Papers Relating to the Foreign Relations of the United States, With the Address of the President to Congress December 8, 1914

File No. 718.1915/225.

Chargé Cresson to the Secretary of State.

No. 331.]

American Legation,
Panama, November 18, 1914,

Sir: I have the honor to transmit herewith the text of the correspondence and its translation (as appearing in the “Estrella de Panama”) which has passed between the Panaman Secretary of Foreign Affairs and the Minister for Foreign Affairs of Costa Rica with respect to the objections made by Panama to the award of the Chief Justice of the United States, acting as Arbitrator with respect to this matter.

I have been assured by the Sub-Secretary of Foreign Affairs that the correspondence forwarded herewith is substantially correct.

I have [etc.]

Wm. P. Cresson

.

[Inclosure 1—Translation.]

Panama to Costa Rica.

No. 4739.]

Department of Foreign Affairs,
Panama, October 17, 1914.

Mr. Minister: The Minister of this Republic in Washington has informed this Department that under date of September 12 last he was informed of the decision rendered by the Chief Justice of the United States in the boundary dispute between Panama and Costa Rica, and at the same time transmitted a copy of the decision.

From the study made by the Government of Panama of this decision it has arrived at the following conclusions:

1. That through the Porras-Anderson Treaty the Arbitrator received power and jurisdiction to determine the boundary between Panama and Costa Rica most nearly in accord with the real intention and correct interpretation of the Loubet Award, which was the only question that Panama could constitutionally submit to arbitration.

2. That the said treaty fixed the boundary between Panama and Costa Rica and declared that the boundary from Punta Burica to Cerro Pando is clear and unquestionable. The boundary line on the Pacific, therefore, was recognized, not because the interested parties decided upon it in the Treaty of March 10 [17], 1910, but because the award established it.

3. That the said treaty also establishes that the parties “have not been able to reach an agreement in respect to the interpretation which ought to be given to the arbitral award as to the rest of the boundary line,” thus given additional force to the attitude of Panama in not consenting to submitting to discussion the validity and correctness of the the award.

4. That it is therefore clear that the validity and correctness of the Loubet Award were not questions submitted to the arbitration of Mr. Chief Justice White, and that he therefore lacked jurisdiction to consider or decide them.

5. That the essential question submitted to the Arbitrator was the interpretation of the Loubet Award in the part where it referred to one part of the boundary line, and that he had power to determine only that part of the line, taking the said award for his basis and deciding as nearly as possible in conformity therewith.

6. That the Arbitrator, instead of determining the boundary line by interpretation of the said award, has ignored that award completely and fixed a line that has no contact at any point with the line established by President Loubet.

7. That although the Porras-Anderson Treaty specified as fundamental the question of the validity of the Loubet Award, when the award was submitted to the Arbitrator for interpretation he specified as a fundamental question for his decision “to determine whether the line fixed in the former arbitration was within the former treaty or treaties”.

8. That Panama, before and during the arbitration hearings, relying on the treaty that gave life to the arbitration, constantly contended that the Arbitrator had no power to revise or correct the Loubet Award, and that if for any reason he found that award inapplicable he should abstain from rendering a decision on the essence of the controversy; that the Arbitrator has nevertheless declared that power was conferred upon him to correct the award in so far as he might find it outside the jurisdiction conceded to the previous arbitrator.

9. That Mr. Chief Justice White in the award describes the boundary between the two countries adjudged by him as “most in accordance with the correct interpretation and true intention of the former award”; that Panama cannot, however, consider that expression to be compatible with the bases of the award, since the award declares, inter alia, “that the line of boundary which was purported to be established by the previous award from Punta Mona to the main range of the Cordilleras, and which was declared to be a counterfort or spur of mountains in said award described, be and the same is held to be non-existing.”

10. That the Arbitrator has, in short, made a revision of the Loubet Award instead of interpreting it, as he was by the arbitration convention called upon to do; and that as a consequence of such revision he has fixed a boundary line entirely foreign to said award.

For the foregoing reasons the Government of Panama considers that the Arbitrator, Mr. Justice White, has exceeded the powers conferred upon him by the Porras-Anderson Treaty; that the award made by him is therefore null in the light of international law; and that the Republic of Panama considers itself not obliged to comply with a decision which is juridically ineffectual for the settlement of the boundary dispute between Panama and Costa Rica.

It is with genuine regret that I communicate the foregoing to the Government of your excellency, expressing at the same time the hope entertained by my Government that what has occurred will not in the least alter the harmony that happily exists between our two countries, and declaring that it is the invariable desire and purpose of Panama to seek the solution of its international difficulties by righteous means alone.

I avail [etc.]

E. T. Lefevre

.

[Inclosure 2—Translation.]

Costa Rica to Panama.

No. 63A.]

