the provisions of the Mandate and of the Treaties of S�vres
and Lausanne, has decided that the [p16] "international obligations accepted
by the Mandatory", within the terms of Article 11, are constituted by the
Protocol of Lausanne; but it has expressly stated that the jurisdiction
bestowed upon it by Article 26 of the Mandate only covers the interpretation
and application of the Protocol in so far as the Mandatory, in the exercise
of the full power conferred upon him by Article 11, subject to the
international obligations above mentioned, may have disregarded the
obligations accepted by him in signing the Protocol. The jurisdiction
possessed by the Court as concerns the interpretation and application of the
terms of the Mandate does not, therefore, extend to the provisions of the
Protocol of Lausanne, except in relation to Article 11 of the Mandate.
[36] The full power, as regards the exercise of which Article 11 makes a
reservation, is a full power "to provide for public ownership or control of
any of the natural resources of the country or of the public works, services
and utilities established or to be established therein". Since, in the case
decided by Judgments Nos. 2 and 5, the question of "public ownership" did
not arise but only that of "public control", the Court confined itself to
the interpretation of the latter conception.
[37] In this respect, it came to the conclusion that "public control" means
an economic policy consisting in subjecting, in one way or another, private
enterprise to public authority. This expression, in Article 11, serves to
define a situation which, although it does not take the legal form of
ownership, enables the public authorities to exercise certain powers
normally inherent in ownership.
[38] It follows that, within the limits fixed by Article 11, power to
provide for public control does not mean all the rights generally recognized
as belonging to any public administration for the safeguarding of public
interests; and that the conception of "public control" must be construed in
relation to Article 11 and to the programme for economic development
contemplated therein. It also follows that the question whether, in a given
case, there has been an exercise of the full power to provide for public
control is essentially a question that can only be decided for each
particular case as it arises. [p17] That is why the Court, in Judgment No.
2, confined itself to establishing that the High Commissioner for Palestine,
when he granted to Mr. Rutenberg, on September 12th, 1921, a concession for
electricity and irrigation in the district of Jaffa, and when he undertook,
by a contract concluded on September 21st, 1921, also with Mr. Rutenberg, to
grant to the latter a concession for the exploitation of the hydraulic power
of the Jordan and the Yarmouk, was exercising this full power. The Court
came to this conclusion, more particularly because these concessions, which
directly or indirectly secured to Mr. Rutenberg a monopoly, were to be
worked by companies the formation of which could only be approved by the
High Commissioner with the advice and co-operation of the Jewish Agency,
which was provided for under Article 4 of the Mandate as a public body
designed to cooperate with the Palestine Administration. And the
participation of this Agency in the development of the natural resources of
the country and in the construction or operation of any public works,
services and utilities is precisely contemplated by Article 11 of the
Mandate.
[39] Such are the special circumstances which in the Court's opinion have
endowed the grant of the Rutenberg concessions with the character of an
exercise of the full power to provide for "public control"; but Judgment No.
2 does not fail to state very clearly that the grant of a concession does
.not in itself constitute an exercise of the full power in question. The
right reserved in certain circumstances to the authorities in respect of
concessionary undertakings, either by means of administrative regulations or
by clauses inserted in the concessionary contracts, to exercise powers of
advice and supervision, does not come within the conception of "public
control" as used in Article 11.
[40] The Court, after satisfying itself that the Rutenberg concessions of
1921 at least partially overlapped the concessions which were obtained by M.
Mavrommatis in 1914 and which, by reason of the date of grant, fell under
the terms of the Protocol of Lausanne, accepted jurisdiction in so far as
the application of 1924 related to these Mavrommatis concessions. Further,
in Judgment No. 5, it decided that Article 29 of the concession promised to
Mr. Rutenberg by the contract of [p18] September 21st, 1921, was
incompatible with the principle established by the Protocol of Lausanne to
the effect that concessions granted by the Turkish authorities before
October 29th, 1914, were to be maintained. Only in so far as such
incompatibility existed was the Court, in virtue of the jurisdiction which
it derives under Article 26 of the Mandate, able to find that there had been
a breach of the "international obligations accepted by the Mandatory" and
consequently a breach of Article 11 of the Mandate.
[41] In the same connection, the Court stated that it was in virtue of an
agreement arrived at between the Parties in the course of the proceedings
that it gave a decision upon the question whether Article 4 or Article 6 of
the Protocol of Lausanne was applicable to those concessions of M.
Mavrommatis, which were to be maintained under the first Article of the
Protocol. In regard to this point, the Court also observed that it could
only consider other disputes in regard to the application of Articles 4 and
6 of the Protocol of Lausanne in virtue of a further agreement between the
Parties "unless such disputes resulted out of the grant of the Rutenberg
concession, and to this extent fell within the scope of the jurisdiction
obtained, as indicated above, from Articles 26 and и of the Mandate" ; the
same considerations no doubt hold good as regards the whole Protocol.
[42] It is therefore clear that, according to the construction of Articles
11 and 26 of the Mandate established by the Court in Judgments Nos. 2 and 5,
in all cases where an alleged breach of the Protocol of Lausanne is the
outcome of the exercise of the full power given by Article 11 to provide for
"public control", but in these cases only, the Court has jurisdiction under
Article 26 of the Mandate to deal with such a breach.
[43] The Court sees no reason to depart from a construction which clearly
flows from the previous judgments the reasoning of which it still regards as
sound, more especially seeing that the two Parties have shown a disposition
to accept the point of view adopted by the Court.
[44] Certain statements made in this connection by the representative of the
Greek Government, however, rather tend to [p19] place on Judgment No. 2 an
other interpretation than the one accepted by the representative of the
British Government. The Court having - as has been stated above - indicated
in that judgment that the grant of a concession of public utility is not an
exercise of the power to provide for public control within the meaning of
Article 11, but that the grant may be accompanied by measures which give it
that character, the representative of the Greek Government seems to have
held that not only would the grant of a concession of public utility always
constitute an exercise of public control, but that any act performed by the
administration in connection with the grant of a concession would also have
the same character. In regard to this, it will however suffice to say that
if that was really his meaning, it would seem to be contrary to the doctrine
enunciated in Judgment No. 2 and summarized above.
[45] In considering the second argument put forward by the British
Government in support of its objection to the Court's jurisdiction, it
therefore remains to ascertain whether the facts alleged by the Greek
Government in support of its claim constitute an exercise of the "full power
to provide for.. public control" under Article 11 of the Mandate.
[46] The main fact relied on by the Greek Government in this connection is
the alleged delay of the High Commissioner in approving the plans which M.
Mavrommatis had to submit under the contracts of February 25th, 1926. For
the reasons set out above, it is unnecessary for the moment to consider
whether this delay would have constituted a breach of the Protocol of
Lausanne, because the first question which arises is - as has already been
stated - whether there has been an exercise of the full power mentioned in
Article 11. In this respect, the following points must be considered:
[47] The grant of the new Mavrommatis concessions and all other steps taken
with a view to the readaptation of the old concessions, do not, for the
reasons already set out, constitute an exercise of the full power in
question. Notwithstanding the numerous powers reserved to the authorities in
the 1926 concessions, the latter contain nothing which, according to the
[p20] criteria adopted in Judgment No. 2 and retained in the present
judgment, constitutes an exercise of the full powers referred to, because
the powers reserved all fall within the category of administrative powers in
respect of private undertakings to which public services are conceded, and
they therefore do not suffice to give the concessions in question the
character of an exercise of the full power to provide for "public control",
within the meaning attributed to that expression by the Court in Judgment
No. 2. It is impossible, therefore, for any violations of the Protocol of
Lausanne which may have been committed in the course of the readaptation and
by the grant of the new concessions, to be brought within the Court's
jurisdiction, as defined by Article 26, on the ground of the exercise of the
full power mentioned in Article 11.
[48] Assuming that the attitude of the British and Palestine authorities,
which is said to have resulted in the alleged delay, were not legally
justifiable, or even were of an entirely arbitrary character, the
non-approval of the plans within the time laid down - whether it should be
regarded, as argued by the British Government, as a ground for the
contention that the terms of the contract, having duly come into effect,
have been infringed, or, as argued by the Greek Government, as a ground for
maintaining that the contract had ceased to be effective - would not in any
case constitute an exercise of the full power to provide for "public
control".
[49] Being satisfied as to this point, the Court must still ascertain
whether any concessions granted in the exercise of the said full power -
and, in the present case, the only concessions which enter into question are
those of Mr. Rutenberg - constituted a legal obstacle to the approval of the
plans within the required time. If that had been the case, M. Mavrommatis'
rights would have been violated by the mere fact of the existence of these
concessions, and, although the delay would merely have made manifest the
violation, the Court might nevertheless have had jurisdiction. But the Greek
Government does not base its conclusions on an alleged incompatibility
between the Mavrommatis and Rutenberg concessions.
[50] What the Greek Government really reproaches the British Government
with, in respect of the latter concessions, is that the [p21] British and
Palestine authorities profited, in its contention, by Mr. Rutenberg's
opposition to M. Mavrommatis' utilizing the waters of the El-Audja for his
water concession, in order to delay the approval of the plans for that water
concession, and that they did not, according to the Greek Government, in
order speedily to overcome Mr. Rutenberg's opposition -which the British
Government now declares to be unjustified - postpone the final grant to Mr.
Rutenberg of the concession promised to him by the contract of September
21st, 1921, for the exploitation of the hydraulic power of the Jordan and
Yarmouk. This final grant which took place on March 5th, 1926, may be
regarded as an act performed in the exercise of the full power referred to
in Article 11. If it had been argued that the concession thus granted
overlapped, at least partially, M. Mavrommatis' concessions and infringed
the latter's rights, the Court would, in this respect, have been confronted
with a situation resembling that with which it had to deal in its Judgment
No. 2.
[51] But in the present case, the situation is essentially different. All
that the British and Palestine authorities are reproached with is that they
did not refuse to grant this concession until Mr. Rutenberg had abandoned
his claim to exclude M. Mavrommatis from utilizing the El-Audja. The
reservation made by Article 11 in regard to international obligations may -
according to the context - only be intended to prevent rights, acquired by
private persons and protected by the Protocol of Lausanne, from being
disregarded in order to render possible or easy the acquisition or exercise
of public ownership or of public control; but it cannot be maintained that
this reservation obliges the Mandatory to take advantage of negotiations in
progress with the holder of a concession to be granted in the exercise of
this full power, in order to bring pressure to bear upon him in favour of
another concessionnaire, who claims to be protected by the Protocol of
Lausanne.
