Sir Joseph Gold, Senior Consultant and formerly the General Counsel and Director of the Legal Department of the Fund, is a graduate of the University of London and Harvard University. He is the author of numerous books, pamphlets, and essays on the Fund and on international and national monetary law.
80 L Ed 2d 273.
49 Stat. 3000, T.S. No. 876 (1934), reprinted at 49 U.S.C. §1502 note.
49 U.S.C. §130 et seq.
690 F. 2d 303 (1982).
Deere and Company v. Deutsche Lufthansa Aktiengesellschaft, No. 81 C 4726, United States District Court for the Northern District of Illinois, Eastern Division, 18 Av. Cas. 17, 178, December 30, 1982. For a discussion of cases in the United States and other countries, see Joseph Gold, The Fund Agreement in the Courts: Volume II (Washington: International Monetary Fund, 1982), pp. 439–57, hereinafter cited as Gold, Volume II; SDRs, Currencies, and Gold: Sixth Survey of New Legal Developments, Pamphlet Series No. 40 (Washington: International Monetary Fund, 1983), pp. 83–89, hereinafter cited as Gold, Pamphlet No. 40; James David Simpson, Jr., “Air Carriers’ Liability Under the Warsaw Convention After Franklin Mint v. TWA,” Washington and Lee Law Review (Lexington, Virginia), Vol. 40 (1983), pp. 1463–1503.
In the courts of other countries, the SDR solution involves the value of the SDR in terms of the currency of the forum in lieu of the U.S. dollar.
The most extraordinary statement is that “Effective April 1, 1978, the ‘Special Drawing Right’ (SDR) was to become the sole reserve asset that IMF nations would use in their mutual dealings” (80 L Ed 2d 273, p. 280). This view of the SDR is wrong, but if held could have given the court a reason to conclude that the SDR is the successor to gold in the international monetary system and that a gold unit of account must be interpreted and applied in accordance with that development.
See Joseph Gold, Floating Currencies, SDRs, and Gold: Further Legal Developments, Pamphlet Series No. 22 (Washington: International Monetary Fund, 1977), pp. 33–34.
Pub. L. No. 92–268 §2, 86 Stat. 116 (1972); Pub. L. No. 93–110 §1, 87 Stat. 352 (1973).
Pub. L. No. 94–564 §6, 90 Stat. 2660 (1976).
80 L Ed 2d 273, p. 282. A footnote to the second sentence of this passage reads: “However, Article 39(2) of the Convention expressly permits a Convention signatory to withdraw by giving timely notice. Plainly, a party to a treaty of voluntary adhesion can have no need for the doctrine of rebus sic stantibus, except insofar as it might wish to avoid the notice requirement.”
The Suoreme Court stated (footnote 26 on 80 L Ed 2d 273, p. 283) that Article 22(4) “expressly” permits each signatory to determine the way the Poincaré franc is to be converted (that is, translated) into the national currency. Article 22(4), however, can be read to provide expressly only that the translation may be made into round figures. It is reasonable to assume that this formulation implies authorization to prescribe the mode of translation.
80 L Ed 2d 273, p. 283.
80 L Ed 2d 273, p. 284. In this context, “reasonable” must be taken to mean only that any limit is a limit.
Ibid. (Footnotes omitted.)
International Monetary Fund, By-Laws; Rules and Regulations, 41st Issue (Washington, August 1, 1984), pp. 55–56.
80 L Ed 2d 273, p. 284. The computation for converting Poincaré francs into U.S. dollars would be as follows on the basis of the value of the SDR on March 23, 1979, the date the cargo was delivered to TWA: 1 Poincaré franc (90 percent fine gold) = 0.0655 gram of fine gold; 1 Poincaré franc (100 percent fine gold) = 0.05895 gram of fine gold; 1 SDR (gold value on March 31, 1978) = 0.888671 gram of fine gold. The number of francs in 1 SDR = 0.888671/0.05895 = 15.075, rounded to 15. The Warsaw Convention limit of 250 francs per kilogram converted to SDRs = 250/15 = 16.67 SDRs per kilogram, rounded to 17 SDRs. The dollar value of 1 SDR on March 23, 1979 = 1.28626; 17 SDRs per kilogram times 1.28626 = $21.87 per kilogram. (SDR 17 per kilogram was equal to approximately $17.99 on April 17, 1984.) Petition for a Writ of Certiorari to the United States Court of Appeals for the Second Circuit, by Trans World Airlines, Inc., Petitioner, January 15, 1983, p. 20 n. 34; in Trans World Airlines v. Franklin Mint Corporation et al.
