Anglo-Iranian Oil Company v Idemitsu Kosan Kabushiki Kaisha
| Jurisdiction | Japón |
| Date | 01 January 1953 |
| Court | High Court (Japan) |
(Yanagawa, President; Muramatsu and Nakamura JJ.)
International Law Relation to Municipal Law Recognition of Acts of Foreign Governments Contrary to International Law Expropriation without Compensation Nationalization.
Recognition of Acts of Foreign States and Governments Acts Contrary to International Law Expropriation and Confiscation.
Aliens Treatment of Property of Aliens Expropriation without Compensation Expropriation by Iran of Property of Anglo-Iranian Oil Co. Confiscatory Nature of the Expropriation Question of Validity of Decree Purporting to Deprive an Alien of his Property Purported Transfer of Title by Expropriating State Nature of Concession Agreement Whether a Treaty Recognition of Acts of Foreign Governments Contrary to International Law National Constitution Right to Adjudicate on Validity of Foreign Nationalization Law Presumption in favour of Conformity with International Law Nationalization of Expropriated Oil Already Extracted when Nationalization Law Came into Force Ownership of Expropriated Oil International Law Relation to Municipal Law The Law of Japan.
The Facts.This was an application for an interim order for the placing in the custody of the Court of certain petrol and light oil (hereinafter called the oil) imported from Iran into Japan by the respondents. The oil had been purchased in April 1953 by the respondents from the National Iranian Oil Co., but the applicants claimed the ownership of the oil on the ground that the National Iranian Oil Co. had had no right to sell it and the respondents had therefore acquired no title to the oil.
The oil was part of certain oil extracted and refined by the applicants under a Concession Agreement (hereinafter called the Concession Agreement) dated April 29, 1933, and made between the Government of Persia (the former name of Iran) and the Anglo-Persian Oil Co., Ltd. (as the applicants were formerly called). The extraction and refinement took place before the coming into force on May 1, 1951, of the Oil Nationalization Law of Iran (hereinafter called the Nationalization Law).
The applicants contended that even if the oil in question had not been refined before the Nationalization Law came into force, then in view of the fact that it was loaded in Southern Iran and had a high octane value, it must have been actually produced in the concession district granted to the applicants and refined in one of the applicants' refineries; therefore the oil should be held to be the property of the applicants. Under the Nationalization Law, on May 1, 1951, all the rights and interests in Iran of the applicants under the Concession Agreement were nationalized and acquired by the National Iranian Oil Company. The Nationalization Law deprived the applicants of their rights and interests without compensation contrary to the principle of international law that No rights or interests of foreigners shall be infringed without payment of reasonable compensation and for that reason it was invalid, the expropriation was invalid, and the National Iranian Oil Company was not entitled to the rights and interest in the oil of the applicants. It was true that Article 2 of the Nationalization Law provided that the Iranian Government could deposit a certain sum of money to meet such compensation, but this did not oblige that Government to pay compensation. It simply meant that the Government could pay compensation voluntarily. The expropriation under this Law, therefore, could not be called expropriation with reasonable compensation, and, in fact, no compensation had yet been paid to the applicants by the Iranian Government. (On January 9,1953, the Court at Aden gave judgment in favour of the applicants upon similar reasoning.1) Further, the said Nationalization Law violated the provision in paragraph 3 of Article 21 of the Concession Agreement that neither party should annul the Agreement unilaterally. Moreover, despite the provision in the Agreement that any dispute between the parties should be referred to arbitrators appointed by the parties and if the arbitrators were unable to agree, an umpire was to be nominated by the President of the International Court of Justice, the Iranian Government refused such arbitration.
The applicants also contended that the attitude of the respondents in resisting their claim for the oil in reliance on the Nationalization Law amounted to an attempt to apply a foreign Law which violates the provisions of Article 29 of the Japanese Constitution and would result in violation of public policy as stipulated in Article 30 of the Hrei.2
The respondents contended that under the Nationalization Law all the rights and interests of the applicants in Iran were expropriated and nationalized by the Government of Iran. This was not confiscation, it was expropriation with compensation. In the Nationalization Law the Government was authorized to appropriate sufficient moneys to provide compensation for the applicants, by depositing with the Bank Milli (Iran) or any other bank an amount up to the equivalent of 25 per cent. of the normal income from oil, and, in fact, such deposit account had already been opened with the said Bank. The applicants, being unwilling to negotiate directly with the Iranian Government on the matter of compensation, asked the British Government to negotiate on their behalf. The British Government applied to the International Court of Justice at The
Hague with regard to the oil dispute with Iran, contending that the measures taken by Iran were contrary to international law. The International Court of Justice, however, in its decision dated July 22, 1952,1 held that the applicants' right of oil extraction granted in 1933 by the Government of the Iranian Empire was not such as may be termed an international treaty in nature, and was an agreement of a private law nature concerning rights and interests and made between the Government of a country and a foreign corporation. On this ground the British application was dismissed. The Nationalization Law, it was now contended, naturally superseded the Concession Agreement and rendered it no longer valid. It was in the exercise of the sovereignty of an independent State that Iran enacted her industrial nationalization Law; even in Britain a number of industries had been nationalized. The British Government had, however, attempted to check the sale of Iranian oil abroad. For example, early this year, when the Italian tanker Miriella, of Supor, carrying crude oil from Iran, arrived in Venice on February 14, 1953, the applicants applied to the Court of Venice for the interim detention of the oil. The application was dismissed on March 11, 1953. In the present case the respondents on February 14, 1953, purchased oil from the National Iranian Oil Co., took delivery of the same at Abadan on April 13, 1953, and brought it to Japan by their own tanker Nissho Maru. As the National Iranian Oil Co. had been engaged in extracting, refining and selling oil under the sanction of the Government of Iran, the oil in question was the property of the said CompanyThe...
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