Case concerning Gabcikovo-Nagymaros Project
(Hungary/Slovakia)
Summary of the Judgment of 25 September
1997

Review of the proceedings and statement of claims (pares.
1-14)

The Court begins by recalling that proceedings had been instituted on 2 July
1993 by a joint notification, by Hungary and Slovakia, of a Special Agreement,
signed at Brussels on 7 April 1993. After setting out the text of the Agreement,
the Court recites the successive stages of the proceedings, referring, among
other things, to its visit, on the invitation of the parties, to the area, from
I to 4 April 1997. It further sets out the submissions of the Parties.

History of the dispute (pares. 15-25)

The Court recalls that the present case arose out of the signature, on 16
September 1977, by the Hungarian People’s Republic and the Czechoslovak People’s
Republic, of a treaty “concerning the construction and operation of the
Gabcikovo-Nagymaros System of Locks” (hereinafter called the ” 1977 Treaty”).
The names of the two contracting States have varied over the years; they are
referred to es Hungary end Czechoslovakia. The 1977 Treaty entered into force on
30 June 1978. It provides for the construction and operation of a System of
Locks by the parties as a “joint investment”. According to its Preamble, the
system was designed to attain “the broad utilisation of the natural resources of
the Bratislava-Budapest section of the Danube river for the development of water
resources, energy, transport, agriculture and other sectors of the national
economy of the Contracting Parties”. The joint investment was thus essentially
aimed at the production of hydroelectricity, the improvement of navigation on
the relevant section of the Danube and the protection of the areas along the
banks against flooding. At the same time, by the terms of the Treaty, the
contracting parties undertook to ensure that the quality of water in the Danube
was not impaired as a result of the Project, and that compliance with the
obligations for the protection of nature arising in connection with the
construction and operation of the System of Locks would be observed.

The sector of the Danube river with which this case is concerned is a stretch
of approximately 200 kilometres, between Bratislava in Slovakia and Budapest in
Hungary. Below Bratislava, the river gradient decreases markedly, creating an
alluvial plain of gravel and sand sediment. The boundary between the two States
is constituted, in the major part of that region, by the main channel of the
river. Cunovo and, further downstream, Gabcikovo, are situated in this sector of
the river on Slovak territory, Cunovo on the right bank and Gabcikovo on the
left. Further downstream, after the confluence of the various branches, the
river enters Hungarian territory. Nagymaros lies in a narrow valley at a bend in
the Danube just before it turns south, enclosing the large river island of
Szentendre before reaching Budapest (see sketch-map No. 1).

The 1977 Treaty describes the principal works to be constructed in pursuance
of the Project. It provided for the building of two series of locks, one at
Gabcikovo (in Czechoslovak territory) and the other at Nagymaros (in Hungarian
territory), to constitute “a single and indivisible operational system of

works” (see sketch-map No. 2). The Treaty further provided that the technical
specifications concerning the system would be included in the “Joint Contractual
Plan” which was to be drawn up in accordance with the Agreement signed by the
two Governments for this purpose on 6 May 1976. It also provided for the
construction, financing and management of the works on a joint basis in which
the Parties participated in equal measure.

The Joint Contractual Plan, set forth, on a large number of points, both the
objectives of the system and the characteristics of the works. It also contained
“Preliminary Operating and Maintenance Rules”, Article 23 of which specified
that “The final operating rules [should] be approved within a year of the
setting into operation of the system.”

The Court observes that the Project was thus to have taken the form of an
integrated joint project with the two contracting parties on an equal footing in
respect of the financing, construction and operation of the works. Its single
and indivisible nature was to have been realized through the Joint Contractual
Plan which complemented the Treaty. In particular, Hungary would have had
control of the sluices at Dunakiliti and the works at Nagymaros, whereas
Czechoslovakia would have had control of the works at Gabcikovo.

The schedule of work had for its part been fixed in an Agreement on mutual
assistance signed by the two parties on 16 September 1977, at the same time as
the Treaty itself. The Agreement made some adjustments to the allocation of the
works between the parties as laid down by the Treaty. Work on the Project
started in 1978. On Hungary’s initiative, the two parties first agreed, by two
Protocols signed on 10 October 1983 to slow the work down and to postpone
putting into operation the power plants, and then, by a Protocol signed on 6
February 1989 to accelerate the Project.

