## Facts

- A nitrate factory at Chorzów in Upper Silesia, previously under German control, was located in territory transferred to Poland after World War I.
- Poland took possession of the factory, affecting German corporate interests.
- In prior proceedings, the court determined Poland’s taking was not in conformity with obligations under the 1922 Geneva Convention on Upper Silesia and that compensation was owed.
- Germany filed a new application seeking reparation for damage suffered by the affected German companies.
- Poland’s jurisdictional objection was rejected in an earlier jurisdiction judgment.
- The merits phase addressed the nature, form, and measure of reparation for the internationally wrongful act.

## Issues

1. What standard governs reparation for an internationally wrongful act consisting of an unlawful taking of alien property in breach of treaty obligations?
2. Whether reparation should prioritize restitution in kind, and, if restitution is not possible, what monetary remedies and additional damages are required.
3. Whether the measure of reparation for an unlawful taking may exceed the compensation that would be owed for a lawful expropriation.

## Decision

- The court held that breach of an international engagement entails an obligation to make reparation in an adequate form.
- It ruled that reparation must, as far as possible, eliminate the consequences of the unlawful act and re-establish the situation that likely would have existed absent the breach.
- It set a remedial order of preference: restitution in kind where possible; otherwise payment of a sum corresponding to the value that restitution would bear, plus additional damages for losses not covered by restitution or its monetary substitute.
- It concluded Poland was responsible for full reparation for the unlawful seizure of the Chorzów factory and directed that compensation be assessed consistently with these principles.

## Legal Principles

- A breach of an international obligation gives rise to state responsibility and a duty to provide adequate reparation.
- The aim of reparation is full restoration of the injured party’s position (status quo ante) to the extent possible.
- Restitution in kind is the primary remedy; if impossible, monetary compensation should reflect the value of the restitution that should have occurred.
- Additional damages may be required to cover consequential losses not remedied by restitution or its monetary equivalent.
- For an unlawful taking, the measure of reparation is not necessarily limited to the compensation associated with a lawful expropriation; it must account for the consequences of the illegality.

## Conclusion

The court articulated the general rule that internationally wrongful acts require full reparation aimed at restoring the pre-breach position, with restitution preferred and monetary compensation (plus any further damages) required to eliminate the consequences of an unlawful taking.


Case Concerning the Factory at Chorzów (Ger. v. Pol.), 1928 P.C.I.J. (ser. A) No. 17 (Sept. 13)