California Law Review
Volume 16 | Issue 2
Article 3
January 1928
The Rumanian-Hungarian Dispute before the
Council of the League of Nations
Francis Deak
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Recommended Citation
Francis Deak, The Rumanian-Hungarian Dispute before the Council of the League of Nations, 16 Cal. L. Rev. 120 (1928).
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The Rumanian-Hungarian Dispute Before
the Council of the League of Nations
HE reports of the last session of the League of Nations Council
held in Geneva during the month of September mentioned among
other things that the Council is having some difficulty in settling a
dispute between Hungary and Rumania. The controversy arose in
connection with a decision of the Rumanian-Hungarian Mixed
Arbitral Tribunal, and has an importance for international law far
beyond 'the immediate issue involved. The future of international
arbitration may be vitally affected by the solution of the dispute.
The outcome of this pending controversy should interest American
public opinion, for the issue involved questions similar to that in
the dispute between the United States and Mexico concerning the
Mexican oil and land laws. The similarity of the issues is due to
the fact that in both cases laws were enacted providing for expropriation which in the view of the Rumanian and the Mexican
governments, respectively, were general measures of social reform,
in the interests of social justice. In each case, the proposal for compensation is based on the alleged assessed value of the land, and
provision for payment is made not in cash, but in government bonds.
Furthermore, both laws affect the vested rights of a large number of
aliens.
.The controversy arose with respect to the Rumanian land-reform
law of July 30, 1921,1 under which a great number of Hungarians
lost their immovable property situated in Transylvania, a territory
forming part of the Kingdom of Hungary which was ceded to
Rumania by the Treaty of Trianon. The Hungarian government
contended that the Rumanian land law conflicted with the provisions
of the Treaty. After having failed to adjust the controversy amicably through direct negotiations with the Rumanian government,
Hungary addressed the League of Nations in March, 1923. The
request was made under Article 11, paragraph 2 of the Covenant,
calling the attention of the Council of the League to a circumstance
actually "affecting international relations which threatens to disturb
1 See Monitorid Oficial, No. 93, of July 30, 1921, "Agrarian Law applicable
to Transylvania, the Banat, the districts of the Crisana and the Maramuras."
THE RUMANIAN'-HUNGARIAN DISPUTE
the good understanding between nations upon which peace depends." 2
In order to understand the dispute, one must examine the Rumanian agrarian, legislation and the provisions of the Treaty.
During the armistice, and before the peace negotiations between
the Allied Powers and Hungary were begun, the Rumanian Governing Council for Transylvania published a Decree-Law." According
to Article 2, paragraph (a) of this law, immovable property of
aliens was to be expropriated in its entirety regardless of whether
the owners were aliens by origin or became such through any other
fact, such as marriage or the exercise of the right of option. When
the text of the Treaties under negotiation in Paris was disclosed, it
became evident that this provision was in palpable contradiction to
the Treaty of Trianon, and a second Decree-Law in June, 1920,
amended this article and subjected its application to the condition
that "these provisions do not conflict with the stipulations in the
Treaty of Peace concluded between the Allies and Austria-Hun'4
gary."
Meanwhile the definitive text of the Treaty of Trianon, signed on
June 4, 1920, was rendered available and it became apparent that the
provisions of the two Rumanian Decree Laws did conflict with the
provisions of the Treaty.
The Treaty of Trianon, in Article 63, defines the right of persons
losing their Hungarian nationality and obtaining ipso facto a new
nationality to opt for the nationality of the state of which they had
been citizens. It then provides that such persons
"will be entitled to retain their immovable property in the territory of the other State where they had their place of residence
before exercising their right to opt." 5
The property of Hungarian citizens not domiciled in the transferred territories was safeguarded by Article 250 of the Treaty which
reads as follows:
"Notwithstanding the provision of Article 232 and the Annex to section IV, the property, rights and interests of Hun2Request by the Hungarian Government to the Council of the League
in accordance with Article 11 of the Covenant (March 15, 1923). League
of Nations Official Journal, Vol. IV, No. 7, p. 729 and if. As to the failure
of direct negotiations between Rumania and Hungary, see Annex 3 to this
request: Note No. 11304 of the Rumanian Foreign Office to the Hungarian
Legation in Bucarest, dated February 28, 1923, (Ministire des Affaires
Atrangires de Hongrie: Recueil des Actes et Documents relatifs a l'affaire
de l'expropriation par le Royaume de Roamaine des biens immobiliers des
optants Hongrois, Budapest, 1924, p. 17.