As a result of intense criticism which the Project had generated in Hungary,
the Hungarian Government decided on 13 May 1989 to suspend the works at
Nagymaros pending the completion of various studies which the competent
authorities were to finish before 31 July 1989. On 21 July 1989, the Hungarian
Government extended the suspension of the works at Nagymaros until 31 October
1989, and, in addition, suspended the works at Dunakiliti until the same date.
Lastly, on 27 October 1989, Hungary decided to abandon the works at Nagymaros
and to maintain the status quo at Dunakiliti.

During this period, negotiations took place between the parties.
Czechoslovakia also started investigating alternative solutions. One of them, an
alternative solution subsequently known as “Variant C”, entailed a unilateral
diversion of the Danube by Czechoslovakia on its territory some 10 kilometres
upstream of Dunakiliti (see sketch-map No. 3). In its final stage, Variant C
included the construction at Cunovo of an overflow dam and a levee linking that
dam to the south bank of the bypass canal. Provision was made for ancillary
works.

On 23 July 1991, the Slovak Government decided “to begin, in September 1991,
construction to put the Gabcikovo Project into operation by the provisional
solution”. Work on Variant C began in November 1991. Discussions continued
between the two parties but to no avail, and, on 19 May 1992, the Hungarian
Government transmitted to the Czechoslovak Government a Note Verbale terminating
the 1977 Treaty with effect from 25 May 1992. On 15 October 1992, Czechoslovakia
began work to enable the Danube to be closed and, starting on 23 October,
proceeded to the damming of the river.

The Court finally takes note of the fact that on 1 January 1993 Slovakia
became an independent State; that in the Special Agreement thereafter concluded
between Hungary and Slovakia the Parties agreed to establish and implement a
temporary water management regime for the Danube; and that finally they
concluded an Agreement in respect of it on 19 April 1995, which would come to an
end 14 days after the Judgment of the Court. The Court also observes that not
only the 1977 Treaty, but also the “related instruments” are covered in the
preamble to the Special Agreement and that the Parties, when concentrating their
reasoning on the 1977 Treaty, appear to have extended their arguments to the
“related instruments”.

Suspension and abandonment by Hungary. in 1989, of works on the Project
(pares. 27-59)

In terms of Article 2, paragraph I Ad, of the Special Agreement, the Court is
requested to decide first

“whether the Republic of Hungary was entitled to suspend and
subsequently abandon, in 1989, the works on the Nagymaros Project and on the
part of the Gabcikovo Project for which the Treaty attributed responsibility
to the Republic of Hungary”.

The Court observes that it has no need to dwell upon the question of the
applicability or non-applicability in the present case of the Vienna Convention
of 1969 on the Law of Treaties, as argued by the Parties. It needs only to be
mindful of the fact that it has several times had occasion to hold that some of
the rules laid down in that Convention might be considered as a codification of
existing customary law. The Court takes the view that in many respects this
applies to the provisions of the Vienna Convention concerning the termination
and the suspension of the operation of treaties, set forth in Articles 60 to 62.
Neither has the Court lost sight of the fact that the Vienna Convention is in
any event applicable to the Protocol of 6 February 1989 whereby Hungary and
Czechoslovakia agreed to accelerate completion of the works relating to the
Gabcikovo-Nagymaros Project.

Nor does the Court need to dwell upon the question of the relationship
between the law of treaties and the law of State responsibility, to which the
Parties devoted lengthy arguments, as those two branches of international law
obviously have a scope that is distinct. A determination of whether a convention
is or is not in force, and whether it has or has not been properly suspended or
denounced, is to be made pursuant to the law of treaties. On the other hand, an
evaluation of the extent to which the suspension or denunciation of a
convention, seen as incompatible with the law of treaties, involves the
responsibility of the State which proceeded to it, is to be made under the law
of State responsibility.

The Court cannot accept Hungary’s argument to the effect that, in 1989, in
suspending and subsequently abandoning the works for which it was still
responsible at Nagymaros and at Dunakiliti, it did not suspend the application
of the 1977 Treaty itself or then reject that Treaty. The conduct of Hungary at
that time can only be interpreted as an expression of its unwillingness to
comply with at least some of the provisions of the Treaty and the Protocol of 6
February 1989, as specified in the Joint Contractual Plan. The effect of
Hungary’s conduct was to render impossible the accomplishment of the system of
works that the Treaty expressly described as “single and indivisible”.

