Odious Debts

Tinoco Arbitration

(March 7, 1923) Convention between the British Government and the Government of Costa Rica for the submission to arbitration of certain claims against the government of Costa Rica, signed at San Jose de Costa Rica, January 12, 1922.



Whereas there has arisen between their respective Governments a difference as to the application of Law No. 41 of August 21, 1920, to two cases in which British Corporations are interested, to wit: to the concession granted by the Aguilar-Amory Contract of the 25th June, 1918, of which the “Central Costa Rica Petroleum Company” is owner, and the delivery to the Royal Bank of Canada of 998,000 colones in notes of 1,000 colones each in payment of a cheque drawn by the Tinoco Administration against the International Bank of Costa Rica, which cheque was deposited in the Government’s account with the said Royal Bank; and

Whereas the claims and contentions of the two Governments in regard to these points have been set forth, on the part of His Britannic Majesty’s Government, in the Notes which His Britannic Majesty’s Minister addressed to the Costa Rican Ministry for Foreign Affairs on the 13th July and the 8th November, 1921, and in antecedent correspondence; and, on the part of the Costa Rican Government, in their Notes in reply relative to the present diplomatic controversy and especially in the Congressional Resolution of the 13th December, of that same year; and

\\i’hereas both Governments are actuated by a lively desire to reach, within that spirit of cordial friendship which has always inspired their relations, a speedy and just settlement of the pending question; and as the medium of arbitration, indicated by His Britannic Majesty’s Government, has been accepted by the Government of Costa Rica, after previous consultation with the Constitutional Congress;

Have therefore determined to conclude a Treaty of Arbitration, and have appointed for that purpose the following Plenipotentiaries, that is to say:


Andrew Percy BENNETT, Esquire, Companion of the Most Distinguished Order of St. Michael and St. George, His Majesty’s Envoy Extraordinary and Minister Plenipotentiary in the Republic of Costa Rica; and


Senor Licentiate Alejandro ALVARADO QUIROS, Secretary of State for Foreign Affairs;

Who, after having communicated to each other their respective full powers, found in good and due form, have agreed upon the following articles:

Article 1.

A single Arbitrator, appointed by mutual agreement, taking into consideration existing Agreements, the principles of Public and International Law, and in view of the allegations, documents and evidence which each of the two Governments may present to him, shall decide:

(1) Whether the demand of His Britannic Majesty’s Government is well founded;

(2) Or whether on the contrary the Government of Costa Rica is justified in not recognising the said claims by maintaining the Declaration of Nullity contained in Law 41.

The Arbitrator shall have the necessary jurisdiction to establish procedure and to dictate without any restriction whatsoever other resolutions which may arise as a consequence of the question formulated, and which, in conformity with his judgment, may be necessary or expedient to fulfil in a just and honourable manner the purposes of this Convention; and he shall determine what one party may owe the other for the expenses of the claim. The Arbitrator shall also decide with regard to the payment of the expenses of the arbitration.

Article 2.

Both Governments solemnly undertake to conform to the decision of the Arbitrator, whatever it may be; and to comply with it without delay, as final and beyond appeal, pledging to this effect the national honour; and they shall take such measures as may be requisite to carry out the arbitral Award. The Government of Costa Rica undertake to obtain the adhesion of the International Bank of Costa Rica in so far as it may be necessary for the execution of the Award, and undertake to faithfully comply with the resolutions of the Arbitrator in as far as they may affect the official Credit Institution in question.

Article 3.

The High Contracting Parties agree in nominating as Arbitrator the Chief Justice of the United States of America, and in the event of the said Chief Justice declining to accept the office, another Jurist of international repute, whose Award shall be a guarantee to both parties of a true conception of justice and right, shall be chosen; and to this end it will be sufficient for the two Governments to sign a supplementary document, or to agree on the nomination by means of a simple exchange of Notes.

Article 4.

Immediately after the exchange of the ratifications of this Convention. both Governments, jointly or separately, shall solicit the acceptance of the Arbitrator. The Governments will consider that they have been formally notified of such acceptance by a communication to this effect from the Arbitrator to His Britannic Majesty’s Embassy and the Costa Rican Legation in Washington.

Within ninety calendar days following such notification, each of the parties will present their respective allegations and evidence.

