Island of Palmas Case

On 1 January 1906, General Leonard Wood, Governor of Moro Province, Philippines, visited Palmas. According to the Counter-Memorandum filed in the case by the United States, he had already visited the island in "about 1903". The report of Wood to the Military Secretary, United States Army, on 26 January 1906, and the certificate delivered on 21 January by First Lieutenant Gordon Johnston to the native interrogated by the controller of the Sangi (Sanghi) and Talauer (Talaut) Islands clearly show that the 21 January visit relates to the island in dispute. The visit led to the US statement that the Island of Palmas, undoubtedly included in the "archipelago known as the Philippine Islands," as delimited by Article III of the Treaty of Peace between the United States and Spain, also called "Treaty of Paris," and ceded in virtue of the said article to the United States, was considered by the Netherlands as forming part of the territory of its possessions in the East Indies.[3]

The United States, as the successor to the rights of Spain over the Philippines, based its title in the first place on discovery. The existence of sovereignty thus acquired was not merely confirmed by the most reliable cartographers and authors and even by treaty, particularly the Treaty of Münster of 1648, which was agreed to by Spain and the Netherlands. According to the same argument, nothing had occurred of a nature to cause the acquired title to disappear in international law. The United States argued the latter title at the moment when Spain ceded its title to the Philippines by the Treaty of Paris in 1898. Thus, it was unnecessary to establish facts showing the actual display of sovereignty precisely over the Island of Palmas.

The American government finally maintained that Palmas forms a geographical part of the Philippine group and is closer to the Philippines than to the Dutch East Indies. Thus, the principle of contiguity substantiated the claim that it belongs to the power with sovereignty over the Philippines.[4]

The United States argued that it held the island because it had received actual title by legitimate treaties from the original discoverer of the island, Spain. The United States argued that Spain acquired title to Palmas when Spain discovered the island and the island was terra nullius. Spain's title to the island, because it was a part of the Philippines, was then ceded to the United States under the Treaty of Paris (1898) after Spain's defeat in the Spanish–American War. The arbitrator noted that no new international law invalidated the legal transfer of territory via cession.

However, the arbitrator noted that Spain could not legally grant what it did not hold and the Treaty of Paris could not grant Palmas to the United States if Spain had no actual title to it. The arbitrator concluded that Spain held an inchoate title when Spain "discovered" Palmas. However, for a sovereign to maintain its initial title via discovery, the arbitrator said that the discoverer had to actually exercise authority even by as simple an act as planting a flag on the beach. Spain did not exercise authority over the island after making an initial claim after discovery and so the American claim was based on relatively weak grounds.

The United States argued that Palmas was American territory because the island was closer to the Philippines than to the Netherlands East Indies. The arbitrator said that there was no positive international law for the American view of terra firma in which the nearest continent or island of considerable size gives title to the land in dispute. The arbitrator held that mere proximity was not an adequate claim to land and noted that if the international community followed the proposed American approach, that would lead to arbitrary results.

The Netherlands' primary contention was that it held actual title because the Netherlands had exercised authority on the island since 1677. The arbitrator noted that the United States had failed to show documentation proving Spanish sovereignty on the island except the documents that specifically mentioned the island's discovery. Additionally, there was no evidence that Palmas was a part of the judicial or administrative organization of the Spanish government of the Philippines. However, the Netherlands showed that the Dutch East India Company had negotiated treaties with the local princes of the island since the 17th century and had exercised sovereignty, including a requirement of Protestantism and the denial of other nationals on the island. The arbitrator pointed out that if Spain had actually exercised authority, there would have been conflicts between the two countries, but none is provided in the evidence.

Thus, a title that is inchoate cannot prevail over a definite title found on the continuous and peaceful display of sovereignty. Peaceful and continuous display of territorial sovereignty is as good as title. However, discovery alone, without a subsequent act, cannot suffice to prove sovereignty over the island. The territorial sovereignty of the defendant, Netherlands, was not contested by anyone from 1700 to 1906 so the title of discovery was, at best, an inchoate title and does not prevail over the Netherlands claims of sovereignty.[4]