Introduction: This is a case about violation of international agreement known as “The Chorzow

Factory Case”. The question before the court was whether Poland can be made liable for such
violation of an international agreement.

FACTS:

After the First World War due to a bipartite agreement between Germany and Poland; Germany
agreed to transfer the control of Upper Silesia area to Poland. On an agreement that Poland
would not forfeit any property of Germany, but thereafter Poland forfeited two of German
Companies situated at that area.

ISSUES:

1. Whether the court has its jurisdiction over the matter or not?

2. Whether there was any violation of the agreement between Germany and Poland or not?

3. Whether there was any international obligation on Poland due to the breach of bipartite
agreement between Germany and Poland?

HELD:

The Permanent Court of International Justice has its jurisdiction to try the case. Poland had
violated the international agreement between Germany and Poland. Poland would be liable to
repair any loss suffered by the Germany due to the forfeit of that two company as they
violated that international agreement.

Analysis:

The rule of Permanent Court of International Justice was very appropriate, which was given in
favour of Germany as the attitude of Polish Government towards two German companies was
not in conformity with the articles of Convention concerning Upper Silesia[1], concluded at
Geneva on May 15th, 1922 (hereinafter referred as Geneva Convention), thus violating the
international agreement by unlawful expropriation of the said companies and that infers the state
responsibility on Poland for reparation for such violation. It is a general principal of International
law that every violation of an engagement involves an obligation to make reparation[2] adopted
form municipal law, which is applied in this case along with the principal of state responsibility
as a state is considered as an individual entity when come to an international dispute and it was
accepted by all, repetition of which confirms that the decision is conform to existing law. A
recent initiative of International Law Commission at its fifty-third session, in 2001 gave the state
responsibility a more precise scope for the application of the principal of state responsibility[3].
Observation of similar cases undertook by Permanent Court of International justice. If compared
with the reasoning with this case would be quite new to that time[4], therefore it is highly
unlikely that any consistent previous reasoning could be found in similar cases. But the decision
has already been significantly influenced the jurisprudence of International law and its impact
can be seen in various cases such i.e. Genocide Convention Case[5], Phosphates in Morocco
case[6], Corfu Channel case[7], Gabčíkovo-Nagymaros[8] and others. The PCIJ adequately justified
its reasoning by bringing all the disputed matters and argument presented before it or by suo
moto. At first it had justified its jurisdiction which was under question by the Poland as raised in
respect of res judicata[9] showing Article 23 of Geneva Convention, but the court justified its
jurisdiction by referring Article 36 of the Statute of the Court. In order to reason the
compensation declared was also justified by Article 6 -22, special by Article 7 of Geneva
Convention and by its interpretation. It also interpreted the municipal laws as well as customary
international laws with a new view of International law concerning the subject matter of
international law. The appropriate interpretation were made by PCIJ in every point, such as the
interpretation of Article 36 of the Statute of the Court to justify its jurisdiction[10]. The Article
said the parties can go to the court in all or any of the classes of legal dispute concerning a)
the interpretation of a Treaty; c) the existence of any fact which, if established, would constitute
a breach of an international obligation d) the nature or extent of the reparation to be made for
the breach of an international obligation. It bring the general concept of law that every violation
of an engagement involves an obligation reparation.[11] And the violation was clarified as the
Poland violated the Article 7 of Geneva convention and illegally expropriate two of German
factories .In this case, the court further interpreted that the expropriating state must, in
addition to paying the compensation due in respect of a lawful expropriation, pay also damages
for any loss sustained by the injured party.[12] The reasoning that the PCIJ has given is logical
and consistent to me. First of all, the court acted interpreting the Geneva Convention, where
the parties agreed to come before the court on any violation of the convention. Secondly, as
one party denied the jurisdiction of the court citing the concerning law, the court clear the
ambiguity of that matter and the shadow over the jurisdiction became clear. Thirdly, when the
court saw the violation of Geneva convention Articles 6 -22, the court ordered indemnity
referring the principal of international law, as mentioned by the court, “It is a principle of
international law that the reparation of a wrong may consist in an indemnity corresponding to
the damage which the nationals of the injured State have suffered as a result of the act which
is contrary to international law.”[13] Fourthly, It was a question who would indemnify as
therefor the court held, in a different plane” to private law, with the claimant State being the
one entitled to claim damages. Id. It also noted that it was open for states to create private
tribunals to adjudicate private claimants’ claims for breach of international law, but that nothing
in Article 23 of the Geneva Convention affected Germany’s entitlement to claim damages in this
case”.[14] So the state (Poland) was made liable to indemnify Germany. In the question of
whether the expropriation was legal or illegal the PCIJ held that” this was not a situation where
a governmental seizure would have been made “lawful” by simply paying “fair compensation”; it
was a seizure of a kind that was Banned outright under the 1922 Geneva Convention and would
only have been lawful had the treaty’s “exceptional” procedures been followed. Which is the fifth
reasoning with adequate logic[15] Where the indemnity amount is concerned the court give its
reasoning, is the sixth consistent point. The court held “The essential principle contained in the
actual notion of an illegal act-a principle which seems to be established by international practice
and in particular by the decisions of arbitral tribunals-is that reparation must, as far as possible,
wipe out all the consequences of the illegal act and reestablish the situation which would, in all
probability, have existed if that act had not been committed. Restitution in kind, or, if this is
not possible, payment of a sum corresponding to the value which a restitution in kind would
bear; the award, if need be, of damages for loss sustained which would not be covered by
restitution in kind or payment in place of it-such are the principles which should serve to
determine the amount of compensation due for an act contrary to international law”[16] Thought
the liability, indemnity or reparation as well as state responsibility was not questioned but M.
EHRLICH, Advocate of Poland has raised some point on his dissenting opinion that the court had
ignored some issues as well as some arguments[17] regarding the jurisdiction of the PCIJ, but as
far the documents is concerned it is evident in my prospect; the court had considered his
arguments with explanation. So, it can be concluded on the question of consideration, that the
court did not omit any issues or arguments. Therefore the decision was nether questioned nor
weakened. Moreover, it was highly appreciated by jurists all over the world. This case has
strengthen the interpretation about the jurisdiction of international law. it confirms the use of
municipal law consistently in international law, but most importantly this case lead the jurists of
international law to have some new thought about state responsibility and therefore they
decided to include the interpretation of the court in the material source of international law.
The light of the present case decision has observed in Draft Articles on Responsibility of States
for Internationally Wrongful Acts, by International Law Commission[18] and Article 60 of Vienna
convention 1969 as well as the Rule 150 of Geneva convention (1949)[19] In every sphere of
life, there always been another way, it depends on us how we want to treat it. So I think if I
say there was no alternative approach I must be wrong but so far my limited knowledge sees
the approach is very appropriate to the public policy. In my opinion the decision is very
satisfactory as and it could not be any better. Conclusion: This extra ordinary case with exclusive
interpretation bind the jurists of international law to have new thoughts about the matters of
jurisdiction of international court, state responsibility, reparation as well as the necessary
elements to weight this matter by the of law. It also give use legal precedent which will be a
supportive material for understanding and analyzation of the cases which is in the nature is
similar to the fact or in the matter of concerning issues regarding the matter of international law
but it would not have any binding force as International Law doesn’t consider the previous
judgments as binding for during the judgment of new cases as the international law treats every
new case with a fresh view as every case have its different facts as well as merits, which they
think should considered not being influenced by other case.