The Minister in Cuba ( Gonzales ) to the Secretary of State

No. 1048

Sir: Referring to the Department’s instruction No. 831 dated June 27, 1919,92 with reference to the proposed arbitration of the McGivney & Rokeby Construction Company’s claim against the Cuban Government, and to my telegram No. 33, dated July 18, 1919,92 I have the honor to transmit, herewith enclosed, the translation of Note No. 96, dated July 10, 1919, from the Cuban State Department, which fully explains the position taken by that Government in this case, and which constitutes the formal reply which was promised and mentioned in my telegram.

I shall await the Department’s instruction before proceding further in this matter.

I have [etc.]

William E. Gonzales

The Cuban Secretary of State ( Desvernine ) to the American Minister ( Gonzales )

No. 96

Mr. Minister: The purpose of this note is to reply to another which I had the honor to receive from Your Excellency bearing date of April 10th last, together with its accompanying enclosures, and which I acknowledged on May 8th informing Your Excellency that I had remitted it to the Secretary of Public Works for his report upon the matter, which fell within his jurisdiction.

A few days ago there was received in this Department a communication from the said Secretary upon this matter, and it is in view of this report, and also in view of previous notes which I have had the honor to address to Your Excellency, and of other antecedents [Page 95] in the case which have come within my knowledge, that I now pass to explain the position of the Government respecting the subject of Your Excellency’s communication of April 10th last.

In substance the note of Your Excellency states that it submits to the consideration of this Government a project of a Protocol, which is attached thereto, for deciding by means of arbitration the claims of the McGivney & Rokeby Construction Company, alleging as a basis for the adoption of that procedure of arbitral decision respecting the matter, that the circumstances of the contract of June 23, 1908, distinguish it from other ordinary contracts entered into by the Government of Cuba with American citizens, with the result that the Government of the United States has a direct interest in its fulfilment and a right to request that the disputes arising out of the said contract be settled by arbitration.

To that effect, and as a proof of those grounds, there is cited in the Note referred to, Article V of the treaty of 1903 between the United States and Cuba, in which promise was made to the Government of the United States to comply with, and even so far as necessary, to extend, the plans already in project for the sanitation of the cities of the Island, adding that the interpretation of what was understood by “plans in project”, was given by the Military Governor of Cuba, General Leonard Wood, on May 20, 1902, upon delivering the Government of the Island of Cuba to the Republic, with the declaration that, in those plans already in project, the contract of the said Company had been included.

It is clear that the whole question at issue has been submitted in its entirety to the consideration of the President of the Republic, and it is in accordance with his opinion and instructions, and also with the written and verbal reports of the Secretary of Public Works, that I have the honor to give to Your Excellency this reply.

I must first of all express the deep regret, not only of the undersigned, but also on the part of the Government of Cuba, that it is not possible to always accede to all the desires and petitions of the Government of the United States; but there is no room for doubt that when the Government of Cuba, in attempting to accede to those desires and petitions, encounters law and legal principles contrary to the action sought, its plain duty is to explain the reasons that render impossible a favorable reply, since, however great its powers, it cannot act contrary to the laws and other principles of almost universal application, and if it were to do so despite the opposition of those laws, thus setting them aside, the Government of Cuba would permit the establishing of precedents which citizens and companies of other countries would wish to avail themselves of in the future.

[Page 96]

With this declaration, and returning to the contract which is the subject of this dispute, I should state that it is important upon entering into a discussion of the matter, to examine it from the point of view of what is involved, to see whether in fact the questions raised by the Company can be vested with public and international character, and, in such case, do not treat exclusively of the private interests of a particular Company or Corporation, but are interests of such nature and so affecting the Government of the United States that if they are not protected, as the Company claims, the Government of Cuba would be failing of compliance with an international obligation and offering an offence against the Government of the United States.

The argument invoked in the Note to which I have the honor to reply, to justify the intervention and interest of the American Government in the pretensions of the contracting Company, is Article V of the treaty of 1903, entered into between the United States and Cuba, and which, in its relevant part, reads as follows:

“The Government of Cuba shall execute, and in so far as may be necessary, amplify, the plans already in project, or others which may be mutually agreed upon, for the sanitation of the cities of the Island, with the view of avoiding a recurrence of epidemic and infectious diseases, thus protecting the people and the Government [commerce] of Cuba, as well as the commerce and people of the Southern, Ports of the United States.”

To this precedent of the Treaty, Your Excellency adds the declaration that the “plans already in project” are those reduced to the contract with the aforesaid Company, and this, moreover, is not denied.

But none of those precedents carry the category of that contract to that of a public and international agreement, since evidently the interest of the United States,—and in which respect it cannot be presumed to exceed that of the Government of Cuba—is that there shall be compliance with the plans for sanitation by means of the works which have been the object of that contract; and this interest of both Governments, American and Cuban, in so far as refers to the sanitation and paving and sewering which were the purpose of the contract with the McGivney & Rokeby Company, has already been completely satisfied and fulfilled, since the said works are concluded for all purposes of the contract, whether done by the Company, or by the Cuban Government itself; wherefore, it does not appear that the Treaty mentioned, of 1903, has been infringed in any part, nor can it enter into question in this matter.

The rest, or that is, what remains in dispute between the Government of Cuba and the contracting Company, is a matter relating [Page 97] solely to the private, pecuniary, purely economic interest of the Company, which claims what it cannot claim and which does not refer to the construction of the works which were the object of the contract since these works were completed with the paving of the nine hundred ninety three thousand five hundred (993,500) meters stipulated with the said Company.

