FACTS

The origin of the dispute is to be found in the visit paid to the Island of Palmas (or St. Miangas)
on January 21 , 1906, by General LEONARD WOOD, who was then Governor of the Province of
Moro. It is true that according to information contained in the Counter- Memorandum of the United
States the same General WOOD had already visited the island “about the year 1903”, but as this
previous visit appears to have had no results, and it seems even doubtful whether it took place, that
of January 21 , 1906 is to be regarded as the first entry into contact by the American authorities
with the island. The report of General WOOD to the Military Secretary, United States Army, dated
January 26 , 1906, and the certificate delivered on January 21st by First Lieutenant GORDON
JOHNSTON to the native interrogated by the controller of the Sangi (Sanghi) and Talauer (Talaut)
Islands clearly show that the visit of January 21st relates to the island in dispute.

This visit led to the statement that the Island of Palmas (or Miangas), undoubtedly included in the
“archipelago known as the Philippine Islands”, as delimited by the Treaty of Peace, and ceded in
virtue of the said article to the United States, was considered by the Netherlands as forming part
of the territory of their possessions in the East Indies. There followed a diplomatic correspondence,
beginning on March 31, 1906, and leading up to the conclusion of the Special Agreement of
January 23 ,1925.

The dispute having been submitted to arbitration by Special Agreement, each Party is called upon
to establish the arguments on which it relies in support of its claim to sovereignty over the object
in dispute. As regards the order in which the Parties’ arguments should be considered, it appears
right to examine first the title put forward by the United States, arising out of a treaty and itself
derived, according to the American arguments, from an original title which would date back to a
period prior to the birth of the title put forward by the Netherlands; in the second place, the
arguments invoked by the Netherlands in favour of their title to sovereignty will be considered;
finally the result of the examination of the titles alleged by the two Parties must be judged in the
light of the mandate conferred on the Arbitrator by Article I, paragraph 2, of the Special
Agreement.
 US ARGUMENT

Whether or not the island is part of Spanish or Dutch (Netherlands) territory

The title alleged by the United States of America as constituting the immediate foundation of its
claim is that of cession, brought about by the Treaty of Paris, which cession transferred all rights
of sovereignty which Spain may have possessed in the region indicated in Article III of the said
Treaty and therefore also those concerning the Island of Palmas (or Miangas).

It is evident that Spain could not transfer more rights than she herself possessed. This principle of
law is expressly recognized in a letter from the US Secretary of State to the Spanish Minister at
Washington concerning a divergence of opinion which arose about the question whether two
islands claimed by Spain as its territory and lying just outside the limits traced by the Treaty of
Paris were to be considered as included in, or excluded from the cession. This letter, reproduced
in the Explanations of the United States Government, contains the following passage:

“The metes and bounds defined in the treaty were not understood by either party to limit
or extend Spain’s right of cession. Were any island within those described bounds
ascertained to belong in fact to Japan, China, Great Britain or Holland, the United States
could derive no valid title from its ostensible inclusion in the Spanish cession. The compact
upon which the United States negotiators insisted was that all Spanish title to the
archipelago known as the Philippine Islands should pass to the United States – no less or
more than Spain’s actual holdings therein, but all. This Government must consequently
hold that the only competent and equitable test of fact by which the title to a disputed
cession in that quarter may be determined is simply this: ‘Was it Spain’s to give? If valid
title belonged to Spain, it passed; if Spain had no valid title, she could convey none.’”

The essential point is therefore whether the Island of Palmas (or Miangas) at the moment of the
conclusion and coming into force of the Treaty of Paris formed a part of the Spanish or Netherlands
territory. The United States declares that Palmas (or Miangas) was Spanish territory and denies
the existence of Dutch sovereignty; the Netherlands maintain the existence of their sovereignty
and deny that of Spain. Only if the examination of the arguments of both Parties should lead to the
conclusion that the Island of Palmas (or Miangas) was at the critical moment neither Spanish nor
Netherlands territory, would the question arise whether – and, if so, how – the conclusion of the
Treaty of Paris and its notification to the Netherlands might have interfered with the rights which
the Netherlands or the United States of America may claim over the island in dispute.