[52] In point of fact, the Greek Government does not accuse the British
Government of having violated M. Mavrommatis' rights by definite action
taken under Article 11; it is rather a question of a passive and negative
attitude, which is said to constitute the "hostility" referred to in the
second submission of the Greek Case as the cause of the unjust injury which,
in the Greek Government's contention, has been inflicted. [p22]
[53] In the Court's opinion - even admitting that the exercise of the full
power mentioned in Article 11 may also take the form of action designed to
set aside private ownership and control, thus making possible the
acquisition of public ownership and control - , there is no need to consider
this hypothesis, seeing that, even prima facie, the contentions of the Greek
Government do not seem capable of establishing the existence of acts of this
nature. In actual fact, however, the assertion that "hostility" has been
displayed towards M. Mavrommatis, as made before the Court, simply amounts
to the suggestion of a reason for the alleged violation of the 1926
contracts or the alleged failure to carry out those contracts.
[54] The Court therefore arrives at the conclusion that that argument put
forward by the British Government in support of its objection to the Court's
jurisdiction which has just been examined, is well founded.
***
[55] Accordingly, the Court need not concern itself with the third argument
set out by the British Government to the effect that the international
obligations which are referred to by Article 11 of the Mandate and which are
those arising under the Protocol of Lausanne, have nothing to do with the
Mavrommatis concessions of 1926. Indeed, as the Court has expressly stated
in Judgments Nos.2 and 5, that Protocol can only be applied by it upon a
unilateral application in so far as is required by Article 11 of the
Mandate. It was accordingly in virtue of the agreement between the Parties
that the Court, in Judgment No. 5, dealt with the question whether the
Mavrommatis concessions of 1914 fell to be dealt with under Article 4
instead of under Article 6 of the Protocol. As Article 11 of the Mandate has
no bearing upon the present case, the question of applicability of the
Protocol of Lausanne is entirely outside the ground for jurisdiction invoked
by the Greek Government's Application: only in virtue of a subsequent
agreement could the Court consider the question whether there has or has not
been a breach of that Protocol arising out of the facts cited in the
Application of May 28th, 1927. [p23]
[56] In these circumstances, the Court is also not called upon to consider
certain points of municipal law bearing upon the provisions of the
concessionary contracts of 1926, although these points were discussed at
length by the Parties; for they would only be of importance in connection
with the present question if the Court had to ascertain what is the
relation-ship between the contracts and the Protocol of Lausanne.
***
[57] Similarly, the Court need not consider the legal effect of the
alternative ground for the objection taken by the British Government. It
will confine itself to recording the statements made at the hearing by the
representative of that Government, to the effect that it is open to M.
Mavrommatis to obtain reparation by process of law for the damage which he
claims to have suffered as a result of the nonfulfilment of the obligations
towards him which the High Commissioner for Palestine had accepted under the
contracts of February 25th, 1926.
[58] For These Reasons, The Court, having heard both Parties, by seven votes
to four, upholds the Preliminary Objection taken by His Britannic Majesty's
Government in Great Britain denying the Court's jurisdiction to entertain
the Application filed by the Greek Government on May 28th, 1927, against the
aforesaid Government in its capacity as Mandatory for Palestine.
[59] Done in French and English, the French text being authoritative.
[60] At the Peace Palace, The Hague, this tenth day of October one thousand
nine hundred and twenty-seven, in three copies, one of which is to be placed
in the archives of [p24] the Court and the others to be forwarded to the
Agents of the Governments of His Britannic Majesty and of the Greek Republic
respectively.
(Signed) Max Huber,
President.
(Signed) �. Hammarskj�ld,
Registrar.
[61] M. Pess�a, Judge, who had sat from the commencement of the session,
took part in the discussions relating to the present suit, but was obliged
to leave The Hague before the final draft was accepted; he declared he was
unable to agree to the conclusions of the judgment, the Court having, in his
opinion, jurisdiction.
[62] MM. Nyholm and Altamira, Judges, and M. Caloyanni, National Judge,
declaring that they are unable to concur in the judgment delivered by the
Court and availing themselves of the right conferred on them by Article 57
of the Statute, have delivered the separate opinions which follow hereafter.
(Initialled) M. H.
(Initialled) A. H. [p25]
Dissenting Opinion by M. Nyholm
[Translation.]
[63] The present case is now before the Court only for a decision on the
question of jurisdiction. The merits, therefore, namely, the claim for
damages to be paid to M. Mavrommatis by the Mandatory for Palestine, in
consequence of having prevented the readaptation of M. Mavrommatis' Turkish
concession, which readaptation had been decreed by the Court (Judgment No. 5
of March 26th, 1925), have not now to be considered. Giving the case the
degree of simplicity which it should have at the present stage, it is only
necessary to consider the Mandatory's plea to the effect that the Court has
no jurisdiction to entertain the suit.
[64] Before approaching this question, it should be observed that in a suit
brought in 1924 by the Greek Government (a suit of a nature entirely similar
to the present one), the Court declared itself to have jurisdiction in
Judgment No. 2 of August 30th, 1924, and in so doing expressly based its
jurisdiction on Article 11 of the Mandate for Palestine of July 24th, 1922.
***
[65] In order to determine the scope of the jurisdiction obtained by the
Court from the Mandate for Palestine, which is the sole source of the
Court's jurisdiction to consider the Mandate, regard must be had (1) to the
character of the Mandate and especially to the reasons which led the League
of Nations to insert in the Mandate a clause giving jurisdiction to the
Permanent Court of International Justice, and (2) to the structure of the
Mandate in order to ascertain in what manner, by which articles of the
Mandate and within what limits, this jurisdiction has been established. Ad
(1): As regards the first point, the historical development of the Mandate
system shows that the mandatory Powers were to carry out this task under the
control of the League of Nations to which they were bound to submit annual
reports. [p26]
[66] The institution of this control was due to the fact that the Powers did
not wish to leave a mandatory at liberty to govern mandated territories
entirely at his discretion. Certain limits were to be fixed, not only with a
view to harmonizing the principles established under the various mandates,
but also with a view to establishing special rules in regard to each
country, that is to say, a guarantee that the administrations should act in
accordance with the principles adopted in the interests of the community of
nations by the Covenant.
[67] The guarantee which offered itself consisted in conferring on the Court
- a new international institution - jurisdiction to decide any questions
regarding the interpretation and application of the Mandate.
[68] Mandatories were not to infringe the rights either of States or of
individuals. Each State therefore has a right of control which it may
exercise by applying to the Court. It is true that there is no provision
giving the Court jurisdiction as regards the relations between individuals
and the mandatory, but it is to be presumed that, if a subject of a certain
State suffered injury, his government would, if necessary, take action on
his behalf. When a suit is conducted between a mandatory and another Member
of the League of Nations, regarding a question of interpretation or
application - which is precisely the case in the present suit - , Article 26
of the Mandate gives the Court jurisdiction. This article is also recognized
by the judgment given today to be the general basis of the Court's
jurisdiction. But whereas the judgment seeks to limit this jurisdiction on
the basis of Article 11 of the Mandate, it may be shown that this article
contains no rule in regard to jurisdiction.
[69] Turning next to point (2): This follows from an examination of the
structure of the Mandate. The latter contains, apart from various paragraphs
of no importance from the point of view of the present case, Article 26
which lays down the general rule in regard to jurisdiction, and Article 1
which relates to the administration of the Mandatory. Article 1 says:
"The Mandatory shall have full powers of legislation and of administration,
save as they may be limited by the terms of this Mandate." [p27]
[70] These limits were necessary with a view to the control of legislation
and administration. They are laid down in the following articles - 2 to 23 -
which give special instructions regarding the exercise of his power by the
Mandatory. Thus Article 2 relates to the creation of a national home, and
the following articles relate to various matters such as emigration,
nationality regulations, the establishment of a judicial system, etc.
Article 11, with which the present case is specially concerned, refers to
the necessary measures to be taken by the Mandatory, "for the development of
the country".
[71] In order to enable the case to be properly understood, it will be well
at this point to reproduce the text of Article 11 in full:
Article 11. "The Administration of Palestine shall take all necessary
measures to safeguard the interests of the community in connection with the
development of the country, and, subject to any international obligations
accepted by the Mandatory, shall have full power to provide for public
ownership or control of any of the natural resources of the country or of
the public works, services and utilities established or to be established
therein. It shall introduce a land system appropriate to the needs of the
country, having regard among other things to the desirability of promoting
the close settlement and intensive cultivation of the land.
"The Administration may arrange with the Jewish Agency mentioned in Article
4 to construct or operate, upon fair and equitable terms, any public works,
services and utilities, and to develop any of the natural resources of the
country, in so far as these matters are not directly undertaken by the
Administration. Any such arrangement shall provide that no profits
distributed by such Agency, directly or indirectly, shall exceed a
reasonable rate of interest on the capital, and any further profits shall be
utilized by it for the benefit of the country in a manner approved by the
Administration."
[72] Upon examining the text of this article, it will be seen that it forms
part of the series of indications laid down for the [p28] Mandatory in
Articles 2 to 23. It deals with the particular subject: "the development of
the country". This development is supposed to be based upon the exploitation
of the natural resources of the country, that is to say, of public works,
services and utilities, such as tramways, railways, electricity and water
works, ports, etc. The article also mentions as a special point the
introduction of a land system appropriate to the needs of the country.
