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Max Planck Encyclopedia of Public International Law [MPEPIL]

Permanent Court of Arbitration (PCA)

Nisuke Ando

From: Oxford Public International Law (http://opil.ouplaw.com). (c) Oxford University Press, 2015. All Rights Reserved.date: 20 January 2019

Arbitral tribunals — International courts and tribunals, procedure — Arbitration

Published under the auspices of the Max Planck Foundation for International Peace and the Rule of Law under the direction of Rüdiger Wolfrum.

A.  Introduction: Legal Basis and Establishment

The Permanent Court of Arbitration (PCA) is based on the two Conventions for the Pacific Settlement of International Disputes of 29 July 1899 (‘Hague Convention I [1899]’) and 18 October 1907 (‘Hague Convention I [1907]’) adopted by the Hague Peace Conferences (1899 and 1907).

The modern practice of arbitration as a means of peaceful settlement of international disputes, said to begin with the Jay Treaty (1794) between Great Britain and the United States, became widespread in the international community during the 19th century. However, disputing States often found it difficult to reach a mutually satisfactory agreement to settle their differences by arbitration, and even after such an agreement was reached, difficult negotiations ensued before they successfully adopted a specific procedure for arbitration concerning the creation of an arbitral tribunal together with the selection of arbitrators and applicable rules (International Courts and Tribunals, Judges and Arbitrators). In order to overcome these difficulties and enhance the effectiveness of arbitration, it was considered essential on a multilateral basis, first, to establish a permanent tribunal to which disputing States could submit their differences, and second, to adopt standard regulations clarifying arbitration procedure.

The First Hague Peace Conference of 1899 attempted to materialize these considerations and adopted Hague Convention I (1899). Under Art. 21 Hague Convention I (1899), which was ratified by 26 States, the Contracting States agreed to establish a PCA accessible to States at all times ‘with the object of facilitating an immediate recourse to arbitration for international differences, which it has not been possible to settle by diplomacy’. Unlike its name, however, the PCA thus established was not a standing court with permanent judges. Arts. 20–29 Hague Convention I (1899), which directly concern the PCA, merely provide an institutional mechanism to facilitate the formation of an arbitral tribunal when Contracting States choose to organize one for settling their differences. In other words, while the Hague Convention I (1899) materialized the second consideration as mentioned above, it failed to realize the first one. As a matter of fact, the Second Hague Peace Conference of 1907, where 17 Latin American States were newly invited to participate, undertook to improve the Hague Convention I (1899) and discussed the idea of a court of arbitral justice, which was to be a standing court with permanent judges. Unfortunately, due to the difference of opinions among the participating States on the composition of the prospective court, the conference failed to adopt a necessary convention although the idea assisted in influencing international opinion leading later to the establishment of the Permanent Court of International Justice (PCIJ). In any event, the fundamental features of the PCA under the Hague Convention I (1899) remained the same under the Hague Convention I (1907).

In Art. 41 Hague Convention I (1907), the Contracting States undertook ‘to maintain the Permanent Court of Arbitration, as established by the First Peace Conference’. Both conventions are still in force, and as of April 2011, 111 States are parties to both or either one of the conventions. Of these 111, 18 are parties only to the Hague Convention I (1899), 40 to the Hague Convention I (1907) only, while 53 are parties to both.

One remarkable feature of the PCA is the role of national groups consisting of members of the court selected by Contracting States. Under the Hague Conventions I (1899 and 1907), each Contracting State is entitled to select up to four individuals as members of the court. Such members of the national group of a Contracting State, which is also a party to the Statute of the International Court of Justice (ICJ), may nominate a candidate for a judge of the ICJ.