Problem as to discovery

As pointed out above, the United States bases its claim, as successor of Spain, in the first place on
discovery. In this connection a distinction must be made between the discovery of the Island of
Palmas (or Miangas) as such, or as a part of the Philippines, which, beyond doubt, were discovered
and even occupied and colonised by the Spaniards. This latter point, however, will be considered
with the argument relating to contiguity; the problem of discovery is considered only in relation to
the island itself which forms the subject of the dispute.

It is probable that the island seen when the Palaos Islands were discovered to the East of Sarangani
and Cape San Augustin, was identical with the Island of Palmas (or Miangas). The Island
“Meanguis” mentioned by the Spanish Government and presumed by them to be identical with the
Talaos – probably Talautse or Talauer Islands – seems in reality to be an island lying more to the
south, to which, perhaps by error, the name of another island has been transferred or which may
be identified with the island Tangulandang (Tangulanda or Tahoelandang) just south of Siau
(Siaoe), the latter island being probably identical with “Suar” mentioned in the same report as
lying close by. Tangulandang is almost the southernmost of the islands situated between Celebes
and Mindanao, whilst Palmas (or Miangas) is the northernmost. On Tangulandang there is a place
called Minangan, the only name, as it would seem, to be found on maps of the region in question
which is closely similar to Miangas and the different variations of this word. The name of
“Mananga” appears as that of a place on “Tagulanda” in official documents but is never applied
to the island itself; it is therefore not probable that there exists a confusion between Palmas
(Miangas) and Minangan (Manangan) in spite of the fact that both islands belonged to Tabukan.
However there may exist some connection between Minangan and the island “Meanguis”, reported
by the Spanish navigators.
It does not seem that the discovery of the Island of Palmas (or Miangas) would have been made
on behalf of a Power other than Spain; or Portugal. In any case for the purpose of the present affair
it may be admitted that the original title derived from discovery belonged to Spain; for the relations
between Spain and Portugal in the Celebes Sea during the first three quarters of the 16th century
may be disregarded.

The fact that the island was originally called, not, as customarily, by a native name, but by a name
borrowed from a European language, and referring to the vegetation, serves perhaps to show that
no landing was made or that the island was uninhabited at the time of discovery. Indeed, the reports
on record which concern the discovery of the Island of Palmas state only that an island was “seen”,
which island, according to the geographical data, is probably identical with that in dispute. No
mention is made of landing or of contact with the natives.

Exercise of sovereignty over the island

It is admitted by both sides that international law underwent profound modifications between the
end of the Middle-Ages and the end of the 19th century, as regards the rights of discovery and
acquisition of uninhabited regions or regions inhabited by savages or semi- civilised peoples. Both
Parties are also agreed that a juridical fact must be appreciated in the light of the law contemporary
with it, and not of the law in force at the time when a dispute in regard to it arises or falls to be
settled. The effect of discovery by Spain is therefore to be determined by the rules of international
law in force in the first half of the 16th century – or (to take the earliest date) in the first quarter of
it, i.e. at the time when the Portuguese or Spaniards made their appearance in the Sea of Celebes.

International law in the 19th century, having regard to the fact that most parts of the globe were
under the sovereignty of States members of the community of nations, and that territories without
a master had become relatively few, took account of a tendency already existing and especially
developed since the middle of the 18th century, and laid down the principle that occupation, to
constitute a claim to territorial sovereignty, must be effective, that is, offer certain guarantees to
other States and their nationals. It seems therefore incompatible with this rule of positive law that
there should be regions which are neither under the effective sovereignty of a State, nor without a
master, but which are reserved for the exclusive influence of one State, in virtue solely of a title of
acquisition which is no longer recognized by existing law, even if such a title ever conferred
territorial sovereignty.