For a discussion of the effect of variability in the value of the SDR in relation to another treaty, see Chester D. Hooper, “Dow Should Promote the Visby Amendments,” Journal of Commerce (New York), October 19, 1984, p. 4A.
80 L Ed 2d 273, p. 285.
Ibid., p. 284.
Ibid., p. 285 n. 31.
Ibid., p. 285. What the court meant by the decision of countries in 1978 “to exit from the gold market” is obscure. The reference is to the Second Amendment, but the Articles now free members of the Fund from the earlier legal constraints on them under the Articles with respect to the prices at which they could engage in transactions in the market. Nevertheless, the objection to the market price in the application of the Warsaw Convention should be beyond further controversy. The dissenting Justice, however, held that the majority was not enforcing the liability limit in the Convention, but the limit set by TWA and accepted by the CAB on the ground that it was more compatible with the purposes of the Convention. In preferring the market price of gold, he considered absolute uniformity the main purpose of the Convention and not the approximation to uniformity that the majority struggled to discover in justification of its solution. 80 L Ed 2d 273, pp. 287–301.
80 L Ed 2d 273, p. 285.
Ibid., p. 286.
Ibid., p. 285 n. 31.
Gold, Pamphlet No. 40, p. 88.
Ibid., pp. 88–89; Joseph Gold, SDRs, Gold, and Currencies: Third Survey of New Legal Developments, Pamphlet Series No. 26 (Washington: International Monetary Fund, 1979), pp. 35–38, hereinafter cited as Gold, Pamphlet No. 26.
531 F. Supp. 344 (S.D. Tex. 1981).
737 F. 2d. 456 (1984).
Ibid., at p. 459. The court decided that there was no federal law that allowed the recovery of attorney’s fees. Prejudgment interest was allowed, however, under Texas law.
Droit maritime français (Paris), Vol. 32 (1980), pp. 285–94.
Ibid., p. 275 et seq. The cases are discussed in Gold, Volume II, pp. 448–51.
Revue critique de droit international prive (Paris), Vol. 73 (April-June 1984), pp. 310–15.
Ibid., p. 311 (translation).
Marthe Simon-Depitre, ibid., pp. 311–15, at pp. 314–15 (translation).
Foro Italiano (Bologna), Part 1–134 (1982), p. 2074.
Konrad Zweigert and J. Kropholler, eds., Sources of International Uniform Law, Vol. 2, Transport Law (Leiden, Netherlands: Sijthoff en Noordhoff, 1972), pp. 23–28. The Brussels Convention will be replaced by the Convention on the Carriage of Goods by Sea, 1978 (“the Hamburg Rules”), adopted on May 31, 1978, when it becomes effective; Joseph Gold, SDRs, Currencies, and Gold: Fifth Survey of New Legal Developments, Pamphlet Series No. 36 (Washington: International Monetary Fund, 1981), pp. 33–34.
See Gold, Pamphlet No. 26, p. 35.
International Monetary Fund, Articles of Agreement, Article IV, Section 2(b).
Foro Italiano (see footnote 37), p. 2076 (translation). On the valuation of gold in official reserves, see Gold, Pamphlet No. 26, p. 86 n. 98; SDRs, Currencies, and Gold: Fourth Survey of New Legal Developments, Pamphlet Series No. 33 (Washington: International Monetary Fund, 1980), p. 89, hereinafter cited as Gold, Pamphlet No. 33; Pamphlet No. 40, p. 77.
Joseph Gold, Legal and Institutional Aspects of the International Monetary System: Selected Essays, Vol. II (Washington: International Monetary Fund, 1984), pp. 332, 733, 742, 744.
