REPORTS OF INTERNATIONAL ARBITRAL AWARDS RECUEIL DES SENTENCES ARBITRALES Lehigh Valley Railroad Company, Agency of Canadian Car and Foundry Company, Limited, and Various Underwriters (United States) v. Germany (Sabotage Cases) 15 June 1939 VOLUME VIII pp. 225-460 NATIONS UNIES - UNITED NATIONS Copyright (c) 2006 DECISIONS 225 awards in accordance with the Agreement reached at Munich in July, 1936. The American Agent likewise filed with the Commission the several protests received on behalf of American nationals and on behalf of German nationals. The questions involved in these Motions and protests were discussed in briefs filed with the Commission, and were the subject of oral arguments before the Commission at the meeting held July, 7 1937, at which meeting the following rulings thereon by the Commission were announced by the Umpire:] " The Commission has considered the motion with care and has also consid- ered all of the points made in the briefs and oral argument. Without reiterating its reasons, it is of the opinion that the motion must be dismissed, unanimously of that opinion. " With regard to the protests by certain German nationals, those protests the Commission feels, in large part, fall as a result of its decision. The same thing is true of the protests by certain awardholders. " With regard to the applications filed by certain claimants, either German nationals or holders of claims under certain arbitral awards, and with regard to the applications of certain American awardholders to permit them to intervene in the proceedings, the Commission unanimously denies those applications." (Minutes of meeting, July 7. 1937, p. 1658.) LEHIGH VALLEY RAILROAD COMPANY, AGENCY OF CANADIAN CAR AND FOUNDRY COMPANY, LIMITED. AND VARIOUS UNDER- WRITERS (UNITED STATES) v. GERMANY (Sabotage Cases, June 15, 1939, pp. 310-312; a Certificate of Disagreement and Opinion of the American Commissioner, June 15, 1939, pp. 1-310.) JURISDICTION: EFFECT ON — OF WITHDRAWAL OF MEMBER FROM COMMISSION AND FAILURE TO FILL VACANCY. — PROCEDURE : UNANIMITY. DELIBERA- TIONS. ROLE OF UMPIRE. — INTERPRETATION OF TREATIES: PRACTICE, PUR- POSE, BENEFITS RECEIVED, MUNICIPAL DECISIONS, TEXT WRITERS. With- drawal of German Commissioner from Commission on March 1, 1939, after submission of cases to Commission on January 27, 1939, followed by conferences of Umpire and Commissioners with a view to the decision of the issues presented until February 28, 1939. Failure of German Government to fill vacancy (see Agreement of August 10, 1922, art. II). Held that Com- mission not functus qfficio and, acting through Umpire and American Com- missioner, has power to proceed with cases and decide whether fraud proved sufficient to set aside decision of October 16, 1930 (see p. 84 supra), and whether claimants proved their cases: (1) under Agreement supra, art. II and VI, and its Rules of Procedure, unanimity not required, and concur- rence of only two members necessary for decision (practice ever since Commission's creation), (2) both before and after special rules of procedure for sabotage cases were adopted, Umpire participated in deliberations and opinions of Commission (reference made to decision of March 30, 1931, p. 101 supra), (3) after submission of case to Commission, retirement of one National Commissioner cannot prevent decision by remaining members of a Henceforth, references to page numbers are to Opinions and Decisions on the Sabotage Claims Handed Down June 15, 1939, and October 30, 1939. and Appendix. (Washington, Government Printing Office, s.d.). Cornp. Vol. VII, p. 3. 226 UNITED STATES/GERMANY Commission: (a) this would defeat purpose of Governments in establishing" Commission, (b) Germany received benefits after Commission's creation, i.e., under Settlement of War Claims Act of 1928, 80 per cent of German property returned to former owners, (c) reference made to municipal decis- ions, inter alia. Republic of Colombia v. Cauca (1903), 190 U.S. 524, and to text writers on international law. SABOTAGE DURING PERIOD OF AMERICAN NEUTRALITY. — PROCEDURE : SETTING ASIDE OF PREVIOUS DECISION; REINSTATEMENT OF CASE INTO PREVIOUS POSITION, REOPENING; REHEARING: OLD AND NEW EVIDENCE, FRAUD, EXAMINATION OF MERITS. — EVIDENCE: FRAUD IN— ; WITNESSES, AFFIDA- VITS, DOCUMENTS, AUTHENTICITY OF DOCUMENT. Setting aside of Commis- sion's decision of October 16, 1930, on merits (see p. 84 supra), reinstate- ment of case into position before 1930 decision, reopening, rehearing granted on the whole record: held that material fraud in evidence presented by Germany seriously misled Commission and affected its decision in favour of Germany. Though unnecessary in circumstances, Commission also examined proofs tendered by United States to determine whether claims had been made good: German Commissioner insisted, that misleading of Commission immaterial if United States failed to sustain burden of proof incumbent upon it; held that, on the record as it now stands, claimants' cases are made out. Analysis of new evidence: see supra and Analytical Table