1 For a preliminary surveyFriedmann, “The Changing Dimensions of International Law,”p.62 1147 1962Columbia Law Eev.Google Scholar

2 The distinction between “formal” and “material” sources of law adopted here corresponds to that originally made by Sir John Salmond in his Treatise on Jurisprudence (11th ed., Ch. V). This has been criticized byAllen, C. K.“The Changing Dimensions of International Law,” 1147 1961Columbia Law in the Making 260(6th ed.)but it has rightly been defended by Hart, The Concept of Law 246 (). The term “formal” source of law indicates the repository of authority or, in Hart's words, “the criteria of legal validity accepted in the legal system in question.” The “material” sources are the sum of the substantive rules, principles or other materials from which a particular legal norm is nourishedGoogle Scholar

3 As the actual and potential importance of general principles for the development of the new international law is universally recognized, it is unnecessary, for the purposes of this article, to discuss the theoretical controversy, which in recent years has engaged the attention of some eminent international lawyers such as the late Sir Hersch Lauterpacht and Professor Julius Stone, whether or not the reference in Article 38 of the Statute of the International Court of Justice to the “general principlesof law recognized by civilized nations” has virtually eliminated the problem of the lacuna in international law. See, on the one hand, Lauterpacht, ‘ ‘ Non Liquet and the Completeness of Law,” Symbolae Verzijl 196, at 205, and, on the other hand, Stone, “Non Liquet and the Function of Law in the International Community,” 35 Brit. Yr. Bk. of Int. Law (1959) 145 et seq. As Judge Lauterpacht observed (loc. cit. 198) and as is confirmed by even more recent experience, non liquet has hardly, if ever, deterred an international court or tribunal from giving a substantive decision. The Lotus case (the SS Lotus (France v. Turkey), 1927, P.C.I.J., Ser. A, No. 10) is not, of course, a proposition for the application of non liquet in international law, but for the very different theory that international law grants to states the liberty to invoke national jurisdiction over foreigners where there is no positive international norm to the contrary. Judge Lauterpacht's observation that for this reason the whole discussion had “a measure of unreality” (p. 198) applies even more strongly to the contemporary developments in international law, which mainly occur outside the field of litigation. Even where no specific reference is made to the ‘ ‘ general principles “ o r a similar formulation, their use is implicit in the making and purport of international agreements. See further, p. 282 et seq. below.

4 The Development of International Law by the International Court 165 ff. (1958).

5 The Function of Law in the International Community 115 (1933).

6 In his last contribution (see note 3 above), Judge Lauterpacht modified this statement by characterizing the use of general principles as “ t h e analogy of all the branches of municipal law, and in particular, of private law.” (P. 205.)

7 See further on this point p. 291 et seq. below.

8 Friedmann, Law in a Changing Society 383 ff. (1959).

9 Cf., in particular, Eoling, International Law in an Expanded Society (1960).

10 See now Jenks, The Proper Law of International Organizations, Pt. I I (1962).

11 “ As seems to be suggested by McNair, in 33 Brit. Yr. Bk. of Int. Law (1957) 6, and Jenks, op. cit. 152.

12 Such as Sommers, Broches and Delaume, in 21 Law and Contemporary Problems 463 et seq. (1956); Mann, “The Proper Law of Contracts Concluded by International Persons,” in 35 Brit. Yr. Bk. of Int. Law (1959) 34 ff.; and see Broches, “International Legal Aspects of the Operations of the “World Bank,” 98 Hague Academy Becueil des Cours 297, at 316 (1959): “ I n analysing the legal nature of the Bank's loan and guarantee agreements with its members, I shall be concerned primarily to consider by what rules of law these agreements are governed. My conclusion will be that they are international agreements governed by international law.”

13 Eeported in 1 Int. and Comp. Law Q. 247 ff. (1952); 47 A.J.I.L. 156 (1953).

14 It has been quoted, with emphatic approval and as representing amajor advance, by—among others—Jessup, Transnational Law 80 ff. (1956); McNair, “The General Principles of Law Recognized by Civilized Nations,” 33 Brit. Tr. Bk. of Int. Law (1957) 12 ff.; and Mann, “ T h e Proper Law of Contracts Concluded by International Persons,” 35 ibid. (1959) 52 ff.

15 Gutteridge, Comparative Law 65 (2nd ed., 1949).

16 is As will be pointed out later, the limitation of the use of general principles to the private law sphere, which was also emphasized, although less absolutely, by Lauterpacht (p. 281 above), is no longer justified in the present context of international law, which must draw its strength from a combination of public and private law sources.

17 Gutteridge, op. eit. 70-71.

18 For an example, see the discussion of basic concepts of Muslim law in the field of property and contract, as applied in the Aramco Award of Aug. 23, 1958, discussed by Habachy in “Property, Eight and Contract in Muslim Law,” 62 Columbia Law Eev. 450 ff. (1962).