Foro Italiano, p. 2077 (translation).
Istituto Centrale di Statistica (Central Institute of Statistics), Rome.
Foro Italiano, p. 2075 n. 3.
See Gold, Pamphlet No. 26, pp. 24–26; Pamphlet No. 33, pp. 32–33.
Schip en Schade (Zwolle, Netherlands), No. 30 (1983), pp. 78–80 (translation).
Ibid., p. 78.
The Carriage by Air and Road Act 1979 (Commencement No. 1) Order 1980 (1980 No. 1966 (C.84)).
1979 c. 28.
Ibid., Section 4(1).
Under Section 5 of the statute, which was brought into force by the Order cited in footnote 49, the value of an SDR on a particular day shall be treated as equal to such sum in sterling as the Fund has found for that day, or, if no sum has been found for that day, for the last day before that day for which the Fund has found a sum. A certificate by or on behalf of the U.K. Treasury stating the sum in sterling in accordance with the foregoing rule shall be conclusive evidence in any proceedings.
The report does not clarify why the proceedings were brought in the Netherlands, but it may be that the defendant was a resident of that country. Article 31(1) of the CMR provides that:
In legal proceedings arising out of carriage under this Convention, the plaintiff may bring an action in any court or tribunal of a contracting country designated by agreement between the parties and, in addition, in the courts or tribunals of a country within whose territory:
(a) the defendant is ordinarily resident, or has his principal place of business, or the branch or agency through which the contract of carriage was made, or
(b) the place where the goods were taken over by the carrier or the place designated for delivery is situated,
and in no other courts or tribunals.
Probably, subparagraph (a) applied because the carrier received the goods in Marseilles for delivery in England.
No. 1 R 145/83, translated and reproduced in Brief of Trans World Airlines, Inc., August 29, 1983, at BA 12–21; in Trans World Airlines, Inc. v. Franklin Mint Corporation et al.
For an English decision on what part of a total consignment is the subject of compensation for loss or damage under the Warsaw Convention, see Data Card Corp. et al. v. Air Express International Corp. et al.  2 A 11 ER 639 (QBD).
European Transport Law (Antwerp), Vol. 9 (1974), pp. 701–10.
Joseph Gold, Floating Currencies, Gold, and SDRs: Some Recent Legal Developments, Pamphlet Series No. 19 (Washington: International Monetary Fund, 1976), pp. 17–33. See also Gold, Volume II, pp. 228, 242, 442.
Joseph Gold, Legal and Institutional Aspects of the International Monetary System: Selected Essays (Washington: International Monetary Fund, 1979), pp. 558–66.
The relevant Articles of the General Civil Code are as follows:
Article 6. No other interpretation shall be attributed to a particular provision of the law than that which is apparent from the plain meaning or the language employed and from the clear intention of the legislator.
Article 7. If a case can be decided neither from the language nor from the natural sense of a law, similar situations which are determined by reference to the laws and the purpose or related provisions must be taken into consideration. Should the case still remain doubtful, then it must be decided upon the carefully collected and well-considered circumstances in accordance with the natural principles of justice.1
Footnote 1 attached to Article 7 is as follows:
These two articles (6 and 7) are rules of interpretation which are binding upon the court. Article 6 demands principally a semantic interpretation, taking into account the intent of the legislator. Such intent is found in the deliberations of the experts who drafted the law, and, in later laws in the published reports of the “motives”, the reasons for drafting the laws. The first part of Article 7 refers to the use of analogy, and the second sentence refers to the principles of “natural law” which were in vogue at the time (1811). This rule was later discarded, and the meaning is now: The judge shall decide according to such rules as he would enact if he were the legislator at the time of drafting of the Code (see Commentary by Prof. Klang).
Paul L. Baeck, ed., The General Civil Code of Austria, annotated and rev. ed. (Dobbs Ferry, New York: Oceana, for the Parker School of Foreign and Comparative Law, Columbia University, 1972), p. 4.
See brief referred to in footnote 54, at BA 19.
Gold, Pamphlet No. 40, pp. 87–89.
