Originally from Journal of Damages in International Arbitration

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MR. NELSON: I want first to thank Lord Hoffman for his splendid words about the Factory at Chorzów case. I will kick off the legal side of our discussion with some observations on what the decision actually amounted to at the time. One thing to be stressed about the Factory at Chorzów decisions, and there are about five of them in the PCIJ record, culminating with the ultimately enigmatic damages judgement, is that the Court did not award damages: the case settled before any award of damages.  In historical terms, it was a ruling during a brief window of time when the judges and many intelligentsia within Europe were bending over backwards to accommodate Germany, and where Germany had a slice of legal and political goodwill.  That window of course closed in the 1930s, but in this very, very small interval in the 1920s the Court was trying very hard, I think, to be good to Germany. The case itself concerned a nitrates factory established by the imperial government during World War I, in what was then incontestably sovereign German territory in the province of Upper Silesia (it may previously have been Austrian, but by 1914 it was firmly part of the Kaiser’s empire).  The name of the town in Polish is Chorzów, and in German, Königshütte.  In 1919, after Germany had lost the war, there was a Polish revolution in certain areas, with the result that the future of Upper Silesia was “up for grabs” at the Versailles peace conference.  At around that same time, it was decided (controversially) to reassign the nitrates factory to private owners.