provision expressly stating that the Convention shall not apply to commercial companies formed under the law of States not parties to the Convention. (Signed) SCHÜCKING.

M. RUNDSTEIN'S COMMENTS ON M. SCHÜCKING'S OBSERVATIONS

[Translation.]

Before venturing to offer a few comments on M. Schücking's observations, I should like to tender my sincerest thanks to our distinguished colleague, whose clear and lucid criticism has so largely contributed to the settlement of difficult and controversial points. I, too, will endeavour to explain some passages in my report which might lead to misunderstandings and ambiguity.

1. I still feel that the case of a company having several "seats" or a plurality of organs (more than one board of directors in the form of "managing boards") does not in any way affect the fundamentals of the main test of nationality (Article 1 of the draft). As M. Schücking rightly observes, we can admit that a company possesses more than one seat without concluding that it possesses several nationalities. Since, then, there is no danger of such a conflict, I think that the test which couples the law of the company's incorporation with the establishment of its actual seat in the territory of the State in which it was incorporated would eliminate the possible application of a law not in harmony with this definition; "additional" seats would be subordinated to the "principal seat" (cf. the observations of M. HATSCHEK, Völkerrecht, 1923, pages 217, 218, "Massgebend ist also der Gesichtspunkt, ob das Gründungstatut die Zugehörigkeit der juristischen Person zu Staate dadurch bestimmt, dass es den Sitz der juristischen Person bestimmt").

Certainly, the view which has repeatedly been adopted by French doctrine and practice regarding the "elected domicile-domicilé elu" of a commercial corporation cannot be held to be reasonable (cf. in re West Canadian Collieries Limited, Lille Commercial Court of May 21st, 1908, and in re the Huelva Central Copper Mining Company, judgment of the Court of Appeal dated July 6th, 1914, and SURVILLE-Cours élémentaire de droit international privé, 1925, page 724). International rules could not accept this view of the Courts that, by conforming to a given country's laws, a company could elect to have its "seat" elsewhere than in the country to which it has always been attached by its origin and its incorporation.

I do not deny that there are certain "pathological" cases: for instance, the "Grande Compagnie de Suez" possesses a nationality other than that of the country under whose laws it was incorporated; the Morocco State Bank was created in 1906 in accordance with French law, but its official seat and administrative centre is in Tangier (cf. also the case of the "DeutschNiederländische Telegraphengesellschaft," CuQ, page 26), but these abnor

mal cases are the result of exceptional circumstances, and in many cases it is diplomatic conventions which have decided what law is to apply, ignoring the concordance which should exist between the lex constitutionis and the actual seat.

2. In his observations, which throw much light on the subject, Professor Schücking raises very serious objections to the wording of paragraph 3 of Article 3 of my draft, producing many apposite quotations in support of his view.

I would wish first of all to say that, by the international recognition of forfeiture, I mean merely the recognition and registration of the "decease of a company which has been acting fraudulently; the legal effects of such forfeiture will depend entirely on the provisions of the municipal law of each country and will not prejudge the general recognition of measures ordered by the competent authorities.

I agree with Professor Schücking that the question of forfeiture is intimately bound up with the recognition and execution of judgments delivered by foreign courts; but I do not see that there will be any contradiction with the draft of the fifth Hague Conference (Article 1, paragraph 1) if the various States recognise the jurisdiction of one of their number (solely, of course, in the case of a fictitious and artificial seat) and, by so doing, recognise the forfeiture which has been lawfully decided and ordered by the Courts. This is not a case of disregarding the rules of international jurisdictional competence, because such competence will be recognised reciprocally.

The main question depends upon how the following problem is solved: Should a commercial corporation having a fictitious seat be held to have forfeited its juridical personality and be consequently non-existent (1) in the country of origin? (2) in the country in which it has been established in defiance of the law? (3) in third States? (See the Netherlands Government's Questionnaire No. 5, on a draft Convention concerning Foreign Legal Entities: Preliminary documents I-Sixth Session of the Hague Conference on International Private Law).

I am of opinion that, in formulating international rules, we could not be satisfied with the exclusive jurisdiction of the country of origin. Suppose a company were incorporated in Great Britain in order to avoid some material provision of French law. Its "seat" in London is fictitious; its real administrative centre is situated in Paris and the Board of Directors, all of whom are Frenchmen, meets in Paris. The French courts say that the company is in spite of its "English" form-really a French company, and they therefore order its liquidation and dissolution (see the case of the Société du Moulin-Rouge in Paris, PILLET-NIBOYET, page 304).

