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Chorzow Factory 1

The Permanent Court of International Justice ruled that Poland violated the German-Polish Arbitration Treaty by expropriating a German-owned factory in Chorzow without compensation. The factory was located in Chorzow, which had been part of Germany but was awarded to Poland after World War I. The court held that it had jurisdiction and that Poland's expropriation violated the treaty and international law. The court ordered Poland to pay reparations to Germany for the unlawful expropriation.

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122 views

Chorzow Factory 1

The Permanent Court of International Justice ruled that Poland violated the German-Polish Arbitration Treaty by expropriating a German-owned factory in Chorzow without compensation. The factory was located in Chorzow, which had been part of Germany but was awarded to Poland after World War I. The court held that it had jurisdiction and that Poland's expropriation violated the treaty and international law. The court ordered Poland to pay reparations to Germany for the unlawful expropriation.

Uploaded by

Matthew Evan Esteves
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Chorzow Factory Case 1928 PCIJ Ser. A, NO.

17
(Germany vs Poland)
LAND MARK CASE by Permanent Court of International Justice
BRIEF HISTORY WHY THIS CASE HAPPENED:

Dispute is about factory located in City of Chorzow


After World War I City of Chorzow was a part of Germany until a series of uprising called the Silesian
Uprising came which resulted to the awarding of Chorzow to Poland.

The awarding of Chorzow to Poland resulted to a German owned company-factory being situated in a
Polish land - which was originally a German land.

Principle: Reparation in re: “pacta sund servanda” & expropriation of Alien


Property
FACTS
Chorzow when still a German state: The Reich (State) of Germany made a contract with BSAG
Bayerische Stickstoffwerke -Beyrich Stiktoferk(German Company) for the construction of a nitrate
factory. Including in this contract is the acquisition of the land on behalf of Germany and the purchase of
Germany of the machinery and the construction of the building, however, the licenses and manpower/
service were to be by BSAG’s. State of Germany owns the land, building and the machineries, while
BSAG handles the manpoewer.

(a private company partnering with the government)

The stipulation between the two entities was the sharing of the surplus resulting from the working of
the factory during each financial year.

CHORZOW became a Polish State because of the Silesian uprising. The complexity of the situation was
governed by provisions of the Germano-Polish Arbitration Treaty in relation to the Geneva Convention
which renders the non- forfeiture of any German property. – ( Germano-Polish Arbitration Treaty from Treaty of
Versailles)

What does that mean?- it means that the factory in Chorzow is still a property of the Germany Government, even though Poland
has territorial sovereignty over the city.

Germany assumed that the German-Polish Arbitration Treaty is ruling the complexity. Thinking it was in
force. The State of Germany made a sale of the machinery and the factory to a newly formed company
named OSAG Oberschlesische Stickstoffwerk AG- Oberslich Stiktofrk, however, the manning power was
still to be managed by BSAG. (OSAG and BSAG agreement)

The predicament arises during the transfer of the registration of the land from the ownership of
Germany to OSAG. The Polish Court having jurisdiction over the city made a decision that the transfer of
registration was null and void, and should be cancelled. It stated that the property land should be
registered in the name of the Polish Treasury. This decision was based on Article 256 of the Treaty of
Versailles and the Polish law and decree. And by virtue of that law that property had already been first
expropriated then liquidated by the Polish government on the same day the Decision for the invalidity of
the transfer registration was made.

Now, what Germany assails is the payment for compensation of Poland to BSAG and OSAG.

ISSUE
WON Permanent Court of International Justice(PCIJ. Now ICJ) has jurisdiction over the matter
-(the treaty in question is only between two states)

WON Poland violated the Germano-Polish Arbitration Treaty with Germany

HELD:
FIRST: Yes it has. The jurisdiction issue was answered by virtue of the Geneva Convention.
PCIJ’s jurisdiction under Article 23 of the Geneva Convention was not affected by the fact that
the rights claimed were based on other provisions of other treaties. (p35)

SECOND: Yes it did. It was answered by the Court under Art. 6 of the Geneva Convention which
allowed Poland to expropriate major industrial undertakings, conformably to the provisions of;
but with exception, the property, rights and interests of German nationals, or of companies
controlled by them, cannot be liquidated.

That expropriation without compensation was contrary to the Geneva Convention ; and that
the application of the law(Polish Decree), was contrary to Article 6 and subsequent articles of
the Geneva Convention, and that the Court had express and definite jurisdiction of the subject
matter by Article 23 of that Convention.

The resolution of PCIJ (PERMANENT COURT OF INTERNATIONAL JUSTICE) to this matter is


reparation. It is a general conception of international law that every violation of an engagement
between two independent states ensue an obligation to make reparation. It is international law
that determines what constitutes an internationally unlawful act, irrespective of any provisions
of international law, irrespective of any provisions of municipal law.

XPrinciple

▪ If a treaty comes later than a particular custom, as between the parties to the
treaty, the treaty should prevail.
▪ Pacta Sunt Servanda
▪ General Principles of Law (recognized by civilized nations)
● The general conception of law that every violation of an engagement
involves an obligation to make reparation.

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