8
September, 1919. See, Monitorul Oficial, No. 117, of September 12, 1919.
4
Monitorul Oficial, No. 55, of June 12, 1920.
5The Treaty of Trianon is quoted from the British and For. State
Papers, Vol. 113, p. 486 and ff.
z6 CALIFORNIA LAW REVIEW
garian nationals or companies controlled by them situated in
the territories which formed part of the former Austro-Hungarian Monarchy shall not be subject to retention or liquidation
in accordance with these provisions.
Such property, rights and interests shall be restored to their
owners freed from any measure of this kind, or from any other
measure of transfer, compulsory administration, or sequestration, taken since the 3rd of November, 1918, until the coming
into force of the present Treaty, in the condition in which they
were before the application of the measures in question.
Claims made by Hungarian nationals under this article shall
be submitted to the Mixed Arbitral Tribunal provided for by
Article 239 . . ."
It should be remarked that the interests of Hungarian optants
are also safeguarded in the Minority Treaty concluded at Paris on,
December 9, 1919, between the Principal Allied and Associated
Powers and Rumania. 6 Article 3, paragraph 3 of that treaty, provides that
".. . Persons who have exercised the above right to opt . . .
will be entitled to retain their immovable property in Rumanian
territory . . ."
The Principal Allied Powers attached some importance to the
safeguarding of the rights of the minorities, as is evident from Article
1 of this Treaty, reading:
"Rumania undertakes that the stipulations contained in Articles 2 to 8 of this Chapter shall be recognized as fundamental
laws, and that no law, regulation or official action shall conflict
or interfere with these stipulations, nor shall any law, regulation
or official action prevail over them."
The Treaty of Trianon came into force on July 26, 1921. Four
days later the Rumanian land-reform law was promulgated. 7 Although this law does not contain provisions so palpably contrary to
the Treaty of Trianon. and the Minority Treaty as did the two preceeding laws, there were stipulations which, in the consideration of
the Hungarian government, were of a discriminatory nature necessitating the request made upon the League Council. Article 6,
paragraph (c) of this law provides that the estates of "absentees"
shall be subject to expropriation in their entirety and absenteeism is
defined as follows:
"For the purposes of this law, an absentee shall be any person
who was absent from the country from December 1st, 1918,
until the date on which the law was placed upon the table of the
6 British and For. State Papers, Vol. 112, p. 538 and ff.
7
Supra, note 1.
THE RUMANIAN-HUNGARIAN DISPUTE
Parliament, unless such person was then discharging .official
duties abroad . . ."8'
This definition of absenteeism seems to be directed against Hungarians. The decisive period for the establishment of absenteeism
is from December 1, 1918, to March 23, 1921, the whole period
being prior to the coming into force of the Treaty. As a result,
legal consequences are attached to absenteeism in.a time when
Rumania had no sovereignty over Transylvania. That such a definition is discriminatory against Hungarians is evident also from the
fact that during the greater part of these twenty-seven months, decisive for the establishment of absenteeism, Rumania conducted war
against Hungary. A great number of Hungarians left Transylvania
either from fear of the advancing Rumanian troops or from compulsion. It appears also that Rumanian authorities refused permission
even to those Hungarians who wanted to return, at any time during
the entire period, and even after the Treaty came into force. It
appears also that any brief absence during the period in question
incurred the penalties of the statute.
