Sir Wilfrid Greene M.R., Mackinnon L.J. and Finlay L.J.

By a time charterparty dated June 2, 1936, the defendants as owners let a steamship to the plaintiffs as charterers. The charterparty contained this clause: "Charterers and owners to have the liberty of cancelling the charterparty if war breaks out involving Japan." On September 18, 1937, the defendants by notice to the plaintiffs withdrew the steamship and cancelled the charterparty on the ground that war had broken out involving Japan. The plaintiffs denied that this was so and claimed damages for breach of contract. The matter was referred to an umpire under an arbitration clause in the charterparty. He found that at the date of cancellation and for some time previously serious fighting was in progress between China and Japan in various parts of China in which Japanese troops had advanced over considerable areas in the face of persistent resistance by Chinese troops. Those operations had resulted in serious casualties. At the same time there had been no declaration of war, and diplomatic relations between the two countries had not been discontinued. The Foreign Office in reply to an inquiry by the plaintiffs' solicitors said that the position in China was anomalous and indeterminate and that His Majesty's Government were not prepared to say that in their view a state of war existed. The umpire in these circumstances made an award in favour of the defendants in the form of a special case:-

Held(affirming Goddard J.), (1.) that the question whether on the true construction of the charterparty war had broken out involving Japan was not conclusively determined by the view of His Majesty's Government; (2.) that the word "war" in the charterparty was not to be given a technical meaning based on principles of international law, but its ordinary common sense meaning; and (3.) that it was open to the umpire to find on the facts that war had broken out between China and Japan at the relevant date, although diplomatic relations between these two countries had not been severed.

APPEAL from Goddard J.

By a time charterparty dated June 2, 1936, the defendants as the owners of the Steamship Nailsea Meadow then in course of construction, agreed to let it to the plaintiffs as charterers for twelve calendar months from delivery with a provision for extending the time for a further six months. Clause 31 of the charterparty provided:

"Charterers and owners to have the liberty of cancelling this charterparty if war breaks out involving Japan."

On September 18, 1937, the owners by notice to the charterers withdrew the steamer and cancelled the charterparty on the ground that war had broken out involving Japan. The charterers contended that the cancellation was wrongful and claimed damages in respect of it. The dispute was referred under a clause in the charterparty to two arbitrators, one appointed by each party, and an umpire appointed by the arbitrators. The arbitrators were unable to agree and the matter was referred to the umpire who made an interim award which at the request of the charterers was stated in the form of a special case.

The award contained the following material clauses: Clause 3. "At the hearing of the arbitration the charterers conceded that extensive fighting had taken place between the armies of Japan and China and that if the scale of such hostilities constituted the sole test of the existence of war, the two states were at war on September 18, 1937. The charterers contended, however, that those states were not at war for the following reasons:-

"(a) No declaration of war had been made by China or Japan.

"(b) Diplomatic relations had not been severed between China and Japan.

"(c) The British Government had not recognised a state of war between the two countries.

"(d) The Government of the United States of America had not brought into force the Neutrality Act.

"(e) Neither of the contending states had an animus belligerendi."

As to (a) the umpire found that no such declaration of war had been made. (b) and (d) were admitted by the owners. As to (c) letters from the British Foreign Office dated September 11, 1937, and January 24, 1938, were put in. The letter of September 11, 1937, was in these terms:

"With reference to your communication of the 8th September inquiring whether His Majesty's Government recognise that there was an outbreak of war in which Japan is involved either on or before 25th August or at the date of this reply, I am directed by Mr. Neville Chamberlain to inform you that the current situation in China is indeterminate and anomalous and His Majesty's Government are not at present prepared to say that in their view a state of war exists. At the same time I am to suggest that the question of the meaning to be attached to the term war as used in a charterparty may simply be one of interpreting the relevant clause, and that the attitude of His Majesty's Government may not necessarily be conclusive on the question whether a state of war exists within the meaning of the term 'war' as used in particular documents or statutes."

The letter of January 24, 1938, merely stated that the views of His Majesty's Government regarding the legal status of the conflict in the Far East had not altered, and "that on September 18 His Majesty's Government were still not prepared to say that in their view a state of war existed."