For further support, the court cited Article 1 of International Air Transport Association, Passenger Services Conference Resolutions Manual, 3rd ed. (Montreal, effective January 1, 1983).
See brief referred to in footnote 54, at BA 23–35.
International Monetary Fund, Articles, Article IV, Section 2(b); Schedule C, paragraph 1.
Ibid., Article V (not IV as stated by the court), Section 12(e); Schedule C, paragraphs 3 and 7; Schedule K, paragraph 2.
Joseph Gold, “The Fund Agreement in the Courts—XIX,” Staff Papers, International Monetary Fund (Washington), Vol. 31 (March 1984), pp. 179–234, at pp. 220–23, hereinafter cited as Gold, Fund—XIX.
Criminal Proceedings Against Guerrino Casati (reference for a preliminary ruling from the Tribunale, Bolzano), Case 203/80,  E.C.R. 2595;  1 C.M.L.R. 365.
Court of Justice of the European Communities, Judgment of the Court, 31 January 1984, Joined Cases 286/82 and 26/83, pp. 1–54 (official translation). Dr. Ren6 J.H. Smits has saluted the decision as “The End of Claustrophobia: European Court Requires Free Travel Payments,” European Law Review (London), Vol. 9 (June 1984), p. 192–202.
See Gerhard Rambow, “The End of the Transitional Period,” Common Market Law Review (The Hague), Vol. 6 (1968–69), pp. 434–50. For a discussion of the Casati, Luisi, and Carbone cases, see Lazar Focsaneanu, “Le contrôle des changes en question: L’arrêt de la cour de justice des communautés européennes du 31 janvier 1984,” La semaine juridique—I.—Doctrine (Paris), Vol. 58 (July 1984), 3153.
Paragraph 37 of the opinion, p. 51 (see footnote 69 above). The court did not accept the argument that transfers were not payments in respect of services unless the services had already been contracted for.
Ibid., paragraphs 21–23, pp. 46-7.
Ibid., paragraph 36, p. 51.
Dr. Smits has commented as follows:
The Court thus gives a definition of current payments and capital movements, which until now was conspicuously lacking. The definitions will prove useful whenever a transaction is listed as a capital transaction, but seems more suitably defined as a payment for an underlying transaction. The Court’s definition of current payments differs from that of Article XXX sub (d) of the IMF’s Articles of Agreement which describes as payments for current transactions payments which are not for the purpose of transferring capital and then enumerates some payments which are included in that definition. In practice, transactions defined as “current” under the IMF’s Articles will be qualified likewise under the Court’s definition. The Treaty itself classifies some payments connected with capital movements as “current.” The Court notes this system, which follows from Articles 67(2) and 106(1), in its Judgment. Interests and dividends are among the category of current payments connected with capital movements which are liberalised with direct effect by Article 67(2). These payments are also labelled “current” by the IMF’s Articles.
Smits, “The End of Claustrophobia” (see footnote 69), at pp. 196–97, footnotes deleted. See also Marc Dassesse, “Recent Developments of European Law Affecting Banking: The Free Movement of Capital and the Freedom of Payments in the European Economic Community,” International Banking Law (London), Vol. 3 (December 1984), pp. 95–97.
Gold, Fund—XIX, pp. 220–23.
See Joseph Gold, “Australia and Article VIII, Section 2(b) of the Articles of Agreement of the International Monetary Fund (IMF),” Australian Law Journal (Sydney), Vol. 57 (October 1983), pp. 560–66, at pp. 564–66.
The dissenting justice’s view in Trans World Airlines, Inc. v. Franklin Mint Corporation et al. that the market price of gold is the correct solution under the Warsaw Convention is supported in a note by Barbara A. Lincoln and Christine E. Lanzon, “Franklin Mint Corporation v. Trans World Airlines: Resolution of the Warsaw Convention Gold-Based Liability Limits Issue?” The George Washington Journal of International Law and Economics, Vol. 18 (No. 2, 1984), pp. 393–421.
Simon-Depitre, Revue critique de droit international privé (see footnote 36), at pp. 314–15.