The method employed by Rumania in indemnifying the owners
of expropriated land was also objected to by Hungary. The fixing
of the amount and the mode of payment of compensation was to
take place in the following manner:
The amount of compensation was fixed on the basis of the
assessed value of the land in 1913, expressed in the currency in use
at the present time (which was about two and a half per cent of the
gold value when Hungary addressed the League). The amount so
fixed was to be paid not in cash but in non-transferable government
bonds bearing interest at the rate of five per cent, and redeemable
in fifty years. The market value of these government bonds being
only thirty to forty per cent of their face value, the owner would
receive scarcely one per cent of the true value of his property.
The Hungarian government contended therefore that "expropriation on these lines differs very slightly from confiscation pure
and simple."'"
The request of the Hungarian government was placed on the
agenda of the twenty-fourth session of the Council, held in April,
The law was introduced in the Rumanian Parliament on March 23, 1921.
This is according to Articles 50 and 85 of the Law of July 30, 1921
(supra, n. 1); and to a decision of the Council of Ministers (Monitorul
Ojicial, No. 22, of January 13, 1924 [92/9241 ) ; and to a decree of the Ministry
of Agriculture (Id., No. 74, of April 3, 1924) carrying into effect the pro8
9
visions of the law.
'oSee: Request by the Hungarian Government . . . etc., League of
Nations Official Journal, Vol. 4, No. 7, p. 733.
z6 CALIFORNIA LAW REVIEW
1923. After a prolonged discussion before the Council and Rumania's refusal to refer the case to the Permanent Court of International Justice, the Council requested the Japanese representative,
Ambassador Adatci, to act as mediator between the two governments
concerned and expressed the hope that "the Governments of Hungary
and Rumania will direct their best efforts towards the attainment of
an greed solution.""1
In May, 1923, the representatives of the two governments came,
at the invitation of Ambassador Adatci, to Brussels, where conversations were conducted under the chairmanship of Mr. Adatci and
in the presence of the director of the legal department of the League.
These conversations, however, did not bring about a satisfactory
solution, although a protocol was drawn up and initialed. This
protocol contained only general statements and admitted that no
agreement could be reached on one of the most important points
raised by the dispute, that of compensation. Concerning this question, the third point among the five brought forward by the Hungarian request, the protocol states that "The two representatives
considered it inadvisable to continue the discussion on the question
of the redemption price; no compromise appeared possible between
their respective points of view . . .12
The Hungarian government, moreover, disavowed its delegate
to the Brussels conversation and notified the League that it could
not consider the statements of the protocol as binding upon Hun-3
gary.
When Mr. Adatci's report came before the twenty-fifth session
of the Council, held in July, 1923, there ensued lively discussion,
at the end of which a resolution was adopted, which expressed the
hope that "both Governments will do their utmost to prevent the
"tFor the discussions which took place in the Council Meeting of April,
1923, see: League of Nations Official Journal, Vol. IV, No. 6, pp. 573-577,
604-611.
League of Nations Official Journal, Vol. IV, No. 8, p. 1012,
'See:
Accounts of the Brussels conversation.
"' The documents relating the Hungarian government's refusal to accept
the statements of the Brussels protocol have not been published in the Official
Journal. The correspondence, consisting of a letter of the Hungarian Minister
of Foreign Affairs to Mr. Adatci, dated June 12, 1923, with an aide-mimoire
bearing the same date, and the answer of the Japanese Ambassador to that
aide-m1mire, was circulated to the members of the Council by a communiqu6,
No. 11/29007/28470 of the Secretary-General, dated June 19, 1923. A supplementary document was submitted by the Hungarian government to the
Council, dated June 14, 1923, and communicated as document No. C. 438 of
July 1, 1923. For these documents, see, Recueil . . . etc., referred to in
note 2, supra, pp. 61-102.
THE RUMANIAN-HUNGARIAN DISPUTE
question of Hungarian optants from becoming a disturbing influence
in the relations between two neighboring countries,"' 4 but which
left the problem itself, the nucleus of the dispute, unsettled.
