Germany vs Poland (1928)

THE CHORZOW FACTORY CASE

FACTS:
1. March 5, 1915 The German Government (called Reich) entered into a partnership contract with
a private German company Bayerische (pronounced as Ba-yeh-sha) for the construction of a
nitrate factory at Chorzow in Upper Silesia, which at the time of agreement was a part of the
German territory.
2. December 24, 1919 Reichs majority interest in the factory was ceded to Oberschlesische
(pronounced as O-ber-schley-si-sha) (end result: MGT of Factory Bayerische; Ownership
Reich; Majority Dividend Oberschlesische)
3. Sameday, Dec. 24, 1919, - Oberschlesische transferred some of its interest to another company
Treuhand (pronounced as Troy-hand)
4. The factory continued to function until May 15, 1922 when Germany signed a Convention in
Geneve (called Geneva Convention) effectively transferring Chorzow, Upper Silesia to the Polish
jurisdiction.
5. Immediately taking control over Upper Silesia after the signing of Geneva Convention, the Polish
government demolished the factory despite demands from the three companies to have the
factory spared.
6. The Reich filed this case in the ICJ for collection of monetary damages from Polish government
for the injury that the three German companies sustained due to the demotion of the factory.
ISSUES:
1. Is the collection for monetary damages the right case to be filed?
2. If so, has the German government locus standii to file the case?
3. Is the Polish government liable for monetary damages?
HELD:
1. AFFIRMATIVE. The original action to be filed must be restitution which involves restoring the
subject matter under dispute to its original state. However, in cases like this one where restoring
the demolished factory is no longer possible, the only action that may be filed is collection for
monetary damages.
2. AFFIRMATIVE. Despite not being a direct party that sustained loss in the demolition of the
factory, the German government has the legal standing to file in the ICJ in behalf of the German
companies who sustained the injuries.
3. AFFIRMATIVE. Article 23 of the Geneva Convention declares that the State which failed to apply
its provisions shall be liable for monetary damages. And under the agreement, it is expressly
provided that the infrastructures in Upper Silesia, including the factory, shall not automatically be
under Polish ownership unless proper ceding of rights and interest is done. And since no proper
ceding of interest transpired between the three companies and the Polish government before the
demolition was carried out, the three companies sustained injuries which should be monetarily
compensated by Polish government.
Case decided in favor of Germany.