411.57 N 83/560

The Secretary of State to the Norwegian Minister (Bryn)

Sir: By Joint Resolution approved February 20, 1923,13 the Congress of the United States took appropriate action to satisfy the Award rendered on October 13, 1922, by the Tribunal of Arbitration between the United States and the Kingdom of Norway, established under the Special Agreement concluded June 30, 1921, for the purpose of adjusting by arbitration certain claims of Norwegian subjects against the United States arising out of requisitions by the United States Shipping Board Emergency Fleet Corporation. In pursuance of that Resolution and in conformity with the Award, I have the honor to send you herewith a draft upon the Treasurer of the United States for $12,239,852.47 in full satisfaction of the total sums awarded to your Government after deducting the sum of $22,800 retained by the United States under the terms of the Award for payment to Page Brothers, and including interest at six per centum per annum upon the net total sum due to Norway from the date of the rendition of the decision until the date of payment.

By this action the Government of the United States gives tangible proof of its desire to respect arbitral awards and it again acknowledges devotion to the principle of arbitral settlements even in the face of a decision proclaiming certain theories of law which it cannot accept. Faithful to its traditional policy, my Government is most desirous to promote the judicial determination of international disputes of a justiciable character and in this interest to give its due support to judicial determinations.

It is because of this established policy that my Government especially regrets that it seems to be necessary to refer to statements contained in the present Award, but with due regard for the maintenance of the principles of international law, my Government finds itself compelled to say that it cannot accept certain apparent bases of the Award as being declaratory of that law or as hereafter binding upon this Government as a precedent.

The Award deals with the principle governing the requisitioning power of a belligerent State and the maintenance of correct principle in this matter, quite apart from its application in the present [Page 627]case, is of no little importance. The Award recognizes the requisitioning power of a belligerent but would seem to apply a limitation on its exercise, where the property concerned is that of neutral aliens, by defining the extent of the emergency and its termination, and by enhancing damages accordingly, thus subjecting the Government to a different test and a heavier burden where the property is owned by neutral nationals than in the case where it is owned by nationals of the requisitioning State. No such duty to discriminate in favor of neutral aliens is believed to be imposed upon a State by international law, with respect to property such as is concerned in the present case. It is the view of this Government that private property having its situs within the territory of a State (and the property here concerned is wholly that of private individual claimants on whose behalf the Kingdom of Norway is merely the international representative), including as in the present case property produced or created therein and never removed therefrom, is from the standpoint of international law subject to the belligerent needs of the territorial sovereign quite regardless of the nationality of the owners, provided that in case of its requisition just compensation be made. Due process of law applied uniformly, and without discrimination to nationals and aliens alike and offering to all just terms of reparation or reimbursement suffices to meet the requirements of international law; and thus the requisitioning State is free to determine the extent and duration of its own emergency. In apparently maintaining a different principle, the Tribunal is believed to have proposed and applied an unwarranted rule against which the Government of the United States feels obliged to protest and under which it must deny any obligation hereafter to be bound.

It is also to be regretted that the Award fails to give a satisfactory explanation of the manner in which the Tribunal has arrived at the amounts awarded. While purporting to award compensation on the basis of the fair market value of the property taken, the Tribunal has seen fit to omit discussion of the particular circumstances of the different claims or of the methods of calculation applied, or of the reasons for determining upon the amounts awarded in each case. Indeed, any definite disclosure or specification of the particular grounds of the awards to the respective claimants is so entirely lacking that the Award gives to one who examines it no clue to the method of determining why one amount was awarded rather than another. Again, although holding that claimants were entitled to interest and, that some claimants were entitled to higher rates of interest than others, the Tribunal does not reveal the rates of interest which were allowed on the various claims or the period of time for which interest was calculated or the amounts which were awarded as principal and the amounts awarded as interest.

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The inadequacy of the Award in these respects is particularly regretted in view of the requirements of Article 79 of the Hague Convention of October 18, 1907, pursuant to which the Norwegian claims were submitted to arbitration, that the Award must give the reasons on which it is based. In these circumstances the Government of the United States, while not rejecting the Award, feels obliged to direct attention to the requirements of appropriate arbitral procedure, and to state that it cannot accept as proper or satisfactory in international arbitrations the mode by which the Tribunal has assessed damages or the absence of a reasoned statement indicative of the methods of their computation.

In making these observations this Government has no desire to be controversial, much less to enter upon an exhaustive or critical discussion of the Award, or to intimate acquiescence in the expressions of the Tribunal upon other points not above mentioned, the purpose being simply to point out, not in opposition to, but in support of, the principle of arbitration, that the Award cannot be deemed by this Government to possess an authoritative character as a precedent.

Accept [etc.]

Charles E. Hughes
  1. 42 Stat. 1280.