Again, it adds that in carrying out this programme, the Mandatory will have
full power to make arrangements, in order that, as far as possible, these
public works shall be exploited by the State, or, at all events, subjected
to government control. If the word "full" is not a mere pleonasm, it is
perhaps intended to emphasize that the intention is that the Mandatory
should make every effort to obtain ownership of or control over public
enterprises, in accordance with modern ideas. That that is the intention and
aim expressed in the first paragraph, appears indirectly from the second
paragraph. The article therefore simply lays down the following general
indication for the Mandatory : in the first place, it is desirable that the
exploitation of public works should be in the hands of the State and that in
any case government control should be procured by inserting appropriate
articles in the concessions which form the bases of the development of the
resources of the country. Understood in this way, the interpretation of the
article becomes simple; but this simple construction is not adopted in the
judgment, which regards the article as containing rules concerning
jurisdiction. This view has perhaps been taken to some slight extent on the
basis of the French text which uses the word d�cider; this, however, is an
inadequate translation, hardly in accordance with the intention of the
clause of the English phrase "provide for", which here would be better
translated by avoir soin d'�tablir. Article 11 indeed contains no provision
regarding jurisdiction. The Court confines itself to saying (Judgment No. 2,
page 18) that it "feels that the present judgment should be based
principally on the first part of paragraph 1 of Article 11". It is not easy
to see on what basis the judgment succeeds - without other commentaries - in
establishing that the jurisdiction of the Court is determined in Article и
and precisely by, the phrase to the effect that the Mandatory [p29] acts in
the exercice of his full power to provide for public ownership or control.
These words are certainly not intended here to serve as a basis for a
jurisdictional rule. They constitute in themselves a vague criterion. The
judgment admits that "the exercise of full power to provide for public
control" is essentially a question to be decided in each case as it arises,
and the interpretations of a somewhat restrictive character which have to be
placed upon them in order to apply them are often of a subtle character
which is in contrast to the clearness which should govern the important
question of jurisdiction.
[73] The judgment thus finally says that the grant of a concession providing
for public control does not in itself constitute an exercise of the "full
power" in question, but that the special circumstances of each case must be
considered; that jurisdiction is restricted to the actual grant of the
concession, but that it does not in principle extend to cover the subsequent
exercise of the control provided for in the concession; this appears to
constitute an obstacle to a reasonable application of the rules of
jurisdiction. The judgment then, basing the jurisdiction of the Court on the
phrase in Article 11, which is not calculated to form a basis for
jurisdiction, arrives successively at a number of hardly admissible
conclusions.
[74] Thus it says that the Mavrommatis concessions of 1914 do not fall
within the scope of the article and that the Court can only deal with them
in so far as they are affected by the Rutenberg concessions.
[75] Although the Mavrommatis concessions may not have been granted by the
Mandatory but previously by Turkey, the Mandatory is, concerned with them,
since he must bring them definitely into existence by readapting them, and
that, in order to fulfil the international obligations set out in Protocol
XII.
[76] As regards this Protocol, the judgment concludes that, subject to a few
particular cases, it cannot come into account except in pursuance of an
agreement between the Parties, because the Protocol does not contain any
special rule relating to jurisdiction. In Judgment No. 2, however, it was
stated, with regard to a discussion relating to the origin of the Protocol
(page 31), that the Protocol is the complement of the provisions of the
Mandate in the same way as a set of regulations alluded to in a law
indirectly form part of it. [p30]
[77] Moreover, the agreement does not possess a formal character but appears
to be deduced from a few phrases which appear in the pleadings. Furthermore,
Judgment No. 2 only contains a vague allusion to the necessity of an
agreement, and it is only Judgment No. 5 which contains a statement relating
to it; but this judgment cannot restrict the jurisdiction established by a
previous judgment.
[78] The development of the theory which bases jurisdiction upon Article 11
thus, as a consequence, provides an entirely vague criterion, dependent in
each case upon a restrictive interpretation as regards jurisdiction, whereas
precise terms were necessary in order to establish an exception to the
general rule of Article 26.
[79] This rule establishes as a guarantee for the Powers a system of control
which ensures that the Mandatory will act in conformity with the provisions
of the Mandate.
[80] The intention underlying the Mandate was certainly not that the clear
general rule as to jurisdiction inscribed in Article 26 concerning any
question of "interpretation and application" of the Mandate should be
capable of being overruled by specific interpretations of the different
articles.
[81] The same ground which enables the judgment to find in Article 11 a
restriction upon the jurisdiction would enable also to find such a
restriction in the other articles of the Mandate, and the result would be
that the Mandatory would become more or less free from control by the
Powers.
[82] Other consequences which it is difficult to admit may also be deduced
from the theory upon which the judgment is founded. According to this
theory, the jurisdiction of the Court is confined to the cases in which one
can discern an action on the part of the Mandatory which consists of the
exercise of a certain power of control. As regards any other action on the
Mandatory's part, the Court would have no jurisdiction.
[83] In the case under consideration the actions by the Mandatory which are
in question have not regard to the grant of a concession, but are actions
which would result in the annulment of the rights of M. Mavrommatis to
obtain a definite concession. As regards these actions, the Court would thus
have no jurisdiction. It is obvious that the Mandatory may choose [p31] the
methods of taking action that he wishes, but it follows that by the choice
of his own line of action a mandatory may abolish the jurisdiction of the
Court, an inadmissible proposition. Moreover, generally speaking, it may be
said that if the jurisdiction of the Court, set up as a guarantee for the
nations, is found, as regards concessions, to be limited to the sole grant
of such a concession, and this having regard to the special conditions
particular to each case, and according to the surrounding circumstances of
such grant, this is a conclusion which appears to be inacceptable. Indeed,
the jurisdiction of the Court as regards the Mandate should be general,
subject to specific exceptions. The reason underlying the judgment admits
the jurisdiction of the Court as an exception, which signifies in reality a
cancellation of Article 26.
***
[84] The demonstration which precedes will not be followed up by a detailed
examination of the judgment. It is only necessary to point out that even the
reasoning of the judgment leads to the acceptance of jurisdiction by the
Court. In reality the present case is merely the continuation of the former
one. If it is to be considered as a new independent case, it is, on this
assumption, identical with the first. In both cases the jurisdiction of the
Court should be affirmed.
[85] That the case is a continuation of the former one, may be deduced from
the fact that the Court (Judgment No. 5) had placed the Parties before the
obligation of readaptation. The readaptation was interrupted. M. Mavrommatis
claims that this was through the fault of the Mandatory and draws the
conclusion that the case should be taken up again in order to be terminated
by the allocation of damages. It is clear that this is a question merely of
continuation.
[86] On this important question of jurisdiction the judgment does admit
(page 14) that "the present suit at first sight would seem to be a
continuation of the case decided by Judgments Nos. 2 and 5", adding,
however, that "it does not follow from this circumstance that the
jurisdiction accepted by the Court in Judgment No. 2 also exists as regards
the present case. For this- case concerns facts which have occurred since
[p32] these judgments were given and the solution of the question now before
the Court depends upon the nature of these facts in relation to the clauses
governing the Court's jurisdiction in the present suit".
[87] In the second place, even if the case is a new and independent one, it
is identical with the former case. It is only necessary to recall the two
concessions granted to Mr. Rutenberg on September 21st, 1921, and March 5th,
1926, respectively. The Court ruled that it had jurisdiction as regards the
reaction of the first concession on M. Mavrommatis' position. It is
submitted that the case is identical as regards the second concession. Here,
as in the first case, the submissions refer to the fact that the Rutenberg
concessions have influenced the financial circles, in which the smallest
uncertainty is fatal as regards many transactions, and that they had
effectively prevented the financing of M. Mavrommatis' undertaking. The
Court has jurisdiction, as in the first case, to determine this question.
[p33]
Dissenting Opinion by M. Altamira.
[Translation.]
[88] I regret that I disagree both with the conclusions and the reasoning of
the present judgment, and I feel it my duty to state, very briefly, the
essential points upon which my dissent is based.
1. [Jurisdiction Concerning Interpretation and Application of Protocol XII
of Lausanne]
[89] The doctrine of the Court, which has been enunciated in Judgments Nos.
2 and 5 and is repeated in the present judgment, is that it has jurisdiction
to entertain questions concerning the interpretation and application of
Protocol XII of Lausanne in so far as such questions originate in, or are in
their turn dependent on, a question of the interpretation or application of
Article II of the Mandate for Palestine in connection with a concession
covered by the guarantees afforded in the Protocol itself, which question
therefore falls within the scope of the international obligations accepted
in this respect by the Mandatory.
[90] This necessary connection between the Mandate and the Protocol, is the
condition upon which the coming into play of Article 26 of the former
instrument, which confers jurisdiction on the Court, is dependent, and it
arises whenever there is incompatibility between the obligations contained
in the Protocol and the use made by the Mandatory of the powers bestowed
upon him by Article 11 of the Mandate in the sphere of economic policy to
which the concessions contemplated by the Protocol belong, and whenever, as
a consequence of this incompatibility, the reservation expressly made in
Article II in regard to these obligations is disregarded.
[91] It is clear that, according to the article referred to, disregard of
international obligations may occur when the power exercised by the
Mandatory is that of providing for public ownership as well as when it is
that relating to public control, that is to say, both when the
Administration declares a thing or a right forming part of a previously
granted and valid concession to be public property, and in so doing means
itself to undertake exploitation, and when it grants this thing or [p34]
right to a person other than the original concessionnaire, in a manner
involving the exercise of public control. The wording of the second sentence
of Article 11, paragraph 1, is very clear as regards this point. According
to this sentence, the "reservation concerning international obligations"
covers both public ownership and control. It is no less clear that the
sentence makes a definite distinction between two different powers: that of
providing for ownership and that of providing for public control. Again, if
the word "ownership" is here intended to convey - and it cannot well be
otherwise - the idea of public or State (administration) ownership, it is
obvious that "control" can only contemplate the only other form of ownership
possible in connection with the development of the natural resources of the
country or of works and services of public utility, that is to say, private
ownership, which is economically necessary to the existence of a private
enterprise. The degree or extent to which the administration may intervene
in an enterprise of this second category, in preference to itself
undertaking exploitation, is, in principle, a matter of no, or secondary,
importance in characterizing the system. But one thing is certain, and that
is that there is a limit to such interference which cannot be overstepped
without destroying the very system established by the first paragraph of
Article 11, and this limit is the border line which divides public ownership
from private ownership in regard to the exploitation of resources, etc. Were
it possible for the interference of the administration in a private
enterprise of the kind contemplated in Article 11, when it uses the words
"public control", to become in a particular case in distinguishable from or.
so closely akin to "public ownership" that it would be difficult to separate
the two powers, it would be impossible to understand why a distinction has
been made in the article between the two kinds of power. This conclusion
would have still more weight if it were sought to interpret the expression
"public control" in the Mandate as meaning only that form of intervention in
which the action taken by the administration is indistinguishable from
public ownership, or borrows from the latter most of its characteristic
powers. It is therefore clear that the expression "public control" in
Article 11 must cover many, if not all - a point which the [p35] Court does
not seem to accept - the possible degrees of interference by the
administration in a private undertaking, but always excepting a degree of
control which would obliterate the difference as regards "public ownership".
