422.11 G 93/1258: Telegram

The Secretary of State to the Minister in Ecuador (Bading)

3. Your No. 1, January 24, 4 p.m.

Arbitral provision paragraph 27, Contract of June 14, 1897, between Government of Ecuador and railway company, confirmed by Section 6, Article 2 of decree of 1908, applies to “controversies and disputes which arise between the two parties to this contract.” Thus, by agreement of the parties, arbitration is substituted for trial by ordinary courts of all controversies and disputes between them. This agreement evidently applies to questions of jurisdiction as well as to questions of substantive right. Therefore, a denial of the right to resort to arbitration in the present case is a denial of justice, and the Department considers that you are justified in presenting the request of the railway company, formally to the Ecuadoran Government, and authorizes you to take it up with the President of Ecuador, as you suggest. Telegraph result.