For these reasons, discovery alone, without any subsequent act, cannot at the present time suffice
to prove sovereignty over the Island of Palmas (or Miangas); and in so far as there is no
sovereignty, the question of an abandonment properly speaking of sovereignty by one State in
order that the sovereignty of another may take its place does not arise.

If on the other hand the view is adopted that discovery does not create a definitive title of
sovereignty, but only an “inchoate” title, such a title exists, it is true, without external
manifestation. However, according to the view that has prevailed at any rate since the 19th century,
an inchoate title of discovery must be completed within a reasonable period by the effective
occupation of the region claimed to be discovered. This principle must be applied in the present
case, for the reasons given above in regard to the rules determining which of successive legal
systems is to be applied (the so-called intertemporal law).

Now, no act of occupation nor, except as to a recent period, any exercise of sovereignty at Palmas
by Spain has been alleged. But even admitting that the Spanish title still existed as inchoate in
1898 and must be considered as included in the cession under Article III of the Treaty of Paris, an
inchoate title could not prevail over the continuous and peaceful display of authority by another
State; for such display may prevail even over a prior, definitive title put forward by another State.
This point will be considered, when the Netherlands argument has been examined and the
allegations of either Party as to the display of their authority can be compared.

In view of the interpretation given by Spain and Portugal to the right of discovery, it seems that
the regions which the Treaty of Münster does not consider as definitely acquired by the two Powers
in the East and West Indies, and which may in certain circumstances be capable of subsequent
acquisition by the Netherlands, cannot fail to include regions claimed as discovered, but not
possessed. It must further be remembered that Article V provides not merely a solution of the
territorial question on the basis of possession, but also a solution of the Spanish navigation question
on the basis of the status quo. Whilst Spain may not extend the limits of her navigation in the East
Indies, nationals of the Netherlands are only excluded from “places” which the Spaniards hold in
the East Indies. Without navigation there is no possibility of occupying and colonizing regions as
yet only discovered; on the other hand, the exclusion from Spanish “places” of Netherlands
navigation and commerce does not admit of an extensive interpretation; a “place”, which moreover
in the French of that period often means a fortified place, is in any case an actual settlement
implying an actual radius of activity; Article VI, for instance, of the same treaty speaks of harbours,
places, forts, lodgements or castles. For these reasons a title based on mere discovery cannot apply
to the situation considered in Article V as already established.

Since the Treaty of Münster does not divide up the territories by means of a geographical
distribution, and since it indirectly refuses to recognize title based on discovery as such, the bearing
of the treaty on the present case is to be determined by the proof of possession at the critical epoch.

Historical claim

In connection herewith no precise elements of proof based on historical facts as to the display or
even the mere affirmation of sovereignty by Spain over the Island of Palmas have been put forward
by the United States.

The Spanish rule under which the Spanish Franciscan Fathers of the Philippines exercised the
spiritual administration in the said islands, ended in 1666, when the Captain general of the Spanish
Royal Armada dismantled all the fortified places in the Moluccas, making however before the
“Dutch Governor of Malayo” a formal declaration as to the continuance of all the rights of the
Spanish Crown over the places, forts and fortifications from which the Spaniards withdrew.

There is further no trace of evidence that Spain ever claimed at a later opportunity, for instance in
connection with the territorial rearrangements at the end of the Napoleonic Wars, the restitution of
territories taken or withheld from her in violation of the Treaties of Münster or Utrecht. As it is
not proved that Spain, at the beginning of 1648 or in June 1714, was in possession of the Island of
Palmas (or Miangas), there is no proof that Spain acquired by the Treaty of Münster or the Treaty
of Utrecht a title to sovereignty over the island which, in accordance with the said Treaties, and as
long as they hold good, could have been modified by the Netherlands only in agreement with
Spain.

