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 – Reich’s 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.