His British Majesty's Procurator-General in Egypt v. Deutsche Kohlen Depot Gesellschaft

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JUDICIAL DECISIONS INVOLVING QUESTIONS OP
INTERNATIONAL LAW

HIS BRITISH MAJESTY'S PROCURATOR-GENERAL IN EGYPT V. DEUTSCHE
KOHLEN DEPOT GESELLSCHAFT 1

Judicial Committee of the Privy Council
(Lord Sumner, Lord Parmoor, and Lord Wrenbury)

Decided December 13, 1918

This was an appeal and cross-appeal from a judgment of the
Supreme Court for Egypt in Prize, by which certain tugs, motor-
boats, lighters, and other craft, the property of the Deutche Kohlen
Company, were declared to have belonged at the time of seizure to
enemies of the Crown, and to have been properly seized as good and
lawful prize, and they were directed to be detained until further
orders. The Crown appealed from so much of the judgment as
ordered that the craft should be detained only, and claimed that
they should be condemned and confiscated. The company cross-
appealed, and submitted that the craft were liable neither to con-
demnation nor detention.

The Solicitor-General and Mr. Gavin Simonds appeared for the
Crown; Sir Erie Eichards, K. C, and Mr. Balloch for the company.

The Deutsche Kohlen Company, of Hamburg, had a branch at
Port Said, where it supplied coal to passing steamers. It owned
and used a number of tugs, motor-boats, and lighters, none of which
was registered in the German Mercantile Marine. After the outbreak
of war it carried on its operations under a limited license granted by
the Egyptian Government, but ultimately the business was wound
up and liquidated, and the company's craft requisitioned and used
by the British authorities. The crown claimed the condemnation
of the craft as belonging to enemies. Judge Grain rejected the
company's contention that the craft were exempt from capture under

i Tlie Times Law Reports, Vol. XXXV, p. 159.

805

806 THE AMERICAN JOI'RNAL OF INTERNATIONAL LAW

Article 3 of the Eleventh Hague Convention, as being "vessels em-
ployed exclusively in coast fisheries, or small boats engaged in local
trade." But he held, contrary to the submission of the Crown, that
the craft were "merchant ships" within the meaning of Article 2
of the Sixth Hague Convention, and were liable only to be detained,
not to be condemned or confiscated. From these decisions both parties
appealed.

The arguments were originally heard in February last, but were
broken off to enable the Crown to procure from Egypt certain cor-
respondence bearing on the question whether there had been any
seizure of the craft.

The Solicitor-General said that there had been no formal seizure,
as any such act would have been a breach of the Suez Canal Con-
vention, but he submitted that the steps taken by the authorities
amounted to seizure in law. The possession of the craft by the naval
and military forces was tantamount to seizure.

Sir Erie Richards, K. C, contended that the evidence from
Egypt showed that there had been no capture, and therefore the
court had no jurisdiction, for it was necessary to have capture as a
basis of the proceedings. The craft were merchant ships, which were
not liable to seizure, and, besides, they had been working under a
license from the Egyptian Government, and could not therefore be
seized. They were also protected from seizure by the Suez Canal
Convention.

Lord Sumner, in delivering their Lordships' considered judgment,
said: The Vice-Admiralty Court at Alexandria decided this case on
the application of The Hague Conventions, numbers VI (Arts. 1 and
2) and XI (Article 3). The learned judge held that the craft were
not immune from seizure, but only made a detention order against
them. Accordingly there are cross-appeals. One party claims con-
demnation, the other immediate release. Each prepared his case on
the assumption that there had been a valid seizure and only sought
to inquire, which convention, if either, applied, for if neither was
applicable, condemnation followed. During the hearing it appeared
that the record contained no account of the circumstances of the
seizure, nor indeed expressly alleged any seizure at all, and although
it might have been enough to have relied upon the recital in the
decree under review, that the various craft were "lawfully seized
as good and lawful prize," on such a point their Lordships were