The charterers contended that the statements in the letters were conclusive.

On the evidence adduced in the arbitration the umpire found a sequence of facts as to what happened in China as between China and Japan commencing from July 8, 1937, and, after carrying the matter down to the middle of August, continued: "In a statement of policy issued on the 15th August the Japanese Government charged China with adopting an increasingly arrogant and insulting attitude towards Japan and alleged that she had presumed to complete warlike preparations against Japan. The statement alleged that Japanese patience and restraint had become finally exhausted; and concluded that it had become imperative to take drastic measures in order to chastise the Chinese troops and to impress on the Nanking Government the necessity for a reconsideration. The statement indicated that Japan had no territorial designs."

A summary of the umpire's findings as to the position on September 18, 1937, is that at that date the position in the Shanghai area was that 50,000 men supported by the guns of the Japanese fleet and a strong air arm were engaged in battle with Chinese forces of over 1,500,000 on a thirty miles front. Fighting had lasted over three weeks and casualties had been heavy and many thousands of Japanese and Chinese were killed or wounded. The position in North China was that three Japanese armies numbering over 100,000 men, fully equipped with aeroplanes, tanks and heavy artillery, were advancing in the teeth of the opposition of Chinese armies numbering 300,000. Over fifty battles were fought between August 20 and September 16. Since August 25 the Japanese had maintained a naval blockade over a 1000 miles stretch of the coast line of China and had occupied certain islands.

After a further long detailed account of the position in China the umpire continued: "On the evidence submitted to me I also find the following facts:-

"(a) On August 23 the Secretary of State of the United States of America appealed to both parties to refrain from resort to war ....

"(c) On August 29 the Prime Minister of Japan stated that the existing situation rendered overtures for diplomatic relations with Nanking virtually impossible, and that Japan's best course was to beat China to her knees ....

"(f) On September 2 the Japanese Foreign Minister stated that Japan's objective was to obtain from China a drastic improvement of her attitude towards Japan; that they were fighting the anti-Japanese movement in China which existed largely in the army; that Japan's idea was that Chinese should govern China .... He added that it was not a state of war which prevailed in China but a major conflict ...."

Subsequently the owners' contentions were set out in the award, which then proceeded:

"14. If and so far as it is a question of fact, I find that the military operations in September up to and including the 18th, were undertaken by both Japan and China animo belligerendi.

"15. If and so far as it is a question of fact, I find that by the 18th September, 1937, war had broken out involving Japan.

"16. On the evidence placed before me by the parties, I further find that the military operations above mentioned were on and for some time before the 18th September, ordinarily referred to in the daily press of this country and in the Bulletin of International News published by the Royal Institute of International Affairs as a 'war between Japan and China.' I was also asked by the owners to find, and I do find, that the said military operations constituted a war in the ordinary and popular meaning of that word between Japan and China."

The umpire therefore made his award in favour of the owners.

This award was made subject to the opinion of the Court on the question whether on the true construction of the charterparty and on the facts found by him he was entitled to award that on September 18, 1937, war had broken out involving Japan.

Goddard J., after referring to the facts found by the umpire, said that one was not surprised that on these facts the umpire had found that war had broken out in which Japan was engaged. All the facts seemed to be present which were dealt with in the one case in which any definition in English law had been given to the word "war." That case was Driefontein Consolidated Gold Mines, Ld. v. Janson. [FN1]Mathew J. there said:

"What is a state of war is well described in Hall on International Law, 4th ed., p. 63: 'When differences between States reach a point at which both parties resort to force, or one of them does acts of violence, which the other chooses to look upon as a breach of the peace, the relation of war is set up, in which the combatants may use regulated violence against each other, until one of the two has been brought to accept such terms as his enemy is willing to grant.'"

It was said that in spite of the acts of force and acts of violence which Japan had offered towards China, China had not chosen to look upon it as a breach of the peace; but as the umpire found that they killed many thousands of Chinese and the Chinese troops were operating in hundreds of thousands, it would seem perfectly clear that China at this time was looking upon it as a breach of the peace.