Thus, even taking a very strict interpretation, it would be at all events
very difficult to limit the meaning of public control to such forms of
intervention on the part of the administration as would, for instance,
result in the complete or almost complete nationalization or
municipalization of a private concern. Even admitting that control may
assume some of these extreme forms without ceasing to be "control" and
becoming something more, it is certain that it may also assume other forms
of intervention on the part of the administration, or, in other words, the
reservation by the administration of certain rights of intervention in the
operation of the private concern.
[92] The foregoing reasoning, which is based on legal conceptions, is borne
out by the logical interpretation of Article 11. In the expression of an
idea, two things are never contrasted unless it is considered that they
really possess characteristics sufficiently different, and even perhaps
contradictory, to enable them to be regarded as logically suitable to be
contrasted; and when the expression has a legal significance, the need for
the observance of this rule is greater than ever. It might even be said that
Article 11 only recognizes two ways of exercising the powers granted to the
Administration and that, consequently - when the method chosen is not that
of public ownership - , the only form of concession which is permissible in
Palestine for the exploitation of the natural resources of the country or
the carrying out of public works, services or utilities, is that which takes
the form of public control. In that case it would be still less possible to
hold that this control would only be exercised in one particular way.
2. [Public Control]
[93] Strictly speaking I might have spared myself the greater part of the
foregoing observations, seeing that the hypothesis therein considered of a
conception of public control entirely or partially obliterating the
fundamental difference between [p36] exploitation by the administration, or
public exploitation, and private exploitation does not appear in the
doctrine established and explained in Judgments Nos. 2 and 5.
[94] All that I find in regard to this point in those judgments - and this
might therefore seem to compel the Court not to deviate from them - is the
following:
[95] Firstly, that public control according to the meaning of this
expression in the English text of the Mandate (selected by the Court for
reasons which it is unnecessary to repeat here) does not cover the actual
act of granting an undertaking or concession of public utility to an
individual or company (i.e. the contract by which the administration leaves
economic development to a private person instead of keeping it in its own
hands), but only "the various methods whereby the public administration may
take over or dictate the policy of" undertakings of the kind under
consideration, which methods may "accompany" the grant of the concession.
[96] Secondly, that this somewhat wide sense of public control has not been
determined by any concrete definition (save that which I will consider
shortly) nor by any enumeration of the methods covered by it. It remains
open therefore to all possible interpretations as to the extent and as to
the form in which the taking over or supervision by the administration may
take place. One single observation in this respect has been made by the
Court in Judgment No. 2, because it particularly concerned the case of Mr.
Rutenberg's concessions which were then under discussion. The observation in
question is that concerning the connection between the government control
stipulated in these concessions and their recognition as public utility
undertakings. It seems almost useless to recall - because it is so well
known - that recognition or a declaration of the character as a public
service of a private enterprise of a very general nature concerned, for
instance with the construction of communications (roads, railways, etc.) and
the supply of water, is not necessarily accompanied by very pronounced forms
of advice or of supervision over its management on the part of the
administration. In many systems of legislation, it is rather a form designed
to facilitate certain works of the undertaking or the fulfilment of certain
necessary conditions such as the expropriation of land, the creation of
servitude, etc. [p37]
[97] Thirdly, and this might also be regarded as a definition of the
characteristic methods of public control in the sense of the Mandate,
Judgments Nos.2 and 5 - and especially No. 2 which, as is generally known,
relates to .the jurisdiction - also establish two circumstances: that the
High Commissioner for Palestine had to intervene in order to approve the
statutes of the company to be formed by Mr. Rutenberg to operate his
concessions, and that the Jewish Agency mentioned in the Mandate also played
a part therein. The latter circumstance the judgment appears to regard - to
use the language of the judgment - as a manifestation "of a programme of
economic policy" which is referred to several times in the Mandate and is
characteristic of that instrument from this point of view. And it is because
it found that these two circumstances were present in the Rutenberg
concessions of 1921 that the Court in 1924 held that there was in them an
exercise of public control. It could certainly not follow from this that,
apart from these methods of public control, there were no others which would
also be covered by the general formula then adopted by the Court. It is,
however, unnecessary, from the point of view of my main argument, to proceed
further with the consideration of this question, since the observations I
have just made seem to me sufficient. But I think it necessary to point out,
as regards the part played by the Jewish Agency in the economic policy of
Palestine, that this very fact has the effect of excluding any action on the
part of the public administration which would destroy the interests and
character of that Organization. The recognition of that Organization as a
true public body, with the rights conferred on it by Article 4 of the
Mandate, implies that it must be accorded privileged or exceptional
treatment which would disappear if the control exercised by the
Administration were so extensive as. to result in the substitution of the
Administration itself for the Jewish Agency. In order to effect this
substitution, the Administration might certainly base itself upon public
ownership without having recourse to public control
3. [Public Control in the Present Case]
[98] The doctrine in regard to public control which I have just indicated as
flowing from Judgments Nos. 2 and 5 is not [p38] substantially changed in
the present judgment. The conception of control still means "a situation
which, although it does not take the legal form of ownership, enables the
public authorities to exercise certain powers normally inherent in
ownership", or certain measures which may accompany the grant of the
concession and give it the character of public control. At the same time
this conception also covers, in the present judgment, the "programme of
economic policy" referred to in Article 11 and several other articles of the
Mandate. It should, however, be observed that the "certain powers" as also
the "measures" alluded to, still cover a wide field which is only limited by
an exception in regard to "the Tight reserved in certain circumstances to
the authorities in respect of concessionary undertakings", with which I will
deal later on. The general nature of the terms used only serves to emphasize
the great variety of forms which these "powers" and "measures" may assume in
practice ; and this is doubtless what the judgment means to convey when it
says that "the question whether, in a given case, there has been an exercise
of the full power to provide for public control is essentially a question
that can only be decided for each particular case as it arises".
[99] It would indeed be impossible to construe this sentence in any other
way than as the recognition of the existence of many circumstances, other
than those which in 1924 were found to exist in the Rutenberg concessions
and which would be peculiar to each case. It would, in my opinion, be just
as difficult to make a general assumption, covering all possible
contingencies, to the effect that "the right reserved in certain
circumstances to the authorities in respect of concessionary undertakings,
either by means of administrative regulations or by clauses inserted in the
concessionary contracts, to exercise powers of advice and supervision, does
not come within the conception of 'public control' as used in Article 11".
We will not pause to consider the fact that the insertion of these powers of
advice and supervision in concessionary contracts is by no means essential,
since it is a pure formality, as is shown by, amongst other things, the fact
that in the case of the Rutenberg concessions of 1921, the powers of "public
control" were set out in the actual contracts. [p39] As regards the scope of
the powers of "advice and super-vision", it will suffice to recall the great
variety of forms, which "these two powers" of the public administration may
take in a private undertaking, and likewise the variety of forms which they
actually take in modern administrative law, in order to arrive at the
conclusion that, even only taking into account the definitions - very few in
number - accepted by the judgment as regards "certain powers norm-ally
inherent in ownership", the provisions of administrative law and of
concessionary contracts, in all countries, create, and that very often,
powers of advice and supervision of the same kind as those granted in the
Rutenberg concessions of 1921. The line of demarcation between power of
advice and super-vision constituting "public control" and that which does
not do so (since such a line seems desirable), does not allow of a general
affirmation which at all events would discard from the conception of
"control" the greater proportion of the forms which advice and supervision
may take and which are usual in modern concessions, but in a varying degree,
and which reserve to the Administration powers normally inherent in
ownership. The distinction between the circumstances contemplated in the
first of the quotations from the judgment, given at the beginning of this
reasoning, and those contemplated in the second quotation, does not
therefore correspond to a situation of fact separating two different domains
in the relations between the Administration and private enterprises from the
standpoint of the freedom of action of the latter or the intervention of the
former.
[100] After all, of all the forms and degrees which the public control
mentioned in Article 11 may assume, the only ones which are of importance in
each given case for the solution of the question of the Court's jurisdiction
now under consideration, are those which would be incompatible with the
rights of a previous concession, which must be maintained and protected in
accordance with the obligations established by Protocol XII and reserved by
Article 11 of the Mandate. For this fundamental reason, it was possible to
say that a series of acts tending to set aside, and render impossible to
carry out, certain concessions, in order to give free play to the Zionist
[p40] economic policy of the Mandate, may constitute a method of exercising
public control. In my opinion this is certainly the case.
4. [Exercise of Powers by the Administration]
[101] 4.-In any case it is an accepted fact that, according to Article 11,
the Administration must employ the powers which were conferred upon it in
such a way as not to contravene the obligations which the Mandatory has
accepted as regards the maintenance and respect of formerly valid
concessions. This undertaking cannot, in my opinion, be understood as
meaning that it does not contemplate all the acts which might endanger the
respect or the maintenance of the concessions indicated above. It cannot
therefore end in the accomplishment of a single and formal act, representing
the initial stages of respect and maintenance, but on the other hand it must
include all the elements which would be necessary for the effacement of any
form of contradiction between the application of a measure of public control
relating to a concession of that kind and the respect and maintenance of
another concession granted under the Protocol. That would be the case in the
event of the signature of a contract for readaptation followed by acts which
rendered the adaptation itself ineffective. It goes without saying that the
consequences would be all the more harsh in the case where the contract for
readaptation had annulled the former concession which had been the subject
of such readaptation; because if by that fact the original concession
totally disappeared while the one which had been substituted for it had been
rendered incapable of execution, what then would remain of the rights of the
concessionnaire ? It becomes clear that under any other assumption the
guarantees provided for under the Protocol and affirmed under Article 11 of
the Mandate would be entirely illusory.
