This amount remained unpaid for decades, and British efforts to see it paid led to another ICJ case to resolve competing Albanian and Italian claims to more than two tons of Nazi gold.

On 22 October, a Royal Navy flotilla composed of cruisers Mauritius and Leander, and destroyers Saumarez and Volage, entered the Corfu Channel.

Given the Albanian defenses, the tensions prompted by their increasingly anti-Western ruler and a British government eager to reassert a strong naval role in the region, a clash was perhaps inevitable.

[9] The Security Council passed a resolution on 9 April 1947, with the Soviet Union and Poland abstaining, recommending that the United Kingdom and Albania resolve the dispute in the International Court of Justice.

Despite having a long backlog of matters for consideration, such as a request for an advisory opinion on Article 4 of the United Nations Charter, the Corfu Channel case was considered first.

That after the "awkward tussle before the Security Council", the proceedings before the ICJ would be "for a mere formal pronouncement of guilt or innocence, in an atmosphere of judicial calm, undisturbed by political considerations, uncorrupted by nationalistic and ideological threats and sulks".

In contesting the claims of the UK, the Albanian objection stated that the Security Council resolution was not itself enough to compel Albania to accept the jurisdiction of the Court.

[27] After the judgement, the parties submitted a special agreement in open court[28] certifying two questions: Whether Albania was responsible for the incidents, and whether the United Kingdom violated Albanian sovereignty.

[30] Following the decay of relations between Albania and Yugoslavia in 1948, the Yugoslavian members of Cot's legal team were replaced by French barristers Joseph Nordmann, Marc Jacquier and Paul Villard.

This was in response to the British argument that Yugoslavia and Albania had worked together in mining the Corfu Channel, and the presentation of evidence from Karel Kovacic,[32] a former officer of the Yugoslav Navy.

[33] An important matter involved a Royal Navy document, referred to as XCU,[34][35] which comprised the sailing orders issued to the flotilla on 22 October.

The Admiralty argued that the Court should examine the actions of the flotilla on the day in question, rather than, as Carty describes, "the confused and contradictory expressions of the British Administration through such documents as XCU".

[41] In its merits judgment, the Court generally accepted the Admiralty's argument,[40] holding that the refusal could not lead to "any conclusions differing from those to which the actual events gave rise".

[55] Notably, the Court held that a right to innocent passage existed during times of peace through straits like the Corfu Channel, which connected two parts of the high seas.

Jia goes on to argue that, because Albania was unable to rapidly distinguish between the passage of Greek and other vessels during times of high political tensions, the requirement of prior notification could be lawful.

[57] One commentator has noted that the Court's approach to the British claims illustrated how the standard of proof in the ICJ differed for actions versus omissions.

[59] Another commentator has noted that despite finding that the British sweeping of the Corfu Channel constituted a violation of international law, the Court did not rule that indirect evidence inadmissible.

[62] The Court also rejected the British arguments that Operation Retail was justified as self-protection or self-help,[61] holding that "respect for territorial sovereignty is an essential foundation of international relations".

Judge Krylov's dissenting opinion argued that there was no customary international law allowing passage, and that straits could be regulated by the coastal state.

[63] The Court declined to rule on compensation during the merits phase, because Albania had not indicated what portion, if any, of the damages claimed by the United Kingdom it intended to dispute.

[69] Because Albania did not participate any further in the compensation proceedings, the United Kingdom was awarded judgment by default on 15 December 1949, with the court accepting the argument that the question of its jurisdiction was res judicata under Article 60.

In 2012, Mohammed Bedjaoui wrote of the case: Armed only with the jurisprudence of its predecessor, this new International Court would successfully establish for the future a whole range of procedural rules, as well as a foundation in a great number of areas, while fortuitously strengthening some legal principles for the good of a world that was about to find itself in a period of strong ideological rivalry.

While the 1930 Hague Conference on International Law reached no consensus as to whether the right to innocent passage through territorial seas existed for warships, Corfu Channel heralded a change of this regime.

[87] The ILC ultimately submitted a draft provision to the 1958 United Nations Conference on the Law of the Sea (UNCLOS I), providing that the right of innocent passage through international straits should not be suspended.

The provision was adopted almost verbatim at UNCLOS I into Article 16(4) of the Convention on the Territorial Sea and the Contiguous Zone,[88] but not without significant debate as to how the merits judgment should be interpreted with respect to warships.

Some controversy surrounded the majority decision, which did not specifically reference the UN Charter's prohibition on the use of force, but simply held that the United Kingdom violated the sovereignty of Albania.

In subsequent cases involving use of force, Christine Gray has noted that the Court has similarly avoided specifically referencing the UN Charter in its final pronouncements.

[96] The United States' criticism flows from the fact that, even owing to the use of force against Al-Qaeda in Afghanistan, and the acceptance of the legality of such action, the ICJ still maintains the position that non-state groups cannot commit an "armed attack".

[100] For instance, Corfu Channel differed from other cases in the Permanent Court in that witnesses, both expert and non-expert, were available during the oral proceedings for cross-examination, as well as for questioning by the judges.

[103] Corfu Channel also started a trend in the ICJ where states appointing judges ad hoc would not choose one of their own nationals to fill the role.