DECISIONS INVOLVING QUESTIONS OF INTERNATIONAL LAW 807

reluctant to refuse examination into the facts, when a doubt was
brought to their notice. Accordingly they directed that further in-
formation should be obtained from Egypt. The material now forth-
coming is neither as explicit nor as simple as might have been ex-
pected. Before the war the business of the Deutsche Kohlen Depot
Gesellschaft in Egypt was to coal steamers passing through the Suez
Canal. They owned a large fleet of lighters with the tugs required
to tow them. Most of them were of steel, but a few were of wood.
Four were water tank boats and the rest chiefly coal barges. There
were also for general communication between ship and shore and
for harbor business three fast launches. The tugs were about 57 by
14 feet; their tonnage was about 27 tons, and their engines must
have been of high power. The lighters, 77 in number, ranged from
82 by 20 feet to 46 by 10 feet. Their average tonnage was nearly
130 tons. Where they were built is not stated, though it is reason-
able to suppose that all of them, except perhaps the wooden barges,
had come out from Germany, but whether afloat or not is unknown.
The tugs were capable of open sea voyages, but in fact they were
only employed in Port Said harbor. The lighters were incapable
of taking the open sea. When war broke out the company's business
was for some time allowed to proceed as before. About the end of
1914 some of the lighters were requisitioned, and in October, 1915, a
license was granted to the company to continue supplying the rest
to the British Coaling Company (Limited). At the end of April,
1916, this license was revoked, and an official was appointed by the
General Officer Commanding in Egypt as receiver of the business,
"with instructions to liquidate the same. " He is styled the liquidator,
and, in the name of the Deutsche Kohlen Depot Gesellschaft, is re-
spondent to this appeal. The proclamation under which he was ap-
pointed appeared in the Journal Officiel Extraordinaire of January
25, 1915, and provided that "every receiver shall have such powers
as shall be prescribed in his instructions for managing the property
entrusted to him," but he appears to have been simply placed under
the control of the licensing officer, to whose order he was bound to
conform. His position was very different from that of a liquidator
appointed in legal proceedings. His principal function appears to
have been to hold possession of such of the craft as were not from
time to time in the use and possession of the naval and military
authorities, and with them to supply the requirements of the British

808 THE AMERICAN JOURNAL OP INTERNATIONAL LAW

Coaling Company (Limited). Though variously employed and in
various places the several craft have throughout been treated as one
coaling fleet and as an installation for a single business, physically
divisible into units, but managed as a whole.

During the early part of the war the Procurator-General, the
present appellant, had been fully occupied in taking proceedings
against ships and cargoes in the court of Alexandria, but in the
spring of 1916 he decided to seek the condemnation of the fleet of
the Deutsche Kohlen Depot Gesellschaft. He did not wish actually
to lay hands on the individual units. They were numerous; they
often had no one on board, some were here, some there ; most of them
were no doubt in the harbors of Port Sa'id or Suez, but some were up
the Canal and all were being usefully and indispensably employed
for military, naval, or commercial purposes. He had also to con-
sider, no doubt, the terms of the Suez Canal Conventions, since the
course pursued in the case of The Pindos (32 The Times L. R., 489;
[1916] 2 A. C, 193) was inapplicable to a fleet of such a size and
character. Such of the craft as were not already in the hands of
the naval and military authorities were in the possession of the
liquidator, though physically scattered up and down. In May, 1916,
he instructed the marshal of the Prize Court to report to him on
the company's floating craft, and he asked the liquidator to furnish a
list of them in June. In July he saw the liquidator and intimated,
to quote his affidavit :

That I proposed to take proceedings against the craft, and owing to the
difficulty in serving on the particular craft, I would ask for an order for
substituted service on him. It was then agreed between us that, as liquidator,
he should, on proceedings being taken, continue to hold such of the tugs and
lighters as were in his possession at the disposal of the Crown and the Prize
Court. I also arranged with Mr. Bristow, manager of the British Coaling
Dep6ts, and with Mr. Lloyd Jones that the manipulation contract, which was
being carried on by the liquidator, should continue to be so carried on as be-
tween the Crown and the Coaling Depots.

He further informed the licensing officer what he desired to do,
and with him "came to an understanding that the liquidator should
hold the craft and continue to act on behalf of the Crown from the
time the proceedings were instituted against the craft."

What, then, is the fair conclusion from all this? It is clear that
the Procurator-General meant to bring this fleet before the Prize

DECISIONS INVOLVING QUESTIONS OF INTERNATIONAL LAW 809

Court with a view to its condemnation, and his general intention
must have been to do whatever was necessary to give the court juris-
diction. He desired to avoid taking physical possession of the craft
seriatim, yet he equally desired that all should be validly seized.
The liquidator, Mr. Lloyd Jones, had them under his control, and
those which were not already in the hands of the naval and military
officers of the Crown were being used by Mr. Bristow, above men-
tioned. The liquidator does not contradict the Procurator's evidence,
and in prosecuting his cross-appeal did not question that the Vice-
Admiralty Court had jurisdiction.

Their Lordships take the possession respectively of the naval and
military authorities and of the liquidator to have been, by agreement,
the possession of the marshal of the Prize Court until proceedings
were taken, and thereafter to have been "continued" on behalf of
the court, the actual requirements of the forces and of the British
Coaling Company being satisfied in the meantime and till further
order. It is as though the Procurator had pointed to the fleet,
assembled in the harbor under the liquidator's eyes, and had said,
"Submit to treat this fleet as seized and undertake to do with the
vessels as the court and its marshal may direct, or I will at once use
force, which I have at hand."