The Court then considers the question of whether there was, in 1989, a state
of necessity which would have permitted Hungary, without incurring international
responsibility, to suspend and abandon works that it was committed to perform in
accordance with the 1977 Treaty and related instruments.

The Court observes, first of all, that the state of necessity is a ground
recognized by customary international law for precluding the wrongfulness of an
act not in conformity with an international obligation. It considers moreover
that such ground for precluding wrongfulness can only be accepted on an
exceptional basis. The following basic conditions set forth in Article 33 of the
Draft Article on the International Responsibility of States by the International
Law Commission are relevant in the present case: it must have been occasioned by
an “essential interest” of the State which is the author of the act conflicting
with one of its international obligations; that interest must have been
threatened by a “grave and imminent peril”; the act being challenged must have
been the “only means” of safeguarding that interest; that act must not have
“seriously impair[ed] an essential interest” of the State towards which the
obligation existed; and the State which is the author of that act must not have
“contributed to the occurrence of the state of necessity”. Those conditions
reflect customary international law.

The Court has no difficulty in acknowledging that the concerns expressed by
Hungary for its natural environment in the region affected by the
Gabcikovo-Nagymaros Project related to an “essential interest” of that State.

It is of the view, however, that, with respect to both Nagymaros and
Gabcikovo, the perils invoked by Hungary, without prejudging their possible
gravity, were not sufficiently established in 1989, nor were they “imminent”;
and that Hungary had available to it at that time means of responding to these
perceived perils other than the suspension and abandonment of works with which
it had been entrusted. What is more, negotiations were under way which might
have led to a review of the Project and the extension of some of its
time-limits, without there being need to abandon it.

The Court further notes that Hungary when it decided to conclude the 1977
Treaty, was presumably aware of the situation as then known; and that the need
to ensure the protection of the environment had not escaped the parties. Neither
can it fail to note the positions taken by Hungary after the entry into force of
the 1977 Treaty. Slowly, speeded up. The Court infers that, in the present case,
even if it had been established that there was, in 1989, a state of necessity
linked to the performance of the 1977 Treaty, Hungary would not have been
permitted to rely upon that state of necessity in order to justify its failure
to comply with its treaty obligations, as it had helped, by act or omission to
bring it about.

In the light of the conclusions reached above, the Court finds that Hungary
was not entitled to suspend and subsequently abandon, in 1989, the works on the
Nagymaros Project and on the part of the Gabcikovo Project for which the 1977
Treaty and related instruments attributed responsibility to it.

Czechoslovakia’s proceeding. in November 1991. to “Variant C” and putting
into operation, from October 1992, this Variant (pares. 60-88)

By the terms of Article 2, paragraph 1 (b), of the Special Agreement, the
Court is asked in the second place to decide

“(b) whether the Czech and Slovak Federal Republic was entitled to
proceed, in November 1991, to the ‘provisional solution’ and to put into
operation from October 1992 this system”.

Czechoslovakia had maintained that proceeding to Variant C and putting it
into operation did not constitute internationally wrongful acts; Slovakia
adopted this argument. During the proceedings before the Court Slovakia
contended that Hungary’s decision to suspend and subsequently abandon the
construction of works at Dunakiliti had made it impossible for Czechoslovakia to
carry out the works as initially contemplated by the 1977 Treaty and that the
latter was therefore entitled to proceed with a solution which was as close to
the original Project as possible. Slovakia invoked what it described as a
“principle of approximate application” to justify the construction and operation
of Variant C. It explained that this was the only possibility remaining to it
“of fulfilling not only the purposes of the 1977 Treaty, but the continuing
obligation to implement it in good faith”.

The Court observes that it is not necessary to determine whether there is a
principle of international law or a general principle of law of “approximate
application” because, even if such a principle existed, it could by definition
only be employed within the limits of the treaty in question. In the view of the
Court, Variant C does not meet that cardinal condition with regard to the 1977
Treaty.

