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Island of Palmas Case was a case involving a territorial dispute over the Island of
Palmas (or Miangas) between the Netherlands and the United States which was heard
by the Permanent Court of Arbitration. Palmas was declared to be a part of
the Netherlands East Indies and is now part of Indonesia.

Facts of the case:

Palmas (Miangas) is an island of little economic value or strategic location. It is two

miles in length, three-quarters of a mile in width, and had a population of about 750 in
1932, when the case was decided. Palmas lies between Mindanao, the southernmost
part of the Philippines, and the Nanusa Islands, the northernmost part of Indonesia
other than Palmas.
In 1898, Spain ceded the Philippines to the United States in the Treaty of Paris
(1898) and Palmas lay within the boundaries of that cession to the U.S. In 1906, the
United States discovered that the Netherlands also claimed sovereignty over the island,
and the two parties agreed to submit to binding arbitration by the Permanent Court of
Arbitration. On 23 January 1925, the two governments signed an agreement to that
effect. The arbitrator in the case was Max Huber, a Swiss lawyer.
The question before the arbitrator was whether the Island of Palmas (Miangas), in its
entirety, was a part of the territory of the United States or the Netherlands.
The legal issue presented was whether a territory belongs to the first discoverer, even if
they do not exercise authority over the territory, or whether it belongs to the state which
actually exercises sovereignty over it.

Right by Discovery
n the first of its two arguments, the United States argued that it held the island because
it had received actual title through 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 in
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
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 if it were
as simple an act as planting a flag on the beach. In this case, 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 also argued that Palmas was American territory because the island
was closer to the Philippines than to the Netherlands East Indies. The arbitrator said
there was no positive international law which favored the United States approach
of terra firma, where 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 noted that if the international community followed the proposed American
approach, it would lead to arbitrary results.

Continuous display of sovereignty

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 those 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, then there would
have been conflicts between the two countries but none are provided in the evidence.


THREE important rules for resolving island territorial disputes were decided:

 Firstly, title based on contiguity has no standing in international law.

 Secondly, title by discovery is only an inchoate title.

 Finally, if another sovereign begins to exercise continuous and actual

sovereignty, (and the arbitrator required that the claim had to be open and public
and with good title), and the discoverer does not contest this claim, the claim by the
sovereign that exercises authority is greater than a title based on mere discovery.