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Judicial Committee of the Privy Council

(Lord Sumner, Lord Parmoor, Lord Wrenbury, Lord Sterndale,

and Sir Arthur Channell

Decided July 31, 1919 The Reprisals Order in Council of February 16, 1917, which authorizes the capture and condemnation of vessels carrying cargoes to or from countries contiguous to Germany, if such vessels have not first called at a British or Allied port for examination, was, in the circumstances existing at the date of the Order, justified by the recognized principles of international law, and the consequential results to neutrals give them no right to complain or to claim compensation.

Decision of Evans, P. (34 The Times L. R., 366; [1918] p. 182) affirmed.

These were appeals from a judgment of the late President of the Admiralty Division in Prize (see 34 The Times L. R., 366; (1918] p. 182) condemning the steamship Leonora and her cargo as good and lawful prize.

Sir John Simon, K. C., Sir Erle Richards, K. C., Mr. Mackinnon, K. C., and Mr. W. R. Bisschop appeared for the appellant shipowners; Mr. Leslie Scott, K. C., Mr. Balloch, Mr. Stuart Bevan, and Mr. C. T. Le Quesne for the appellant cargo owners; the AttorneyGeneral, the Solicitor-General, Mr. Greer, K. C., Mr. Clive Lawrence, and Mr. Pearce Higgins for the Crown.

The appeal of the owners of the ship was first taken.

The main question raised was the validity of the Order in Council of February 16, 1917, commonly known as the Second Retaliatory Order. By a previous order of March 11, 1915, the Crown had claimed a right of requiring neutral vessels carrying goods of enemy origin to discharge those goods in a British port irrespective of the destination or character of the goods. The claim was justified as retaliation for illegal acts by the German Government. By the order, no penalty was imposed on neutral vessels. Under the second order, a neutral vessel carrying goods of enemy origin was liable to capture and condemnation unless on her voyage she called at an appointed British or Allied port. The appeal was therefore brought to decide whether a belligerent could exercise a right of retaliation against his enemy to the extent of seizing and forfeiting neutral vessels carrying goods of enemy origin unless they deviated from their voyage and

1 The Times Law Reports, Vol. XXXV, No. 35, pp. 719-726.

called at an appointed British port, although they were not engaged in any trade that rendered them subject to condemnation by international law.

The Leonora, a Dutch steamer, owner by the appellants, a limited company, was registered in the Netherlands. At the time of capture she was on a voyage from Rotterdam to Stockholm (both neutral ports) with a cargo of coal bought by neutral merchants from Belgium colliery owners at the pit's mouth. At that time the purchase of and payment for coal in Belgium was regulated and controlled by the German authorities. The Leonora was captured on the dayAugust 16, 1917—when she left Rotterdam by a British torpedoboat and was taken to Harwich, where she was seized as prize. The Crown applied for a decree of condemnation on the ground that the coal on board was of enemy origin or was enemy property. The owners sought the release of the vessel, urging that a neutral vessel carrying goods the property of neutral merchants from one neutral port to another was not liable to condemnation by international law.

The President decided that the retaliatory order was not inconsistent with, or essentially contrary to, the principles of the law of nations; that the appointment of a port of call for examination as laid down in the order was not a condition precedent to the condemnation of the ship, and that the coal on board was of enemy origin. He therefore condemned the Leonora and her cargo as good and lawful prize, but he gave the owners leave to appeal.

SIR JOHN SIMON, in opening the arguments, said the Leonora when seized was on a route which lay far away from any British port. The question was whether the retaliatory order did not put on the neutral an unreasonable burden in requiring ships to go a long way out of their course to reach a British port. The Leonora, in her course from Rotterdam, would have had to go through a narrow lane between the British mine-field on her starboard and the German submarines on her port in order to reach a British port. The main point for the appellants was that the second retaliatory order was one which imposed a punishment the most severe that international law could impose on a neutral ship which left one neutral port for another, carrying a cargo which belonged to neutrals, and for the first time the order introduced, not a provision which under the head of retaliation would inflict inconvenience on a neutral in his operations, but the capital punishment of international law upon the ship. The mere fact that the order had been issued did not in itself confer on the Prize Court either the power or the duty to punish neutral ships for something which under international law was not an offence.

The first retaliatory order imposed restrictions upon the freedom of action of neutral ships, and when a neutral attempted to complain of that, as in the case of the Stigstad (35 The Times L. R., 176; [1919]

A. C., 279,2 the ship was told that it could not go to the Prize Court and claim compensation because it was inconvenienced by a regulation which, having regard to the conditions, was justified as against the enemy. The second retaliatory order not only said that the neutral was not entitled to compensation, but created a new international law offence and asked the Prize Court to condemn any ship which had committed it. It was within the rights of a belligerent to make orders which created additional inconvenience for neutrals, but not to create a new offence. The order therefore was illegal.

LORD SUMNER said that if it was part of international law that a belligerent might retaliate, then a Prize Court in enforcing the order was only giving effect to a new chapter in well-established international law.

SIR JOHN Simon said that the cargo was not of enemy origin within the true meaning of the Order in Council. In the case of retaliatory orders a neutral must put up with incidental inconvenience, the reason being that the belligerent was not attacking the neutral but was exercising a right which had sprung up in consequence of the bad conduct of his opponent; but while a neutral must suffer inconvenience, a retaliatory order should not expose him to the loss of his property by decree of a prize court. The inconvenience to which the second retaliatory order exposed a neutral was unreason. able and excessive. A neutral had certain rights, and those rights could not be turned into wrongs by a retaliatory order. International law was concerned with securing a true balance between the rights of neutrals and the rights of belligerents. One must work a retaliatory order so as not to forfeit the neutral's vested rights.

