State responsibility
97
case when it said that the responsible State was under “the
obligation to restore the undertaking and, if this be not
possible, to pay its value at the time of the indemnification, which value is designed to take the place of restitution which has become impossible”. The Court went on
to add that “[t]he impossibility, on which the Parties are
agreed, of restoring the Chorzów factory could therefore
have no other effect but that of substituting payment of
the value of the undertaking for restitution”.492 It can be
seen in operation in the cases where tribunals have considered compensation only after concluding that, for one
reason or another, restitution could not be effected.493 Despite the difficulties restitution may encounter in practice,
States have often insisted upon claiming it in preference
to compensation. Indeed, in certain cases, especially those
involving the application of peremptory norms, restitution
may be required as an aspect of compliance with the primary obligation.
vidual arrested in its territory,497 the restitution of ships498
or other types of property,499 including documents, works
of art, share certificates, etc.500 The term “juridical restitution” is sometimes used where restitution requires or
involves the modification of a legal situation either within
the legal system of the responsible State or in its legal
relations with the injured State. Such cases include the
revocation, annulment or amendment of a constitutional
or legislative provision enacted in violation of a rule of
international law,501 the rescinding or reconsideration of
an administrative or judicial measure unlawfully adopted
in respect of the person or property of a foreigner502 or
a requirement that steps be taken (to the extent allowed
by international law) for the termination of a treaty.503 In
some cases, both material and juridical restitution may be
involved.504 In others, an international court or tribunal
can, by determining the legal position with binding force
for the parties, award what amounts to restitution under
another form.505 The term “restitution” in article 35 thus
(4) On the other hand, there are often situations where
restitution is not available or where its value to the injured
State is so reduced that other forms of reparation take
priority. Questions of election as between different forms
of reparation are dealt with in the context of Part Three.494
But quite apart from valid election by the injured State or
other entity, the possibility of restitution may be practically excluded, e.g. because the property in question has
been destroyed or fundamentally changed in character or
the situation cannot be restored to the status quo ante for
some reason. Indeed, in some cases tribunals have inferred
from the terms of the compromis or the positions of the
parties what amounts to a discretion to award compensation rather than restitution. For example, in the Walter
Fletcher Smith case, the arbitrator, while maintaining that
restitution should be appropriate in principle, interpreted
the compromis as giving him a discretion to award compensation and did so in “the best interests of the parties,
and of the public”.495 In the Aminoil arbitration, the parties agreed that restoration of the status quo ante following the annulment of the concession by the Kuwaiti decree
would be impracticable.496
497 Examples of material restitution involving persons include the
“Trent” (1861) and “Florida” (1864) incidents, both involving the arrest of individuals on board ships (Moore, Digest, vol. VII, pp. 768 and
1090–1091), and the United States Diplomatic and Consular Staff in
Tehran case in which ICJ ordered Iran to immediately release every
detained United States national (see footnote 59 above), pp. 44–45.
498 See, e.g., the “Giaffarieh” incident (1886) which originated in the capture in the Red Sea by an Egyptian warship of four
merchant ships from Massawa under Italian registry, Società Italiana per
l’Organizzazione Internazionale–Consiglio Nazionale delle Ricerche,
La prassi italiana di diritto internazionale, 1st series (Dobbs Ferry,
NY., Oceana, 1970), vol. II, pp. 901–902.
499 For example, Temple of Preah Vihear, Merits, Judgment, I.C.J.
Reports 1962, p. 6, at pp. 36–37, where ICJ decided in favour of a
Cambodian claim which included restitution of certain objects removed
from the area and the temple by Thai authorities. See also the Hôtel
Métropole case, UNRIAA, vol. XIII (Sales No. 64.V.3), p. 219 (1950);
the Ottoz case, ibid., p. 240 (1950); and the Hénon case, ibid., p. 248
(1951).
500 In the Bužau-Nehoiasi Railway case, an arbitral tribunal provided
,
for the restitution to a German company of shares in a Romanian railway company, UNRIAA, vol. III (Sales No. 1949.V.2), p. 1839 (1939).
501 For cases where the existence of a law itself amounts to a breach
of an international obligation, see paragraph (12) of the commentary
to article 12.
502 For example, the Martini case, UNRIAA, vol. II (Sales No. 1949.
V.1), p. 975 (1930).
503 In the Bryan-Chamorro Treaty case (Costa Rica v. Nicaragua),
the Central American Court of Justice decided that “the Government of
Nicaragua, by availing itself of measures possible under the authority
of international law, is under the obligation to re-establish and maintain
the legal status that existed prior to the Bryan-Chamorro Treaty between the litigant republics in so far as relates to matters considered in
this action” (Anales de la Corte de Justicia Centroamericana (San José,
Costa Rica), vol. VI, Nos. 16–18 (December 1916–May 1917), p. 7);
and AJIL, vol. 11, No. 3 (1917), p. 674, at p. 696; see also page 683.
504 Thus, PCIJ held that Czechoslovakia was “bound to restore to the
Royal Hungarian Peter Pázmány University of Budapest the immovable
property claimed by it, freed from any measure of transfer, compulsory administration, or sequestration, and in the condition in which it
was before the application of the measures in question” (Appeal from
a judgment of the Hungaro-Czechoslovak Mixed Arbitral Tribunal
(see footnote 481 above)).
505 In the Legal Status of Eastern Greenland case, PCIJ decided that
“the declaration of occupation promulgated by the Norwegian Government on July 10th, 1931, and any steps taken in this respect by that
Government, constitute a violation of the existing legal situation and
are accordingly unlawful and invalid” (Judgment, 1933, P.C.I.J., Series
A/B, No. 53, p. 22, at p. 75). In the case of the Free Zones of Upper
Savoy and the District of Gex (see footnote 79 above), the Court decided that France “must withdraw its customs line in accordance with
(5) Restitution may take the form of material restoration
or return of territory, persons or property, or the reversal
of some juridical act, or some combination of them. Examples of material restitution include the release of detained individuals, the handing over to a State of an indi492
Factory at Chorzów, Merits (see footnote 34 above), p. 48.
See, e.g., British Claims in the Spanish Zone of Morocco (footnote 44 above), pp. 621–625 and 651–742; Religious Property Expropriated by Portugal, UNRIAA, vol. I (Sales No. 1948.V.2), p. 7 (1920);
Walter Fletcher Smith, ibid., vol. II (Sales No. 1949.V.1), p. 913, at
p. 918 (1929); and Heirs of Lebas de Courmont, ibid., vol. XIII (Sales
No. 64.V.3), p. 761, at p. 764 (1957).
494 See articles 43 and 45 and commentaries.
495 Walter Fletcher Smith (see footnote 493 above). In the Greek
Telephone Company case, the arbitral tribunal, while ordering restitution, asserted that the responsible State could provide compensation instead for “important State reasons” (see J. G. Wetter and
S. M. Schwebel, “Some little known cases on concessions”, BYBIL,
1964, vol. 40, p. 216, at p. 221.
496 Government of Kuwait v. American Independent Oil Company
(Aminoil) ILR, vol. 66, p. 519, at p. 533 (1982).
493
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