B.  Organizational Structure and Functions

Arts 20–29 Hague Convention I (1899), almost identical to Arts 41–50 Hague Convention I (1907), define the legal framework of the PCA which, as noted above, constitutes an institutional mechanism to facilitate the formation of an arbitral tribunal when Contracting States choose to organize one for settling their differences. Also, as part of the mechanism, the Hague Convention I (1899) provides for an International Bureau (‘Bureau’) which serves as registry for the court as well as a Permanent Administrative Council (‘Council’) which shapes the policy of the organization, provides general guidance on its work, and supervises its administration, budget and expenditure. On 9 December 1900, the Council adopted a resolution setting up the Bureau, which came into existence in April 1901. On 14 October 1902, the PCA rendered its first award in the case of the Pious Fund Arbitration of the Californias between the United States of America and the Republic of Mexico. Since August 1913, the PCA has been housed in the Hague Peace Palace, which was built with the fund donated by the Carnegie Endowment for International Peace. The palace later became the seat of the PCIJ and its successor, the ICJ.

The Bureau and the Council are standing organs of the PCA. The Bureau provides registry services and administrative support to tribunals and commissions, serving as the official channel of communications and ensuring safe custody of documents, Art.22 Hague Convention I (1899) /Art. 43 Hague Convention I (1907). The Bureau also provides services such as legal research, financial administration, logistical and technical support for meetings and hearings, travel arrangements, and general secretarial and linguistic support. It also provides administrative support to tribunals or commissions operating under the auspices of the PCA outside The Netherlands. As of April 2011, a Secretary-General and some 32 officers and staff members are working in the Bureau.

The Council is composed of the diplomatic representatives of Contracting States accredited to The Hague and of the Netherlands Minister for Foreign Affairs who acts as president. According to Art. 28 Hague Convention I (1899) and Art. 49 Hague Convention I (1907), the Council has the power to settle its Rules of Procedure and any other necessary regulations, which it must communicate to the Contracting States. It meets as the occasion arises but at least once a year. The discussion at meetings of the Council is valid with the presence of nine members and the decisions are taken by a majority of votes. The Council is also required to furnish the Contracting States with an annual report on the activities and administration of the court.

The expenses of the Bureau are borne by the Contracting States in the proportion fixed for the Bureau of the Universal Postal Union (UPU), Art. 29 Hague Convention I (1899)/Art. 50 Hague Convention I (1907).

10  In addition to the Bureau and the Council, both conventions provide for a list of individuals who may serve as members of an arbitral tribunal. According to Art. 23 Hague Convention I (1899) and Art. 44 Hague Convention I (1907), each Contracting State is entitled to appoint up to four individuals to be inscribed in the list as ‘members of the court’. These individuals should be known for their competency on questions of international law, of the highest moral reputation, and disposed to accept the duties of arbitrators. One and the same individual can be selected by different Contracting States. In the case of the death or resignation of a member of the court, the vacancy will be filled through the same procedure. The members of the court are appointed for six years and their appointments are renewable. The general list inscribing the names of arbitrators is notified by the Bureau to all Contracting States. It should be noted that while Art. 24 Hague Convention I (1899) and Art. 44 Hague Convention I (1907) state that arbitrators must be chosen from the general list of members of the court, in practice the more permissive approach of Art. 32 Hague Convention I (1899) and Art. 55 Hague Convention I (1907) has been applied, which does not limit arbitrator selection to this list.

11  According to Art. 27 Hague Convention I (1899) and Art. 48 Hague Convention I (1907), the Contracting States consider it their duty, if a serious dispute threatens to break out between two or more of them, to remind the latter that the PCA is open to them ( Peace, Proposals for the Preservation of). In a similar vein, the Contracting States declare that the fact of reminding other Contracting States in dispute of the provisions of the conventions as well as advising them to have recourse to the PCA should be regarded as friendly actions, and if a dispute arises between two Contracting States, one of them can always address to the Bureau a note indicating its readiness to submit the dispute to arbitration. In turn, the Bureau must inform the other party of such indication.

12  Art. 26 Hague Convention I (1899) and Art. 47 Hague Convention I (1907) provides that the jurisdiction of the PCA may be extended to disputes between non-Contracting States or between Contracting States and non-Contracting States if the parties to a dispute agree to have recourse to the PCA (International Courts and Tribunals, Jurisdiction and Admissibility of Inter-State Applications).