The main point argued was that it was the duty of a judge to exercise judicial cognizance on the question whether the two foreign countries were at war, and that if his own knowledge did not enable him to answer the question he must apply to the Crown through the appropriate minister, and that this was what had been done by one of the parties, and that the letters from the Foreign Office were conclusive. He was far from being of opinion that they were conclusive. They merely said that His Majesty's Government suspended judgment on the fact.

It seemed to him that what he had to determine was what the parties meant by the clause of the charterparty. He thought they were using the word "war" and intended it to be construed as war in the sense in which an ordinary commercial man would use it. He did not think the parties in a case of this sort were going into the niceties of international law. He decided this case exactly on the same grounds and applying the same rules of construction as Pickford J. did in Republic of Bolivia v. Indemnity Mutual Marine Assurance Co., Ld. in construing the word "piracy." On the facts found by the umpire he was satisfied that he was well justified in holding for the purpose of construing the charterparty that war had broken out in which Japan was involved.

The plaintiffs appealed. The appeal was heard on March 1 and 2, 1939.

SIR WILFRID GREENE M.R.

In my opinion this is a clear case and the judgment of Goddard J. was manifestly right. The main argument addressed to us by Sir Stafford Cripps on behalf of the appellants was, if I rightly appreciated it, of this nature. He said that in all matters of State it is a rule of law in this country that the decision or statement of the Executive Government as to a particular state of facts is not merely conclusive but essential, and, as the basis of that rule, he asserted that it was undesirable that the Courts should come to a decision, which might embarrass the Executive, with regard to matters of State in which this country is or might be concerned. I do not myself find the fear of the embarrassment of the Executive a very attractive basis upon which to build a rule of English law, and, in the present case, the argument presents a certain air of unreality; for we find that the Executive, when appealed to for a statement with regard to the position at the relevant date as between China and Japan, informed the inquirer "that the current situation in China is indeterminate and anomalous and His Majesty's Government are not at present prepared to say that in their view a state of war exists."

But the Foreign Office letter went on to suggest "that the question of the meaning to be attached to the term 'war' as used in a charterparty may simply be one of interpreting the relevant clause, and that the attitude of His Majesty's Government may not necessarily be conclusive on the question whether a state of war exists within the meaning of the term 'war' as used in particular documents or statutes."

The writer of that letter, written with the authority of the Prime Minister, as appears on its face, does not appear to have realized the supposed unfortunate results embarrassing to the Executive which might occur if the determination of such a question as the present were to be undertaken by the Courts, and, if Sir Stafford Cripps' argument be right, it would appear that the Executive is in need of being protected against itself.

However, the proposition for which Sir Stafford Cripps contended is one which on principle I find quite unacceptable, and for which I can find no sort of authority. He referred quite properly to a large number of cases in which the question of judicial notice by the Courts of this country of certain matters of State, whether municipal or foreign, is considered. It is perfectly manifest, to take a simple case, that, if in any particular litigation a question arises whether or not this country is at war with another country, that is a matter of which the Courts of this country will take judicial notice; and, if the Courts find themselves unable from their own knowledge to take that notice, the source of information to which they must address themselves is one and one only - namely, the Executive Government, whose function it is to make war or not to make war and whose decision as to whether a state of war exists concludes the matter. That is one example and that was what took place in Janson v. Driefontein Consolidated Mines, Ld. upon which Sir Stafford Cripps relied. That authority seems to me to have nothing at all to do with the present case, nor does it come anywhere near laying down a proposition of the kind asserted by Sir Stafford. Other cases to which he referred, which I do not propose to discuss in detail, were familiar cases, such as those where the question is as to the status of a foreign sovereign depending upon his recognition as such by the Government of this country. If a litigant in these Courts claims that he is not subject to the jurisdiction of these Courts because he is a foreign sovereign, the answer to the question whether or not he is a foreign sovereign depends upon his recognition as such by the Government of this country. It is a matter of which the Courts take judicial notice, assisted in case of necessity by the answer of the Government itself, which is the one way of bringing that matter to the mind of the Court. Cases of that kind appear to me to have nothing to do with the present case at all. We are not concerned here with the question whether His Majesty's Government recognizes a state of war as existing between China and Japan. If that were the question which had to be decided, the Court would be bound to take judicial notice of the fact of such recognition, and if the Court were unable to answer that question they would ascertain from the appropriate department of Government whether or not His Majesty's Government had recognized the existence of that state of war. That is not the question with which we are concerned. We are concerned, and concerned only, with the question whether upon the true construction of a particular private document, the owners were entitled to cancel the charterparty, which they are only entitled to do if war breaks out involving Japan. Now it is in my judgment impossible to assert that within the meaning of that clause the words "if war breaks out" mean "if war is recognized to have broken out by His Majesty's Government." War may break out without His Majesty's Government recognizing it. If His Majesty's Government had recognized that war had broken out it may be - and I say no more - that a statement to that effect by His Majesty's Government would be a matter which, even when dealing with a document of this kind, the Court would be bound to accept. It is not necessary to decide that question one way or the other, because that is not the question with which we have to deal.

