THE RETALIATORY ORDERS IN COUNCIL.

I. ORDER IN COUNCIL 11TH MARCH, 1915.

THE STIGSTAD.

[2 B. & C. P. C. 179; 3 ib. 347; [1919] A. C. 279; Scott, 804.]

Case.] ART. 3 of the Order is as follows: "Every merchant vessel which sailed from her port of departure after March 1st, 1915, on her way to a port other than a German port, carrying goods with an enemy destination or which are enemy property, may be required to discharge such goods in a British or Allied port. Any goods so discharged in a British port shall be placed in the custody of the Marshal, and unless they are contraband of war, shall, if not requisitioned for the use of His Majesty, be restored by order of the Court, upon such terms as the Court may in the circumstances deem to be just, to the person entitled

thereto :

"Provided that this Article shall not apply in any case falling within Articles II. and IV. of this Order."

This Order was expressed in the preamble to be in retaliation for the orders of the German Government declaring the waters surrounding the United Kingdom a "war zone" in which all British and Allied merchant vessels would be destroyed irrespective of the safety of the lives of the passengers and crew, and in which neutral shipping would be exposed to a similar danger.

Its object was expressed to be to prevent commodities of any kind from reaching or leaving Germany.

The Stigstad was a Norwegian vessel which, on the 10th of April, 1915, left a Norwegian port with a cargo of iron-ore briquettes for Rotterdam, for transhipment into Rhine barges for purchasers in Germany. She was stopped by H.M.S. Inconstant and ordered to Leith. On the intervention of the owners she was allowed to proceed to Middlesbrough, where the discharge of the cargo commenced on the 1st and was completed on the 15th of May. Upon the sale of the cargo, Evans, P., ordered release of the proceeds, less freight, to the Norwegian owners. The vessel

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was released. The shipowners claimed freight, and damages for detention and expenses.

Judgment.] The question, said Evans, P., was whether or not, as a matter of law, the shipowners were entitled to damages for detention consequent upon the vessel being required to enter a British port and to remain there until her cargo was discharged. It was submitted by the Crown that there was no further delay or inconvenience caused to the owners than was inevitable in carrying out properly the provisions of the Order. The Order was a retaliatory or reprisal Order, and according to the decision. of the Privy Council in The Zamora, supra, p. 279, any Order in Council authorising reprisals is conclusive as to the facts which are recited as showing that cause for reprisals exists. It had been argued that the Order was unlawful because it entailed upon neutrals a further degree of inconvenience. The Order dealt very leniently with neutrals engaged in trade with the enemy. Whereas in breach of blockade, or of its attempt, the neutrals suffered complete confiscation of the vessel, nothing of the kind happened here. The vessel and cargo were merely taken to a British port and the vessel released as soon as the cargo had been discharged, the owners receiving a proper sum for freight. The Order did not entail upon neutrals a degree of inconvenience unreasonable considering all the circumstances and therefore could not be said to be unlawful. It was in accordance with the principles of international law. Whatever delay or inconvenience might inevitably or necessarily be caused, neutrals must suffer that delay and that inconvenience, as the consequence of the exercise of legitimate belligerent rights. The claim of the shipowners was disallowed.

In dismissing the owners' appeal to the Privy Council Lord Sumner said there was no direction in the Order allowing such damages as were claimed. Neutrals and belligerents enjoyed equal rights on the high seas. It was said in The Zamora, 2 B. & C. P. C. at p. 15, by Lord Parker, that the decision of Lord Stowell in The Fox "proceeded upon the principle that, where there is a just cause for retaliation neutrals may by the law of nations be required to submit to inconvenience from the acts of a belligerent Power greater in degree than would be

justified had no just cause for retaliation arisen, a principle which had already been laid down in The Lucy, Edw. 122."

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The question here was not the right of the belligerent to retaliate upon his enemy the same measure as had been meted out to him or the propriety of justifying in one belligerent some departure from the regular rules of war on the ground of necessity arising from prior departures on the part of the other, but the claim of neutrals to be saved harmless under such circumstances from inconvenience or damage thereout arising. If the above statement from The Zamora be correct, the only question open to the neutral claimant was whether the Order subjected neutrals to more inconvenience or prejudice than was reasonably necessary under the circumstances. The policy embodied in the Order was the result of the outrage committed by the enemy upon law, humanity and the rights alike of belligerents and neutrals. considering whether more inconvenience is inflicted upon neutrals than the circumstances involve, the frequency and the enormity of the original wrongs are alike material, for the more gross and universal those wrongs are the more are all nations concerned in their repression and bound for their part to submit to such sacrifices as that repression involves. It is right to recall that as neutral commerce suffered and was doomed to suffer gross prejudice from the illegal policy proclaimed and acted on by the German Government, so it profited by and obtained relief from retaliatory measures, if effective, to restrain, to punish and bring to an end such injurious conduct. Neutrals whose principles or policy lead them to refrain from punitory or repressive actions of their own, may well be called on to bear a passive part in the necessary suppression of courses which are fatal to the freedom of all who use the seas. . . . The seas are the highways of all and it is incidental to the very nature of maritime war that neutrals in using that highway may suffer inconvenience from the exercise of their concurrent rights by those who have to wage war upon it."