After the failure of the League's mediation, the expropriated
Hungarian landowners began to bring suits against Rumania, in
accordance with Article 250, paragraph 3, of the Treaty of Trianon,
in the Rumanian-Hungarian Mixed Arbitral Tribunal, established
under Article 239 of the Treaty. These cases, although differing in
details, were similar in substance. 15 The complainants petitioned
the Tribunal to declare the measures applied by the Rumanian
state against their property to be contrary to Article 250 of the
Treaty of Trianon; to condemn Rumania to in integrum restitutio
of their movable and immovable property, and to pay an indemnity
for all losses and damages, and to reimburse all expenses which
plaintiffs incurred in consequence of the measures under complaint;
in case that restoration of the whole of the property or a part thereof
should be impossible, to require Rumania to pay them the equivalent
value; to fix the amount of indemnity ex aequo et bono; to hold the
defendant to the costs; and, finally, to enjoin the Rumanian state
from the execution of all measures which might affect the property
or restrict their rights thereto.
The Rumanian government in a demurrer (demande exceptionelle) challenged the jurisdiction of the Tribunal on the ground
that,
(1) Article 250 of the Treaty applied only to property which
was seized under "exceptional war measures";
(2) The land-reform laws do not constitute such exceptional
measures, but have been enacted "in the interest of social justice"
and they affect equally nationals and foreigners;
(3) The owners receive "full and just" compensation.
After arguments before the Tribunal during December, 1926,16
the Tribunal in a decision delivered on January 10, 1927, overruled
the demurrer of Rumania, declared itself competent and instructed
14 See: League of Nations Official journal, Vol. IV, No. 8, P. 907.
Il See: "Les Lois Roumaines de Riforrne Agraire devant le Tribunal
Arbitral Mixte Roumano-Hongrois; a collection of different types of cases
filed with the tribunal. Imp. Desfossgs, Paris (No. 93606).
16 Both parties were represented by international jurists of the highest
repute and authority, as Messrs. Dupuis, Gidel, Lapradelle, Millerand and
Politis. The arguments of cou nsel of both parties on the question of the
competence of the Tribunal are collected in A. de Lapradelle: Recueil de la
Jurisprudence des Tribunaux Arbitraux Mixtes, Vol. IV. (Compitence),
Paris, La Documentation Internationale, 1927.
16 CALIFORNIA LAW REVIEW
the defendant to file its answer on the merits of the case within two
17
months from the notification of the decision.
According to Article 239, paragraph (g), of the Treaty of
Trianon (the article which established the Mixed Arbitral Tribunal),
"The High Contracting Parties agree to regard the decisions
of the Mixed Arbitral Tribunal as final and conclusive, and to
render them binding upon their nationals."
Rumania, instead of complying with the request of the Tribunal,
to file her answer on the merits of the complaints, declared that she
would not accept the decision. Mr. Millerand, counsel of the Rumanian government, in a letter dated February 24, 1927, notified
the president of the Tribunal that the Rumanian government
"will refrain from the filing of its answer on the merits and,
consequently, its arbiter on the Rumanian-Hungarian Mixed
Arbitral Tribunal will no longer sit in any of the agrarian cases
filed by Hungarian citizens."' 8
In addition, Rumania addressed a request to the League under
Article 11, paragraph 2, of the Covenant. Thus, the whole dispute
was brought before the Council a second time. This time, however,
an entirely different aspect of the situation was to be considered.
At the Council meeting of March 7, 1927, M. Titulesco, the Rumanian representative, explained the reasons which, in his estimation,
justified the attitude taken. by Rumania regarding the decision of
the Mixed Arbitral Tribunal. M. Titulesco asserted that the dispute, regarding which claims were brought before the Mixed Arbitral
Tribunal, had been previously settled at the Brussels negotiations;
that the Mixed Arbitral Tribunal had no jurisdiction over claims
arising out of the application of the Rumanian agrarian law to Hungarian nationals; that in exercising jurisdiction over such claims the
Tribunal exceeded its powers as defined by the Treaty; that the
Tribunal declaring its competence and requiring Rumania to answer
on the merits re-opened the question of a possible incompatibility
- Emeric Kulin pare c. Etat Rourmain, Tribunal Arbitral Mixte RoumanoHongrois, Docket No. R. H. 139.