C.  Procedure

13  The Hague Conventions I (1899 and 1907) contain basic procedural rules for the conduct of various types of dispute resolution proceedings. For example, rules for the conduct of an arbitration are set out in Arts 30–57 Hague Convention I (1899) and Arts 51-85 Hague Convention I (1907). These rules apply to arbitration conduct at the PCA unless other rules have been agreed upon by the parties (International Courts and Tribunals, Procedure). Of note, most arbitrations currently administered by the PCA are conducted under other rules.

14  If the parties to a dispute elect to conduct an arbitration under the procedural rules of the Hague Conventions, they must sign a compromis which defines the subject of the dispute, the composition and powers of the tribunal, the language or languages to be employed before the tribunal, and other conditions regulating the arbitration. The tribunal usually sits at The Hague, but the parties may choose another place with the consent of the territorial State concerned. The parties are entitled to appoint agents to attend the tribunal to act as intermediaries between themselves and the tribunal. They are also entitled to retain counsel or advocates for the defence of their rights and interests before the tribunal. However, members of the court may not act as agents, counsel, or advocates except for the Contracting State which nominated them (International Courts and Tribunals, Agents, Counsel and Advocates).

15  In practice, arbitration procedure comprises two distinct phases: written pleadings and oral discussion. Written pleadings consist of the communications by the respective agents to the members of the tribunal and the opposite party of cases, counter-cases, and of replies, if necessary, including all relevant papers and documents. These communications may be made directly or through the intermediacy of the Bureau in the order and must be made within time limits agreed to by the parties. The oral discussion consists of the arguments of the parties through their agents and counsels before the tribunal. It should be noted that the parties may agree to a summary procedure, such as that set out in Chapter VI Hague Convention I (1907), whereby no oral discussion takes place in order to expedite the arbitration. Otherwise, the oral discussion is under the control of the president and can be made public only if the tribunal so decides with the consent of the parties. For example, in many PCA- administered cases, parties opt to keep the proceedings confidential. Two recent examples of where it was agreed to have public hearings are the Abyei Arbitration and the arbitration between TCW Group Inc and Dominican Energy Holdings LP v Dominican Republic. During the oral discussion, the agent and counsel of each party are authorized to raise objections and points and the tribunal decides on them. The members of the tribunal are entitled to put questions to the agents and counsels of the parties and the parties undertake to supply the tribunal with all the information required in deciding the case. When the agents and counsels have submitted all their explanations and evidence ( International Courts and Tribunals, Evidence), the president declares the discussion closed.

16  The deliberation of the tribunal in reaching its decision is private and questions are decided by a majority of the members of the tribunal. The award thus reached must give the reasons upon which it is based. It may be read out in public sittings where the agents and counsels of the parties are summoned to attend, if the parties so agree, but in practice the award is usually communicated to the parties in written form only. The award, duly pronounced and notified to the agents of the parties, settles the dispute definitively and without appeal (International Courts and Tribunals, Appeals; Judicial and Arbitral Decisions, Validity and Nullity; Res iudicata). However, in the absence of an agreement to the contrary, any dispute arising between the parties as to the interpretation and execution of the award shall be submitted to the tribunal which pronounced it (Judgments of International Courts and Tribunals, Interpretation of).

17  Under the Hague Conventions I (1899 and 1907), the parties should bear their own expenses and share equally the expenses of the tribunal. However, in most cases administered by the PCA today, questions of costs are subject to the discretion of the tribunal.

18  While the rules set out in the Hague Conventions I (1899 and 1907) may still be used, Art. 30 Hague Convention I (1899) and Art. 51 Hague Convention I (1907) set out that the parties are free to agree to use other procedural rules. The PCA developed a series of Optional Rules to govern various types of arbitration that might be submitted to it, which were designed to promote recourse to arbitration under the auspices of the PCA by State and non-State actors. As will be explained below, although the PCA was originally established to settle inter-State disputes, it has since evolved to encompass disputes involving non-State actors. The Optional Rules are as follows: a) Optional Rules for Arbitrating Disputes between Two States (1992); b) Optional Rules for Arbitrating Disputes between Two Parties of Which Only One Is a State (1993); c) Optional Rules for Arbitration Involving International Organizations and States (1996); d) Optional Rules for Arbitration between International Organizations and Private Parties (1996); e) Optional Conciliation Rules (1996); f) Optional Rules for Fact-Finding Commissions of Inquiry (1997); g) Optional Rules for Arbitration of Disputes Relating to Natural Resources and/or the Environment (2001); h) Optional Rules for Conciliation of Disputes Relating to Natural Resources and/or the Environment (2002).

