Island of Palmas Case (United States v. The Netherlands)

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Citation. Perm. Ct. of Arbitration, 2 U.N. Rep. Int’l Arb. Awards 829 (1928).

Brief Fact Summary. Both the United States (P) laid claim to the ownership of the Island of Palmas. While the U.S. (P) maintained that it was part of the Philippines, the Netherlands (D) claimed it as their own.

Synopsis of Rule of Law. A title that is inchoate cannot prevail over a definite title found on the continuous and peaceful display of sovereignty.

Facts. Both the United States (P) laid claim to the ownership of the Island of Palmas. While the U.S. (P) maintained that it was part of the Philippines, the Netherlands (D) claimed it as their own. The claim of the U.S. (P) was back up with the fact that the islands had been ceded by Spain by the Treaty of Paris in 1898, and as successor to the rights of Spain over the Philippines, it based its claim of title in the first place on discovery. On the part of the Netherlands (D), they claimed to have possessed and exercised rights of sovereignty over the island from 1677 or earlier to the present.

Issue. Can a title which is inchoate prevail over a definite title found on the continuous and peaceful display of sovereignty?

Held. (Huber, Arb.). No. A title that is inchoate cannot prevail over a definite title found on the continuous and peaceful display of sovereignty. The peaceful and continuous display of territorial sovereignty is as good as title. However, discovery alone without subsequent act cannot suffice to prove sovereignty over the island. The territorial sovereignty of the Netherlands (D) was not contested by anyone from 1700 to 1906. The title of discovery at best an inchoate title does not therefore prevail over the Netherlands (D) claims of sovereignty.

Discussion. Evidence of contracts made by the East India Company and the Netherlands (D) was examined by the arbitrator. The claims made by the Netherlands (D) were also based on the premise of the convention it had with the princes and native chieftains of the islands. Hence, at the time of the Treaty of Paris in 1898, Spain was found not to have dominion over the island.
y 4,700 private U.S. claims, ordered payment by Iran (D) to U.S. nationals amounting to over $2.5 billion.