Recueil des dicisions des Tribunaux Arbitraux Mixtes, Vol. VII, pp.
138-162.
There is a very good expos6 of this judgment by Professor Dupuis: Les
Arrits de Compitence du Tribunal Arbitral Mixte Rournano-Hongrois,8 (3-e
Sr.) Revue de Droit International et de Ligislation Comnparge (1927) Nos.
1-2, p. 1 and ff. See also: PilIst, A., Les affaires agrairesdes ressortissants
Hongrois devant le Tribunal Mixte Rouinano-Hongrois,34 (3-e Sr.) Revue
Ginirale de Droit International Public, pp. 1-19; Scells, G., L'arrt du 10
janvier 1927 du T. A. M. Rouniano-Hongrois,ibid., pp. 433-482.
28 This correspondence is not published by the League of Nations. Mr.
Millerand's above quoted letter was attached as Annex B. 2 to the request
of the Hungarian government to the League, dated May 21, 1927.
THE RUMANIAN-HUNGARIAN DISPUTE
of the agrarian law with treaties; that such action would expose
Rumania to the danger of social upheaval that she was protecting
her vital interests in withdrawing her judge from the Tribunal;
that therefore the Rumanian government deemed it a duty to notify
the Council of the reasons for its action and to call the attention of
the Council to the judgment of the Tribunal as a circumstance which
might endanger peace. Thiere was again an acrimonious discussion
between him and the Hungarian delegate, Count Apponyi, during
which the latter submitted a request to the Council for the appointment of a substitute judge for the Tribunal in accordance with the
provisions of Article 239, paragraph (a), and of the Annex to said
article. This request was formally submitted in a note to the
Secretary General, dated May 21, 1927, and constitutes the reason
for Hungary invoking the jurisdiction of the Council.
The Council decided to study the question, and appointed a committee, consisting of Sir Austen Chamberlain, chairman, and Viscount Ishii and Mr. Villegas, representatives of Japan and Chile,
respectively. This committee was to investigate the dispute and
report, at a subsequent meeting of the Council, the possibility of an
amicable adjustment1 9
The problem put to the Council and referred to the Committee
of Three was a delicate and complicated one. As was pointed out
at the close of the discussion by Dr. Stresemann, chairman of the
forty-fourth session of the Council:
". .. This is not just a dispute between two Members of the
League. The question is much more important than that. The
point at issue is that of the competence of arbitral tribunals in
relation to national and international laws on the same subject . . .,20
The problem entrusted to the committee embraced two issues.
There was a request of the Rumanian government under paragraph
2 of Article 11 of the Covenant. There was also a request of the
Hungarian government for the appointment by the Council of two
deputy judges for the same Tribunal, by virtue of Article 239 of
the Treaty of Trianon.
How did the committee respond to the difficult task which was
put upon it? How far did the committee fulfill the two conflicting
obligations imposed upon it, first as a mediator under the Covenant,
and second, as the safeguarder and enforcer of the Treaties?
19
For the discussion before the Council, see: League of Nations Official
Journal, Vol. VIII, No. 4, pp. 350-372.
20 Id., p. 372.
16 CALIFORNIA LAW REVIEW
The report of Sir Austen and his committee was presented to the
Council at its meeting held on September 17, 1927.21 It begins with
a short historical survey of the dispute. Thereafter the committee
states with regret that the several proposals submitted by it to the
parties met with refusals and failed to bring about a solution through
direct conciliation. The report continues:
"The committee was, therefore, obliged to seek a solution by
other methods. A minute examination of the question of the
Mixed Arbitral Tribunal's jurisdiction seemed to be of primary
importance. It therefore formulated the following questions:
"(1) Is the Rumanian-Hungarian Mixed Arbitral Tribunal
competent to take cognizance of complaints resulting from the
application of the Rumanian agrarian law to Hungarian optants
and citizens?