infra. Cross-reference: A.J.I.L., Vol. 33 (1939), pp. 770-772; Witenberg, Vol. Ill, pp. 70-721 (French text). Bibliography: Witenberg, Vol. Ill, pp. 33-72; Woolsey, A.J.I.L., Vol. 33 (1939), pp. 737-740, and Vol. 35 (1941), pp. 289-298. ANALYTICAL TABLE OF CONTENTS OF THE CERTIFICATE OF DISAGREEMENT AND OPINION OF THE AMERICAN COMMISSIONER Page History of Cases : Petition of May 4, 1933 238 Decision of December 15, 1933 238 Motion of May 2, 1935 239 Decision of July 29, 1935 239 Decision of June 3, 1936 240 Cases closed January 14, 1939 240 Cases submitted January 27, 1939 240 Conferences between Commissioners and Umpire 240 German Commissioner retires March 1, 1939 241 Letters of German Commissioner and replies thereto 241 Certificate of Disagreement 241 Points of Difference: (a) Whether the evidence established fraud of such character 241 (b) Whether the American Agent had proven his case 241 Opinion of the American Commissioner: I. Jurisdiction: Letter of German Commissioner and replies 241 Letter of American Commissioner to Secretary of State 242 Question stated 242 Treaty of Berlin 242 DECISIONS 227 Opinion of the American Commissioner [continued) I. Jurisdiction (continued) Page Agreement of August 10, 1922 242 Purpose for which Commission created 243 Rules of Procedure 243 Special Rules of Procedure 243 Unanimity not required 244 Umpire participates in deliberations and in opinions 244 Question restated 245 Republic of Colombia v. Cauca: 190 U.S. 524, affirmed 195 U.S. 604 245 106 Fed. 337 246 113 Fed. 1020 248 Decision of U.S. Supreme Court 248 Unanimity not required 249 United States not obligated to return alien property 249 War Claims Act 1928 249 Atchison, T. & S.F. Ry. Co. v. Brotherhood etc., 26 Fed. (2d) 413 . 249 International Law Text Writers 250 Commercial Arbitration Cases 251 Facts restated 251 Decision 252 II. Fraud Questions Stated 253 A. Fraud in the Pleadings: (1) Memorials filed by U.S 253 (2) Answers filed by Germany: (a) No sabotage in neutral countries 253 (b) No sabotage in U.S. during neutrality 253 (c) Circular authorizing sabotage a fabrication 253 (d) Order extending circular to U.S. a fabrication .... 253 (e) Message of Jan. 26, 1915 genuine but mistake of sub- ordinate and never acted on 254 (3) Papen's affidavit 254 (4) Nadolny's statement 255 (5) Nadolny's affidavit 255 (6) Marguerre's affidavit 256 (7) von Bernstorff's denials 257 (8) von Bernstorff and Rintelen 257 (9) von Bernstorff and National Constituent Assembly . 259 (10) von Bernstorff and Canadian Pacific Railroad 259 (11) Message of January 26, 1915 260 (12) German Brief of Sept. 14, 1929 261 (13) Telegrams between Eckardt and " Sektion Politik " in re Herrmann and Tampico Oilfields 262 (14) Herrmann, Gerdts and Tampico Oil fields 263 B. Fraud in the Evidence: (1) Wozniak: Wozniak's bench 265 Wozniak and the decision at Hamburg 265 228 UNITED STATES/GERMANY Opinion of the American Commissioner (continued) B. Fraud in the Evidence (continued) (1) Wozniak (continued) Page How Wozniak became a witness for Germany .... 266 Tannenberg vouches for Wozniak 266 Wozniak declines witness' fees (according to Tannen- berg) 266 Wozniak, Healy and Tannenberg on compensation . 266 Wozniak's letter demanding compensation 268 Correspondence about compensation between Wozniak and Tannenberg 268 Impossible for Tannenberg to get in communication with Wozniak but letters were passing 269 Wozniak's threat to accept an offer and its result . 269 Wozniak's trip to Washington 4/16/31 270 $500 to Wozniak to be " good " to him 270 Wozniak's degradation 270 Wozniak's compensation 271 Deductions from the letters 271 Wo7niak's true character was known before his affidavits were introduced 272 Wozniak's letters and postcard to the Russians .... 273 Wozniak's contradictory statements 276 Wozniak's conduct immediately preceding, during, and after the fire 277 Wozniak's character as a witness 280 (2) Lyndhurst Testimony: Decision at Hamburg 284 LaScola's affidavit: August 9, 1930 284 Apr. 26, 1933 285 Ruggiero's affidavit: August 4, 1930 286 Payrolls of Company 287 Urciuoli's affidavit 287 Marrone's affidavit 287 Correspondence between Carella and Tannenberg . 287 Healy's affidavit 289 Frangipane's affidavit: August 1930 289 German Agent's statement 289 Draft of telegram from Tannenberg 289 Telegram of May 1, 1931 290 Prittwitz's telegram: Dec. 14, 1931 290 Purpose of Lyndhurst affidavits 291 Evidence since Hamburg 291 (3) Purpose of Affidavits of Ahrendt, Hinsch and Woehst : (a) To strengthen Germany's pleading 291 (b) To destroy confessions of Herrmann and Hilken . 292 DECISIONS 229 Opinion of the American Commissioner (continued) B. Fraud in the Evidence (continued) (3) Purpose of Affidavits of Ahrendt, Hinsch and Woehst (continued) (c) Meeting of Hilken and Herrmann with " Sektion Poli- tik " Nadolny and Marguerre — Hilken's descrip- tion Ex. 583 292 Hilken's examination by Peaslee, Rec. p. 2180 293 Herrmann's description 293 (4) Affidavits of Ahrendt : Ahrendt's biography 294 Hinsch's absences from Baltimore and New London .