C. The Judgment of 1925—Merits

10 Under the 1924 judgment, jurisdiction was limited, in principle, to the question whether the Rutenberg concessions violated the Jerusalem concessions held by Mavrommatis. Yet the judgment on the merits first dealt with a preliminary question. Before any infringement of the Mavrommatis concessions could be examined, the PCIJ had to pronounce on their validity. The concession agreements referred to Mavrommatis as an Ottoman subject although he had, in fact, merely Greek nationality. In dealing with the consequences of this error, the PCIJ relied not only on Ottoman law but also on principles which seem to be generally accepted in regard to contracts (General Principles of Law). The Court held that an error about a certain fact could only lead to annulment of a contract if that fact had been considered conditional for the conclusion of the contract. This formula comes close to what Art. 48 Vienna Convention on the Law of Treaties (1969) (‘VCLT’) now stipulates with regard to international treaties. Under these principles, Mavrommatis’ nationality proved to be irrelevant.

11 The PCIJ then addressed the right accorded to Rutenberg to claim the expropriation of previous concessions (see also Property, Right to, International Protection). As the Rutenberg concessions partly overlapped the Mavrommatis concessions, the pure possibility for Rutenberg to claim an expropriation at any time was considered to interfere with the right of Mavrommatis to use his concession without being threatened by annulment and was therefore contrary to the obligations contracted by Great Britain under Protocol XII to the Lausanne Peace Treaty. In May 1924, however, Rutenberg definitely renounced his right of expropriation, so the Mavrommatis concession was no longer threatened with expropriation. As a consequence, the breach of Protocol XII to the Lausanne Peace Treaty was limited to the period from 1921 until 1924 and compensationwas due for loss suffered out of this violation. The Court pointed out that, in fact, no expropriation had taken place and the concession promised to Rutenberg had not, in itself, hindered Mavrommatis from executing his concessions. While it was true that Mavrommatis had problems in financing his operations, it could not be established that he would have found more favourable conditions at any moment if the Rutenberg agreement had not been concluded. Therefore, the Court did not accept any loss which might have justified a claim for compensation. Judge Altamira was the only judge to express his disagreement on this point.

12 Outside its jurisdiction under Art. 26 Mandate for Palestine, but under an informal agreement reached by the parties during the proceedings, the PCIJ then decided on the provisions of Protocol XII to the Lausanne Peace Treaty being applicable to the Mavrommatis concessions. While Art. 4 Protocol XII to the Lausanne Peace Treaty provided that concessions should be put into conformity with the new economic conditions by agreement, Art. 6 Protocol XII to the Lausanne Peace Treaty provided for an exception for concession contracts that had not ‘begun to be put into operation’. In interpreting Art. 6 Protocol XII to the Lausanne Peace Treaty, the PCIJ relied, inter alia, on the drafting history of the French version where the initial formulacommencement d’exécution had been replaced by the wider formula commencement d’application. The PCIJ concluded that putting a contract into operation referred not only to the beginning of works but also to preliminary actions foreseen in the concession contract, such as the submission of plans and designs of the works to be carried out, which Mavrommatis had undertaken in 1914. The concessions therefore had to be readapted according to Art. 4 Protocol XII to the Lausanne Peace Treaty. In order to confirm this result, the PCIJ elaborated that Art. 6 Protocol XII to the Lausanne Peace Treaty was an exception which had to be strictly construed.

Date: 2016-04-22; view: 530