Goldenberg & Sons Case (Germany versus Romania)

Award - Sept 27, 1928

Goldenber & Sons through the Romanian agent had brought a series of claims against the German State
to the Mixed Romanian-German Arbitral Tribunal.

Facts:

The plaintiffs were traders in Braila, bought in Berlin 30 tons of tinplate. These goods were dispatched in
to Antwerp which would be shipped to Braila.

The declaration of war in 1914 prevented the departure of the ship; the goods were requisitioned by the
German military authorities in 1915.

The plaintiffs were not compensated immediately, but in 1916 they received a delivery note, in which
German military seized the property of the former in 1920. The latter granted them in 1921, an
indemnity of 532.30 Marks-gold, or a little less than one- sixth of the gold value of the goods
requisitioned. This sum was accepted by the plaintiffs.

The case was brought to claim the difference between the compensation received and the gold value of
the property seized.

The German State rejected the request.

The complaint was based on § 4 of the appendix to art. 297 and 298 of the Treaty of Versailles.

The discussion concerns the following unique question: Do the acts of the German authorities,
established before the arbitrator, constitute "acts committed" within the meaning of § 4 of the
appendix, which may entail the penalty provided for by that provision?

The two States had provided their respective arguments.

Romanian: By "act committed", within the meaning of § 4 of the appendix, is meant " any act harmful.

German State Agent invokes the case-law of the Hague Court, the Greco-German Tribunal and the sole
arbitrator between Germany and England. the words "acts committed" are used only in § 4 of the
annex. Their meaning is so clear that the United States, when, treating itself in isolation with Germany,
they wanted - contrary to the opinion expressed by their representatives, during the negotiations of
Versailles - to make the complete repair of the damages "said of neutrality ", have been careful to
modify in their favor the text of § 4.

Therefore, in order that there may be a remedy under the clause under discussion, there must have
been an act contrary to the law of nations. In the present case, it is a requisition, an act expressly
recognized by international law, namely Article 52 of the Hague Convention of 1907. The requisitioned
goods were paid. There can therefore have been "an act contrary to the will of the people", which must
lead to the rejection of the request.
Ruling:

The interpretation of the clause discussed has already been given by the Hague Court. All these courts
have admitted that § 4 of the appendix refers only to unlawful or at least blameworthy acts .

his unlawful or blameworthy nature must be assessed according to the rules of international law.

a. a) The clause discussed imposes an obligation on Germany.

According to the rule constantly followed by the Romanian-German Mixed Arbitral Tribunal, clauses of
this kind must not be extended, by way of interpretation, beyond the meaning which the German State
could reasonably attribute to the text submitted to its acceptance. The ambiguous clause is interpreted,
in principle, against the person who wrote it.

b. that § 4 intended to target only unlawful or at least blameworthy acts.

Although the expression "acts committed" is frequently used in the terminology of the law of nations, it
is also commonly used in the language of ordinary law. Its use thus does not prove, by itself, that § 4
refers to acts "contrary to the law of nations", rather than unlawful or blameworthy acts in general 2 .

The Romanian thesis excludes, with regard to reparation, any distinction between so-called "neutrality"
damages and damages resulting from exceptional measures of war.

The regulation made by the Treaty is explained quite differently. The damage referred to in Article 297 (
e) is part of the war damage. Until the Treaty of Versailles, this category of damage did not give rise to
the direct action of the injured party against the offending State: the compensation was granted to the
winning State in the form of a war indemnity.

The Treaty of Versailles has innovated on this point by granting direct action to the injured party (article
297 e), lines 10 and following), and creating, to know, a new jurisdiction, that of the Mixed Arbitral
Tribunals .

The damage inflicted on neutrals, on the other hand, was caused in peacetime. Here we were in a field
familiar with the law of nations, that of the responsibility of the State because of the damage caused to
foreigners by its authorities. Here the claim belonged to the State of which the injured party was a
national. If there was litigation, the action was brought before a neutral Arbitral Tribunal , constituted
between the two States and judging according to the rules of the law of the people.

Action deriving from the responsibility of the State, because of damage caused to foreigners by the acts
of its authorities, remains subject to neutral arbitrators and is not, as usual, granted directly to the
injured party. It is the pure and simple maintenance of the mode of regulation constantly adopted in the
practice of international law.
that § 4 does not specify that single arbitrators will apply international law, but this silence is quite
naturally explained. Having borrowed from the pre-war system, the Treaty had to accept, as a matter of
course, that its neutral arbitral tribunals would always have judged the International Arbitration Courts,
in other words, according to the rules of the law of the people.

the clause under discussion only refers to unlawful or blameworthy acts, evaluated according to the
rules of public international law, in other words acts "contrary to the law of nations".