[102] It is thus obvious that every time we find ourselves confronted with
such contradiction, we are entitled to say that the matter comes under the
operation of Article 11 and consequently of Article 26 of the Mandate.
5. [Application]
[103] 5.-In the case under consideration, this contradiction appears to have
arisen with regard to the facts, the nature and interpretation of which are
the subject of the dispute submitted to the Court by the Application of May
28th, 1927. [p41]
[104] Substantially, the grounds for the dispute are to be found in certain
difficulties which the Palestine Administration and the Colonial Office had
made to the carrying out in a reasonable time of certain conditions without
which the concession granted to M. Mavrommatis as a readaptation of his
former concession would be practically cancelled. The words "delays" and
"hostility" employed in the conclusions of the Case of the Greek Government
serve to show the nature of the alleged difficulties.
[105] Whatever the nature of these acts may be, whether positive or
negative, the Greek Government claims that they were due to the fact of the
existence of a concession granted by the Administration to Mr. Rutenberg
which the latter claimed covered one of the elements considered by M.
Mavrommatis to be essential for his concession. The fact that this
allegation affected in a certain respect and to a certain degree the delays
and the other acts of the authorities alleged by the Greek Government, is in
my opinion clearly established. I am led to believe this is owing to two
circumstances amongst others. The first amongst them is the suggestion made
by the Colonial Office to Sir H. Greenwood on July 9th, 1926, to confer with
Mr. Rutenberg with regard to the opposition set up by the latter with regard
to the readaptation M. Mavrommatis had obtained on February 25th of the same
year. This suggestion would certainly not have been made if the Colonial
Office had not then thought that there was something more or less well
founded in Mr. Rutenberg's opposition. Many of the acts of the
Administration during the year 1926 may be explained on the assumption of
this opinion. The second circumstance which goes to confirm what would
otherwise be simple conjecture in what I have just stated is to be found in
the explanation given by Counsel for the British Government in his reply
made at the public hearing on September 10th last with regard to the delay
by the authorities in deciding whether there had really been a
contradiction, as alleged by Mr. Rutenberg, between his concession and that
of M. Mavrommatis as far as concerns the use of the El-Audja source. It is
impossible to judge now of the weight or of the justification of the grounds
upon which, according to this explanation, the delays of the [p42]
authorities rested, because this question appertains to the merits of the
case and not to the question of the jurisdiction of the Court to adjudicate
upon those merits. But the fact of the existence of these grounds suffices
for the question which the Court is now called upon to determine.
[106] The essential facts for the purpose of reaching a decision are the
following:
(1) The concession upon which Mr. Rutenberg's opposition was founded had
been granted to him by the Administration in the exercise of its public
control. As regards the original form of the concession of September 12th,
1921, the Court has already in its previous judgments stated its opinion. As
regards the confirmation of the concession on March 5th, 1926 (clause 3
[A]), it is sufficient to say that it brought about no change and is
confined to guaranteeing its maintenance. Moreover, the Court has recognized
that this confirmation, which may certainly be defined as a final grant, is
an act undertaken by virtue of the full powers provided for under Article 11
of the Mandate. It is thus in the same situation as the other concession of
Mr. Rutenberg, which was the subject of dispute settled by Judgments Nos. 2
and 5.
(2) In 1924 the concession of September 12th, 1921, called "El-Audja.
Concession", was not in contradiction with any of the previous valid
concessions of M. Mavrommatis. Nor could there in 1926, it seems, have
existed any contradiction with the readapted concessions of M. Mavrommatis,
unless the El-Audja concession were to be interpreted as a monopoly over the
waters of that source considered as having been necessarily granted to Mr.
Rutenberg for the purpose of generating the supply of electrical energy and
thus preventing the use by M. Mavrommatis of these same waters which were
considered technically to be necessary for the sufficient supply of the town
of Jerusalem and consequently for the carrying out of the concession itself.
This eventuality was not provided for in the Rutenberg concession of March
5th, 1926, because that concession, although subsequent to M. Mavrommatis'
readapted concessions (of February 25th), only referred in clause 3 to one
of the latter such as it was granted in 1914 by the Municipality of
Jerusalem for the supply of electricity and electric tramways, a concession
which did not refer to the [p43] waters of El-Audja, and the Rutenberg
concession of September 12th, 1921, and was confined to guaranteeing them
both against the possible and inconsistent application to them of the
concession granted to the Palestine Electric Corporation. Nothing was thus
said with regard to the water concession of Jerusalem granted to M.
Mavrommatis, although on March 5th the possibility might have been foreseen
of a conflict between the El-Audja concession of Mr. Rutenberg and this
concession of M. Mavrommatis, owing to the fact that under clause 6 of the
contract of February 25th (a clause which is a typical clause of
readaptation, namely, of bringing an undertaking into conformity with the
new economic conditions of the country) "a source or sources" was mentioned
capable of providing not less than 6,000 cubic metres of water per day and
up to a maximum of 11,000, and that technical opinions had already been
given that this condition could not be fulfilled unless the El-Audja waters
were utilized. The fact that at the time of the grant of an electricity
concession a water concession, the property of Mr. Rutenberg, had been
reserved, would have made possible without any hardship a reservation also
of the concession for the supply of water newly granted to M. Mavrommatis.
(3) Although it may be admitted that in form there was no express
incompatibility in the terms of the two concessions of Rutenberg and the two
concessions of Mavrommatis, Mr. Rutenberg endeavoured to question the
matter. All his opposition during 1926, all his attempts to approach M.
Mavrommatis in order to get rid of him in the Jerusalem under-takings, all
his threats with regard to M. Mavrommatis and even to the British
authorities, were based on the claim that his concession of September 21st,
1921, finally granted on March 5th, 1926, conferred upon him a monopoly over
the El-Audja waters and on that ground he could prevent the carrying out of
the Mavrommatis concession which depended upon the approval of the plans in
which the El-Audja waters were included as indispensable.
[107] We are therefore confronted with a concession - that of Mr. Rutenberg
- granted, as has already been stated, in the exercise of public control and
which had become incompatible with another concession - that of M.
Mavrommatis � which [p44] belongs to the type of concessions coming under
the guarantee of international obligations provided for under Article 11 of
the Mandate. The fact, recognized some months later by the authorities, that
Mr. Rutenberg's allegation was ill-founded in law, does not deprive that
allegation of being in the nature of an obstacle which had effectively been
in the way of M. Mavrommatis' concession during a certain time, a time
sufficient to produce the disastrous economic consequences of which the
Greek Government complains. If Mr. Rutenberg's allegation had been
well-founded, it would have produced exactly the same result with this
difference: that these results would not have come to an end at a certain
date in the way in which they have done in the present case. But it must
again be repeated that the time during which opposition was made was
sufficient to bring about the vexatious consequences for the Mavrommatis
concession which constitute the subject matter of the discussion between the
Parties.
[108] The difference between an allegation founded in law, and another which
is not, but which has the same effect, is not sufficient in a case such as
the present one to destroy, in the facts which have taken place, the
characteristics necessary for founding the jurisdiction of the Court, that
is to say, in order to consider them as being included in the category of
facts which, being in themselves a direct exercise of public control by the
Administration or resulting from such a previous exercise, lead in practice
to incompatibility with the obligations concerning the respect and
maintenance of the concessions guaranteed under Protocol XII. A mere
external form should not be sufficient. It does not appear to be in
conformity with juridical common sense to consider that the only method of
acting in a manner contrary to and of infringing the respect and maintenance
of a concession is the existence, in another concession granted in the
exercise of public control, of a clause which directly contravenes the
rights of the earlier one or which would give to the concessionnaire of the
second the possibility of contravening the other. In the 1924 case it was
the existence in the Rutenberg concessions of Article 29, the application of
which led to the failure in respect for and maintenance of the concessions
of M. Mavrommatis. It should be recalled that Mr. Rutenberg [p45] did not
make use of this article in 1921-1924. However, the mere existence of that
article and the effect which it seemed to produce on the attitude of the
Palestine and British authorities with regard to the rights of M.
Mavrommatis is sufficient for the Court for the purpose of determining that,
in the practical case under consideration, there was a valid reason for
ruling that it had jurisdiction.
[109] The identity between this situation in 1924 and that existing in the
present case seems to me to be so strong that it would be impossible in my
opinion to justify a decision to the contrary:
[110] As concerns the significance to be attached to the acts now imputed to
the Palestine and British authorities in connection with the interests
represented by the Mavrommatis concession, regard must also be had to the
well known fact that law is not an abstract and merely speculative science.
On the contrary, it is a practical force which reacts on human life, and
generally with a view to the achievement of practical aims. These aims, in
the case of rights over property, assume an essentially economic character.
If these aims are affected by facts which result in an irreparable injury,
those facts will not disappear simply through the intervention of a tardy
declaration to the effect that they are, it is claimed, not legally
justified. That is exactly what the Greek Government says in the present
case and what the British Government denies. The Court cannot give a
decision at the present stage of the proceedings, as this question - in
regard to which moreover I make all necessary reservations - belongs to the
merits of the case. But it is precisely for this reason and because of the
conditions in regard to the existence of public control and the conflict
between one concession which falls within the scope of that conception and
another which is covered by the international obligations accepted by the
Mandatory, that it appears to me to be established that the Court should
reserve the case for decision on the merits.
[111] I do not wish to terminate without explaining that in all the
foregoing, I only have in mind the Court's right to declare itself to have
jurisdiction. It is by reason of my respect for this right, which I consider
made out in the present case, that I have dissented from the judgment. I do
not intend my opinion to have the slightest bearing upon the opinion the
Court might adopt (or that I might adopt myself) in [p46] regard to the
merits of the case, that is to say, the question whether there has really
been a violation of international obligations as regards the responsibility
of the British authorities, if the Court were to hear that question, nor to
prejudge the solution of that question in any way in so far as I myself am
concerned. Just as Judgment No. 2 did not and could not decide this question
in the case of the application of 1924, I think that a decision in favour of
jurisdiction in the case now before the Court would also be incapable of
deciding in advance the case on the merits, just as, moreover, a decision
against jurisdiction, such as the present judgment, could in no case be
supported upon an opinion to the effect that, contrary to the contention of
the Greek Government, there has been no violation by the British Government
of its international obligations.