On the expiry of the above-mentioned ninety days for the presentation of allegations and evidence, a further period of sixty days shall commence, within which the parties may, if they so desire, present counter-arguments or rectifications.

On the expiry of this second period, a further period of ninety days shall commence, within which the Arbitrator shall pronounce his Award.

Similar rules of procedure shall obtain in the event of having to proceed, as above mentioned, to the appointment of an Arbitrator who is not the one chosen by mutual accord under this Agreement in so far as such rules of procedure may be applicable.

Article 5.

The Costa Rican Government undertake to give without delay or any cost whatever the certifications of documents, laws or acts existing in the Public Offices, which may be requested through the Ministry for Foreign Affairs by the Government of His Britannic Majesty, by the Royal Bank of Canada or by the Central Costa Rica Petroleum Company; and such certifications shall be held as authentic in the arbitration. Those documents which may appear published in “La Gaceta” the Official Journal of the Costa Rican Government shall be held without question as authentic and admissible.

Article 6.

To be valid the present Convention must receive the approval of the Constitutional Congress of Costa Rica and of the Government of His Britannic Majesty; and as soon as this approval shall have been obtained, the Convention shall be ratified and the ratifications exchanged in this Capital or in Washington.

In witness whereof, we. the above-named Plenipotentiaries, have signed and sealed the present Convention in duplicate, both in the Spanish and English language.

Done in the City of San Jose de Costa Rica, the twelfth day of January, one thousand nine hundred and twenty-two.




The Undersigned, duly authorised by their respective Governments, have met together for the purpose of exchanging the ratifications of the Convention between His Majesty the King of the United Kingdom of Great Britain and Ireland and of the British Dominions beyond the Seas, Emperor of India, and His Excellency the President of the Republic of Costa Rica, signed at San Jose on 12th day of January, 1922, for the submission to arbitration of certain claims made by the Central Costa Rica Petroleum Company and the Royal Bank of Canada against the Government of Costa Rica.

The respective ratifications have been carefully compared and have been found to be conformable to each other, except that the ratification of His Excellency the President of Costa Rica contains the following reservation:

“Y por cuanto el Congreso Constitucional, por Decreto No. 6 del 23 de mayo de este año, aprobó el preinserto Tratado con la siguiente adición:

“Articulo 2°.—La aprobació dada al Tratado en lel articulo anterior se hace en la inteligencia de qua nada en el Tratado se opone a que Costa Rice haga caler todos los medios de defensa enumerados en el acuerdo del Congrrreso del 13 de diciembre de 1921, a que se hace referencia en el preámbulo del Tratado, y a que el Arbitro pueda fundamentar su fallo en todos o algunos de dichos medios de defensa,” cuya traducción al inglés dice asi:

“Article 2nd. — The approval given in the preceding article to the Treaty is done with the understanding that nothing in the Treaty would prevent that Costa Rica shall bring into play all means of defence enumerated in the Congressional Resolution on the 13th December, 1921, to which reference is made in the preamble of the Treaty, and that the Arbitrator shall base his Award in all or any of the said means of defence,”

articulo que ha sido expresamente aceptado por el Gobierno de Su Majestad Británica, según nota No. 86/13/22 de la respectiva Legación, fechada en Panamá el 15 de setiembre próximo pasado.”

As the above English translation furnished by the Costa Rican Government is liable to misinterpretation. and in order that the matter may be placed upon due record it is understood that the English equivalent of this reservation is as follows:

“The approval of the Convention contained in the preceding article has been given on the understanding that nothing in the Convention prevents Costa Rica from developing all the defences enumerated in the Resolution of Congress of the 13th December 1921, and referred to in the preamble of the Convention; nor the Arbitrator from basing his decision upon all or any of the said defences.”

It is further understood that the Spanish text of the above reservation which was expressly accepted by His Britannic Majesty’s Government in a note addressed to the Minister for Foreign Affairs of Costa Rica by His Majesty’s Chargé d’Affaires at Panama on the 15th September, 1929 (No. 86jl3/22), is alone authoritative for the purposes of the present arbitration.

The said exchange of ratifications has accordingly taken place this day in the usual form.

In witness whereof the Undersigned have signed the present certificate and have affixed thereto their seals.

Done at Washington, this seventh day of March 1923.

(L. S.) A. C . GEDDES .


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