"(2) If so, to what extent and under what circumstances is
it competent to do so?"
The committee then proceeds to define the limits and extent of the
jurisdiction of the Tribunal as viewed by it in interpreting the
Treaty which established the Tribunal. Thereafter the report lays
down three theses as "the definition of principles which the acceptance of the Treaty of Trianon has made obligatory for Rumania
and Hungary." The committee esteems that:
"(1) The provisions of the peace settlement effected after
the war of 1914-18 do not exclude the application to Hungarian
nationals (including those who have opted for Hungarian nationality) of a general scheme of agrarian reform.
"(2) There must be no inequality between Rumanians and
Hungarians either in the terms of the Agrarian Law or in the
way in which it is enforced.
"(3) The words 'retention and liquidation' mentioned in
Article 250 which relates only to the territories ceded by Hungary, apply solely to the measures taken against the property
of a Hungarian in the said territories, and in so far as such
owner is a Hungarian national."
The committee suggested that the Council should:
"(a) Invite both parties to comply with these three prin.ciples;
"(b) Invite Rumania to reinstate her judge on the Mixed
Arbitral Tribunal."
The report concluded by recommending alternative sanctions in case
either or both of the parties should refuse to accept these proposals.
These recommendations are in substance as follows:
21
1383.
See: League of Nations Official Journal, Vol. VIII, No. 10, pp. 1379-
THE RUMANIAN-HUNGARIAN DISPUTE
(1) In case of refusal by Hungary, the Council would not
be justified to proceed to the nomination of substitute judges in
conformity with the Treaty of Trianon.
(2) In case of refusal by Rumania, the Council would be
justified in taking the necessary steps to assure the functioning
of the Mixed Arbitral Tribunal.
(3) If both parties refuse, the committee thinks that the
Council will have exhausted the role incumbent on it by virtue
of Article 11 of the Covenant.
The real significance of these statements and recommendations
deserves analysis.
The first question arises regarding that part of the report which
deals with the competence of the Tribunal., It seems peculiar that
the Council of the League of Nations, an exclusively political body,
should inquire into a purely legal question such as the jurisdiction
of an Arbitral Tribunal. An analogous instance in the United States
would be an inquiry by Congress into the jurisdiction of a federal
court. In every state it is the court itself which decides upon its
jurisdiction; and no other power, legislative or executive, can interfere with the judiciary in this matter. This principle has been
adopted in the procedure of international tribunals. Article 48 of
the Hague Convention for the Pacific Settlement of International
Disputes, of July 29, 1899, reproduced in Article 73 of the Convention of October 18, 1907, lays down this principle in definite form:
"The Tribunal is authorized to declare its competence in
interpreting the "compromis,' as well as the other Treaties
'' 2
which may be invoked, and in applying the principles of law. 2
Many instances may be cited upholding the principle that inter23
national tribunals may pass on pleas to their own jurisdiction.
The decisions of the Mixed Arbitral Tribunal are, according to
Article 239, section (g), of the Treaty of Trianon, final and conclusive; they are such whether they refer to the jurisdiction of the
Tribunal or to the merits of a case. Article 239 makes no distinction
with respect to this matter. The decision of January 10, 1927, being
final and conclusive, the question of jtirisdiction would seem to be
res judicata. The questions at issue are whether the Council can
interfere with a res judicata and whether it is authorized by the
Covenant or by the Treaty to define the limits within which the
Tribunal may act and beyond which it exceeds its powers, or to overS. For. Rel., 1907, Pt. II, p. 1195.
See: Ralston, Jackson H., The Law and Procedure of International
Tribunals, Revised Ed., Stanford Univ. Press, 1926, § 53, p,44 and ff. See
also: Borchard, Edwin M., Opinion on the Roumanian-Hungarian dispute,
Tuttle, Morehouse & Taylor Co., New Haven, 1927, ch. VIII, pp. 18-21.
22U.