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Contraband, blockade and unneutral service were 'illustrations of the broad rule that belligerency and neutrality are states so related to one another that the latter must accept some abatement of the full benefit of peace in order that the former

may not be thwarted in war in the assertion and defence of what is most precious of all the rights of nations, the right to security and independence . . . to say that retaliation is invalid as against neutrals except within the old limits of blockade, contraband and unneutral service, is to reduce retaliation to a mere simulacrum, the title of an admitted right without practical application or effect."

The real question was whether the Order inflicted hardship excessive either in kind or in degree upon neutral commerce, and their lordships thought that no such hardship was shown. "If the neutral shipowner is paid a proper price for the service rendered by his ship and the neutral cargo-owner a proper price according to the value of his goods, substantial cause of complaint can only arise if considerations are put forward, which go beyond the ordinary motives of commerce and partake of a political character, from a desire to embarrass the one belligerent or to support the other. . . . The further claims are in the nature of damages for unlawful interference with the performance of the Rotterdam charterparty. They can be maintained only by supposing that a wrong was done to the claimants because they were prevented from performing it, for in their nature those claims assume that the shipowners are to be put in the same position as if they had completed the voyage under that contract, and are not merely to be remunerated on proper terms for the performance of the voyage which was in fact accomplished. In other words, they are a claim for damages as for wrong done by the mere fact of putting in force the Order in Council. Such a claim cannot be sustained."

This case decides (1) that a belligerent has a right to resort to retaliatory measures against breaches of international law on the part of another belligerent; (2) that the Order in Council declaring the measures to be taken is conclusive as to the fact of such breaches; (3) that the only questio. open to neutral claimants is whether the Order subjects them to more inconvenience or prejudice than is reasonably necessary for carrying out its objects, and that if that were so, the shipowner, on payment of a proper sum for freight, was not entitled to damages for the detention of his ship or to special expenses.

Whereas Arts. I. and III. deal with goods taken into Germany, Art. II provides, "No merchant vessel which sailed from any German

port after 1st March, 1915, shall be allowed to proceed on her voyage with any goods on board laden at such port.' Art. IV. provides, Every merchant vessel which sailed from a port other than a German port after 1st March, 1915, having on board goods which are of enemy origin or are enemy property may be required to discharge such goods in a British or Allied port. Thus it was held in The Cathay, 2 B. & C. P. C. 303, that goods contracted to be purchased by a neutral firm from enemy subjects before the outbreak of war and shipped on a neutral vessel in a neutral port after the 1st of March, 1915, must be restored, since payment had been made by the neutral purchasers. The vessel was detained. But in The United States, ibid. 390, where the goods were despatched from German factories before the 1st of March and shipped by parcel post on board a Danish vessel at Copenhagen after that date, they were held to be of enemy character," and that since the property in goods sent by sea pass only on actual delivery they must be treated as enemy property as well as of enemy origin and must be detained until the conclusion of peace (1). It made no material difference, said Evans, P., at which end there is transit by land (m). In The United States (No. 2), ibid. 525, it was held that transit begins where the goods commence their journey (n). In The Frederik VIII., ibid., 395, when German Government bonds were sent by an enemy bank in Berlin to Copenhagen, to be shipped there for transmission for Chicago, they were held to be commodities of enemy origin.

Thus, in The Sigurd, ibid. 528, where a neutral vessel with a cargo of enemy origin left a German port before the 1st of March, and put into a Norwegian port for repairs and unloaded some of her cargo, and after repairs re-shipped it, leaving the Norwegian port after the 1st of March, Evans, P., held that the vessel did not come under Art. II, since the goods were shipped at a German port before the 1st of March, nor under Art. IV., which was intended to apply to goods not shipped at a German port.

But the Order did not operate to divest an enemy owner of the goods detained of his property in them. In The Oscar (No. 2), where the enemy owner of goods, ordered to be detained under the Order, after seizure sold his interest in them to a neutral, Duke, P., held that the Order did not appear to be designed of its own effect to divest any enemy of his property. It left rights in prize to be determined in prize. Questions of enemy goods under enemy flag, enemy goods captured by various means- -contraband and all questions of that kind— it left where it found them. But it made provision for the lawful interception of goods coming from German ports which were enemy property and of goods proceeding to German ports. There was nothing in the terms of the relevant articles of the Order purporting to divest enemy property or subjecting it to confiscation. Lord Sterndale, P., had found that the goods had an enemy destination and were enemy property, and the goods having been sold with the consent of the Crown, he ordered the proceeds to be detained in Court until the conclusion of peace or

(1) See The Southfield [1915] 1 P. Cas. 332.

(m) See The Baltica, 11 Moo. P. C.

(n) See The Noordam (No. 2), 3 B. & C. P. C. 488, 599; The New Sweden, ib. 984, 1000.