19  The Optional Rules are based on the arbitration rules promulgated by the United Nations Commission on International Trade Law (UNCITRAL). The UNICTRAL Arbitration Rules were designed to be compatible with both civil and common law systems, as well as other legal regimes. They have been modified in the PCA Optional Rules in order to reflect the public international law character of the disputes administered by the PCA. It is open to the parties to select the appropriate Optional Rules for their dispute or to create their own rules, for example by adapting the respective Optional Rules. Optional Rules have also been adopted for conciliation and fact-finding procedures.

20  The current situation is that most PCA-administered arbitrations are conducted under rules other than those of the Hague Conventions I (1899 and 1907) or the PCA Optional Rules. In recent years, the PCA has been called upon to administer an increasing number of treaty-based arbitrations, such as those conducted under Annex VII to the 1982 UN Convention on the Law of the Sea or under bilateral or regional investment treaties. In these arbitrations, the choice of procedural rules is often set out in the treaty.

21  It should be noted that the UNCITRAL Arbitration Rules provide for the PCA Secretary-General to designate an authority for the appointment of arbitrators in the event that no appointing authority has been agreed by the parties or if such authority refuses or fails to act. The Secretary-General may also act as default appointing authority.

22  In 2008 and 2009, the PCA acted as registry in a record 57 cases, including its first intra-State arbitration. This arbitration between the Government of Sudan and the Sudan People’s Liberation Movement/Army concerned delimitation of the Abyei Area between the North and the South of Sudan. The other 56 cases included three inter-State arbitrations, 32 investor-State arbitrations under bilateral or multilateral investment treaties, two arbitrations under national investment laws, and 19 arbitrations under contracts to which at least one party was a State, a State-controlled entity or an intergovernmental organization. Of the three inter-State arbitrations, one was initiated under Annex VII of the 1982 United Nations Convention on the Law of the Sea.

D.  Formation of Tribunals

23  An arbitral tribunal is formed by agreement of the parties (Arbitration and Conciliation Treaties). Where there is no such agreement, the procedural rules governing the arbitration provide the appropriate procedures. Under the UNCITRAL Arbitration Rules and the PCA Optional Rules, if the parties to a dispute fail to agree on the number of arbitrators (ie sole arbitrator, three or five arbitrators), the default number of arbitrators is three. For a three-member tribunal, each party to the dispute is required to appoint one arbitrator and the two party-appointed arbitrators are required to agree upon the identity of the third arbitrator or president of the tribunal. In the absence of such agreement, or upon failure on the part of one of the parties to appoint an arbitrator, the third arbitrator will be appointed by an appointing authority agreed upon by the parties. If the parties have not agreed to an appointing authority, the PCA Secretary-General may be called upon to designate an appointing authority. Similarly, for a dispute before a sole arbitrator, the parties are free to agree on the identity of that arbitrator or, alternatively, to jointly designate an appointing authority. As before, if no agreement is reached, the PCA Secretary-General may be called upon to designate an appointing authority. Of note, the PCA Optional Rules all expressly acknowledge that arbitrators who are not members of the court may be selected.

24  Under the procedural rules of the Hague Conventions I (1899 and 1907), if the parties to a dispute fail to agree on the number of arbitrators, the default number of arbitrators is five. Each party should select two arbitrators and an ‘umpire‘ or president of the tribunal is then selected by the four appointed arbitrators or, in the alternative, by an agreed-upon third party. Only one of the two party-selected arbitrators can be a national of the appointing State or one of its members of the court. The appointment power may be delegated to two party-appointed third States. If the four appointed arbitrators cannot agree on an umpire or if the parties cannot agree to a third party for this role, the umpire may be selected by a draw by lot from a shortlist of four members of the court prepared by the two designated third parties (excluding citizens or members of the court nominated to the PCA of either party to the dispute).

