Mavrommatis Palestine Concessions Case Greece v. UK Merits

(28) M. Mavromatis is referred to in both concessions as an Ottoman… In the contention of the British Government, it follows that the concessions were granted in error and consequently that they are not valid … the Court considers that it is for the Respondent to prove that the concessions are not valid, though it is indisputable that the reference to the Ottoman nationality of the beneficiary in the concessions is incorrect. The British Government does not contend that, in Turkish law, the Ottoman nationality of the beneficiary was a condition essential to the validity of concessions [Error in a contract]

(40) The insertion in clause 29 [of Rutenberg Concession] of a righ on the part of M. Rutenberg to require at any time the expropriation of pre-existing concessions, until it was withdrawn, interfered with the right of holders of pre-existing concessions to utilize their concessions as such without being threatened with annulment…. The annulment which might have resulted from the application of clause 29 of the Rutenberg concession, might moreover have taken place at any moment during the existence of the concession and at the initiative of a private individual, so that the safeguard against ill-considered expropriation which exists when the initiative is in the hands of a State, which can only expropriate for reasons of public utility, was seriously impaired… The Court therefore holds that as long as M. Rutenberg possessed the right to require the expropriation of the Mavromatis concessions, the clause in question was contrary to the obligations contracted by the Mandatory when signed the Protocol [XII of the Treaty of Sevres which provided that pre-existing concessions should be maintained]. (48) fundamental principles of the maintenance of contracts and agreements duly entered into (49) The only way of maintaining concessions granted before war is to readapt them to the new economic conditions [hardship] (50) Which gives birth to a contract is the agreement between the parties to it. …. Everything that happens subsequently… all the conditions with which the parties must comply …. With a view to preventing it form lapsing, may be regarded as p a part of the fulfilment of the contract … The Court therefore is of opinion that …. M. Mavromatis… is entitled to claim that [his concessions] should be brought into conformity with the new economic conditions by means of readaptation.