Ministry for Foreign Affairs,
San José, October 30, 1914.

Mr. Minister: I have had the honor to receive your excellency’s note No. 4739 of the 17th instant, in which your excellency states the reasons that have guided your Government in considering the award made on September 12 in the arbitration of the boundary dispute between Costa Rica and Panama to be null in the light of international law because the Arbitrator exceeded the powers conferred upon him by the arbitration treaty, and in considering itself consequently not obliged to comply with that award.

I have communicated the contents of your note to the President of the Republic, and, in pursuance of his instructions, I have the honor to reply as follows:

In spite of the profound respect that I entertain for the opinion of your excellency, it gives me a complete and well justified surprise to learn of the momentous and, let me say, perhaps not fully matured determination of your excellency’s Government to reject the award that ended a dispute which, for more than a decade, had been extensively discussed between the two parties before submitting it to the rigidly impartial and highly respectable decision of the Chief Justice of the great American Republic, to whose Government’s friendly mediation and patient effort is due the conclusion of the treaty that served as the basis of that decision; a dispute which was thereupon ventilated for over four years in an ample and thoroughly unrestricted argument in which each of the parties made use of all the resources and facilities granted it by the treaty and by the inexhaustible courtesy of the eminent Arbitrator, whose care for the perfect equality of the parties and for maintaining the strongest light upon the case was constantly praised by the representatives of both parties.

In the opinion of my Government the said decision is absolutely invulnerable, as well on account of the profound learning and indestructibly solid bases upon which it rests as by virtue of Article VII of the treaty, which says:

The award, whatever it be, shall be held as a perfect and compulsory treaty between the high contracting parties. Both high contracting parties bind themselves to the faithful execution of the award and waive all claims against it. The boundary line between the two republics as finally fixed by the arbitrator shall be deemed the true line, and his determination of the same shall be final, conclusive, and without appeal.

My Government, therefore, can not at all contemplate the matter from the point of view taken by that of your excellency; and it entertains the deep conviction that after mature reflection and careful reconsideration of the case in the light of the reasons that I shall advance herein in support of the position of my Government, your excellency’s Government will readily adopt conclusions in harmony with the respect due to the decision in its character of res judicata and in conformity with the clear text Of the treaty and the fundamental principles of international law.

The conclusions at which your excellency’s Government has arrived are thus formulated:

[Quotation of the ten conclusions set forth in the foregoing note.]

If the true and acceptable propositions contained in the conclusions above quoted are separated from those which, in the opinion of my Government, are of the contrary nature, they will form two groups, as follows:

First group. Correct propositions, admitted by both Governments.

(a) That through the Porras-Anderson Treaty the Arbitrator received power and jurisdiction to determine the boundary between Panama and Costa Rica most nearly in accord with the true intention and correct interpretation of the Loubet Award.

(b) That said treaty declared the boundary between Costa Rica and Panama fixed by President Loubet, from Punta Burica on the Pacific Ocean to the highest point of the Central Cordillera beyond Cerro Pando near the ninth degree of north latitude, is clear and indisputable.

(c) That the said treaty establishes the fact that the parties have not been able to reach an agreement in respect to the interpretation which ought to be given to the arbitral award as to the rest of the boundary line; namely, from the said point of the Central Cordillera to the Atlantic Ocean.

(d) That the Arbitrator in the award describes the boundary between the two countries adjudged by him as the one “most in accordance with the correct interpretation and true intention of the former award.”

(e) That the validity and general correctness of the Loubet Award were not questions submitted to the arbitration of Mr. Justice White.

In regard to these five points there is no divergence of opinion, and they should therefore be discarded from the present discussion.

Second group. Propositions now advanced by the Government of Panama and contradicted by the Government of Costa Rica.

(a) That under the treaty the parties submitted for arbitration merely the one question of the interpretation of the Loubet Award, without regard to the limitation of that award expressly set by the treaty.

(b) That the only question that Panama, under its Constitution, could submit to arbitration was that of the mere interpretation of the Loubet Award.

(c) That the boundary line on the Pacific Ocean was recognized riot because the parties decided on it in the Treaty of March 17, 1910, but because the award established it.

(d) That the attitude of Panama during the arbitration proceedings was that of not consenting to submit to discussion the partial correctness of the award.

(e) That because the correctness of the Loubet Award was not submitted to arbitration, Mr. Justice White lacked jurisdiction to consider or decide that point.

(f) That the Arbitrator exceeded the limits of his powers when he failed to confine himself to the mere interpretation of the boundary line fixed by the Loubet Award; and that on the contrary he completely ignored that line and fixed another and different one.

(g) That the Arbitrator erred when he established as a fundamental question for his decision “to determine whether the line fixed in the former arbitration was within the former treaty or treaties.”