As the Court has already observed, the basic characteristic of the 1977
Treaty is, according to Article 1, to provide for the construction of the
Gabcikovo-Nagymaros System of Locks as a joint investment constituting a single
and indivisible operational system of works. This element is equally reflected
in Articles 8 and 10 of the Treaty providing for joint ownership of the most
important works of the Gabcikovo-Nagymaros project and for the operation of this
joint property as a co-ordinated single unit. By definition all this could not
be carried out by unilateral action. In spite of having a certain external
physical similarity with the original Project, Variant C thus differed sharply
from it in its legal characteristics. The Court accordingly concludes that
Czechoslovakia, in putting Variant C into operation, was not applying the 1977
Treaty but, on the contrary, violated certain of its express provisions, and, in
so doing, committed an internationally wrongful act.

The Court notes that between November 1991 and October 1992, Czechoslovakia
confined itself to the execution, on its own territory, of the works which were
necessary for the implementation of Variant C, but which could have been
abandoned if an agreement had been reached between the parties and did not
therefore predetermine the final decision to be taken. For as long as the Danube
had not been unilaterally dammed, Variant C had not in fact been applied. Such a
situation is not unusual in international law or, for that matter, in domestic
law. A wrongful act or offence is frequently preceded by preparatory actions
which are not to be confused with the act or offence itself. It is as well to
distinguish between the actual commission of a wrongful act (whether
instantaneous or continuous) and the conduct prior to that act which is of a
preparatory character and which “does not qualify as a wrongful act”.

Slovakia also maintained that it was acting under a duty to mitigate damages
when it carried out Variant C. It stated that “It is a general principle of
international law that a party injured by the non-performance of another
contract party must seek to mitigate the damage he has sustained.” But the Court
observes that, while this principle might thus provide a basis for the
calculation of damages, it could not, on the other hand, justify an otherwise
wrongful act. The Court further considers that the diversion of the Danube
carried out by Czechoslovakia was not a lawful countermeasure because it was not
proportionate.

In the light of the conclusions reached above, the Court finds that
Czechoslovakia was entitled to proceed, in November 1991, to Variant C in so far
as it then confined itself to undertaking works which did not predetermine the
final decision to be taken by it. On the other hand, Czechoslovakia was not
entitled to put that Variant into operation from October 1992.

Notification by Hungary, on 19 May 1992. of the termination of the 1977
Treaty and related instruments (pares. 89-1 15)

By the terms of Article 2, paragraph I by, of the Special Agreement, the
Court is asked, thirdly, to determine

“what are the legal effects of the notification, on 19 May 1992, of the
termination of the Treaty by the Republic of Hungary”.

During the proceedings, Hungary presented five arguments in support of the
lawfulness, and thus the effectiveness, of its notification of termination.
These were the existence of a state of necessity; the impossibility of
performance of the Treaty; the occurrence of a fundamental change of
circumstances; the material breach of the Treaty by Czechoslovakia; and,
finally, the development of new norms of international environmental law.
Slovakia contested each of these grounds.

State of necessity

The Court observes that, even if a state of necessity is found to exist, it
is not a ground for the termination of a treaty. It may only be invoked to
exonerate from its responsibility a State which has failed to implement a
treaty.

Impossibility of performance

The Court finds that it is not necessary to determine whether the term
“object” in Article 61 of the Vienna Convention of 1969 on the Law of Treaties
(which speaks of “permanent disappearance or destruction of an object
indispensable for the execution of the treaty” as a ground for terminating or
withdrawing from it) can also be understood to embrace a legal regime as in any
event, even if

that were the case, it would have to conclude that in this instance that
regime had not definitively ceased to exist. The 1977 Treaty and in particular
its Articles 15, 19 and 20 actually made available to the parties the necessary
means to proceed at any time, by negotiation, to the required readjustments
between economic imperatives and ecological imperatives.

Fundamental change of circumstances

In the Court’s view, the prevalent political conditions were not so closely
linked to the object and purpose of the Treaty that they constituted an
essential basis of the consent of the parties and, in changing, radically
altered the extent of the obligations still to be performed. The same holds good
for the economic system in force at the time of the conclusion of the 1977
Treaty. Nor does the Court consider that new developments in the state of
environmental knowledge and of environmental law can be said to have been
completely unforeseen. What is more, the formulation of Articles 15, 19 and 20
is designed to accommodate change. The changed circumstances advanced by Hungary
are thus, in the Court’s view, not of such a nature, either individually or
collectively, that their effect would radically transform the extent of the
obligations still to be performed in order to accomplish the Project.

