Week 1 international arbitration

Jay Treaty Arbitration

The first modern interstate arbitration between the US and UK to settle post-independence war issues including boundary disputes and compensation of nationals. Arbitrators acted as extensions of their states rather than independently.

Alabama Claims Arbitration

Arbitration over Confederate ships built by the UK that damaged Union property. Settled at the international arbitral tribunal in Geneva under the Washington Treaty — the US won and set a precedent for resolving international disputes via arbitration.

Alabama Claims Award — Key Ruling

The tribunal found the UK violated its duty of neutrality by allowing ships to be built for the Confederacy. Even after the ships were transferred, the UK was not absolved. The US was awarded 15.5 million in gold.

Alabama Claims Award — Parties

Arbitrators came from the US, Britain, Brazil, Switzerland, and Italy — establishing the precedent of nationality independence in modern arbitration practice.

Washington Treaty

Treaty that sent the Alabama Claims dispute to the Geneva tribunal. Established that arbitrators should be of nationalities other than the disputing parties.

1648 Treaty of Westphalia

Created the modern concept of state sovereignty, leading to more state-to-state arbitration.

1899 Hague Convention

Created at the behest of Russian Czar Nicholas II to settle international disputes peacefully. Established the PCA. Article 16 states parties should resort to arbitration when diplomacy fails.

1907 Hague Convention

Revised and expanded the framework from the 1899 Convention; also associated with the formal creation of the PCA.

1921 Permanent Court of International Justice

Early international judicial body that, along with the 1945 ICJ, made arbitration temporarily less popular.

1945 ICJ

International Court of Justice — the successor to the PCIJ. Its rise temporarily decreased the use of arbitration.

1960s ICSID

International Centre for Settlement of Investment Disputes, established in Washington. Led to the rise of investor-state arbitration.

1981 Iran-US Claims Tribunal

A major mixed arbitration tribunal created after the Iranian Revolution to resolve claims between Iranian and US nationals/states — reflects the post-Cold War growth of mixed arbitrations.

Arbitration (definition)

A binding method of legal dispute settlement where the parties themselves design the process — choosing arbitrators, procedural law, and applicable law.

Judicial Settlement (definition)

A binding dispute resolution method conducted through standing courts or tribunals with fixed procedural and applicable rules that parties cannot change.

Diplomatic Dispute Settlement

Non-binding methods of dispute resolution such as mediation and conciliation.

Party Autonomy

The core principle of arbitration — parties choose the arbitrators, procedural law, applicable law, and the issues to be decided.

Procedural Law (in arbitration)

The law that governs how arbitration proceedings are conducted. Freely chosen by the parties.

Applicable Law (in arbitration)

The substantive law used to decide the merits of the dispute. For interstate disputes: international law. For investor-state: international law plus domestic law.

Ex Aequo et Bono

Decision-making based on fairness and equity rather than strict legal rules. Tribunals are prohibited from using this unless explicitly authorized by the parties.

Compromis / Special Agreement

A specific agreement signed by parties to establish the logistics of a particular arbitration — covering procedural rules, applicable law, and the scope of the tribunal's powers.

Commissory Clause

A clause in a treaty consenting to arbitration for disputes over the treaty's interpretation or application. Usually vague — a Compromis must still be signed to set up the actual proceedings.

Competence de la Competence

The principle that only the established tribunal itself can decide the limits and extent of its own jurisdiction.

Interstate Arbitration — Number of Arbitrators

Usually 5 members.

Investor-State Arbitration — Number of Arbitrators

Usually 3 members.

Appointing Authority (arbitration)

The entity that appoints arbitrators when parties cannot agree — usually the Secretary-General of the PCA or the President of the ICJ.

Challenging Arbitrators

Arbitrators must be independent and impartial, and parties have the right to challenge arbitrators who fail to meet this standard.

PCA (Permanent Court of Arbitration)

The most important interstate arbitration institution. Based in The Hague, Netherlands. Founded by the 1899 Hague Convention. Not a court nor a permanent tribunal — it is an arbitration institution that provides facilities and administrative support.

PCA — International Bureau

The secretariat of the PCA. Handles communications, document management, and registry functions. Headed by the Secretary-General.

PCA — Administrative Council

Made up of diplomatic representatives of member states. Sets PCA policy and provides oversight to the International Bureau. Headed by the Dutch Minister of Foreign Affairs. Has 128 members.

PCA — Financial Assistance Fund

Created in 1994 by the Administrative Council to help developing countries fund arbitration proceedings.

PCA — Procedural Mechanisms

(1) Emergency arbitrators for preliminary rulings; (2) institutional scrutiny of draft awards before issuance; (3) fast-track/expedited procedures; (4) summary dismissal of claims that are manifestly without legal merit.

UNCITRAL

UN Commission on International Trade Law. Provides procedural rules used for interstate arbitration, investor-state disputes, and international commercial disputes.

Ad Hoc Arbitration

Both parties agree on arbitration procedure independently without being bound by any institution's default rules.

Institutional Arbitration

Both parties use a given arbitration institution (e.g. PCA, ICSID) which provides administrative support and procedural frameworks.

ICSID

International Centre for Settlement of Investment Disputes. Based in Washington, DC. Handles disputes between states and foreign investors.

Arbitration — Two Procedural Phases

Preliminary examination (exchange of written documents) and Discussion (oral arguments and presentations).

Arbitration — Witnesses and Experts

Parties may use witnesses and experts if permitted by the Compromis. Cross-examination and tribunal-led investigations may also be permitted.

MOX Plant Case

An example of applicable law in interstate arbitration — a dispute between Ireland and the UK decided using the OSPAR Convention as the applicable international law.

Why Arbitration Over Judicial Settlement?

Arbitration offers party autonomy, confidentiality, finality of award (no appeal), and flexibility in choosing arbitrators with subject-matter expertise.

Limits of Arbitration Consent

Arbitration is typically not used for: events predating the arbitration clause, matters in the exclusive jurisdiction of a state, issues of territorial integrity, or military activities.

Arbitration Before vs. After Dispute

Parties can agree to arbitration either before a dispute arises (via treaty clause) or after a dispute has already emerged (via ad hoc agreement).

ICJ Article 38

The default reference for applicable law when no other law is specified. Covers international conventions, international custom, general principles of law, and judicial decisions/doctrine.

Revised General Act Article 28

If no applicable law is specified, tribunals refer to ICJ Article 38 and may apply principles contextually (ex aequo et bono) so long as there are no hard rules on the dispute.

Pre-PCA Access to Tribunals

Before modern institutions, individual nationals had no direct access to international tribunals — disputes had to be brought by their state on their behalf.

International Commission of Inquiry (1899 Convention)

A body created to establish facts in a dispute. It cannot give arbitral awards, but parties can decide how to use its findings.

Nationality Independence Principle

The precedent, established in the Alabama Claims arbitration, that tribunal members should be of nationalities other than those of the disputing parties to ensure impartiality.

Soft Law in Arbitration

Parties can request that the tribunal apply non-binding norms and guidelines (soft law) in addition to or instead of hard international law.