There is one case which Sir Stafford Cripps relied upon which I think perhaps I should just mention. It is Thelluson v. Cosling [FN15]and I will assume for the present purposes that the report is an accurate one. There the question that arose was whether or not war had been declared by Spain against France on a particular date. The evidence on that matter consisted of a document. That document was a declaration by the Spanish Government to the effect that war was declared by Spain against France on March 23. That document had been transmitted by the British Ambassador in Madrid to the Secretary of State in this country and it was produced in Court. Now Sir Stafford Cripps says that this shows that the proper method of proving a declaration of war is by the production of a statement by the Secretary of State and that that is the only method of doing it. As I have said, I assume that the case is accurately and sufficiently reported and it seems to me to prove the exact opposite. First of all the document produced was not a declaration by His Majesty's Government, it was a declaration by the Spanish Government relating to the state of affairs between itself and France. The custody from which it was produced was the British Foreign Office, for the very simple reason that it had been communicated to the Foreign Office by the British Ambassador in Madrid. That does not make it a statement by the British Government nor was it tendered as such. It was produced as being exactly what it was, a statement by the Spanish Government as to the existence or non-existence of a state of war between Spain and France. It was accepted by Lord Ellenborough as evidence, not on the ground that it was the only evidence, but on the ground that it was proper evidence, to prove that particular matter of fact as to the date when war was declared between Spain and France. So understood, the case is a perfectly simple one, and it is as far as any case could be, with respect to the argument of Sir Stafford Cripps, from establishing the proposition in support of which he cited it. For these reasons, in addition to those given by the learned judge, I am of the opinion that the first point put forward by Sir Stafford Cripps is one which has no justification.

His second point was this. He said with regard to the phrase "if war breaks out involving Japan" that the word "war" has not a loose or popular meaning, but a technical meaning, and that technical meaning, he said, is to be found in the principles of international law. Where these principles of international law for this purpose are to be found I must confess that I remain in complete doubt, since the only source of these principles suggested to us was the writings of various writers on international law. It is to be observed, as indeed it was to be expected, that these writers do not speak with one voice, and it is possible to extract from their pages definitions of "war" which not only differ from one another, but which are inconsistent with one another in important respects. I asked for any authority in which for the purpose of the municipal law of this country "war" is in any way defined. No such authority could be suggested. The nearest authority for that purpose which has been furnished is the observation of Mathew J. in the Driefontein case, in which he cites with approval the passage from Hall on International Law, 4th ed., p. 63, referred to in the judgment of Goddard J. But to say that English law recognizes some technical and ascertainable description of what is meant by "war" appears to me to be a quite impossible proposition. If the English Courts had endeavoured in ancient days to lay down such a definition, no doubt one of the things which in those days they would have regarded as essential to "war" was a declaration of war. Nobody would have the temerity to suggest in these days that war cannot exist without a declaration of war. Similarly, the recent events in the world have introduced new methods and a new technique, with regard to which I conceive that writers on international law will dispute for many years to come. I do not propose to be the first to lay down a definition of "war" in a so-called technical sense.

Now Sir Stafford Cripps said that, whatever else war may mean, an essential element in it is animus belligerendi on the part of both, or at least one, of the combatants. What precisely animus belligerendi means is again a matter of great obscurity. In fact, to define "war" as a thing for which it is requisite to have animus belligerendi is coming very near defining the thing by itself. I must confess that at the end of the argument and with the very skilled assistance that we have had, I am still as doubtful as to the meaning of animus belligerendi as I was before the argument began.