19 Thus, an application of the principles ‘ ‘ common to the laws of the p a r t i e s ‘ ‘ under the Iranian Oil Agreement of 1954 would essentially mean an application and comparison of the principles of contract of the common law, as interpreted in England and the United States (which would reveal many differences of detail, but very few of principleindisbetween the two leading common-law jurisdictions), and, on the other hand, the French civil-law system, as developed in France itself, in the French-inspired Netherlands Civil Code, and in the equally French-inspired Iranian civil and commercial law. Thus, although the parties to this Agreement represent five different national legal systems, the comparison would most likely reduce itself to one between the two major legal systems of the Western world.

20 I.e., when the actively lawmaking members of international society are expanding from a small club of Western nations to entire mankind and a variety of civilizations (horizontal expansion), and the subject matter of international legal relations is extending from the regulation of diplomatic inter-state relations to a growing number of social and economic relations formerly outside its province (vertical expansion).

21 E.g., by Cheng, General Principles of Law as Applied by International Courts and Tribunals (1953), an enterprise limited in scope and value by its restriction to the very occasional use which international courts and tribunals have so far made of the general principles. See also Wortley, “The Interaction of Public and Private Law Today,” 85 Hague Academy Eecueil des Cours (1954, I ) , Ch. IV, and Jenks, The Common Law of Mankind 106-172 (1958). For an earlier survey, see “Verdross, 52 Hague Academy Eecueil des Cours 191 (1935, I I ) ; for illuminating observations on the uses of “general principles” which do not attempt classification or enumeration, see McNair, “The General Principles of Law Eecognized by Civilized Nations, “ 3 3 Brit. Tr. Bk. of Int. Law (1957) 1 ft., and 1 Dahm, Volkerrecht 35-42 (1958). The “World Peace through Law” Program of the American Bar Association has issued a provisional study on the subject (January, 1963). A comprehensive research project on the substantive meaning of “general principles” is being undertaken by the Cornell University Law School under the direction of Professor Rudolf Schlesinger,

22 In his Droit International Public (1953), Professor Eousseau (at p. 71) distinguishes between “regies de droit materiel (prineipe pacta sunt servanda, principe de l'abus du droit, respect des droits acquis, theories de loi prescription libeVatoire et des interSts moratoires, regie nemo plus juris transferre potest quam ipse habet, e t c . ) ‘ ‘ and ” d e procedure (principe du respect de la chose jugee, exception de litispendance, regies relatives au regime des preuves ou au paiement des depens, e t c . ) . “ But surely the application of such principles as “abuse of rights “ (or equity) does not give us a substantive solution, especially in the international context, since abuse or equity can only gain content in the context of a particular system of law. On the other hand, pacta sunt servanda, or doctrines restrictive of this principle, like frustration, imprevision, clausula rebus sic stantibus, etc., do give a substantive solution, however uncertain or controversial its application may be in specific cases. Hence the threefold division of the text.

23 Cf., for an illustration of the application of equity in this latter sense, in the modern common law, Friedmann, Legal Theory 494 ff. (4th ed., 1960).

24 Private Law Sources and Analogies of International Law, Par. 28 (1927).

25 The Permanent Court of International Justice 616, where the task of equity is described as being “ t o liberalize and to temper the application of law, to prevent extreme injustice in particular cases, to lead into new directions to which received materials point the way.''

26 60 Bevue de Droit International et Compare 414 ff. (1933).

27 1 Volkerrecht 40 ff. (1958).

28 Cayuga Indians (Great Britain v. IT. S.), Nielsen, Rep. 203, 307 (1926).

29 P.C.I.J., Ser. A/B, No. 70 (1937).

30 On a discussion of the application of estoppel to international law, see Lauterpacht, op. cit., pars. 87, 88

31 See Gutteridge, Comparative Law 70 (2nd ed.) ; Friedmann, Legal Theory 506 (4th ed.). On the use of estoppel in international law, see now the detailed analysis of McGibbon in 7 Int. and Comp. Law Q. 458 ff. (1958).

32 A leading comparative study of abuse of right is that of Gutteridge, 5 Cambridge Law J. 22 ff. (1934). On the significance of the principle in international law, see also the recent monographs of Siorat, Laeunes en Droit International, Titre I I I (1959), and Van Bogaert, Het restsmisbrink in het volkenrecht (1948).

33 Thus, the principle has been incorporated in the Soviet Civil Code of 1922 as indicating the subordination of private rights to the welfare of the community. On the other hand, according to Habachy, loo. eit. 456, the classical Muslim jurisprudence regards respect for property rights so sacrosanct that during the second World War, the Ulamas objected to a law placing a ceiling on rents, which had soared as the result of spectacular developments in Arab oil production, and inflicted great hardship on salaried employees. They held that such a law would constitute an unlawful restriction of the right of owners to enjoy the income they could derive from their property.

