411.57 N 83/153
The Secretary of State to the Norwegian Minister (Bryn)
Sir: I have the honor to acknowledge the receipt of your note of June 3, 1921, in which you refer to the arbitration of the claims of Norwegian subjects against the Government of the United States on account of the requisition of property by the United States Emergency Fleet Corporation, and make certain observations respecting the draft arbitration agreement enclosed with my note to you on May 28th.
You observe that the draft agreement, which was left by you at the Department, was not referred to in my communication just mentioned, but that you are assured that it has had the benefit of my consideration. No reference was made to it in the Department’s note of May 28, because it had not been mentioned in any communication addressed by the Legation to the Department, which received some time ago a copy of it, which it was understood was given to the Department informally and was not presented formally for the Department’s consideration. The Department has been pleased to give the draft careful examination, and as you have doubtless observed, portions thereof were incorporated, in the Department’s counter-draft.
I have taken note of your statement to the effect that you observe that the element which your Government “has regarded of overshadowing importance, viz., the violation of the treaty existing between the two Governments is not referred to in the draft.”
It would seem possible that there has been a misunderstanding between the Department and the Legation in this matter which it would be well to have cleared up before further steps are taken in the negotiations respecting arbitration. It was the Department’s understanding, resulting from discussions with yourself and counsel for the Legation, that your Government was not disposed to press any issue of treaty violation. On that understanding the Department expressed its willingness to enter into negotiations for an arbitration of the entire number of claims which had been presented to the United States Emergency Fleet Corporation and to the Department [Page 591] in behalf of the Norwegian claimants, including certain claims which, irrespective of the correctness or incorrectness of the interpretation of the Treaty of 1827, set forth in your note of December 2, 1919, could not possibly come within the terms of the Treaty. The Department presumes that your Government would not insist that the Government of the United States would be debarred under the treaty from requisitioning property owned by American corporations because of Norwegian interests in such corporations. And it appears obvious that Norwegian subjects who may have purchased certain property after requisition thereof could not complain that treaty rights possessed by them in relation to such property were violated by the requisition. It will probably be admitted therefore by the Norwegian Government that, even under its construction of the Treaty of 1827, some of the claims in question could not come within its terms. Without admitting that all of the claims which have been presented to this Government by the Legation are not within the principle of international law that a claimant against a foreign country must, as a general rule, exhaust his legal remedy in the appropriate tribunal of the country against which he makes the claim before he is entitled to the diplomatic intervention of his own Government, I deem it proper to state that, if it is intended that the question of treaty violation is to be raised in any way, the Department is not disposed to arbitrate such of the claims as clearly come within the operation of this well established rule. I should, therefore, like to be informed definitely on that point.
However, I will take the present opportunity to comment on the alterations in the Department’s draft suggested by the Legation in the order in which they appear in your note under acknowledgment.
1. It does not appear to me that the revised language of the preamble you suggest has the effect of stating the nature of the claims in more “general terms”, as you say, but rather in more specific terms. This may not necessarily be objectionable, but if the preamble, which is merely a statement of reasons for the negotiation of the agreement under consideration, is to contain details such as have been proposed by you, it would seem desirable that other parts of the treaty, such as that defining the duties of the arbitrators, should be set forth more in detail and not in the very general terms you have proposed as a substitute for provisions in the Department’s draft. It is the Department’s understanding, however, after consultation with legal representatives of the Legation, that the following substitute would be acceptable to you.
“The United States of America and His Majesty the King of Norway, desiring to settle amicably certain claims of Norwegian subjects against the United States arising, according to contentions of the Government of Norway, out of certain requisitions by the United States Shipping Board Emergency Fleet Corporation;”
2. I am not entirely clear regarding your observations respecting the provisions in Article I of the Department’s draft defining the duties of the arbitrators; and although I believe that these provisions would afford a basis of arbitration entirely fair to the claimants, I am willing, with a view to meeting your desire in this matter, to substitute a provision of a more general character as follows:
“The tribunal shall examine and decide the aforesaid claims in accordance with the principles of law and equity and determine what sum, if any, shall be paid in settlement of each claim.”
3. Although your note under acknowledgment contains a reservation with regard to the designation of the third arbitrator, since you have made no new proposal respecting this point, I assume that the Department’s plan is not objectionable. Should the President of the Swiss Confederation not be acceptable to your Government, as a person to designate the third arbitrator, in case of a failure of the two Governments to agree upon one, the Department would be willing to have the designation made by His Majesty King George V of England.
4. The Department is agreeable to your proposal to designate specifically the claim referred to in Article I of the Department’s draft.
5. The Department is preparing to meet the Legation’s desire with respect to the shortening of the period of time intervening between the ratification of the agreement and the meeting of the arbitral tribunal, so that five months will be allowed for the presentation by each side of its case and one month for the delivery of the printed argument. The period provided after such alterations is the shortest one which, in the Department’s opinion, can properly be fixed for the entire preparation of the case.
6. I am not disposed to agree to the provision suggested by you with respect to the obligation of each of the contracting parties to furnish evidence to the other. I have taken note of your comparison of the arbitral procedure in contemplation with judicial proceedings generally. Without entering into a discussion of this comparison, it may be observed, on the one hand, that the claimants have declined, evidently under advice from their Government, to present their case to the appropriate judicial tribunal, and on the other hand, that Government records generally are not public records in the sense that court records are public, or subject to production in court as other records not of a privileged character are subject to demand under subpoena. The broad provision suggested by you would doubtless cover many kinds of papers which either Government might very properly consider should not be subject to the [Page 593] demand of the other. For this reason, and with a view to avoiding any possible future misunderstanding, it seems desirable not to incorporate into the agreement provisions such as those suggested by you with reference to this point.
I perceive no reason for the following unusual stipulations suggested by you:
“Each party shall have the right to submit, as evidence in the case, all documents, records, and other official or public statements, or facts, or affidavits bearing on the subject as it may consider necessary.”
The Department’s draft makes provisions for a full presentation of the case of each side with documentary evidence and with oral and written arguments.
7. It appears from the statements made to the Department that interest at the rate of five per centum to be paid on any award rendered, from the date of rendition to the date of payment, is considered by the Legation as inadequate. The Department is willing to agree to the rate of six per centum.
8. I would prefer to eliminate the phrase which you suggest that the award shall be given effect “without delay”. It would seem desirable to avoid incorporating into the agreement any implication as to the necessity for stipulating against an unwarranted delay in the execution of the award.
I trust that negotiations respecting the proposed agreement may be speedily adjusted on the basis of the foregoing suggestions.