6. [Disposition]
[112] 6.-Having regard to the reasons for my opinion, based on the questions
raised by Article 11 of the Mandate, I do not think it necessary to consider
the other question whether the case, indicated in Judgment No. 5 (page 26)
in regard to the possibility of deciding disputes concerning the application
of Articles 4 and 5 of Protocol XII without the necessity for a fresh
agreement between the Parties, has or has not arisen. I will confine myself
to saying that, in my opinion, it would have been possible to argue this
point, if it had been thought advisable to do so. [p47]
Dissenting Opinion by M. Caloyanni.
[Translation.]
[113] I regret to state that I am unable in the case submitted to the Court
to concur with the opinion of the majority of my colleagues.
[114] The Court has based its judgment upon the second argument put forward
by the British Government in support of its objection to the jurisdiction,
according to which argument it is claimed that, in so far as the Greek
Government has shown that the British Government, by preventing the carrying
out of the concessionary contracts entered into by the Palestine
Administration with M. Mavrommatis on February 25th, 1926, had not conformed
to the international obligations accepted by the Mandatory within the
meaning of Article 11 of the Mandate and consequently had committed a breach
of the terms of that article, the British Government puts forward, as
against this, that the Court, by virtue of Article 11 of the Mandate, has no
jurisdiction to adjudicate upon an alleged breach of the international
obligations of the Mandatory otherwise than as the result of the exercise
the Palestine Administration had made of its full powers, in order to decide
as to the public ownership or control of all the natural resources of the
country, or of the public works, services and utilities established or to be
established therein ; now there has been no exercise of these full powers,
since no right inconsistent with those of M. Mavrommatis has been granted to
Mr. Rutenberg ; and the fact that there was delay in approving the plans,
even if this delay were due, as the Greek Government alleges, to Mr.
Rutenberg's hostility or that of certain British or Palestine officials
towards M. Mavrommatis, cannot be considered as an exercise of the said
powers.
[115] The Greek Government had, in its Case submitted to the Court on June
4th, 1927, concluded as follows:
1� that by delaying, regardless of the undertakings of the High Commissioner
for Palestine, until the month of December, 1926, the approval, which should
have been given in August, of the plans deposited by M. Mavrommatis on the
[p48] preceding May 5th, and by thus preventing the putting into execution
of the concessionary contracts concluded on February 25th, 1926, the British
Government, as Mandatory for Palestine, has not complied with its
international obligations under Article 11 of the Mandate;
2� that by these delays and by the hostility displayed towards him by
certain British authorities - which delays and hostility were due to Mr.
Rutenberg's opposition - it was rendered materially and morally impossible
for M. Mavrommatis to obtain the financing of his concessions, and that he
has thus unjustly suffered damage, for the reparation of which the British
Government must pay him compensation.
[116] The Greek Government estimates this compensation at the sum of
�217,000 to be paid by the British Government, together with interest at 6 %
from the filing of the application until the date of payment.
[117] Although the discussions therefore dealt with all the questions raised
by the British Government in its Preliminary Objection to the jurisdiction,
the Court did not go beyond the question which related to the application
and interpretation of the meaning of Article 11 of the Mandate and the
international obligations which resulted therefrom.
[118] The two preceding judgments of the Court determined certain questions
relating to the interpretation of Article 11 of the Mandate, and at the same
time established the relationship between Protocol XII of Lausanne and that
article.
[119] In these two judgments it was a question of defining the jurisdiction
of the Court in the first place, and then of considering the violation of
international obligations alleged by the Greek Government.
[120] As regards jurisdiction, the Court had declared that, indeed, certain
concessions granted to Mr. Rutenberg had been granted by virtue of the full
powers which the Palestine Administration were entitled to exercise, and
that, in granting these concessions, the Mavrommatis concessions, whilst not
coming within the terms of Article 11 themselves, came, however, within the
jurisdiction of the Court by virtue of Article 26 of the Mandate ; because,
indeed, it was a question of international obligations accepted by the
Mandatory and provided for under Protocol XII of Lausanne, obligations which
the [p49] Palestine Administration was obliged to respect subject to the
rich penalty of disregarding and consequently of violating such obligations
which would involve reparation to M. Mavrommatis.
[121] As a result of these judgments, the Court ordered the readaptation of
the Mavrommatis concessions, having noted that the Rutenberg concessions
constituted a violation of the international obligations accepted by the
Mandatory, and this principally owing to two facts which were: the grant of
certain concessions to Mr. Rutenberg, namely, the concession of September
21st, 1921, and that of September 12th, 1921, both of which comprised an
article (29) in which the Court found one of the grounds on which it rested
its jurisdiction. The second fact related to the close connection which
existed between the exercise of the full powers which Article 11 granted to
the Palestine Administration with regard to public control and Zionism, an
organization recognized by the Mandate and intended to collaborate towards
the development of the country. The Court held, however, that as regards the
readaptation, it was upon an agreement entered into between the Parties in
relation to the application of Article 4 or Article 6 of the Mandate that it
rested its jurisdiction.
[122] In the present case the question of the interpretation of Article 11
of the Mandate is again raised in relation to the Court's jurisdiction.
***
[123] Article I of the Mandate runs as follows:
"The Mandatory shall have full powers of legislation and of administration,
save as they may be limited by the terms of this. Mandate."
[124] Article II:
"The Administration of Palestine shall take all necessary measures to
safeguard the interests of the community in connection with the development
of the country and .... shall have full power to provide for public
ownership or control of any of the natural resources of the country or of
public works, services and utilities established or to be established
therein. The Administration may [p50] arrange with the Jewish Agency
mentioned in Article 4 to construct or operate. any public works, services
and utilities, and to develop any of the natural resources of the country ."
[125] Article 4:
"An appropriate Jewish Agency shall be recognized as a public body for the
purpose of advising and cooperating with the Administration of Palestine in
such economic, social and other matters ... and ... to assist and take part
in the development of the country",
always subject to the control of the Palestine Administration.
[126] From a study of these texts it clearly appears that the Zionist
Organization is so closely connected with the Palestine Administration that
for purposes of developing the country as regards economic questions and as
regards works of public utility, it appears to be unable to do without this
Organization, unless it consented. It is true that in the French text of
Article 11 the indefinite expression pourra occurs, but that does not
exclude such an obligation, because it refers to the Administration and not
to the Jewish Organization; the words contained in Article 4 are imperative
as far as concerns the co-operation of the Jewish Organization in all
economic questions and those concerning the development of the country;
indeed, the words employed in the French text are aura le droit to do so,
the only restriction being, in relation to all these matters, that the
Palestine Administration reserves the right of control.
[127] It may thus be seen that any action by the Palestine Administration in
its relations with Zionism, and one may add that of persons proved to have
intimate relations with the Jewish Organization, assumes a special character
and legal significance; if it is true that the Palestine Administration has
reserved the right of control, it follows that this control can only be the
control which the Court has declared in its two preceding judgments as being
the forcible cancellation or interference in concessions granted by the
Administration.
[128] Moreover, the full powers which that Administration exercises are not
the full powers of an ordinary public administration; [p51] they are powers
within the meaning always of public control because the purpose of the
Mandate is the development of the country, either as regards natural
resources, or as regards public works and utilities which have to be
undertaken in the public interest. As a result of these preliminary
considerations, it becomes necessary to investigate certain points with
regard to the nature and purpose of the Mandate.
[129] It is by reference to the spirit of Article 22 of the Covenant of the
League of Nations that one finds the essential element underlying the
Mandate from the point of view of the full powers in question ; indeed, it
is upon the idea of "development" that the principles of Article 22 are
mainly based; whenever the exercise of the full powers is therefore
concerned, the Administration has an obligation to exercise them, because in
the development of the country a great deal of its mission and all its
activities are comprised. It could not be otherwise, having regard to the
responsibility voluntarily assumed by the Mandatory when accepting the
Mandate; a limit, however, was placed upon the exercise of these full
powers: it was the reservation made with regard to the international
obligations accepted by the Mandatory; clearly, this was an application of a
principle of international law as against which the powers granted by the
Mandate could not be applied; this tutorship had to be determined without,
however, for the purpose of its exercise, granting powers which would
infringe upon the principles of international law from which international
obligations arise. Indeed, the concessions granted prior to October 29th,
1914, had to be maintained and this principle of international law had to be
respected. The terms of the treaty guaranteeing the maintenance of this
principle on every occasion on which the full powers of control would be
exercised, must contemplate not only positive acts but also negative acts,
in this sense that the Palestine Administration would be obliged to respect
international obligations accepted by it, not only when it granted
concessions, but also when it exercised its powers in a manner which would
cause injury to the concessionnaire; indeed, it could not be otherwise
because it would confer upon the Palestine Administration powers of action
and at the same time give it complete liberty every time that acts were
concerned which constituted, [p52] as regards their application or their
effects, a failure to observe these international obligations; and this is
all the more true since the purpose itself of safeguarding public interests
is closely connected with the idea of control; the Administration must see
that all the natural resources, the use of which it allows, and all public
works and utilities, the carrying out of which it authorizes, should tend to
safeguard the interests of the community and the development of the country.
And, as has been stated, the Palestine Administration is not by the nature
of the Mandate itself an administration similar to others. It has a purpose,
expressed at the time of the origin of its rights, which differs from that
of any other public administrations, in the sense that it could not have
acted if there had been no Mandate or this tutorship, which was conferred
upon it by Article 22 of the Covenant. Owing to the nature sui generis of
the Mandate and owing to its purpose or special mission of tutorship, a
tutorship which dominates the whole of the Mandate, the exercise by the
Administration of its full powers becomes compulsory, whether it is a
question of deciding with regard to a public ownership or public control ;
in other words, it is obliged, in order to safeguard the interests of the
community, to decide whether it has to exercise these full powers by the
method of ownership or by that of control ; hence, the words "provide" or
d�cider have a specific and identical legal meaning. Similarly, the words
"ownership" and "control" cannot be separated from the word "public".
Furthermore, the words "public control", whilst supporting the restricted
meaning attributed to sequestration or intervention by the Court, acquire an
obligatory character. That is to say that the Administration, in deciding to
exercise its full powers, must decide whether it is going to exercise them
by sequestration or by intervention; it is obliged to do one or the other.