34 The cardinal difference between the essentially individual and unique character of international disputes and the essential generality of the typical municipal legal norm is often neglected. It has, however, been stressed by some eminent writers, among them Max Huber, 3 Vermischte Schriften 208, Brierly, The Outlook for International Law at 40-41 (1944), De Visscher, Theories et Hyalites en Droit International Public 171 ff. (3d ed., 1960), and Dillard, “Some Aspects of Law and Diplomacy,” 91 Hague Academy Kecueil des Cours at 469-471 (1957, I ) .

35 Tor some suggestions as to how the gap between the substantive legal conceptions of the capital-exporting and the capital-importing states in such matters as the termination of concession agreements or proper compensation for nationalization of foreign enterprises, can be narrowed, if not eliminated, see pp. 291 et seq. below

36 Cf. Arts. 112, 127, 128 of the Constitution of 1936.

37 Arts. 9-11.

38 For an enumeration of the principal international standards of due process, see Orfleld, “What Constitutes Fair Criminal Procedure under Municipal and International Law,” 12 U. Pittsburgh Law Rev. 35, 41-44 (1950).

39 For details, see Pfiquignot, Thgorie Genfaale du Contrat Administratif (1945); Mitchell, Contracts of Public Authorities (1954); Langrod, “Administrative Cont r a c t s , “ 4 A. J. Comp. Law 347 ff. (1955); Friedmann, Law in a Changing Society 371 ff. (1959).

40 This is the famous theory of imprivision, first established by the Conseil d'Etat in the Gaz de Bordeaux case in 1916. Sirey 1916, I I I , 19.

41 For details see, for example, Miller, ‘ ‘ Government Contracts and Social Control,'' 41 Va. Law Eev. 27 (1955); the chapter on “Government Contracts” in 9 Williston, Law of Contracts, Ch. X I I ; Pasley, “The Interpretation of Government Contracts,” 25 Fordham Law Eev. 211 (1956); Friedmann, op. cit. note 8 above, 375 ff.; and for Great Britain, Mitchell, op. cit., Ch. I I.

42 This was laid down by the Conseil d'Etat as long ago as 1874, in the Hotehkiss case, and it has been reconfirmed in a number of later decisions, as listed in the most comprehensive and recent French treatise on this subject: 3 de Laubadere, TraitS Thfiorique et Pratique des Contrats Administratifs 165 ff. (1956).

43 Judgments of the Conseil d'Etat of Jan. 14, 1938, Eecueil, p. 21, and of Feb. 13, 1942, as quoted by PSquignot, Theorie GSnerale du Contrat Administratif at 501 (1945).

44 de Laubadere, op. cit. at 165

45 See in particular the decision in the case of Chambouvet, Jan. 23, 1952, Eecueil, p. 50, and the observations by de Laubadere, op. cit. at 165-166.

46 “Bussell Motor Car Company v. TJ. S. (1923), 261 “CJ. S. 514, 523.

47 J. D. B. Mitchell, The Contracts of Public Authorities at 228 ff. (1954).

48 A fact certainly borne out by the revelations of a number of Congressional inquiries on the prices paid by the U. S. Government to private contractors.

49 Cf. de Laubadere, op. cit. at 166, and Mitchell, op. cit. at 229.

50 Government Guarantees to Foreign Investors 196 ff. (1962).

51 P.CLJ., Ser. A/B, No. 62, p. 20 (March 17, 1934).

52 The award, dated Dec. 22, 1954, is fully reported by Schwebel, “The Alsing Case,” 8 Int. and Comp. Law Q. 320 ff. (1959).

53 Op. cit. 208.

54 See on this point, in particular, White, Nationalisation of Foreign Property 235 et seq. (1961), and see further on this question p. 297 et seq. below.

55 For comparative studies see David, “Unjust Enrichment,” 5 Cambridge Law J. 205 et seq. (1935); Friedmann, “The Principle of Unjust Enrichment,” 16 CanadianBar Eev. 243, 377 et seq. (1938); Dawson, Unjust Enrichment (1951); O'Connell, “Unjust Enrichment,” 5 A. J. Comp. Law 2 et seq. (1956).

56 Lena Goldfields Arbitration, 1929-30 Annual Digest, Case No. 1.

57 See, among others, MeNair, 6 Netherlands Law Keview 239 ff. (1959); Wortley, Expropriation in International Law 95 fE.; Eriedmann, Law in a Changing Society 456.

58 E.g., by McNair and Wortley, op. cit.

59 Unjust enrichment is, however, generally closer to damnum emergens than to lucrum cessans (see p. 293 above).

60 Esser, Sclmldrecht 767 (2nd ed., 1960).

61 The distinction between damages and enrichment is made by Dr. O ‘Connell in his Law of State Succession (1956):

62 Spanish Zone of Morocco Claims, Great Britain v. Spain, 1923-24 Annual Digest, No. 80.

63 On these, see the detailed survey by White, Nationalisation of Foreign Property 193 et seq. (1961); Bindschedler, “ L a Protection de la Proprifite’ Privfie en Droit International Public,” 90 Hague Academy Eecueil des Cours 173 et seq. (1956, I I ).