422.11 G 93/1261: Telegram

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

4. Department’s 3, February 1, 5 p.m. Minister for Foreign Affairs replies that denial of justice can exist only after judicial decision, therefore denies right of railway company to present request for arbitration formally through diplomatic channel especially when Ecuadorean constitution makes waiver of diplomatic intervention implicit part of every contract. In personal interview with the President I laid before him such points of international law as seemed pertinent to refute the position of the Foreign Minister particularly pointing out that in case the decision of the court were against the railway the latter could legally refuse to accept the decision on the ground that it would not be bound by the decision of judges to whom it had not consented to refer its cause nor could it by voluntary agreement deprive its own country of any right to protect it which it might otherwise possess. The President replied however that he could not at present discuss the justice of arbitration since by article 81 of the Constitution he was expressly forbidden to hinder the course of judicial procedure and he could therefore do nothing until the court rendered its decision. This last statement appears to me the most valid argument so far presented by the Government and I cannot see what further steps can be taken until judicial decision is rendered.