The Explosion and the Testimony: The WWI Sabotage Claims and an International Arbitral Tribunal’s Powers to Revise Its Own Awards – Vol. 23 No. 2

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Author: Timothy Nelson*

Published: December 2012

Description: On Christmas Day, 1930, Paul Hilken, a German-born shipping executive, searched his Baltimore home one more time for proof of his role as paymaster for German sabotage operations in America during World War I, a career that involved financing the destruction of the “Black Tom” munitions depot at Jersey City, New Jersey, in July 1916. Only six weeks previously, an international arbitral tribunal had lambasted his testimony on the issue, branding him and another confessed saboteur, Fred Herrmann, as “liars, not presumptive but proven.” Hilken “desperately wanted vindication.” Then he found that magazine. The magazine in question was a January 1917 issue of Blue Book, a monthly compilation of feature articles, once popular on long train trips or voyages. Concealed within Hilken’s copy was a message by fellow spy Fred Herrmann, written in a combination of invisible ink (using lemon juice) and coded pinpricks. The Herrmann message referred to the past attack on the “Jersey City Terminal” (i.e., the Black Tom depot) and requested $25,000 to help finance another attack. Hilken had retrieved the message in 1917 by rubbing the page with a hot iron, and in 1930, the text “could still be clearly read.” Hilken took the freshly discovered Blue Book magazine to the American team responsible for the arbitral claim against Germany. “[A]mazed and ecstatic,” they used it as their prime exhibit to reopen the case.

What followed was a milestone in arbitral history. By its 1933 decision in what were known as the Sabotage Claims, the German-U.S. Mixed Claims Commission held that it had “inherent power to reopen” a case based on newly …

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*B.A. L.L.B. (University of New South Wales), B.C.L. (University of Oxford). Partner in the International Litigation and Arbitration Group of Skadden, Arps, Slate, Meagher & Flom LLP, New York. The views expressed herein are solely those of the author and are not those of his firm or the firm’s clients. Portions of Sections II and V reflect case research by Jose Torres (formerly of Skadden London) and Sahib Singh (formerly of Skadden Vienna), and the author gratefully thanks these colleagues.