28
16 CALIFORNIA LAW REVIEW
rule its decisions. Assuming that the decisions of the Tribunal are
not final and appeal may be taken from them, even then, is the
Council of the League the proper forum to which such an appeal is
to be taken? To confer on the Council the functions of an Arbitral
Tribunal, to superimpose the Council upon a court established by
the Treaty itself, -would seem to constitute a dangerous encroachment by a political agency into the judicial activities of a court.
Attention should also be given to the three principles which "the
acceptance of the Treaty of Trianon has made obligatory for Rumania and Hungary" and which three principles the committee
deduced from its inquiry as to the competence of the Mixed Arbitral
Tribunal. Do they represent undisputed and generally recognized
principles of international law?
The first and third proposition result from the interpretation of
the Treaty of Trianon. Supposing that the interpretation given to
the provisions of the treaty are correct, one may ask whether the
Council is the forum which is called upon to interpret the Treaty.
It was certainly not the intention of the draftsmen of the Covenant to
confer such powers and duties on the Council. The Covenant provides for the settlement of disputes by two distinct methods. According to Article 12, disputes between members of the League shall
be submitted either to arbitration or to inquiry by the Council.
Article 13, paragraph 2, defines those disputes which are subject to
arbitral procedure thus:
"Disputes as to the interpretation of a treaty, as to any question of international law, as to the existence of any fact which
if established would constitute a breach of any international
obligation, or as to the extent and nature of the reparation to
be made for any such breach, are declared to be among those
which are generally suitable for submission to arbitration."
This language seems clear and explicit. These matters, very
evidently involving questions of law, are considered beyond the
political role of the Council, namely, mediation and conciliation. If
the Council desires to know whether the provisions of the Treaty do
not exclude the application of an agrarian reform to Hungarian
optants, if it desires to have an authoritative interpretation of the
words "retention and liquidation" as used in Article 250 of the
treaty, the Council may ask an advisory opinion from the Permanent
Court of International Justice; but in no case should the Council
itself interpret the treaty. In the first draft prepared in Paris for
the Covenant of the League, provision was made for the setting
THE RUMANIAN-HUNGARIAN DISPUTE
aside of arbitral decisions by the three-fourths vote of the Assembly. 24
The omission of this paragraph in the Covenant as ultimately adopted
clearly indicates that the contracting parties did not approve of the
political review of judicial decisions.
But even granted that the Council may properly interpret treaties,
do these three principles conform to international law? Do the
sanctions suggested by the committee, in case of refusal by either or
both parties to accept these principles, contain constructive proposals
as to the settlement of the dispute?
The first principle states that the provisions of the Treaty do
not exclude the application of an agrarian reform to Hungarian
nationals, whether optants or not. But the dispute did not arise
with respect to the applicability or non-applicability of an agrarian
reform in any form whatsoever to Hungarian nationals. It arose
with respect to one particularagrarian reform which the Hungarian
government contends is contrary to those provisions of the treaty
which safeguard the particular rights of Hungarian nationals. It
concerns "the interpretation of a treaty": Articles 63 and 250, as
well as Article 239 of the Treaty of Trianon; "questions of international law": the question of private property of aliens; the
"existence of a fact which if established would constitute a breach
of international obligations": the contention that the administration
of the Rumanian land law in fact constitutes a breach of her international obligations under the treaties and these very questions the
Covenant declares explicitly to be appropriate for arbitration. It is
not the Rumanian agrarian reform to which the Hungarian government deemed it necessary to raise objection. In fact it has never been
contended on the part of Hungary that the agrarian reform as such
is incompatible with the treaty as far as Hungarian nationals are
concerned. The objection was raised against certain provisions of
the Rumanian law which, as claimed by Hungary, do conflict with
the treaty when applied to her nationals. The acceptance by Hungary of the general principle enunciated by the Council would not
affect her complaint that the provisions and application of the
Rumanian law are discriminatory and confiscatory. But Sir Austen
Chamberlain's report gives no answer to the question as to which
authority will investigate these complaints.