So that the question today cannot be said to have public and international interest, that is—affecting the Nation as a Nation, but it treats solely of the private interests of a Company which obtained that contract by means of public bidding, the same as any other company could have obtained it, and what is now claimed is only the satisfaction of purely private and personal interests of said Company.

I permit myself to believe that only questions clothed in fact with public and international significance are such as can render necessary the mediation of one Government in another Government’s relations with foreigners, even though the latter may be citizens of the Nation which it is proposed shall intervene,—because when the interests of those citizens have no public character, but are only of a personal and private order, they can only be heard and resolved by the administrative and judicial organs which, according to the laws, are established precisely for the function of hearing and deciding those questions; and only when, in this class of proceedings before the administrative and judicial powers, the legal resources and endeavors of citizens or companies in their disputes with a Government, become exhausted, can other and extraordinary procedure be initiated, such as, for example, the proposition of arbitration, when the claimant party alleges that all its ordinary legal resources have failed, and that it has been denied justice.

There is also mentioned in the Note of Your Excellency, in order to call the attention of this Government to the particular,—the Convention between the United States and other Nations, in which it is stipulated that pecuniary claims should be submitted to settlement by arbitration, and which reads as follows:

“The high contracting parties agree to submit to arbitration all claims for pecuniary losses or damages which may be presented by their respective citizens and which cannot be amicably adjusted through diplomatic channels, when said claims are of sufficient importance to justify the expense of arbitration.”

It is not possible to believe that that Convention, even though it were binding upon Cuba, could justify in the case under consideration, the procedure of arbitral decision, in the absence of the preliminary legal procedure which should have been taken by the Company and which is in force in Cuba, as in the majority of civilized [Page 98] countries, and without which procedure it is not permissible that a Company should improvise an appeal to diplomatic consideration and to international arbitration, completely forgetting or cutting itself off from all that is established by the Constitution and laws of Cuba; but the truth is, in our judgement, that said Convention has acquired no legal force in Cuba, because, although it was in fact signed by the Delegates of Cuba and of other Nations, this was done only ad-referendum and consequently cannot be considered to have obligatory effect in the respective countries, until they have approved and ratified it in accordance with their Constitutions in force; it is thus resulting that the said Convention has never been approved by the Cuban Senate as required by clause VI of Article 67 of our Constitution.

The case of the contracting Company is that, contrary to all legal principles and laws of Cuba, it has not sought its remedy by the ruling procedure before the legal authorities and courts of justice which are properly charged with deciding such claims, and for this reason to agree that its differences with the Government of Cuba should be settled by means of an international tribunal of arbitration, would be to create a special jurisdiction for that Company and grant it the privilege of withdrawing itself from the procedure, laws and jurisdiction of the administrative and judicial authorities to which it should address itself for a settlement of its claim,—thus establishing a precedent bound to be invoked by other citizens and Companies and which would leave the laws of Cuba without legal effect as to foreign Companies.

The Company did establish some claims, but later abandoned them. For example, it took an appeal before the President of the Republic against a resolution of the Secretary of Public Works ordering the suspension of certain work which said Secretary considered was not authorized by the contract. The President of the Republic, by resolution of March 3, 1914, decided this appeal against the Company; and under the laws, there remained to the Company the right to apply to the courts, through the procedure known as “contentious-administrative”, in which it could have asked for, and if justified, could obtain revocation of the President’s resolution; but the Company did not do this, but refrained from establishing any judicial claim whatever against this resolution. Therefore the said Presidential Resolution was converted into a final and irrevocable decision, or what is known as “Res [ad]judicata.

In its other claims, the Company failed to file the appeals, which it could have done under the laws, against decisions of the Secretary of Public Works, thus allowing that all those resolutions should acquire the irrevocable character which everywhere inheres to Res adjudicata; the most extraordinary being the case where, instead of [Page 99] conforming to the Cuban laws and adopting those legal measures, the Company decided to close its offices, abandon its contract which the Government of Cuba continued, cease all further work under the same, and betake itself to the United States without leaving in Cuba any representative with whom the Government of the Republic could treat.

That is to say, for the McGivney & Rokeby Construction Company the laws of Cuba have been a dead letter, as to procedure and appeals which should be resorted to by those deeming themselves prejudiced by resolutions of the Government; and instead of availing itself of those laws and proceedings it has preferred to ask the privilege of being heard by a tribunal of arbitration, which amount[s] to deciding questions already decided, the Company not having brought against the resolutions of the Government the appeals and proceedings provided by the laws of Cuba. What it seeks, therefore, is not that a pending question shall be settled by arbitration, but that resolutions be overthrown and revoked which were issued by the Government of Cuba in the exercise of its functions, and to which the Company consented, technically speaking, since it resorted to no appeals or other remedies which it was entitled to do under our laws.

For all the following reasons, the acceptance of the Protocol of arbitration accompanying the Note of Your Excellency and which would involve a Treaty or Convention between the Governments of the United States and Cuba, would be based on the principal fact that in this case the provisions of our Constitution in its Article 85 declaring that the Courts will take cognizance of all actions whether civil, criminal or contentious-administrative, are prescinded as to the contracting Company, as also the laws and provisions regulating the procedure for discussing and deciding questions between citizens or companies,—all of which the Government cannot do without clearly breaking those laws itself.

The Government of Cuba is willing to inform the Government of the United States of all the facts, circumstances and antecedents of this question, and for this purpose our Secretary of Public Works who has competent knowledge of the matter, was sent to Washington to confer with the American Government. If now the Government of the United States desires further reports it may present a complete, numbered statement of each and every of the grievances of which the Company complains, in the assurance that they will be answered, one by one, in a thorough and satisfactory manner by our Department of Public Works.

I avail myself [etc.]

Pablo Desvernine
Secretary of State
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