(h) That Panama, during the arbitration hearings, constantly contended that the Arbitrator had no power to correct the Loubet Award; that if for any reason he found the award inapplicable he should abstain from rendering a decision on the essence of the controversy; that the Arbitrator has nevertheless declared that power was conferred upon him to correct that award in so far as he might find it outside the jurisdiction conceded to the previous arbitrator.

(i) That in the opinion of the Government of Panama the expression used by the Arbitrator, “the boundary most in accordance with the correct interpretation and true intention of the former award,” cannot be considered compatible with the bases of the award, since the award declares “that the line of the boundary which was purported to be established by the previous award from Punta Mona to the main range of the Cordilleras,” is not within the disputed territory, and therefore should be ignored and “held to be non-existing.”

(j) That the Arbitrator has, in short, made a revision of the Loubet Award instead of limiting himself merely to interpreting it, as he was by the arbitration convention called upon to do; and that as a consequence he has fixed a boundary line entirely foreign to said award.

Such are the propositions presented by the Government of your excellency which Costa Rica rejects, not without regret, as totally unfounded and inadmissible. And now I proceed, with the permission of your excellency, to their refutation.

Point “(a)” is discarded from the discussion with the observation that the argument of Panama is here based solely on the suppression of the second paragraph of Article I of the Porras-Anderson Treaty, which says:

In order to decide this the arbitrator will take into account all the facts, circumstances and considerations which may have a bearing on the case, as well as the limitation of the Loubet Award expressed in the letter of his excellency M. Delcassé, Minister of Foreign Relations of Prance, to his excellency Señor Peralta, Minister of Costa Rica in Paris, of November 23, 1900, that this boundary line must be drawn within the confines of the territory in dispute as determined by the Convention of Paris between the Republic of Colombia and the Republic of Costa Rica of January 20, 1886.

This text being still in force, it is not permissible to ignore any part of it, and any argument based on its suppression is incompetent.

Point “(b)” is likewise inapplicable, for if it were valid it would prove that since January 21, 1825—the date of the first Constitution of Costa Rica—the boundary question, which has just been finally settled by the award of Mr. Justice White, had been forever adjudicated. Your excellency will surely remember that in that Constitution and in several subsequently promulgated, the national territory of Costa Rica on the Colombia or New Granada frontier was bounded by the Chiriquí (Calobebora) River from the Atlantic, and the Chiriquí Viejo River from the Pacific. When in 1903 the Constitution of Panama was framed and reference was made therein to the Loubet Award, Costa Rica and Colombia had already for several years been discussing the scope and interpretation of that award, and consequently that award could not benefit Panama except insofar as the final decision of the pending dispute might legally do so. Any other interpretation would evidently lead to the absurd and inadmissible consequence that one of the parties could render the decision in the case, to the damage of the other party.

Point “(c)” is purely technical or academic; a correct statement of this point would be to say that the part of the boundary line there referred to (the Pacific section, from the cordiliera to the ocean) was recognized because the award clearly established it as well as because the parties readily accepted it in the Treaty of March 17, 1910. This question lacks practical importance because for either of the above reasons, or for both probably, it is not today and never has been the object of dispute.

Point (d)” contains an error which is exposed by the lucid texts of the statement of Panama’s case dated November 18, 1913; as follow, first on page 4:

The “true intention” of the award being established to the effect that the boundary line must be drawn “within the limits of the territory in dispute,” it is therefore incumbent on the present Arbitrator to modify that part of the line so as to conform to that intention, and nothing more is necessary.

At a preceding point in the same paragraph occurs the following:

If the line described by President Loubet did, in any part, lie outside the territory in dispute, this limitation (that contained in the letter of Minister Delcassé) would avert all difficulty arising therefrom (from the fact of having run the line through territory foreign to the dispute).

And then it says:

It would be merely an occasion for the Arbitrator to exercise his powers.

On page 10 occurs the following:

But if any part of the line fixed by President Loubet did in fact lie outside the limits set by the Convention of 1886, that part would require modification, and the present Arbitrator would be compelled to substitute for said part another that should be adjudged “most in accordance with” what he might find to be the “true intention of the award.”

On page 3:

For such a contingency it is provided that the Arbitrator may have recourse not only to the interpretation of the language of the award but also to its “true intention”; and if he cannot fix a line exactly and precisely as described in the award, he must fix one that shall be “most in accordance with “not only the “correct interpretation” but also with the “true intention” of the award made by President Loubet.

Also on page 3:

But if any ambiguity appear, or if in any part it be impossible to draw the line exactly as described in the award, and be therefore necessary to fix the line “most in accordance” with the “true intention “of President Loubet, the Arbitrator, in order to clear up such ambiguity or to determine the true intention, must “take into account all the facts, circumstances and considerations which may have a bearing on the case “as he would have had to do if the treaty had been silent in this regard.

