GOLDBERG CASE: Germany v Romania

FACTS

In July 1914, traders in Romania bought 30 tons of tinplate from Berlin. These goods were paid in
advance by 3,229.10 Gold Marks and were shipped on July 21, 1914 to Antwerp. Levante and Middle Sea Kontor
A-G was responsible for shipping them to Romania. The declaration of war in 1914 prevented the departure of
the ship hence, the goods remained with the sender which was requisitioned by German military authorities.
The plaintiffs were not immediately compensated but on June 7, 1916, they received a delivery note from the
Reich Compensation Commission and the latter awarded them, as compensation, 22,558 paper marks which
represented only 532.30 gold marks which is less than one sixth of the gold value of the requisitioned goods.
This was transferred to the applicants who admitted to accept the sum but they are now claiming the difference
between the compensation received and the gold value of the property seized.

ISSUE

WON Germany committed an act contrary to the law of nations

HELD

YES.

The act contrary to the law of nations, within the meaning of the clause discussed, must therefore be
defined: any act which, in the pre-war state to state relations, could have been submitted to an international
court of arbitration, entail an obligation to make reparation, according to the general rules of common
international law.

Respect for private property is undoubtedly one of the general principles admitted by international law.
In the present case, the German military authority requisitioned the private property of the applicants for the
needs of the occupying army in Belgium. Military requisition is a sui generis form of expropriation for public
utility. The latter is an accepted derogation from the principle of respect for private property. The same is true of
requisition, which, in international law, constitutes so little an unlawful act that it is authorized by an express
text of written law. However, if the law of nations authorizes a State, for reasons of public utility, to derogate
from the principle of respect for the private property of foreigners, it is on the sine qua non condition that the
property expropriated or requisitioned will be equitably paid as quickly as possible.

Thus, the requisition carried out by the German military authority did not initially constitute an "act
contrary to the law of nations" provided that plaintiffs were able to obtain fair compensation within a
reasonable time. However, this was not the case, the compensation, allocated several years after the
requisition, barely reaching one-sixth of the value of the expropriated property.

Hence, Germany must compensate plaintiffs the amount due with interest.