Radio Orient

Facts

The French Company Radio Orient, a private enterprise within the meaning of the Telecommunications Convention, was authorized by the French High Commission to operate wireless communications through a radio station in Beirut to the States of the Levant under French Mandate (Syria and Lebanon). The international rules, in conformity with Article 96, paragraph 3, of the Madrid Telegraph Rules, applied to communications exchanged through Radio Orient's installations. Radio Orient had no radio station in Egypt itself and thus a connection was made through telegraph lines from Egypt, across British Mandate (Palestine), to Beirut. Radio Orient did not maintain public offices in Egypt, and did not acquire the needed authorization required under Egyptian law. The company made use of agents, however, which was permitted under Egyptian law. At the time Radio Orient began its activities in Egypt, no other wireless company was operating a similar service. After 15 January 1928, the Marconi Radio Telegraph Company of Egypt began to operate a radio telegraph service under authorization of the Egyptian Administration. Between 1923 and 1935, Egyptian authorities did not protest the operations of Radio Orient. On 14 April 1935, the Under-Secretary of State in the Ministry of Communications of Egypt, however, addressed a letter to Radio Orient in which he notified the company that under Article 33 of the International Telegraph Rules, Egyptian telegraph offices had been instructed not to accept telegrams over the lines of Radio Orient.

Article 33 of the 1932 Telegraph Rules of Madrid provides as follows:

The Governments of the Union reserve the right to apply penalties to private enterprises which directly or through their agents or sub-agents, allow to senders and receivers in any manner, whatsoever discounts ... having the effect of reducing the rates filed with the Bureau of the Union. These penalties may require the suspension of service with these enterprises.

The Radio Orient Company did not deny that reductions had been allowed by agents, but it maintained that the suspension at issue was improper, and at any rate was imposed too late.

The Egyptian Administration responded that, even without relying upon Article 33, the Egyptian Government, by virtue of its sovereign rights, could continue the suspension of service with Radio Orient.

Questions Submitted to Arbitration

1. To hold and declare that the nullity of the procedure of inquiry (Article 28, Madrid Telegraph Rules) must have the effect of revocation of the disputed question.

2. To hold and declare that, even if the errors pointed out do not nullify the contested penalty, it is the duty of the Egyptian Administration to produce the documents on which it has based its decision.

3. To state, upon examination of these documents, whether the violations set forth justify the most severe penalty in the list of the sanctions in Article 33 of the Madrid Telegraph Rules.

The Decision of the Arbitral Tribunal

The Egyptian Administration disputed the competence of the Tribunal, because no arbitral agreement was made between the Parties and that the competence of the Tribunal extends only to Article 33 of the Telegraph Rules. The Tribunal declared itself competent, based on Article 15 of the Telegraph Rules. This Article states:

In case of disagreement between two or several contracting Governments concerning the execution either of the present Convention or of the Rules envisaged in Article 2, if the difference is not settled through diplomatic channels, it is submitted to arbitration upon the demand of any one of the Governments in disagreement.

Furthermore, the Tribunal declared that, except in cases where parties have agreed otherwise, every international arbitral tribunal is the judge of its own competence.

The questions at issue:

The Tribunal found that the answer to the first question depended on the nature of the action taken by the Egyptian Administration and not upon the nature of the proceedings leading up to it.

For this reason the Tribunal cannot declare that the suspension should be revoked by reason of nullity. On the other hand Radio Orient has complained that the Egyptian Administration violated its obligation under Article 28 of the Telegraph Rules, which reads as follows:

The contracting Governments undertake to inform each other in regard to violations of the provisions of the present Convention and of the Rules agreed to, in order to facilitate prosecutions to be carried out.

If the prosecution of every violation of the Rules by a private enterprise constitutes an obligation on the part of the Government which has licensed the company, that Government likewise has the right to be put in a position to carry out such a prosecution. The States of the Levant stated it had presented its complaint not only by way of diplomatic protection of the private enterprise Radio Orient, but also in its own name, because it might be forced to take over the radio electric services of the said company at Beirut. The Egyptian Government should, in execution of Article 28, have informed the States of the Levant without delay. A telegraph administration cannot apply to a foreign enterprise the sanctions provided in the Telegraph Rules, unless its Government, in accordance with Article 28, also informs the Government having jurisdiction of the company, thus enabling the latter Government to either institute proceedings or to furnish proof that the charge made against the said enterprise is without foundation.

Because this was not done, the Tribunal found no reason to examine whether the suspension of service with Radio Orient did or did not constitute a too severe penalty in proportion to the infraction imputed to Radio Orient. Furthermore, the Tribunal was of the opinion that the decision suspending the service with Radio Orient could not be maintained on the basis of Article 33 of the Telegraph Rules. 

The Egyptian Government has invoked Article 1 of the Convention concluded in 1919 between the Administration of Telegraphs O.E.T.A. (Occupied Enemy Territories Administration) and the Egyptian Administration of Telegraphs concerning the exchange of Telegraphs by lines between O.E.T.A. and Egypt, by virtue of which Article each of the Parties can suspend telegraphic service in whole or in part, provided it notifies the other Party. This Convention, however, is an agreement for the technical development of a means of telecommunication of the nature of those envisaged by Article 25 of the Convention and Article 3 of the Telegraph Rules. It could not in any way prejudice the full execution of the Telegraph Convention and Rules.

Egypt has invoked her sovereign right to maintain order in her own territory. It is true that only Egypt can police her own territory and, within the framework of the Convention of Madrid and of the Rules annexed, she is even obliged to do so in order to ensure the carrying out of their provisions in her territory. The sovereign rights of every State are, however, limited by the obligations which it has assumed towards other States, in this case by the said Convention and Rules.

The Egyptian Administration, in authorizing the Marconi Radio Telegraph Company of Egypt to operate radio-telegraph stations in Egypt, imposed upon the latter such conditions of service that in case of equalization of rates between the Marconi service and the Radio Orient service, the Radio Orient service was likely to entail financial sacrifices for Egypt.

The Tribunal, in the face of the admissions made in the course of the diplomatic correspondence, has recognized that the agents of Radio Orient allowed discounts in violation of Article 33 of the Telegraph Rules, and consequently, the Egyptian authorities had a right to make the ruling in dispute.

The Tribunal was not in the possession of the facts necessary either to ascertain the date from which a time limit should have been placed upon the suspension of service with Radio Orient, or to assess the damages suffered by the company and could thus not award Radio Orient damages.

For these reasons, the Arbitral Tribunal:

1. Declared that the Egyptian Government, by failing to notify the French High Commission to the States of the Levant under Mandate concerning the violations of the provisions of the Telegraph Rules of Madrid of 1932 committed by the agents of the Radio Orient Company in Egypt, acted contrary to Article 28 of the International Telecommunications Convention of Madrid, 1932.

2. Ordered the revocation, within six weeks of 2 April 1940, of the order by which the Egyptian Administration of Telegraphs on 16 April 1935, prohibited Egyptian telegraph offices from accepting telegrams for transmission over the lines of the Radio Orient Company.

3. Dismissed the other contentions.

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