E.  Awards

25  In the period before World War I, the PCA’s Contracting States brought 17 cases before the court to which it rendered awards except one that was settled by agreement between the parties. These cases included (in chronological order of the date of award) the Pious Fund Arbitration of 1902 between the US and Mexico; the Preferential Claims against Venezuela concerning the preferential treatment of the claims of Britain Germany and Italy against Venezuela; the Japanese House Tax Arbitration against Germany, France and Britain concerning the tax exemption as stipulated in the mid-19th-century treaties with Japan; the Muscat Dhows Arbitration between France and Britain (Muscat Dhows, The); the Casablanca Arbitration concerning the protection accorded by the German Consulate-General in Casablanca to deserters of the French Foreign Legion; the Grisbadarna Case between Norway and Sweden; the North Atlantic Coast Fisheries Arbitration between the United States and Britain concerning the American fishermen’s rights in the 1818 Anglo-American Convention; the Savarkar Case between France and Britain; the Canevaro Claim Arbitration between Italy and Peru; the Russian Indemnity Arbitration; the Manouba Arbitration on the Italian right to arrest Turkish passengers on board French vessels and to seize the vessels during the 1912 Turko–Italian war, and the Carthage Arbitration concerning the Italian right to capture a French vessel suspected of carrying contraband during the same war; the Timor Island Arbitration between The Netherlands and Portugal; the Expropriated Religious Properties Arbitration (France, United Kingdom, Spain v Portugal); and finally the French-Peruvian Claims Arbitration of 1921.

26  The tribunals that arbitrated these cases were composed of three or five arbitrators except for the Timor Island Arbitration which was settled by a single arbitrator. Most of the arbitrators were nominated from among the members of the court, but on three occasions (Grisbadarna Case; Russian Indemnity Arbitration; French-Peruvian Claims Arbitration), non-members were nominated. The procedure of these tribunals more or less followed the process set out in the Hague Convention I (1899) except in the Expropriated Religious Properties Arbitration where the summary procedure of the Hague Convention I (1907) was employed.

27  Subsequent to the establishment of the PCIJ, which was a standing and, literally, a ‘permanent’ court with the jurisdiction to apply international law, the PCA fell into relative disuse: only eight cases were submitted to the court between World War I and 1980, including the Norwegian ShipownersClaims Arbitration; the Palmas Island Arbitration; the Chevreau Claim Arbitration; the Kronprins Gustaf Adolf and Pacific Arbitration; the Radio Corporation of America Arbitration concerning the effects upon a Chinese agreement with Radio Corporation of America of a subsequent similar agreement with another company; the Radio Orient Arbitration, a claim to reopen operations of a French wireless company in Levant which had been suspended by Egypt; the Administration of Lighthouses Case Arbitration on French claims and Greek counter-claims concerning the administration of lighthouses (Lighthouses and Lightships) located in parts of the former Ottoman Empire territories; and finally the Turriff Construction Arbitration, a claim by a Sudanese construction company against Sudan for repudiation of a contract for the construction of a housing project for displaced persons from the Aswan Dam Region. Of all these arbitrators, the majority were nominated from non-members of the court. In the Palmas Island Arbitration, the proceedings were exclusively in writing.

28  The Radio Corporation of America Case was particularly significant because it was the first dispute between a State and a private party administered by the PCA, marking the first extension of the PCA’s organizational role to mixed arbitration, that is arbitration between States or State entities and private parties. The PCA’s competence in this regard was founded on Art. 26 Hague Convention I (1899) and Art. 47 Hague Convention I (1907), which provide that the Bureau is authorized to place its offices and staff at the disposal of Contracting States for the use of ‘any special board of arbitration’. The PCA’s ability to administer cases of this nature has been the basis of a resurgence in the use of the PCA in the last few decades.