Their Lordships do not overlook the fact that both the Procurator
and the liquidator elsewhere seem to suggest that the question was
rather one of service of proceedings in rem than of capture, for they
give August 8, 1916, as the date of the seizure, which was actually
the date when substituted service was effected on the liquidator. The
liquidator, however, was chiefly concerned with his disbursements,
and it was in this connection that the date of seizure was given to
and accepted by the court as August 8th in an interlocutory applica-
tion. Their Lordships do not think this sufficient to negative the
inference to be drawn from the procurator's account of his agreement
with the liquidator, and as their Lordships are not asked to suppose
that the Procurator completely overlooked the importance of seizure,
they conclude that a sufficient seizure having been arranged by con-
sent, the matter subsequently received no further attention.

This view of the facts disposes of two other matters. In spite of
a general statement, made on the application for leave to effect
substituted service, that the craft to the number of eighty-five were
in various places along the canal and constantly changing their

810 THE AMERICAN JOURNAL OF INTERNATIONAL LAW

position, no evidence is forthcoming to enable any one lighter to be
discriminated from the rest, and the coal barges must for the most
part have been kept in the harbors of Port Sa'id and Suez. Sir Erie
Richards for the liquidator stated to their Lordships that on the
present materials he could not ask for a decision, that the craft were
seized in inland waters, and were not the subjects of maritime prize
at all, and, indeed, such a contention would have precluded the
liquidator from obtaining a judicial decision on the effect of the
Hague Convention, which is the true issue in the case and in strict-
ness the only issue, which can be presented as of right in the interests
of an enemy company. As no point of this kind was made at the
hearing, their Lordships will deal with the whole fleet as having been
enemy property seized in port, and as such liable to be condemned
in a court of prize.

The liquidator further contended that the seizure was bad as
being a breach of the Suez Canal Convention, 1888, Article IV. It
does not, however, follow that a seizure, otherwise good, must be
invalid for all purposes merely because it contravenes some term in
an international instrument cognizable in a prize court.

It is legitimate to consider the object with which the convention
was entered into, the scope of its provisions, and the mischief which
it was intended to prevent. As was pointed out in the Sudmark
(34 The Times L. B., 289; [1917] A. C, at p. 623), this convention
does not stipulate any penalty for its infraction, and a court of
prize is not warranted in creating a penalty where the convention
creates none, or in declaring a seizure to be had because in no other
form could it effectively create a penalty at all. Again, their Lord-
ships cannot forget that, long before the seizure in the present case,
the Canal generally had been made a field of battle by the armies of
the Sublime Porte, acting in alliance with those of the German Em-
peror, and for want of mutuality alone the convention could not be
used to protect the property of an enemy whose sovereign had already
fundamentally disregarded it. There is, however, on the facts a
simpler means of disposing of the point under the terms of Article
IV., "Aucun droit de guerre ne pourra etre exerce dans le canal et
dans ses ports d'acces." In the present case the exercise of any
right of war in the Canal was carefully avoided. "What was done,
though constituting a seizure for the purposes of prize jurisdiction,
was done ashore by word of mouth, and involved no belligerent con-

DECISIONS INVOLVING QUESTIONS OP INTERNATIONAL LAW 811

duct in the Canal or its ports of access contrary to the convention.
The de facto tranquillity, which in the interest of neutrals the con-
vention secures, was fully respected. The interests of neutrals do not
demand that acts done in Egyptian territory which do not affect the
Canal or its ports of access should be invalidated on the mere ground
that they took place in its neighborhood.

To turn to The Hague Conventions, can these tugs and lighters
be covered by the words of Convention XI, "Bateaux exclusivement
affect es a des services de petite navigation locale?" For some reason,
which is not apparent, the French text makes the element of size a
quality of the service in which the craft are engaged ; in the English
it is a quality of the craft themselves. In the present case it is
difficult to describe either the craft or the navigation in which they
engage as small. As applied to the navigation the words evidently
predicate of it a petty, local character. These craft are an integral
and indispensable adjunct of most important ocean voyages, and
without them voyages through the Suez Canal would be impracticable.
Their service is the reverse of petty or local. Nor are the craft
themselves truly small. The tugs must be of high power, and their
mere tonnage and dimensions are therefore not decisive. Few of the
barges are even of modest size; none is insignificant, and most of
them are of ample burden. Their Lordships are satisfied that, what-
ever be the precise limits of this article, it was never contemplated
that such craft as these should fall within them, and they think the
same of the argument that they can be assimilated to fishing boats,
so as to entitle them to the tenderness which has often been extended
to fisherman under international law.