It is, therefore, unnecessary to consider whether subsequently Spain by any express or conclusive
action, abandoned the right, which the said Treaties may have conferred upon her in regard to
Palmas (or Miangas). Moreover even if she had acquired a title she never intended to abandon, it
would remain to be seen whether continuous and peaceful display of sovereignty by any other
Power at a later period might not have superseded even conventional rights. It appears further to
be evident that Treaties concluded by Spain with third Powers recognizing her sovereignty over
the “Philippines” could not be binding upon the Netherlands and, as such Treaties do not mention
the island in dispute, they are not available even as indirect evidence.

Continuity

In the last place there remains to be considered title arising out of contiguity. Although States have
in certain circumstances maintained that islands relatively close to their shores belonged to them
in virtue of their geographical situation, it is impossible to show the existence of a rule of positive
international law to the effect that islands situated outside territorial waters should belong to a
State from the mere fact that its territory forms the terra firma (nearest continent or island of
considerable size). Not only would it seem that there are no precedents sufficiently frequent and
sufficiently precise in their bearing to establish such a rule of international law, but the alleged
principle itself is by its very nature so uncertain and contested that even Governments of the same
State have on different occasions maintained contradictory opinions as to its soundness.

The principle of contiguity, in regard to islands, may not be out of place when it is a question of
allotting them to one State rather than another, either by agreement between the Parties, or by a
decision not necessarily based on law; but as a rule establishing ipso jure the presumption of
sovereignty in favour of a particular State, this principle would be in conflict with what has been
said as to territorial sovereignty and as to the necessary relation between the right to exclude other
States from a region and the duty to display therein the activities of a State. Nor is this principle
of contiguity admissible as a legal method of deciding questions of territorial sovereignty; for it is
wholly lacking in precision and would in its application lead to arbitrary results. This would be
especially true in a case such as that of the island in question, which is not relatively close to one
single continent, but forms part of a large archipelago in which strict delimitations between the
different parts are not naturally obvious.

As regards groups of islands, it is possible that a group may under certain circumstances be
regarded as in law a unit, and that the fate of the principal part may involve the rest. Here,
however, we must distinguish between, on the one hand, the act of first taking possession, which
can hardly extend to every portion of territory, and, on the other hand, the display of sovereignty
as a continuous and prolonged manifestation which must make itself felt through the whole
territory.

As regards the territory forming the subject of the present dispute, it must be remembered that it
is a somewhat isolated island, and therefore a territory clearly delimited and individualised. It is
moreover an island permanently inhabited, occupied by a population sufficiently numerous for it
to be impossible that acts of administration could be lacking for very long periods. The memoranda
of both Parties assert that there is communication by boat and even with native craft between the
Island of Palmas (or Miangas) and neighbouring regions. The inability in such a case to indicate
any acts of public administration makes it difficult to imagine the actual display of sovereignty,
even if the sovereignty be regarded as confined within such narrow limits as would be supposed
for a small island inhabited exclusively by natives.

NETHERLAND’S ARGUMENT

The acts of indirect or direct display of Netherlands sovereignty at Palmas (or Miangas), especially
in the 18th and early 19th centuries are not numerous, and there are considerable gaps in the
evidence of continuous display. But apart from the consideration that the manifestations of
sovereignty over a small and distant island, inhabited only by natives, cannot be expected to be
frequent, it is not necessary that the display of sovereignty should go back to a very far distant
period. It may suffice that such display existed in 1898, and had already existed as continuous and
peaceful before that date long enough to enable any Power who might have considered herself as
possessing sovereignty over the island, or having a claim to sovereignty, to have, according to
local conditions, a reasonable possibility for ascertaining the existence of a state of things contrary
to her real or alleged rights.

It is not necessary that the display of sovereignty should be established as having begun at a precise
epoch; it suffices that it had existed at the critical period preceding the year 1898. It is quite natural
that the establishment of sovereignty may be the outcome of a slow evolution, of a progressive
intensification of State control. This is particularly the case, if sovereignty is acquired by the
establishment of the suzerainty of a colonial Power over a native State, and in regard to outlying
possessions of such a vassal State.

