Administration of Lighthouses

Facts

In 1860, a French company, Collas & Michel, obtained the concession for the Lighthouses of the Ottoman Empire. The concession was granted in 1913 for the period from 1924 to 1949. Following the Baltic War of 1912 and the First World War, some of the territories comprised by the concession came under the authority of the Greek Government. Several problems arose between the Greek Government and Collas & Michel. Following diplomatic exchanges between the Governments of Greece and France, a compromis (submission agreement) was signed on July 15, 1931. The Permanent Court of International Justice (P.C.I.J.) was to judge on the prorogation of the concession, and the financial reclamations were to be settled by arbitration. In its Judgments of March 17, 1934 and October 8, 1937, the P.C.I.J. validated the prorogation of the concession. Because of the outbreak of war in Europe, a Tribunal for the settlement of the financial claims did not meet until August 2, 1956.

Questions Submitted to Arbitration

Judgment on 28 French claims and 10 Greek counterclaims, concerning the financial consequences of the prorogation of the concession for the light-houses of the Ottoman Empire.

Decision of the Arbitral Tribunal

Because most of the claims dealt with the frequent changes of territory, the Tribunal first had to go into the historic events leading to the underlying case.

The award distinguishes between the changes of territory after the Balkan War of 1912 and after the First World War (1914-1918).

1. Changes of territory following the Balkan War

The basis of the changes of territory after the Balkan War is the Peace Treaty signed in London on May 30, 1913. In this Treaty several borders were changed, however, war broke out in 1914 as negotiations were still going on. Therefore the change of territory occurred on different dates for different territories.

A. Eastern Macedonia

The Tribunal concluded that this part of Macedonia had become Greek as of August 25, 1913. This (early) date was of importance in evaluating the validity of the last prorogation of the Lighthouses concession in April 1913.

B. Aegean Islands

These islands were attributed to Greece by the then Great Powers at the abovementioned conference in London under certain conditions by decision of February 13, 1914. Greece accepted the attribution on February 21, 1914. The Tribunal stated that, as there was no consideration on the acceptance in the Treaty of London, February 13, 1914 would have to be seen as the date on which the islands were detached from Turkish jurisdiction and attributed to Greece.

C. Islands with an exceptional status

Crete

In the case of Crete, the detachment from the Ottoman Empire and the attribution to Greece occurred in four different stages: (1) in 1868 Crete received autonomous status under Ottoman Guardianship; (2) in the Treaty of London (May 30, 1913); and (3) the Treaty of Bucharest (August 10, 1913), Turkey and Bulgaria denounced all rights on Crete; (4) Greece claimed Crete in a Serbo-Greek Protocol of August 15, 1913. Thus the situation in the case of Crete is similar to the situation in the case of Eastern Macedonia: detachment from Turkey on May 30, 1913, attribution to Greece on August 15, 1913.

Imbros and Tenedos

At the conference in London following the Balkan War, the Great Powers excepted these islands from the attribution to Greece and decided to return them to Turkey (February 13, 1914). However because of the outbreak of war (1914), no effect was given to this decision and Greek occupation was maintained. After the war, the Treaty of Sevres (August 10, 1920) was to attribute the islands to Greece, but because of the Greek Revolution and the war between Turkey and Greece, this treaty was never ratified. It was replaced by the Peace Treaty of Lausanne (July 24, 1923), in which the islands were again reassigned to Turkey. Thus the islands of Imbros and Tenedos have never been under Greek sovereignty, but were under Greek occupation between 1912 and 1924.

Islands situated within the Turkish three-mile territorial zone (especially Paspargos)

These islands were attiibuted to Greece by the Treaty of London (February 13, 1914) and Greece occupied the lighthouse on the island of Paspargos. The Treaties of Sevres and Lausanne reassigned them to Turkey (August 6, 1924). These islands have consequently been under Greek Guardianship between February 13, 1914 and August 6, 1924.

Dodecanese

In the Treaty of London this island was assigned to Italy. Despite several efforts in bilateral negotiations, it did not become Greek until 1947.

Castellorizo

This island was Greek between 1913 and 1914, was given by Turkey to Italy in the Treaties of Sevres and Lausanne. It became Greek in 1947.

2. Changes of territory following the First World War

Essentially this part of the award deals with the attribution to Greece of Western Thrace. This territory was attributed to Bulgaria following the Balkan War, but this decision was revised by the Treaty of Neuilly (November 27, 1919). After being occupied by French forces, followed by Greek forces, it was attributed to Greece in a Treaty signed the same day as the Treaty of Sevres (August 10, 1920). This Treaty was however not ratified until August 6, 1924. The Tribunal established as the date of detachment from Bulgaria, August 9, 1920 (the ratification date of the Treaty of Neuilly) and considered that Greece was to be regarded as an occupying force between August 9, 1920 and August 6, 1924. The territory was finally attributed to Greece on the latter date.

Financial Claims by the Parties

The award first examined the preliminary questions as presented by Greece.

The question of extinction by limitation was not accepted by the Tribunal, because this objection was excluded by the compromis and because of the exceptional circumstances of war between 1912-1923.

The objection that local remedies were not exhausted was rejected as being contrary to the intentions that led to this arbitration.

The Tribunal distinguished four groups of claims against Greece:

A. Acts accountable to Turkey before 1924.

B. Acts accountable to Crete before 1913.

C. Acts or omissions accountable to Greece as occupying power in the periods: 1912-1913 and 1919-1924.

D. Acts or omissions accountable to Greece as State successor to the concessions by subrogation in the period between 1913-1949.