F.  Recent Developments

29  In recent years, the PCA has progressed from a period of relative inactivity to a previously unsurpassed caseload. The willingness and flexibility of the Council as well as the Bureau to make the court facilities and staff available for promoting the peaceful settlement of any international dispute where at least one of the parties is a State, State-controlled entity or intergovernmental organization has produced tangible results. Indeed, when the Iran-United States Claims Tribunal was established and started functioning in 1981, the PCA provided it with office facilities and secretarial support and after the tribunal moved to its own premises, the court has continued to serve as secretariat of the tribunal’s ‘appointing authority’, designated, in turn, by the Secretary-General of the PCA. The PCA also made its facilities available for the Heathrow Airport User Charges Arbitration concerning a dispute which had long been an issue between the US and the United Kingdom (1988-94).

30  Since 1980, the Bureau of the court has served as registry for some 88 arbitral tribunals set up ad hoc or under the auspices of the PCA or other arbitration institutions, among others the Loan Agreement between Italy and Costa Rica Arbitration; the Eritrea-Yemen Arbitration; the OSPAR Arbitration and the the MOX Plant Arbitration and Cases between Ireland and Britain concerning the pollution of the Irish Sea from a mixed oxide fuel plant at a nuclear facility; the Bank for International Settlements Arbitration on compensation to be paid for the recall of privately held shares in a sui generis financial institution; the Rhine Chlorides Arbitration Concerning the Auditing of Accounts concerning the pollution of the Rhine River between France and the Netherlands; the Iron Rhine (Ijzeren Rijn) Arbitration on the territorial rights related to reactivation of a railway line between Belgium and Germany through the Netherlands; the Land Reclamation by Singapore Arbitration; the Delimitation of the Exclusive Economic Zone and Continental Shelf Arbitration between Barbados and Trinidad and Tobago; the Delimitation of the Maritime Boundary Arbitration between Guyana and Suriname, and the Eurotunnel Arbitration concerning the breach of a concession agreement relating to the development of the Channel Tunnel.

31  Since 2001, the PCA has also administered more than 30 disputes between foreign investors and host States pursuant to contracts, national investment laws, bilateral investment treaties, and multilateral treaties, such as the North American Free Trade Agreement (1992) (‘NAFTA’), the Dominican Republic-Central America Free Trade Agreement (‘DR-CAFTA’), and the 1994 Energy Charter Treaty.

32  The PCA has also served as registry for a number of international conciliation commissions and commissions of inquiry. Most recently, the PCA has administered the Boundary Commission to delimit the disputed border between Eritrea and Ethiopia (2000-05) and the Eritrea-Ethiopia Claims Commission, which delivered its final award on damages on 17 August 2009.

33  In October 1994, the Administrative Council agreed to establish the Financial Assistance Fund for the Settlement of International Disputes (‘Fund’), which aims at helping developing countries meet part of the costs involved in international arbitration or other means of dispute settlement offered by the PCA. The Fund comprises voluntary financial contributions made by States, international organizations, non-governmental organizations (‘NGOs’) and natural or legal persons. Only Member States, or an institution or enterprise owned and controlled by such State may request financial support from the Fund, provided a) that they are parties to either or both of the Hague Conventions I (1899 and 1907), b) that they have concluded an agreement to refer particular dispute(s) to settlement before the PCA, and c) that at the time of requesting financial assistance from the Fund, they are listed on the DAC List of Aid Recipients prepared by the Organization for Economic Cooperation and Development (OECD). Since its establishment in 1994, the Fund has made eight grants to cover, in whole or in part, the arbitration costs of developing countries and to assure their ability to participate fully in arbitral proceedings. These grants were made to a Central Asian State, to a South Asian State, to five African States, including the Republic of Sudan, and to Nicaragua.