The application of the Eleventh Convention does not depend
merely on the question whether these craft can or cannot be styled
"navires de commerce" with tolerable propriety. The construction
of the article which would bring under that term all floating struc-
tures not "navires d'etat" was rejected by their Lordships in The
Germania (33 The Times L. B., 273; [1917] A. C, at p. 378, and in
delivering the opinion of the Board, Lord Parmoor observed at p.
378), "There is nothing in the context of Article 2 which would
suggest that the expression, 'un navire de commerce' includes every
class of private vessel." It would be a mistake to seek in the Hague
Conventions, or in the terms there employed, exhaustive categories of
every kind of batiment afloat, or to suppose that, taken collectively,

812 THE AMERICAN JOURNAL OF INTERNATIONAL LAW

the bateaux, batiments and navires there mentioned cover the whole
field of possible means of carriage by water so as to make provision
somewhere or other for each and all of them. Conventions con-
cluded between nations so diversely interested rest principally on
compromise, and cannot be expected to exhibit the comprehensive-
ness of a code.

The language of the general preamble to the article is of im-
portance, but the actual text must come first. The articles contem-
plate ships — navires de commerce — which in the course of a voyage
from a port of departure or to a port of destination enter a port
and there find themselves entangled in hostilities of which they were
unaware, or ships also commercially engaged upon a voyage, finding
themselves in a port, whether of loading, of call, or of discharge,
which by the outbreak of war becomes an enemy port, and they
provide days of grace, in order that such ships may have their chance
to go in peace, and deal specifically with the case in which force
majeure prevents them from availing themselves of this opportunity.
The picture so drawn is plain, and, if there are vessels entitled to
the designation of navires de commerce which lie outside this picture,
then the scope of the article affords them no assistance, be their
designation on their classification what it will. Neither collectively
nor individually was the fleet of the Deutsche Kohlen Depot engaged
in or between ports of departure and discharge. It did not find
itself in Port Said in the course of a voyage. Port Said was its
home, nor had it any other. No force majeure affected it. In point
of fact, after the outbreak of war it went on with its regular em-
ployment in its permanent home as before, and no opportunity for
departure was desired, for there was neither the intention nor the
means for taking it elsewhere. This fleet was the very opposite of
the navires de commerce referred to, and was as fixed in its habitat
and in its orbit as trains of coal trucks from which steamers take
their coal under a tip. If so, it is unnecessary to express an opinion
whether the craft could be called navires, and, if so, whether they
were also navires de commerce. To them Convention XI had no
application at all.

In the alternative, but only in the alternative, the question arises
whether any benefit could be claimed under the convention for craft
which did not avail themselves of the days of grace and were not
prevented by force majeure from doing so. The "Decision" of the

DECISIONS INVOLVING QUESTIONS OP INTERNATIONAL LAW 813

Egyptian Government, dated August 5, 1914, gave permission to
German ships, which found themselves in Egyptian ports at the out-
break of hostilities, to quit the port up to sunset of August 14. Let
it be that some of these craft could not go, because they were not
built for sea, though no doubt with some alterations they could have
been made fairly seaworthy; let it be that none of the members of
the fleet had any business or .occupation elsewhere. This does not
secure to them the benefit of the convention without complying with
its terms: it is only ground for saying that they are not within the
scope of the convention at all. They remained in the port and con-
tinued their usual employment and took the risk involved in the
fact that by Article XIII of the same Decision "les forces navales et
militaires de Sa Majeste Britannique pourront exercer tout droit de
guerre" in Egyptian waters, apart of course from the terms of the
Suez Canal Convention. Eemaining where they were conferred on
them no irrevocable permission to stay and trade, no permanent
immunity from the belligerent rights of the Crown. Later on a
license was applied for and obtained, but before seizure that license
had been duly revoked. Thereafter at any rate the liquidator could
not invoke for their protection the principle that "When persons are
allowed to remain either for a specified time after the commencement
of war or during good behaviour they are exonerated from the dis-
abilities of enemies for such time as they in fact stay," Princess
Thurn and Taxis v. Moffit (31 The Times L. R., 24; [1915] 1 Ch., at
p. 61), even if such a principle is applicable to personal property
only, when no enemy person is actually present or in charge of it.

In the result the appeal succeeds and should be allowed, and the
cross-appeal fails and should be dismissed, in each case with costs.
The decree of condemnation must be amended by omitting the words
"and that the said tugs, lighters, motor-boats, and floating craft be
detained until further order of the court," as well as the subsequent
words "and detention," and the subjects seized must be forthwith
condemned and confiscated.

Their Lordships will humbly advise his Majesty accordingly.