Page 5:

That is, the language of the award could not be followed literally, and the Arbitrator would have to choose such a line as he might find “most in accordance” with the award, thus escaping the difficulty.

It (the Loubet Award) would stand in all its force in accordance with its “correct interpretation and true intention “as determined by the Arbitrator.

The ideas of modification of and substitution for the line of the Loubet Award are here perfectly expressed, and these ideas are nothing but the admission of the possibility of introducing into the Loubet Award amendments or corrections, which Panama now refuses to accept.

The competence of possible amendments or corrections of the Loubet Award in accordance with the treaty having been demonstrated, the argument against acceptance of the jurisdiction of the Arbitrator in point “(e)” fails for lack of foundation.

The same is true of point “(f)”, since the argument rests entirely on the premise of the fixing of a line different from the one fixed by the Loubet Award.

The statement made in point “(g)” is not sustainable in the presence of the following text from the above-quoted statement of Panama’s case dated November 18, 1913, on page 8:

The question now to be considered is—as expressed in the treaty—What is the boundary line with respect to this award?* * * We must confine ourselves to that part of the line between this point of the Cordillera Central to the north of Cerro Pando near the ninth degree of north latitude, and Punta Mona on the Atlantic. As to this part of the line two questions may arise:

1. Is it drawn, as described in the award, entirely within the territory in dispute, as determined by Articles II and III of the Treaty of January 20, 1886?

2. If the line as described in the award is entirely within the territory in dispute, can it be identified more in detail, to the point of being made clear and indisputable, as the parties have agreed that the rest of the line already is?

These two questions were extensively discussed by the Chief Justice because they were the corner-stone of his award; and in the award it was necessary to declare that the entire boundary line on the Atlantic side was outside the disputed territory, for which reason he withdrew the line to the extreme limits of the disputed territory.

The Arbitrator, acting within the limits of his powers, decided that question in the negative; and it is evident that in taking cognizance thereof he did not exceed the limits of his jurisdiction, as is plainly shown in the text reproduced above.

The first and third clauses of point “(h)” are amply answered in the foregoing. The second clause, namely that in the opinion of your excellency’s Government, “if for any reason the Arbitrator found the award inapplicable he should abstain from rendering a decision on the essence of the controversy “, is, permit me to say, an alarming novelty in general jurisprudence. The true doctrine is precisely the contrary; it is the unavoidable duty of the Arbitrator to decide every point comprised by the litigation to the limit of his jurisdiction, even if an applicable law be lacking or other difficulties arise. Panama specifically recognized this doctrine during the arbitration, in the statement of its distinguished representative, who said:

It was rcognized that some part of the description of the line in the award might not be in exact accordanee with the physical character of the territory involved. Therefore the Arbitrator might not find the precise geographic accidents described by President Loubet, or assumed by him perhaps, as the basis of his award. In such a case it is provided that the Arbitrator may have recourse not only to an interpretation of the language of the award, but also to its true intention; and if he cannot fix a line exactly the same as that of the award, he must fix one not only in accordance with the correct interpretation but also with the true intention of the Loubet Award.

In no part of the statement of the case of Panama so frequently quoted above does there appear the idea of an abstention from judgment in relation to questions stated and argued in the case.

The idea that the Arbitrator should abstain from rendering a decision on argued points is, as above shown, absolutely unsustainable.

Finally, if there is any point extensively considered and wisely decided in the Award of September 12, last, that point is precisely the one relative to the determination of the territory comprised in the decision in regard to frontiers in the case argued before the President of France. The objections made under points “(i)” and “(j)” have no weight at all in the opinion of my Government. And the supposed incompatibility between the opinion and the decision of the Chief Justice I consider entirely unfounded. Even on the inadmissible supposition that such an incompatibility existed, it would not suffice to warrant a disregard of what is clearly and categorically settled, according to the commonest rules of judicial procedure and the agreement of the parties set forth in Article VII of the treaty, above quoted.

Such, Mr. Minister, are the solid reasons on which my Government relies for rejecting, as with great regret it does reject, the final declarations of the important note under acknowledgment, as follows:

1. That the Arbitrator, Mr. Justice White, in his decision and award of September 12, 1914, exceeded the powers conferred upon him by the Anderson-Porras Treaty;

2. That the award made by him is therefore null; and

3. That the Republic of Panama considers itself not obliged to comply with that award.

Having thus replied to your excellency’s note, it is highly gratifying to me to say that my Government most sincerely deplores, in company with your excellency’s Government, that the unexpected and grave contention now raised should have interrupted the harmony that has happily existed and exists between Costa Rica and Panama; and trusts that this difficulty may find a prompt and satisfactory solution by legal channels in keeping with the firm friendship of the two countries.

I avail [etc.]

Manuel Castro Quesada

.