There is one matter on which Sir Stafford Cripps was quite precise, and that was that there cannot be an animus belligerendi when diplomatic relations between two countries are still preserved, and he pointed out that in the present case diplomatic relations between China and Japan had not at the relevant date been severed, and he says that it is impossible, as a matter of English municipal law, for war to exist between two countries which have not severed diplomatic relations with one another. Therefore, he said, the finding of the arbitrator could not stand, because, having found that diplomatic relations had not been severed, he was bound as a matter of law, as a result of that finding, to find that war had not broken out. There again I can find no justification for so extreme a view. There may be very good reasons, and no doubt there are very good reasons, why the parties engaged in these present operations have not recalled their respective ambassadors. But that circumstance appears to me to amount to nothing more than one element to be taken into consideration in answering the question. I cannot find that it is a conclusive element at all. It is one element and no doubt an important element - in some cases even a decisive element - but in the present case it appears to me that it was an element of no particular importance. If my view is right that the fact that diplomatic relations had not been severed did not compel the arbitrator to find that no war had broken out, then the matter becomes a question of fact, and the arbitrator has found as a fact, in so far as it is a matter of fact, that the animus belligerendi existed. Sir Stafford Cripps called our attention to various statements, various findings, in the very clear statement made by the arbitrator which he suggested showed that, viewing this question as a matter of fact, there was really no evidence upon which the arbitrator could find that the animus belligerendi existed. The matters upon which he particularly relied were statements, in some cases by the Japanese, and in some cases by the Chinese, commanders in the field in various places in China, and in some cases by members of the Executive Government of one country or of the other. No doubt the authoritative statements of a government concerned in such a matter as this are matters of importance to which attention must be paid; but acts very often speak more truly than words, and it was perfectly open to the arbitrator, on the facts as found by him as to the state of affairs which preceded the relevant date and were then in existence, to find that war had broken out, notwithstanding that on certain occasions certain individuals had apparently repudiated the idea that there was a war. Speaking for myself, I find myself happy to be able to avoid coming to a conclusion on this matter which would violate all one's feelings of common sense. To say that the finding of fact of the arbitrator is one upon which there was no evidence seems to me to fly in the face of the manifest realities of the position.

I am unable to accept the suggestion that there is any technical meaning of the word "war" for the purpose of the construction of this clause. I repeat that, if there is such a technical meaning, I do not know where it is to be found, and, as I have said, I do not propose to attempt to define it. But, even if there be such technical meaning, it seems to me that for the reasons which I have given the finding of fact of the arbitrator is unassailable, and I can find no trace on the face of his award that he has misdirected himself in law.

That, I think, really concludes the matter. But I must not be taken as in any sense disagreeing with the further view expressed by the learned judge that in the particular context in which the word "war" is found in this charterparty, that word must be construed, having regard to the general tenor and purpose of the document, in what may be callcd a common sense way. If one had asked the owners of this vessel on the relevant date, if this charterparty had never existed, or if one had asked any shipowner what he thought about the present position between China and Japan, as to whether or not a war existed, I cannot imagine any commercial person with any common sense answering that question in any other way than that in which the arbitrator has answered it. MacKinnon L.J. suggests that even the most revered names in international law, such as Bynkershoek or Grotius, would have answered that question in one way, and in one way only. Certainly one modern authority, Professor Westlake, so answered it, because he defines "war" as "the state or condition of governments contending by force," a definition which accords with common sense as far as it goes. It seems to me that to suggest that, within the meaning of this charterparty, war had not broken out involving Japan on the relevant date is to attribute to the parties to it a desire to import into their contract some obscure and uncertain technicalities of international law rather than the common sense of business men.

I have given these reasons in my own words out of respect to the argument put before us. I might have been content to say, as I do say, that I agree with the reasoning and with the conclusion of Goddard J. as he then was. The appeal must be dismissed with costs.

Appeal dismissed. Leave to appeal to the House of Lords refused. (H. C. G.)