Material breach of the Treaty

Hungary’s main argument for invoking a material breach of the Treaty was the
construction and putting into operation of Variant C. The Court pointed out that
it had already found that Czechoslovakia violated the Treaty only when it
diverted the waters of the Danube into the bypass canal in October 1992. In
constructing the works which would lead to the putting into operation of Variant
C, Czechoslovakia did not act unlawfully. In the Court’s view, therefore, the
notification of termination by Hungary on 19 May 1992 was premature. No breach
of the Treaty by Czechoslovakia had yet taken place and consequently Hungary was
not entitled to invoke any such breach of the Treaty as a ground for terminating
it when it did.

Development of new norms of international environmental
law

The Court notes that neither of the Parties contended that new peremptory
norms of environmental law had emerged since the conclusion of the 1977 Treaty;
and the Court will consequently not be required to examine the scope of Article
64 of the Vienna Convention on the Law of Treaties (which treats of the voidance
and termination of a treaty because of the emergence of a new peremptory norm of
general international law (ins covens)). On the other hand, the Court wishes to
point out that newly developed norms of environmental law are relevant for the
implementation of the Treaty and that the parties could, by agreement,
incorporate them through the application of Articles 15, 19 and 20 of the
Treaty. These articles do not contain specific obligations of performance but
require the parties, in carrying out their obligations to ensure that the
quality of water in the Danube is not impaired and that nature is protected, to
take new environmental norms into consideration when agreeing upon the means to
be specified in the Joint Contractual Plan. By inserting these evolving
provisions in the Treaty, the parties recognized the potential necessity to
adapt the Project. Consequently, the Treaty is not static, and is open to adapt
to emerging norms of international law. By means of Articles 15 and 19, new
environmental norms can be incorporated in the Joint Contractual Plan. The
awareness of the vulnerability of the environment and the recognition that
environmental risks have to be assessed on a continuous basis have become much
stronger in the years since the Treaty’s conclusion. These new concerns have
enhanced the relevance of Articles 15, 19 and 20. The Court recognizes that both
Parties agree on the need to take environmental concerns seriously and to take
the required precautionary measures, but they fundamentally disagree on the
consequences this has for the joint Project. In such a case, third-party
involvement may be helpful and instrumental in finding a solution, provided each
of the Parties is flexible in its position.

Finally, the Court is of the view that although it has found that both
Hungary and Czechoslovakia failed to comply with their obligations under the
1977 Treaty, this reciprocal wrongful conduct did not bring the Treaty to an end
nor justify its termination.

In the light of the conclusions it has reached above, the Court finds that
the notification of termination by Hungary of 19 May 1992 did not have the legal
effect of terminating the 1977 Treaty and related instruments.

Dissolution of Czechoslovakia

The Court then turns to the question whether Slovakia became a party to the
1977 Treaty as successor to Czechoslovakia. As an alternative argument, Hungary
contended that, even if the Treaty survived the notification of termination, in
any event it ceased to be in force as a treaty on 31 December 1992, as a result
of the “disappearance of one of the parties” On that date Czechoslovakia ceased
to exist as a legal entity, and on 1 January 1993 the Czech Republic and the
Slovak Republic came into existence.

The Court does not find it necessary for the purposes of the present case to
enter into a discussion of whether or not Article 34 of the 1978 Vienna
Convention on Succession of States in respect of treaties (in which a rule of
automatic succession to all treaties is provided for) reflects the state of
customary international law. More relevant to its present analysis is the
particular nature and character of the 1977 Treaty. An examination of this
Treaty confirms that, aside from its undoubted nature as a joint investment, its
major elements were the proposed construction and joint operation of a large,
integrated and indivisible complex of structures and installations on specific
parts of the respective territories of Hungary and Czechoslovakia along the
Danube. The Treaty also established the navigational regime for an important
sector of an international waterway, in particular the relocation of the main
international shipping lane to the bypass canal. In so doing, it inescapably
created a situation in which the interests of other users of the Danube were
affected. Furthermore, the interests of third States were expressly acknowledged
in Article 18, whereby the parties undertook to ensure “uninterrupted and safe
navigation on the international fairway” in accordance with their obligations
under the Convention of 18 August 1948 concerning the Regime of Navigation on
the Danube.