As to the second principle, namely, that "there must be no inequality between Rumanians and Hungarians either in the terms of
24See:
Senate Doc. No. 106, 66 Cong. 1st Ses. Hearings before the
Senate Committee on Foreign Relations, p. 1167 (Art. V) ; this provision was
still retained in a later draft, id., at p. 1216.
i6 CALIFORNIA LAW REVIEW
the Agrarian Law or in the way in which it is enforced," two observations should be made. First, this seems far from being an undisputed axiom in international law. On the contrary, there are
many instances where private property of aliens enjoys a larger and
greater protection than that of nationals. The sanctity of private
property and vested rights was, in fact, a generally recognized rule
of international law, a rule unquestioned until the recent war when
the confiscation and liquidation of alien enemy property gave a severe
blow to this well-established principle. 25 The acceptance of this
principle would justify the confiscation of alien private property by
Soviet Russia, though Great Britain would scarcely acquiesce in this
perhaps inevitable conclusion. Nevertheless, the principle suggested
by Sir Austen would carry this implication. Second, if the principle be accepted, we are faced again with the question whether the
acceptance of this principle would solve the Rumanian-Hungarian
dispute. One of the complaints of the Hungarian government is
based on the inequality of treatment with respect to the peculiar
construction of absenteeism. Is the Council entrusted with the determination of the question whether there is inequality between Rumanians and Hungarians either in point of law or in point of fact?
As to the third principle, which defines the meaning of the words
"retention and liquidation" as used in the text of the treaty, it may
be remarked that these very words have been interpreted recently
by the highest judicial authority, by the Permanent Court of International Justice. 2' That precedent doubtless weighed heavily with
the Mixed Arbitral Tribunal in this particular case. The re-interpretation of these words by the Council would transform a judicial
question into a political one and would seem to imply a certain disregard of the judicial organs established by the League.
The report submitted by Sir Austen Chamberlain is not believed
to do credit to the League of Nations. The Hungarian delegate,
Count Apponyi, in a vigorous address protested against the acceptance of this report and the recommendations which it contains, and
the whole question was accordingly postponed for reconsideration at
the next session of the Council, to be held in December.2 7 It is to be
hoped that this reconsideration will bring about serious changes in
the report, the acceptance of which, in its present form, would constitute a severe blow to the cause of international arbitration. Such
25 See: Borchard, Edwin M., Les principes de la protection diplonuatique
des nationaux a l'itranger. Bibliotheca Visceriana, Vol. III, at p. 18.
26 See:
Publications of the Permanent Court of International justice,
Series A, No. 7, pp. 21-22, 32-33; a case concerning German Interests in
Polish Upper Silesia.
THE RUMANIAN-HUNGARIAN DISPUTE
an acceptance would mean the disavowal by the Council of the
League of the decision of an international arbitral tribunal presided
over by a highly qualified man of unquestionable repute. It would
mean that the Council assumes the role of an international court
of appeals to which appeal can he taken from the judgments and
decisions of international tribunals, appeals which can be sustained,
changed or reversed. It also would mean the disregard of the spirit
and letter of the very treaties which established the League of
Nations.
It would seem that the proper procedure for the Council would
have been to refer the entire question to the Permanent Court of
International Justice. This procedure was suggested several times
during the discussions by the Hungarian representatives, but was
never followed. Even if the Council should be successful in adjusting the immediate dispute between Hungary and Rumania, still, in
disregarding the decision of the Mixed Arbitral Tribunal, a precedent
would be established which would have an unforunate effect upon
the principle of arbitration, a principle which it is one of the domi27
nant purposes of the League of Nations to foster.
FrancisDedk.28
27 Since this article went to the press, the December meeting of the Council postponed decision concerning Sir Austin Chamberlain's report in view of
Hungary's offer to compromise.
No information was available as to the
substance
and basis of Hungary's offer.
28
Dr. Deik, as a Laura Spellman Rockefeller fellow in international law,
appointed from Hungary, visited the University of California for some weeks
in the summer of 1927.