34  To make its dispute resolution services more widely accessible, the PCA has adopted a policy of concluding Host Country Agreements with States that are Contracting Parties to either the Hague Convention I (1899) or the Hague Convention I (1907). Through these agreements, the host country and the PCA establish a legal framework under which future PCA-administered proceedings can be conducted in the territory of the host country on an ad hoc basis, without the need for a permanent physical PCA presence in that territory. For example, such an agreement might secure the provision by the host country of the facilities and services required for PCA-administered proceedings (such as office and meeting space and secretarial services) and regulate the privileges and immunities that are afforded by the host country to adjudicators and participants in PCA-administered proceedings (such as certain fiscal exemptions and immunity, under certain conditions, from legal process in respect of words spoken or written). Agreements of this kind have been concluded with Costa Rica (2001), Lebanon (2006), South Africa (2007), Singapore (2007), India (2008), Mauritius (2009), and Argentina (2009).

35  The PCA has been involved in the negotiations of multilateral environmental agreements which provide for arbitration or conciliation procedures, such as the one in the 1992 United Nations Framework Convention on Climate Change (1771 UNTS 107), which may serve as a model for future liability regimes. Also, the 2001 PCA Optional Rules for Arbitration of Disputes Relating to Natural Resources and/or the Environment are referred to in the Emissions Trading System Master Agreement of the International Emissions Trading Association, which has lead to subsequent references as standard clauses in agreements on emissions trading.

G.  Assessment

36  An overall assessment of the role and work of the PCA may be summarized in the following three points. Firstly, through its initial three decades of existence, the court certainly helped to establish the institution of arbitration as a means for settling inter-State differences. True, arbitration had been practised in the international community since the days of the Jay Treaty, and the Alabama Arbitration of 1872 provided landmark evidence of its validity. And yet, there is no doubt that the practice of arbitration under the Hague Conventions I (1899 and 1907) made a remarkable contribution to the promotion and consolidation of inter-State arbitration as witnessed by the conclusion of many bilateral treaties providing arbitration to resolve differences, including the famous Agreement of 1903 between France and Great Britain for the Settlement by Arbitration of Certain Classes of Questions which May Arise between the Two Governments. Its Art. I stipulated: ‘Differences which may arise of a legal nature, or relating to the interpretation of Treaties existing between the two Contracting Parties, and which it may not have been possible to settle by diplomacy, shall be referred to the Permanent Court of Arbitration established at the Hague by the Convention of the 29th July 1899’.

37  Secondly, the establishment of the PCIJ together with the development of the role of the League of Nations in settling inter-State disputes resulted in the relative disuse of the PCA in this field, and the trend went further under the United Nations (UN). Of course, a distinction can be made between arbitration and adjudication, the former being the function of the PCA and the latter, of the PCIJ as well as of the ICJ. However, the modern role of the PCA in settling inter-State disputes, as well as disputes between various combinations of States, State entities, intergovernmental organizations, and private parties has revitalized the importance of this institution. Reference is made to the role of the PCA for the Iran-United States Claims Tribunal, as mentioned above. Further reference is made to the dispute over the contract between Technosystem SpA and Taraba State Government and the Federal Government of Nigeria (1996), the dispute between the Bank for International Settlements (BIS) and some former private shareholders (2001-03), and the dispute between Saluka Investments BV and the Czech Republic (2001-08), which were all submitted to arbitration through the extended organizational role of the PCA founded under Art. 26 Hague Convention I (1899) and Art. 47 Hague Convention I (1907). Disputes involving investors and host States currently occupy a substantial portion of the PCA’s docket.

38  Thirdly, recent developments have also encouraged new developing States in Asia, Africa, and the Caribbean Region to have recourse to arbitration for resolution of their disputes. Thus the Bureau has worked as a registry for the Eritrea-Yemen Arbitration, a territorial dispute between Eritrea and Yemen over certain Red Sea islands, for a dispute between Barbados and Trinidad and Tobago concerning their maritime delimitation under the UN Convention on the Law of the Sea, and a similar dispute between Guyana and Suriname, as well as the arbitration between the Government of Sudan and the Sudan People’s Liberation Movement/Army, concerning delimitation of the Abyei Area between the North and South of Sudan. The latter case demonstrates the flexibility of the PCA to adapt to the evolving dispute resolution needs of the international community.

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