The Court then refers to Article 12 of the 1978 Vienna Convention on
Succession of States in respect of Treaties, which reflects the principle that
treaties of a territorial character have been regarded both in traditional
doctrine and in modern opinion as unaffected by a succession of States. The
Court considers that Article 12 reflects a rule of customary international law;
and notes that neither of the Parties disputed this. It concludes that the
content of the 1977 Treaty indicates that it must be regarded as establishing a
territorial regime within the meaning of Article 12 of 1978 Vienna Convention.
It created rights and obligations “attaching to” the parts of the Danube to
which it relates; thus the Treaty itself could not be affected by a succession
of States. The Court therefore concludes that the 1977 Treaty became binding
upon Slovakia on I January 1993.

Legal consequences of the Judgment

The Court observes that the part of its Judgment which answers the questions
in Article 2, paragraph I, of the Special Agreement has a declaratory character.
It deals with the ~ conduct of the Parties and determines the lawfulness or
unlawfulness of that conduct between 1989 and 1992 as well as its effects on the
existence of the Treaty. Now the Court has, on the basis of the foregoing
findings, to determine what the future conduct of the Parties should be. This
part of the Judgment is prescriptive rather than declaratory because it
determines what the rights and obligations of the Parties are. The Parties will
have to seek agreement on the modalities of the execution of the Judgment in the
light of this determination, as they agreed to do in Article 5 of the Special
Agreement.

In this regard it is of cardinal importance that the Court has found that the
1977 Treaty is still in force and consequently governs the relationship between
the Parties. That relationship is also determined by the rules of other relevant
conventions to which the two States are party, by the rules of general
international law and, in this particular case, by the rules of State
responsibility; but it is governed, above all, by the applicable rules of the
1977 Treaty as a lex specialist. The Court observes that it cannot, however,
disregard the fact that the Treaty has not been fully implemented by either
party for years, and indeed that their acts of commission and omission have
contributed to creating the factual situation that now exists. Nor can it
overlook that factual situation or the practical possibilities and
impossibilities to which it gives rise when deciding on the legal requirements
for the future conduct of the Parties. What is essential, therefore, is that the
factual situation as it has developed since 1989 shall be placed within the
context of the preserved and developing treaty relationship, in order to achieve
its object and purpose in so far as that is feasible. For it is only then that
the irregular state of affairs which exists as the result of the failure of both
Parties to comply with their treaty obligations can be remedied.

The Court points out that the 1977 Treaty is not only a joint investment
project for the production of energy, but it was designed to serve other
objectives as well: the improvement of the navigability of the Danube, flood
control and regulation of ice-discharge, and the protection of the natural
environment. In order to achieve these objectives the parties accepted
obligations of conduct, obligations of performance, and obligations of result.
The Court is of the opinion that the Parties are under a legal obligation,
during the negotiations to be held by virtue of Article 5 of the Special
Agreement, to consider, within the context of the 1977 Treaty, in what way the
multiple objectives of the Treaty can best be served, keeping in mind that all
of them should be fulfilled.

It is clear that the Project’s impact upon, and its implications for, the
environment are of necessity a key issue. In order to evaluate the environmental
risks, current standards must be taken into consideration. This is not only
allowed by the wording of Articles 15 and 19, but even prescribed, to the extent
that these articles impose a continuing and thus necessarily evolving obligation
on the parties to maintain the quality of the water of the Danube and to protect
nature. The Court is mindful that, in the field of environmental protection,
vigilance and prevention are required on account of the often irreversible
character of damage to the environment and of the limitations inherent in the
very mechanism of reparation of this type of damage. New norms and standards
have been developed, set forth in a great number of instruments during the last
two decades. Such new norms have to be taken into consideration, and such new
standards given proper weight, not only when States contemplate new activities
but also when continuing with activities begun in the past. For the purposes of
the present case, this means that the Parties together should look afresh at the
effects on the environment of the operation of the Gabcikovo power plant. In
particular they must find a satisfactory solution for the volume of water to be
released into the old bed of the Danube and into the side-arms on both sides of
the river.

What is required in the present case by the rule pacta sunt servanda, as
reflected in Article 26 of the Vienna Convention of 1969 on the Law of Treaties,
is that the Parties find an agreed solution within the co-operative context of
the Treaty. Article 26 combines two elements, which are of equal importance. It
provides that “Every treaty in force is binding upon the parties to it and must
be performed by them in good faith”. This latter element, in the Court’s view,
implies that, in this case, it is the purpose of the Treaty, and the intentions
of the parties in concluding it, which should prevail over its literal
application. The principle of good faith obliges the Parties to apply it in a
reasonable way and in such a manner that its purpose can be realised.