[130] It follows therefore that in applying these legal conceptions we
cannot assimilate the Palestine Administration to an ordinary
administration, and we must refuse to confer upon it this ordinary control
and apply in its relation a form of control within the meaning the Court has
laid down ; consequently, in regard to concessions, every positive or
negative act which the Administration accomplishes in the exercise of its
full powers [p53] is an act of public control within the meaning above
indicated. In exercising, therefore, this public control, the Administration
must respect the international obligations which it has accepted and which
constitute a restriction upon its freedom of action whenever it is a
question of determining public control.
[131] In applying these conceptions to Article 11 of the Mandate, this
article cannot go beyond the purpose and the nature of the Mandate and the
purpose which the Covenant has conferred upon the Mandate. The connection
between the provisions of Article 22 of the Covenant and those of the
Mandate with regard to the safeguarding of the interests of the community is
close and inseparable; the development of the peoples cannot be separated
without including one of the essential elements of that development, namely,
the economic development of the country. It is a tutorship sui generis which
the Mandate has imposed upon the Mandatory, who must render a full account
of this tutorship. Moreover, this Mandate is a complex tutorship, and one of
the aspects of this complexity is the one which relates to the Jewish
Organization. This Organization has the right to assist and participate in
the development of the country ; in other words, the Administration,
although tutelary, has a necessary collaborator in the accomplishment of its
mission; the only right which the Administration has in relation to this
assistance and to this participation in the development of the country is
the right of control. And when, later on, El-Audja will come to be
considered, the importance of Mr. Rutenberg will be observed, owing to his
indisputed ties with the Jewish Organization. This tutorship thus
constitutes a legal element as regards the mandatory Administration, which
is entirely different from that of any ordinary public administration.
[132] In the light of these principles, what relation does Protocol XII of
Lausanne bear to Article 11 of the Mandate?
[133] Protocol XII takes the place of Article 311 of the Treaty of S�vres.
The Court in its Judgment No. 2 states: "Later when it became clear that the
Treaty of S�vres would never come into force, whilst the new peace treaty
with Turkey had not yet been drafted, in order to avoid delay in the
adoption of the Mandate for Palestine, [p54] the reference to the Treaty of
S�vres was replaced by the words: international obligations accepted by the
Mandatory. This phrase, therefore, whatever its scope may be in other
directions, includes at all events the provisions which, in the future peace
treaty with Turkey," (in the present case the Treaty of Lausanne and its
protocols), "were to take the place of the provisions of Article 311 of the
Treaty of S�vres."
[134] The Court, after quoting Article 311 of the Treaty of S�vres,
continues as follows in its Judgment No. 2: "As Article 311 of the Treaty of
S�vres dealt with concessions in territories detached from Turkey and as
that article is now replaced by Protocol XII of the Treaty of Lausanne, it
follows that the 'international obligations accepted by the Mandatory',
referred to in Article 11 of the Mandate, certainly include the obligations
arising out of Protocol XII of the Lausanne Treaty."
[135] And after having stated that these obligations "limit the powers of
the Palestine Administration to provide for public ownership or control of
any of the natural resources of the country or of the public works, services
and utilities established or to be established therein", the Court adds:
"The Court considers that the reservation made in Article 11 regarding
international obligations is not a mere statement of fact devoid of
immediate legal value, but that, on the contrary, it is intended to afford
these obligations, within the limits fixed in the article, the same measure
of protection as all other provisions of the Mandate."
[136] The Court adds that these international obligations which are stated
and established by Protocol XII of Lausanne only fall within the scope of
Article 11 and set in operation the jurisdiction of the Court under Article
26 if the Mandatory has exercised his full power to provide for public
ownership or control. By applying the principles set out above, that is to
say those relating to the special character of the Mandate, we arrive at the
conclusion that Protocol XII always falls within the scope of Article 11 of
the Mandate, because the Administration always exercises its full power to
provide for public ownership or control. [p55]
[137] Moreover, a natural consequence of the foregoing is that there was no
need for Protocol XII to state what tribunal should hear disputes arising in
connection with the application and interpretation of the Mandate; for being
always covered by Article 11, the Court would necessarily have jurisdiction
and thus there would be no need for an agreement between the Parties to
decide which article, 4 or 6, would be applicable, because readaptation or
compensation, being international obligations, in the sense indicated above,
would come within the scope of Article 11, and necessarily involve the
jurisdiction of the Court.
***
[138] We thus stated certain principles which, whilst maintaining the
principles in regard to public control established by the Court's judgments,
nevertheless, both by their nature and object, extend the sphere of
application to cover the circumstances of the present dispute. For it is
important to begin by establishing a parallel between the cases which led up
to the two previous judgments and the present case.
[139] Can it be said that the present case is independent of the preceding
ones ?
[140] The present case concerns, on the one hand, concessions granted to M.
Mavrommatis and, on the other hand, concessions granted to Mr. Rutenberg.
Furthermore, the concessions granted to M. Mavrommatis constitute the
execution of the Court's judgment ordering the readaptation of M.
Mavrommatis' concessions of 1914. We are therefore in point of fact
concerned with the execution of the international obligations which the
Palestine Administration was bound to respect by maintaining the concessions
obtained by M. Mavrommatis from the State to which the British Government
succeeded as succession State and at the same time as Mandatory. From these
points of view, therefore, it is necessary to consider what is the relation
in law between the preceding cases and the present one. [p56]
***
[141] The new contracts, both dated February 25th, 1926, have been concluded
between the Palestine Administration and M. Mavrommatis. Have these
contracts been granted to M. Mavrommatis in the exercise of the full power
belonging to the Palestine Administration ? Are the contracts granted to Mr.
Rutenberg on March 5th, 1926, incompatible with M. Mavrommatis' new
contracts? Does readaptation in itself constitute an international
obligation to which the Mandatory must give full effect ?
[142] From the principles developed above, it follows that the contracts of
February 25th, 1926, granted to M. Mavrommatis, were granted in the exercise
of the full power preserved by the Palestine Administration, because they
concern the grant of a concession for works of public utility and also the
utilization of natural resources. Has this full power been exercised by the
Administration to provide for the public control both of natural resources
and of works of public utility ? According to the principles set out above,
there can be no doubt as to this, for the Palestine Administration is under
an obligation to exercise its powers of public control owing to the special
nature of the public administration ;. the protection of the interests of
the community as regards the development of the country is of a peculiar
character owing to the nature of the Mandate. The Administration is not free
to act as an ordinary administration could. It must exercise particular care
because it has to render account of the manner in which it protects the
interests of the community; this it has to do not only under Article 11 but
also in accordance with the spirit of Article 22 of the Covenant of the
League of Nations.
[143] Again, the Palestine Administration, being closely linked with the
Zionist Organization, is obliged, under Article 4, to co-operate with the
Jewish Agency in regard to all economic questions and questions concerning
the development 01 the country. But the question of the development of the
country is inseparable from that of works of public utility, just as it is
also inseparable from questions in regard to the natural resources of the
country; when therefore concessions had to be granted to [p57] M.
Mavrommatis which the Administration was obliged to maintain under Protocol
XII, it was at the same time bound to remember the interests of the Jewish
Agency and, consequently, also the concessions it had already granted to Mr.
Rutenberg. The close connection therefore existing between these concessions
of Mr. Rutenberg and those of M. Mavrommatis is precisely the Palestine
Administration's obligation to confirm what it had already granted by the
agreements of September, 1921. This connection obliged the Palestine
Administration to do nothing conflicting with its obligations in respect of
the Rutenberg concessions which it had already granted and with which the
Zionist Organization was closely associated.
[144] The foregoing simply amounts to this: when the question of the plans
and their approval came up, the point which irked the Palestine
Administration was that the El-Audja source had been granted to Mr.
Rutenberg, and this source therefore became the link which established the
close connection between the Rutenberg concessions and those granted to M.
Mavrommatis on February 25th, 1926.
[145] There was an incompatibility between these contracts, owing to the
fact that the former conflicted with M. Mavrommatis' interests, and from
this very fact arose the international obligation of the Palestine
Administration not to do anything which might prevent the application of the
Mavrommatis contracts, which consisted in complete and effectual
readaptation, readaptation which was ordered by the Court and which the
representative of the British Government promised, should be effected not
only without difficulty but under its especial protection. There is no doubt
that readaptation, being a condition laid down by the Protocol of Lausanne,
constitutes an international obligation; this obligation falls under Article
и of the Mandate when the full power to provide for public control has been
exercised. When there is a question of readaptation, it is necessary to
refer to the contracts whereby such readaptation has been effected ; since
the Palestine Administration exercised public control when granting the
concessions, readaptation as regards every stipulation and condition
comprised therein, becomes an international obligation, owing to this
exercise of the power to provide for control of natural [p58] resources and
of works of public utility. In this respect the Administration, at the time
of the readaptation, must do all in its power to make this readaptation
effectual and must not allow anything to impede it. This therefore amounts
to saying that when, in connection with readaptation, there are certain
conditions to be fulfilled, these conditions must be entirely protected by
the Administration. At the same time the Administration must effectually
contribute towards their fulfilment in order, that the readaptation may be
properly carried out and to render possible the effective operation of the
concessions granted. Accordingly, if in one of the conditions of
readaptation there were an essential point requiring acceptance or refusal,
that point must be accepted: refusal would engage the responsibility of the
Palestine Administration towards the concessionnaire: therefore there would
or would not be a breach of international obligations in respect of the
plans which were to be approved within a fixed period, according to whether
the Palestine Administration did or did not approve them within that period.
Again, if it proved impossible to approve the plans owing to some particular
circumstance, for instance, owing to discussions raised in connection with
some source of water supply (in this case the El-Audja), this very
circumstance would constitute the factor requisite for determining the
responsibility arising under the international obligations accepted by the
Mandatory.