Now the evidence relating to the period after the middle of the 19th century makes it clear that the
Netherlands Indian Government considered the island distinctly as a part of its possessions and
that, in the years immediately preceding 1898, an intensification of display of sovereignty took
place.

Since the moment when the Spaniards, in withdrawing from the Moluccas in 1666, made express
reservations as to the maintenance of their sovereign rights, up to the contestation made by the
United States in 1906, no contestation or other action whatever or protest against the exercise of
territorial rights by the Netherlands over the Talautse (Sangi) Isles and their dependencies
(Miangas included) has been recorded. The peaceful character of the display of Netherlands
sovereignty for the entire period to which the evidence concerning acts of display relates (1700–
1906) must be admitted.

There is moreover no evidence which would establish any act of display of sovereignty over the
island by Spain or another Power, such as might counter-balance or annihilate the manifestations
of Netherlands sovereignty. As to third Powers, the evidence submitted to the Tribunal does not
disclose any trace of such action, at least from the middle of the 17th century onwards. These
circumstances, together with the absence of any evidence of a conflict between Spanish and
Netherlands authorities during more than two centuries as regards Palmas (or Miangas), are an
indirect proof of the exclusive display of Netherlands sovereignty.

This being so, it remains to be considered first whether the display of State authority might not be
legally defective and therefore unable to create a valid title of sovereignty, and secondly whether
the United States may not put forward a better title to that of the Netherlands.

As to the conditions of acquisition of sovereignty by way of continuous and peaceful display of

The display has been open and public, that is to say that it was in conformity with usages
as to exercise of sovereignty over colonial States. A clandestine exercise of State authority
over an inhabited territory during a considerable length of time would seem to be
impossible. An obligation for the Netherlands to notify to other Powers the establishment
of suzerainty over the Sangi States or of the display of sovereignty in these territories did
not exist.

Such notification, like any other formal act, can only be the condition of legality as a consequence
of an explicit rule of law. A rule of this kind adopted by the Powers in 1885 for the African
continent does not apply de plano to other regions, and thus the contract with Taruna of 1885, or
with Kandahar-Taruna of 1889, even if they were to be considered as the first assertions of
sovereignty over Palmas (or Miangas) would not be subject to the rule of notification.

There can further be no doubt that the Netherlands exercised the State authority over the Sangi
States as sovereign in their own right, not under a derived or precarious title.

Finally it is to be observed that the question whether the establishment of the Dutch on the Talautse
Isles (Sangi) in 1677 was a violation of the Treaty of Münster and whether this circumstance might
have prevented the acquisition of sovereignty even by means of prolonged exercise of State
authority, need not be examined, since the Treaty of Utrecht recognized the state of things existing
in 1714 and therefore the suzerain right of the Netherlands over Tabukan and Miangas.

CONCLUSION

The conditions of acquisition of sovereignty by the Netherlands are therefore to be considered as

The title of discovery, if it had not been already disposed of by the Treaties of Münster and Utrecht
would, under the most favourable and most extensive interpretation, exist only as an inchoate title,
as a claim to establish sovereignty by effective occupation. An inchoate title however cannot
prevail over a definite title founded on continuous and peaceful display of sovereignty.
The title of contiguity, understood as a basis of territorial sovereignty, has no foundation in
international law.

The title of recognition by treaty does not apply, because even if the Sangi States, with the
dependency of Miangas, are to be considered as “held and possessed” by Spain in 1648, the rights
of Spain to be derived from the Treaty of Münster would have been superseded by those which
were acquired by the Treaty of Utrecht. Now if there is evidence of a state of possession in 1714
concerning the island of Palmas (or Miangas), such evidence is exclusively in favour of the
Netherlands. But even if the Treaty of Utrecht could not be taken into consideration, the
acquiescence of Spain in the situation created after 1677 would deprive her and her successors of
the possibility of still invoking conventional rights at the present time.

The Netherlands title of sovereignty, acquired by continuous and peaceful display of State
authority during a long period of time going probably back beyond the year 1700, therefore holds
good.