SIR ARTHUR CHANNELL.—Does not that take away the possibility of the power of retaliation? If your enemy does a wrong, you must do the same by way of retaliation.

Sir John SIMON.-It is idle to talk about the rights of neutrals under international law if by the wrongdoing of belligerents those rights can be whittled away.

SIR JOHN SIMON, continuing his argument for the shipowners, said that the second retaliatory order was not only wrong in kind, but excessive in degree. In carrying out the order, the captain of the Leonora had said that he would have had to run enormous risks in going to and returning from a British port, as he would have had to pass over the British and German mine areas. Indiscriminate sinkmg was announced by the Germans on February 1, and this was Lollowed by the second retaliatory order. In the meantime, the Admiralty took action quite inconsistent with what the order said neutral vessels must do. The Admiralty announced that it was dangerous for ships to cross certain areas, and later actually warned neutrals that those areas should be avoided.

2 This Journal, January, 1919, p. 127.

LORD SUMNER pointed out that ships were merely required to go along a lane.

SIR JOHN SIMON replied that what they were required to do was in the highest degree dangerous, and thus the only terms on which a neutral could escape condemnation were terms of extreme severity.

LORD WRENBURY said that it would be possible to get to a British port in safety by passing along the lane.

SIR JOHN SIMON said that he thought not. The only safe way was for the ship to put herself under the protection of a patrol boat.

LORD SUMNER.—The dangers to which vessels were exposed in crossing the North Sea arose from the illegal acts of the enemy, and therefore the neutral must not say that the retaliatory order, which followed from the illegal acts of the enemy, was directed against the neutral.

SIR JOHN SIMON.—The reasonable thing would have been to indicate to the neutral vessel the course which she could safely take.

LORD SUMNER asked whether counsel said that because the course to the port was dangerous, the right of search ceased.

SIR JOHN SIMON replied that the right of search should not entail upon the vessel additional risks.

LORD SUMNER said that the wrongful acts of the enemy did not take away the undoubted right of search.

Sir John Simon.—The right was to visit and search, but not to compel a vessel to go to be searched.

LORD SUMNER said there was no order to go and be searched. The order merely said what the Navy would do if a vessel were encountered at sea with a cargo of enemy origin, and added, for the protection of the vessel, that, if she went to a British port, then there would be no condemnation.

Sir JOHN SIMON, continuing, said that, after the Leonora had been condemned, and while she was in the service of the British, she was torpedoed and sunk by the enemy. The physical danger and commercial risks were elements which must be taken into consideration when judging of the reasonableness of the order. There was no failure on the part of the Leonora to fulfil the order, because there was no appointed port at which she was to call.

The goods on board were not of enemy origin. The coal was Belgian coal, and was bought from Belgian colliery owners. The Germans at the time were only in temporary occupation of Belgium, and had never claimed to exercise sovereignty over it; they had not annexed it; indeed, they most deliberately disclaimed any idea of annexation. One could not properly describe the coal as of enemy origin unless one showed what could not be shown here, either that it was coal which came from Germany or belonged to Germans, or that the natural meaning of the words “enemy origin” had been extended so as to cover occupied territory. Goods which came from occupied territory could not be of enemy origin.

MR. LESLIE SCOTT, on the part of the owners of the cargo, contended that “enemy origin” in the order in council meant enemy country, and therefore the coal from Belgian collieries could not be condemned. The right of retaliation was limited by the rights of neutrals. Supposing no question of retaliation had arisen at all, to call upon all neutral vessels to go out of their voyage and come to this country to be searched would be an exercise of sovereignty over the subjects of other states for which there was no justification in international law. If, apart from retaliation, there was no right to call upon all neutral vessels to come to this country, then there was no authority for saying that by way of retaliation that could be done, and if this were the effect of the order it was going far beyond any legal right which could possibly be read into the doctrine of retaliation.

SIR ARTHUR CHANNELL.—The Germans say, “Down you go," but we say, “In you come.”

LORD SUMNER asked whether counsel agreed that it would be right if a cruiser encountered a vessel at sea to order her to come in.

MR. SCOTT replied that he was prepared to concede that when a vessel had been visited the cruiser might ask her to come into port for an effective search.

SIR ARTHUR CHANNELL.-If vessels never were encountered at sea, could any conceivable harm be done by requiring them to come in to be searched! If you don't catch them you cannot enforce it.

MR. SCOTT said that as to the right of visit and search he would argue that a request to a vessel to come in to be searched, if there was justifiable occasion for search, was not illegal. He conceded that that would be justifiable if there were reasonable grounds for suspicion, provided that the ship was guided across the minefield in safety.

LORD SUMNER.—Provided that she was convoyed in safety?

MR. Scott.— Yes. But in this case the vessel was brought in because they were trying to enforce this order against her, and not for any other reason.

LORD SUMNER said that courts of prize endeavored to find a compromise between the right of retaliation and the claim of neutrals not to be the victims of retaliation, and that compromise, however unsatisfactory, was at least better than war.

MR. Scott said that there were certain limits to belligerent and neutral rights which were always recognized, and the function of prize courts was to find out what were the generally recognized limits of those rights. There was no authority for the proposition that the belligerent in exercising his right of retaliation could alter the legal rights of neutrals. The belligerent, as an executive act, might interfere with the rights of neutrals, but there was no authority for taking

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