Could we admit that this company would still be in existence in England, and that "French" forfeiture would have no legal effects outside French territory, when fraudulent practices have been proved in the French Courts and these Courts have declared the company to be non-existent, with the

immediate effect that the company ceases to be a corporate body, or in other words forfeits its juridical personality? The company in question possessed no property in London, had no offices there (that is to say, an administrative centre in the strict sense), its "seat" was really the office of an obliging solicitor who accorded it his very suspect hospitality. Would a decision of the British Courts be the only way to establish the exclusive and general recognition of this forfeiture? Should not the interests of the State in which a company really transacts business and desires to transact business, in spite of its foreign form, prevail? Should the decision of the Courts of that State have only a strictly territorial application? That is the main problem which renders the solution to be adopted by our Committee a matter of considerable importance.

Parallelism is not always a sound argument, and I only venture to draw attention to the provisions of a draft Convention prepared by the Institute of International Law on the Legal Status of International Associations (YearBook, Vol. XXX, page 385 et seq.), Article 18 of which refers to forfeiture, subject to the implied reservation that the legal situation is not analogous and the forfeiture referred to in this Article 18 is not concerned with fraus legis.

3. As regards paragraph 2 of Article 8 of my draft, I am of opinion that some reservation on these lines will be desirable. Certain countries might ask that the nationality of companies not possessing juridical personality should be treated on a different footing, for instance, when it is a question of acquiring immovable property.

(Signed) S. RUNDSTEIN.

Work of the Committee of Experts for the Progressive Codification of International Law

RESOLUTION ADOPTED BY THE COUNCIL ON JUNE 13TH, 1927: REPORT PRESENTED TO THE COUNCIL BY THE POLISH REPRESENTATIVE AND MINUTES OF THE PROCEEDINGS IN THE COUNCIL*

Note by the Secretary-General.

On June 13th, 1927, the Council considered the reports drawn up for submission to it by the Committee of Experts for the Progressive Codification of International Law at the Committee's third session held at Geneva in March-April, 1927, together with a letter dated April 2nd, 1927, from the Chairman to the Secretary-General, and adopted the following resolution:

"The Council of the League of Nations,

"Having considered the reports drawn up for submission to the Council by the Committee of Experts for the Progressive Codification of International Law at its third session held from March 22nd to April 2nd, 1927, and the letter from the Chairman of the Committee to the Secretary-General dated April 2nd, 1927.

"Decides to transmit the above-mentioned documents and the report thereon of the Polish representative, as adopted by the Council at its meeting on June 13th, together with the Minutes of that meeting, to the Assembly and to place the consideration of these documents and report upon the agenda of the Assembly."

The present document reproduces below the report of the Polish repre sentative, as adopted by the Council, and the minutes of the Council's proceedings.

The other documents referred to in the resolution of the Council were circulated to the Governments of the Members of the League and other Governments at the same time as they were communicated to the Council and will be placed by the Secretariat at the disposal of the delegates at the Assembly. The complete list of these documents is as follows:

1. Questions which appear ripe for International Regulation.

2. General Report on the Procedure to be followed.

3. Procedure to be followed with regard to the Question of the Procedure of International Conferences and the Procedure for the Drafting and Conclusion of Treaties.

4. Procedure to be followed with regard to the Question of the Products of the Sea.

* Publications of the League of Nations. V. Legal. 1927. V. 15.

5. Recognition of the Legal Personality of Foreign Commercial Cor

porations.

6. Nationality of Commercial Corporations and their Diplomatic Protection.

7. Letter dated April 2nd, 1927, from the Chairman of the Committee to the Secretary-General reporting on the Work of the Third Session of the Committee, held in March-April, 1927, and communicating to the Secretary-General various Questionnaires and a Report for transmission to Governments.

The four questionnaires referred to in the section of the Polish representative's report entitled "Present Programme of the Committee" were communicated to the Governments by the Secretary-General with his circular letter No. C. L. 57. 1927. V. dated June 7th, 1927.

REPORT OF THE POLISH REPRESENTATIVE, M. ZALESKI, APPROVED BY THE COUNCIL ON JUNE 13TH, 19271

Terms of Reference of the Committee

The Committee of Experts for the Progressive Codification of International Law was appointed by the Council in compliance with a resolution adopted by the Assembly on September 22nd, 1924, which laid down the Committee's terms of reference. The resolution was as follows:

"The Assembly:

"Considering that the experience of five years has demonstrated the valuable services which the League of Nations can render towards rapidly meeting the legislative needs of international relations, and recalling particularly the important conventions already drawn up with respect to international conciliation, communications and transit, the simplification of Customs formalities, the recognition of arbitration clauses in commercial contracts, international labour legislation, the suppression of the traffic in women and children, the protection of minorities, as well as the recent resolutions concerning legal assistance for the poor;

"Desirous of increasing the contribution of the League of Nations to the progressive codification of international law;

"Requests the Council:

"To convene a Committee of Experts not merely possessing individually the required qualifications but also as a body representing the main forms of civilisation and the principal legal systems of the world. This Committee, after eventually consulting the most authoritative

1 Document C. 254. 1927. V.