The Rhine Chlorides Arbitration Concerning the Auditing of Accounts (Netherlands/France Permanent Court of Arbitration

This case concerned the parties' financial obligations under the 1991 Additional Protocol to the 1976 Convention on the Protection of the Rhine against Pollution by Chlorides (the "Additional Protocol"), signed by France, Germany, Luxembourg, the Netherlands, and Switzerland. The Additional Protocol required measures to be taken to reduce chloride discharges from the Alsace potassium mines into the Rhine river in the period 1991-1998. France was to reduce chloride discharges and temporarily store the chlorides on land when the chloride concentration in the Rhine at the German-Dutch border exceeded 200 milligrams per liter ("mg/l"). The Additional Protocol established a scheme allocating the storage costs. The contracting parties were to make annual payments to France and France was to reimburse any surplus payments at the end of the period. The quantities of chlorides actually stored by France remained well below the upper limits set out by the contracting parties; as a result there was a surplus to be repaid by France. The subject of the dispute was the manner in which the surplus should be calculated under Annex III of the Additional Protocol. As a result of the lower amounts stored, the costs of storage per ton were higher than predicted. The Netherlands argued that the costs of storage should be calculated at the rate per ton specified in the Additional Protocol. France argued that the actual costs per ton of storage should be used to calculate the surplus.