[146] Turning, therefore, to the present case and examining the Rutenberg
concessions, it will be seen that the concessions of March 5th, 1926,
considered from the standpoint of readaptation and in connection with the
approval of the plans, constitute a factor which necessarily compels the
mandatory Power to accord to the Mavrommatis concessions a full measure of
the protection to which they are entitled by reason of the international
obligations accepted under Protocol XII and the exercise of public control
constituted by the grant of the Rutenberg concessions of March 5th, 1926, in
which it was undertaken to respect the Rutenberg concession of September
12th, 1921, which was described as the "El-Audja Concession".[p59]
***
[147] On a closer consideration of the facts of the case, it will be seen
that the Mavrommatis contracts of February 25th, 1926, were entirely
dependent on the fulfilment of two conditions: the approval of the plans and
the financing of the concessions. These two conditions were vital to the
readaptation, which formed the subject of the concessionary contracts.
[148] It is true that only one of these conditions was an essential part of
the contracts, but the two were so closely inter-connected that it may be
said that they were both vital to the contracts. It was impossible to
separate the question of the time-limit for approval from that of the
financing of the concessions, for the very simple reason that if the plans
were not approved within the times fixed, the financial arrangements were
bound to be detrimentally affected, and this circumstance was one of the
main causes of the ill-success of the attempts to form the company for the
carrying out of the works of public utility for which M. Mavrommatis held a
concession.
[149] In this connection, it will be well to recall what has been said in
regard to M. Mavrommatis' new contracts. It has been maintained that they
destroyed the connection between the 1914 concessions and the international
obligations arising under the Protocol of Lausanne which brought them within
the scope of Article 11 of the Mandate, giving the Court jurisdiction; it
has been said that these are new contracts concluded between the present
Palestine Administration and M. Mavrommatis; consequently, they have been
substituted for the former ones and they have caused the latter to be
deprived of the protection to which they were internationally entitled. It
is worth while considering this more closely in order to see whether they
are a continuation of the old contracts and whether no link connecting the
present situation with the previously existing one has been broken. Now
these contracts state categorically that the concessionnaire finally and
irrevocably abandoned his right to the previous concessions. From this
express renunciation it has been deduced that the new contracts have been
substituted for the old [p60] ones and consequently that they are entirely
new in character. But it is not possible to dispute the fact that M.
Mavrommatis, in these contracts, has always had in view the readaptation of
his old concessions, that is to say, firstly, their maintenance and,
secondly, their putting into operation after readaptation to the new
economic conditions which arose after the war. M. Mavrommatis, as he has
said from the outset, and as was stated in the first correspondence
exchanged on the question, did not consider the signature of the new
contracts as implying anything except the adaptation of the concessions to
the economic conditions, a view which, moreover, must have been shared by
the British Government; for it is impossible to imagine that the British
Government, which had promised to protect M. Mavrommatis against any other
concessionnaire, would have itself changed the character of the contracts
and substituted for them contracts which no longer corresponded either to
the international obligations accepted by it, or to the Court's judgment in
regard to which it had not only declared its readiness to comply, but also
that it would assist in the readaptation of these very con-tracts; it
follows therefore that both Parties were thinking the whole time of the old
concessions and of the rights of M. Mavrommatis protected by Protocol XII
and Article 11 of the Mandate. These expressions, therefore, of categoric
renunciation can only have their normal meaning, that is to say, that he is
abandoning his rights under the clauses of the old contracts and that new
clauses are being substituted for the old ones; but it is indisputable that
it remained under-stood that these new contracts only contemplated
readaptation and that, if this were not effected, the whole arrangement
became purposeless, and consequently the former situation would be
reestablished with all its legal consequences. In this connection it is not
indeed necessary to construe the meaning of the words "in consideration" in
English law; it is a question of expressing the leading idea which is
readaptation. The two Mavrommatis contracts of February 25th, 1926, contain
the following:
"And whereas it is necessary by reasons of the provisions of the Concessions
Protocol attached to the Treaty of [p61] Peace . . . signed at Lausanne on
the 24th day of July 1923 to put the provisions of the said Agreement into
conformity with the new economic conditions";
and in actual fact this readaptation meant nothing else than the maintenance
of the old concessions.
[150] If therefore, in the course of readaptation, circumstances arose
which, in themselves, contravened the international obligations accepted by
the Mandatory, it becomes clear that the latter could be held responsible
for their violation ; at the present stage of the proceedings, attention
cannot be devoted to this violation or to a more considered interpretation
of the con-tracts, as this question belongs to the merits of the case.
Nevertheless, as regards the Court's jurisdiction, it is common ground that
readaptation is the main object of both Parties. Therefore the objection
raised in regard to the renunciation of the previous concessions, being a
question concerning the merits, and because it relates to the existence or
non-existence of the contracts, cannot validly be supported.
[151] The important point at the present stage of the case is to ascertain
whether readaptation has or has not taken place. It is undeniable that this
readaptation has not taken place and that consequently the old concessions
have not been maintained, for readaptation was a condition essential to
their maintenance; from this point of view, therefore, the position is the
same as it was before the signing of the contracts and, therefore, it is
legitimate to say that it was necessary to ascertain whether the Palestine
Administration had respected its international obligations.
[152] In continuation of what has been said above, the Administration,
having expressed its full power to provide for public control, has failed to
observe its obligations by reason of the fact that it has not readapted the
concessions as it was bound to do.
[153] This failure to effect readaptation is closely connected with the
objection raised by Mr. Rutenberg in connection with the El-Audja. If he had
not made this objection, readaptation would certainly have taken place, and
it would seem that, once readaptation had been completely and finally
effected, the concessionary contracts would have entered upon the [p62]
stage of execution and would have been applied in their entirety; then only
would it be possible to discuss the contracts and to raise some other
objection to the Court's jurisdiction, an objection which might be based on
the following point : would the concessions, in spite of readaptation, still
retain their international character under the terms of Articles 11 and 26
of the Mandate and the Protocol of Lausanne ? But this is not the time for
the Court to consider these questions, which are outside the scope of the
present deliberations.
***
[154] It was also contended that Mr. Rutenberg's opposition to the use of
the El-Audja source by M. Mavrommatis did not establish incompatibility
between the concessions granted to M. Mavrommatis and those granted to Mr.
Rutenberg on March 5th, 1926; that, consequently, the present case was of a
different character to that of the cases which were previously determined by
the Court. On a closer scrutiny of this objection, one will observe that
there need not be such an incompatibility in all cases; in the preceding
cases there had been such an incompatibility because there was an opposition
between the Rutenberg concessions and the Mavrommatis concessions. The
reason for this opposition was not the same in the present case; but this
did not prevent another reason than the one given in the previous judgments
becoming the subject upon which the incompatibility between the two
concessions was based. Indeed, had the British Government not granted the
El-Audja concessions to Mr. Rutenberg before approving the plans of M.
Mavrommatis, the grant of the concessions to M. Mavrommatis would have
constituted a good title as against Mr. Rutenberg for the use of El-Audja;
that is to say that Mr.Rutenberg would have found it impossible to delay the
approval of the plans and M. Mavrommatis would have been fully placed in a
position to carry out his concessions. Whereas the British Government did
just the contrary; whilst it was discussing the plans with M. Mavrommatis,
it simultaneously granted concessions to Mr. Rutenberg on March 5th, 1925,
which included in Article 3 (A) a confirmation of the concession of [p63]
September 12th, 1921; this concession had already been declared to be the
basis upon which the jurisdiction of the Court rested in the first case,
because it had been granted for two reasons: firstly, because it constituted
an exercise of the full powers to provide for public control, and secondly
because it was the result of the close collaboration of the Zionist
Organization and the Palestine Administration; to the achievement of what
practical and material ends, so far as concerns the readaptation, the
approval of the plans and the financing of the undertaking was the
reservation made in Article 3 (в) of the Rutenberg concession of March 5th,
1926, directed, in which reservation it is stated: "A concession granted by
the Jerusalem Municipality in the year 1914 for electric supply or electric
tramways" and in which it must be understood that M. Mavrommatis was in
question, although he is not mentioned by name? The Palestine Administration
gave notice of Mr. Rutenberg's concessionary contracts of March 5th, 1926,
only in March, 1927, one year after those of M. Mavrommatis, who, being
unaware of the grant of the concessions, had been struggling with Mr.
Rutenberg, so much so that the latter had threatened the British Government
with seeking a remedy for his claims in the municipal courts; moreover, the
British Government has itself later recognized by the approval of the plans
not only that M. Mavrommatis was entitled to make use of the El-Audja
source, but it also formally recognized that Mr. Rutenberg had no right to
oppose such use. It thus becomes evident that the Palestine Administration,
by its own acts of recognition, had negatively in the exercise of its full
powers of control prevented the approval of the plans in the appoint-ed time
and consequently had prevented the readaptation of the concessions, which it
was obliged to readapt. It would have acted positively by approving the
plans in the period fixed in the new contracts of the Mavrommatis
concessions whilst ignoring Mr. Rutenberg's threats, and besides, it would
have acted positively if it had given instant protection to M. Mavrommatis'
rights by suspending the grant of new concessions to Mr. Rutenberg until the
readaptation had been completed and the concessions had been placed in a
complete state of executory applicability. Quite to the contrary, the
British Government, in [p64] this case as in the previous cases, instead of
taking prompt action by positive acts, preferred to adopt a method of
reconciliation by asking M. Mavrommatis to come to an agreement with Mr.
Rutenberg. The other way would have been a positive act by the Palestine
Administration, an act which would have consisted of immediately approving
M. Mavrommatis' plans and, in the event of Mr. Rutenberg's opposition,
referring him to M. Mavrommatis so that he should come to an understanding
with him and, failing such understanding in the time prescribed for the
approval of the plans, approving the plans and then dealing with Mr.
Rutenberg's claims; being protected by international obligations, M.
Mavrommatis' rights should have had priority over Mr. Rutenberg's private
rights even if these might have been connected with the Zionist
Organization. Therefore, in exercising the full powers to provide for
control over the natural resources, that is to say the El-Audja source, and
for the public works and utilities which were dependent upon the El-Audja
source, the Palestine Administration has, by adopting a negative attitude,
made the readaptation impossible because such readaptation depended upon the
approval of the plans and that the financing of his undertaking in turn
depended upon that approval.
[155] From the preceding it is evident at the present stage of the
proceedings, that, prima facie, the acts of the Palestine Administration
come under Article 11 of the Mandate, which, owing to its relationship with
Article 26, confers jurisdiction upon the Court.
***
[156] It is for these reasons that I am of opinion that the Court has
jurisdiction.
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