The Tribunal examined the Greek counterclaims afterwards following the above distinction.

French Claims

A. Acts accountable to Turkey

The most important claim under this heading dealt with the compensation for a buoy that was placed at a harbor entrance in Eastern Macedonia and removed by the Turkish Administration in 1911 (Claim no. 12a). Turkey had accepted responsibility for this Act. Collas & Michel claimed responsibility from Greece on the ground that Greece had succeeded Turkey after 1913. Annex XII of the Treaty of Lausanne of 1923 provided for the fornial subrogation of all concessions of Lighthouses. The Tribunal rejected this claim because the above annex to the Treaty was intended to govern all posterior obligations.

B. Acts accountable to Crete

Crete had been autonomous under Ottoman Guardianship from 1868. It became Greek on August 15, 1913. These claims relate to the period before 1913. One of the claims (no. 11) considered work done between 1903 and 1908 under the direction of the Cretan Government. This work was not finished because of a disagreement between the Cretan and the Turkish Governments. Collas & Michel claimed compensation for this. The Tribunal attributed the responsibility for the resulting loss both to Collas & Michel for binding itself lightly and to the Cretan and Ottoman Governments for giving contradictory instructions. The Tribunal did not consider the Greek Government to be responsible as State successor for acts that were absolutely foreign to it. Furthermore the Tribunal found this claim was ill-founded.

In another claim (no. 4), the Cretan Government allegedly illegally relieved a navigation company from Lighthouse duties. Crete was responsible for this and it was possible to maintain that Greece was also responsible (it was a Greek company operating from Piraeus). The exoneration was maintained after 1913.

Could Greece be held responsible for this Cretan act? The Tribunal considered this in a special clause:

The underlying case deals with the violation of a legislative power of an autonomous island, of which the inhabitants have had the passionate wish for tens of years to be unified with Greece.... The violation is to the advantage of a Greek company. . . . Greece is to be held responsible for this violation.

C. Acts accountable to Greece as occupying force

Greece had been an occupying force in two periods: (1) following the Balkan War in 1912-1913; and, (2) following the First World War between 1919-1924.

(1) 1912-1913

Claim no. 8 dealt with the seizure of the fees by Greek occupying forces in Eastern Macedonia between 1912-1913. The Tribunal considered this seizure as contrary to the respect owed by occupying forces to protect private property. The concession-holder was in effect a private company which was contrary to Article 46 of the Hague Rules concerning Land Warfare (1907). Although Articles 48 and 53 leave the possibility of the seizure of funds apparently belonging to the State, the Tribunal considered that none of the fees were to be received by the Ottoman Empire. Thus the seizure was nullified.

Claim no. 1 dealt with the refusal of the occupying forces to pay administration fees. The Tribunal stated that the rights of the concession-holder (Collas & Michel) were unharmed by the occupation. The occupying authorities had to respect those rights. Greece was ordered to pay the damages resulting from this claim.

(2) 1919-1924

Claim no. 3 dealt with the non-payment of lighthouse fees between January 18 and September 8, 1919. The fees had been demanded by allied forces, retrospective to May 1919. Greece did not recognize this demand. The Tribunal confiiined the decision by the allied forces and ordered Greece to pay the fees under Article 137 of the Treaty of Lausanne of 1923.
In the case of the claims no. 13 and 14, the Tribunal could not decide, because of the destruction of the lighthouses or buoys.

D. Acts accountable to Greece as State successor to the concessions by subrogation (1913-1949)

This category dealt with about twenty claims. A summary of the most important will be given hereinafter.

The Tribunal stated that some of the claims were no more than a result of the general state of Cold War between Collas & Michel and the Greek Authorities and rejected them.

However, the Tribunal considered a significant part of the claims to be genuine breaches of the concession contract by the Greek Government as successor by subrogation: including seizure or retention of fees due, exoneration of duties for certain navigation companies, seizure of goods and materials, seizure of offices, and irregular taxes. The Tribunal settled the above claims in favor of the claimant.

Greek counterclaims

The majority of the Greek counterclaims concerned maintenance works, repair works and even the construction of lighthouses in some territories. The Greek Government reclaimed the cost of these works on the basis of an article in the concession contract concerning the division of fees in the event of damage caused by force majeure. The Tribunal evaluated these claims based on the circumstances of each case and the concession contract. However, in rejecting most of the counterclaims, the Tribunal ordered the French Government to repay the Greek Government for certain exploitation costs it had incurred as a custodian of several lighthouses.

Claim no. 1 differed from the other claims in that it concerned accidental fees and was dealt with according to the Rules for the Public Debt of the Ottoman Empire (see Article 52 of the Treaty of Lausanne and Award of the Arbitration concerning the Public Debt of the Ottoman Empire, International Arbitral Awards I, p. 554).

Redemption of the Concession

The redemption of the concession before expiration was possible according to several clauses in the concession contract. All these clauses included the payment of damages. The Greek Government had tei ininated the contract on January 1, 1929, without paying any damages or offering a guarantee of payment preceding equitable damages. Taking into account that the Greek Government was the successor to the concession by subrogation, the Tribunal regarded this termination as an act directly contrary to essential clauses of the concession contract.

The amount of damages to which Collas & Michel were entitled should take into account twenty years in which the concession was de jure still in force and should be fixed according to the contracts signed before the expropriation.

The Tribunal decided the damages for the redemption of the concession on the basis of the exploitation figures of 1925-1928 and adjourned for the fixation of the exact amount of the damages until such amount had been calculated by experts.

Case information

Documents