The 1977 Treaty not only contains a joint investment programme, it also
establishes a regime. According to the Treaty, the main structures of the System
of Locks are the joint property of the Parties; their operation will take the
form of a co-ordinated single unit; and the benefits of the project shall be
equally shared. Since the Court has found that the Treaty is still in force and
that, under its terms, the joint regime is a basic element, it considers that,
unless the Parties agree otherwise, such a regime should be restored. The Court
is of the opinion that the works at Cunovo should become a jointly operated unit
within the meaning of Article 10, paragraph 1, in view of their pivotal role in
the operation of what remains of the Project and for the water-management
regime. The dam at Cunovo has taken over the role which was originally destined
for the works at Dunakiliti, and therefore should have a similar status. The
Court also concludes that Variant C, which it considers operates in a manner
incompatible with the Treaty, should be made to conform to it. It observes that
re-establishment of the joint regime will also reflect in an optimal way the
concept of common utilization of shared water resources for the achievement of
the several objectives mentioned in the Treaty.

Having thus far indicated what in its view should be the effects of its
finding that the 1977 Treaty is still in force, the Court turns to the legal
consequences of the internationally wrongful acts committed by the Parties, as
it had also been asked by both Parties

to determine the consequences of the Judgment as they bear upon payment of
damages.

The Court has not been asked at this stage to determine the quantum of
damages due, but to indicate on what basis they should be paid. Both Parties
claimed to have suffered considerable financial losses and both claim pecuniary
compensation for them.

In the Judgment, the Court has concluded that both Parties committed
internationally wrongful acts, and it has noted that those acts gave rise to the
damage sustained by the Parties; consequently, Hungary and Slovakia are both
under an obligation to pay compensation and are both entitled to obtain
compensation. The Court observes, however, that given the fact, that there have
been intersecting wrongs by both Parties, the issue of compensation could
satisfactorily be resolved in the framework of an overall settlement if each of
the Parties were to renounce or cancel all financial claims and counter-claims.
At the same time, the Court wishes to point out that the settlement of accounts
for the construction of the works is different from the issue of compensation,
and must be resolved in accordance with the 1977 Treaty and related instruments.
If Hungary is to share in the operation and benefits of the Cunovo complex, it
must pay a proportionate share of the building and running costs.

The operative paragraphs reads as follows:

” 155. For these reasons,

THE COURT, (1) Having regard to Article 2, paragraph 1, of the Special
Agreement,

A. Finds, by fourteen votes to one, that Hungary was not entitled to suspend
and subsequently abandon, in 1989, the works on the Nagymaros Project and on the
part of the Gabcikovo Project for which the Treaty of 16 September 1977 and
related instruments attributed responsibility to it;

IN FAVOUR: President Schwebel; Vice-President Weeramantry; Judges Oda,
Bedjaoui, Guillaume, Ranjeva, Shi, Fleischhauer, Koroma, Vereshchetin,
Parra-Aranguren, Kooijmans, Rezek; Judge ad hoc Skubiszewski;

AGAINST: Judge Herczegh;

B. Finds, by nine votes to six, that Czechoslovakia was entitled to proceed,
in November 1991, to the “provisional solution” as described in the terms of the
Special Agreement;

IN FAVOUR: Vice-President Weeramantry; Judges Oda, Guillaume, Shi, Koroma,
Vereshchetin, Parra-Aranguren, Kooijmans; Judge ad hoc Skubiszewski;

AGAINST: President Schwebel; Judges Bedjaoui, Ranjeva, Herczegh,
Fleischhauer, Rezek;

C. Finds, by ten votes to five, that Czechoslovakia was not entitled to put
into operation, from October 1992, this “provisional solution”;

IN FAVOUR: President Schwebel; Vice-President Weeramantry; Judges Bedjaoui,
Guillaume, Ranjeva, Herczegh, Shi, Fleischhauer, Kooijmans, Rezek;

AGAINST: Judges Oda, Koroma, Vereshchetin, Parra-Aranguren;Judge ad hoc
Skubiszewski;

D. Finds, by eleven votes to four, that the notification, on 19 May 1992, of
the termination of the Treaty of 16 September 1977 and related instruments by
Hungary did not have the legal effect of terminating them;

IN FAVOUR: Vice-President Weeramantry; Judges Oda, Bedjaoui, Guillaume,
Ranjeva, Shi, Koroma, Vereshchetin, Parra-Aranguren, Kooijmans; Judge ad hoc
Skubiszewski;

AGAINST: President Schwebel; Judges Herczegh, Fleischhauer, Rezek;

(2) Having regard to Article 2, paragraph 2, and Article 5 of the Special
Agreement,

A. Finds by twelve votes to three, that Slovakia, as successor to
Czechoslovakia, became a party to the Treaty of 16 September 1977 as from I
January 1993;

IN FAVOUR: President Schwebel; Vice-President Weeramantry; Judges Oda,
Bedjaoui, Guillaume, Ranjeva, Shi, Koroma, Vereshchetin, Parra-Aranguren,
Kooijmans; Judge ad hoc Skubiszewski;

AGAINST: Judges Herczegh, Fleischhauer, Rezek;

B. Finds, by thirteen votes to two, that Hungary and Slovakia must negotiate
in good faith in the light of the prevailing situation, and must take all
necessary measures to ensure the achievement of the objectives of the Treaty of
16 September 1977, in accordance with such modalities as they may agree upon;

IN FAVOUR: President Schwebel; Vice-President Weeramantry; Judges Oda,
Bedjaoui, Guillaume, Ranjeva, Shi, Koroma, Vereshchetin, Parra-Aranguren,
Kooijmans, Rezek; Judge ad hoc Skubiszewski;

AGAINST: Judges Herczegh, Fleischhauer;

C. Finds, by thirteen votes to two, that, unless the Parties otherwise agree,
a joint operational regime must be established in accordance with the Treaty of
16 September 1977;

IN FAVOUR: President Schwebel; Vice-President Weeramantry; Judges Oda,
Bedjaoui, Guillaume, Ranjeva, Shi, Koroma, Vereshchetin, Parra-Aranguren,
Kooijmans, Rezek; Judge ad hoc

Skubiszewski;

AGAINST: Judges Herczegh, Fleischhauer;

D. Finds, by twelve votes to three, that, unless the Parties otherwise agree,
Hungary shall compensate Slovakia for the damage sustained by Czechoslovakia and
by Slovakia on account of the suspension and abandonment by Hungary of works for
which it was responsible; and Slovakia shall compensate Hungary for the damage
it has sustained on account of the putting into operation of the “provisional
solution” by Czechoslovakia and its maintenance in service by Slovakia;

IN FAVOUR: President Schwebel; Vice-President Weeramantry; Judges Bedjaoui,
Guillaume, Ranjeva, Herczegh, Shi, Fleischhauer, Parra-Aranguren, Kooijmans,
Rezek; Judge ad hoc Skubiszewski;

AGAINST: Judges Oda, Koroma, Vereshchetin;

E. Finds, by thirteen votes to two, that the settlement of accounts for the
construction and operation of the works must be effected in accordance with the
relevant provisions of the Treaty of 16 September 1977 and related instruments,
taking due account of such measures as will have been taken by the Parties in
application of points 2 B and C of the present operative paragraph.

IN FAVOUR: President Schwebel; Vice-President Weeramantry; Judges Oda,
Bedjaoui, Guillaume, Ranjeva, Shi, Koroma, Vereshchetin, Parra-Aranguren,
Kooijmans, Rezek; Judge ad hoc Skubiszewski;

AGAINST: Judges Herczegh, Fleischhauer.”

President SCHWEBEL and Judge REZEK append declarations to the Judgment of the
Court.

Vice-President WEERAMANTRY, Judges BEDJAOUI and KOROMA append separate
opinions to the Judgment of the Court.

Judges ODA, RANJEVA, HERCZEGH, FLEISCHHAUER, VERESHCHETIN and
PARRA-ARANGUREN, and Judge ad hoc SKUBISZEWSKI append dissenting opinions to the
Judgment of the Court.

The above summary of the Judgment has been prepared by the Registry for the
use of the Press and in no way involves the responsibility of the Court. It
cannot be quoted against the text of the Judgment, of which it does not
constitute an interpretation.