A Historical Perspective on International Arbitration

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International Law in Action: the Arbitration of International Disputes

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Universiteit Leiden

International Law in Action: the Arbitration of International Disputes

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‘The Arbitration of International Disputes’ is the third course of Leiden University’s series on International Law in Action. The first course covered generalities on the international courts and tribunals in The Hague, while the second course provided an insider's perspective into the work of international criminal courts and tribunals. This third course explores the major aspects of international arbitration as one of the most common method of international dispute settlement . Through this course you will gain an in-depth understanding of the various facets of international arbitration through the analysis of its role as a mechanism of dispute settlement, its institutions, the fields of law it is applicable to, and, of course, its most famous awards. The main question we will answer together during this course is "Can international arbitration contribute to the creation of a peaceful world through the settlement of disputes between States and between States and non-State actors?" In order to do so, we will learn the basic historical concepts or arbitration, as well as everything there is to know about the Permanent Court of Arbitration, based in The Hague. We will then dive into the role of international arbitration in settling disputes relating to the Law of the Sea, with a particular insight into the landmark South China Sea Arbitration. For an entire module, we will focus on investment arbitration, its principles and the procedure of the ICSID, the International Centre for Settlement of Investment Disputes. We will conclude the course with a module on the interplay between state immunity and enforcement of arbitral awards. This is brought to light through the Yukos Arbitration which is a perfect illustration of the topic. This course offers you an opportunity to gain a better insight into international arbitration, its role and the current issues relating to it. You will gain in-depth knowledge of the principles and rules of arbitration. You will explore the topic through concrete examples and the most prominent arbitrations. You will also grasp the notion of international arbitration navigating between law and politics. International arbitration and The Hague go hand in hand: several key arbitration institutes are located in The Hague and important disputes were settled here through arbitration. The Hague is, so to speak, ‘the place to be for international arbitration’, especially when we are dealing with arbitration between States, or arbitration of investment disputes between foreign investors and States. Join us for the course and become an expert on international arbitration! This course is free to join and to participate in. There is the possibility to get a verified certificate for the course, which is a paid option. If you want a certificate, but are unable to pay for it, you can request financial aid via Coursera.

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The History and General Principles of International Arbitration

Have you read all the tips for studying online? Are you ready to delve into the world of dispute settlement through international arbitration? This week, you will learn the history of international arbitration and the general principles of international arbitration. We will also discuss the work of the Permanent Court of Arbitration and its role as administrator of arbitrations.

Introduction6:01

A Historical Perspective on International Arbitration8:09

Principles of International Arbitration - Part I6:58

Principles of International Arbitration - Part II5:55

The Permanent Court of Arbitration5:23

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Eric De Brabandere
Prof. Dr.
Grotius Centre for International Legal Studies
Giulia Pinzauti
Dr.
Grotius Centre for International Legal Studies

Welcome to this historical overview of international arbitration.

In this video, we will focus on how modern international arbitration came about.

When did international arbitration emerge?

For which types of disputes was it used?

And, what can we learn today from these historical examples?

These are the main issues that we will be addressing together in this video.

Arbitration between states or state like entities has a long history.

In fact, disputes between states and state like entities were settled through

international arbitration well before

the first international court or tribunals were created by states.

Even at the time of ancient Greece,

early forms of what we could call arbitration were used to solve disputes

between allied states and city states relating to their independence and sovereignty.

In the Middle Ages, arbitration was also largely used.

In those arbitrations, the dispute was often

settled by a single arbitrator called an Empire.

Most often the single arbitrator was the Pope or a King or Emperor from another state.

But these arbitrations involved different entities than what we now call states.

And the way in which the dispute was settled did not resemble modern day practice.

The decision was regularly based on principles of equity than law,

was not reasoned and the arbitrators were not fully independent and impartial.

With the 1648 peace treaties of Westphalia,

which followed the 30 years war in Europe,

and the primacy of states sovereignty that came along,

arbitration almost disappeared in interstate relations.

But arbitration resurfaced towards the end of the 18th and 19th century.

These arbitrations paved the way for the contemporary arbitration we now have.

The Jay Treaty arbitration is usually considered as

the starting point of modern international arbitration.

The treaty was signed between Great Britain and the United States,

mainly to settle outstanding issues following the American War of Independence.

The mechanism established under that treaty to settle

these disputes is remarkable in several respects.

First, the treaty established three types of commissions.

First commission was established to settle the dispute

between the two states in relation mainly to boundaries.

The second and third commission were established to hear two types of mixed disputes.

First, claims for compensation due to

British nationals for debts owed to them by US nationals,

which would be compensated by the US.

Secondly, claims from United States nationals against Great Britain

for treatment of their property subsequent to the independence of the United States.

The treaty paved the way not only for

a modern form of arbitration to settle disputes between two states,

but also for disputes between nationals of one state and another state.

It also set precedents since the decisions

of the commissions were based on law and contained reasons.

At the same time, the commissions were composed exclusively of nationals of both parties.

The Alabama Claims arbitration is another notable example in this respect.

The dispute related to damages suffered by the US government,

due to attacks on union ships by Confederate Navy ships

which had been built in British shipyards during the American Civil War.

One of the ships was the CSS Alabama.

In 1871, the U.S. and the United Kingdom signed the Washington Treaty.

In which they decided to have this and

some other claims settled through an international arbitration tribunal in Geneva.

The Arbitration ruled in favor of the US and it set

an important precedent to successfully settle interstate claims through arbitration.

Moreover, the tribunal for the first time was composed of a majority of

arbitrators which were not nationals of one of the states party to the dispute,

a practice which persists to date.

The independence of the tribunal thus was enhanced.

In that sense, it was one of

the first arbitrations that very much resembles the current practice.

The case was also important in establishing the rule that the parties to

the dispute can freely determine the law applicable to the dispute,

and that this can include non-binding rules or so-called soft law.

This was the beginning of a series of several other mainly interstate arbitrations,

and paved the way for the 1899 Hague Convention

which created the Permanent Court of Arbitration.

We will discuss this institution more in detail in the next video.

Concurrently with these developments,

the 19th and the start of the 20th centuries,

saw more than 120 so-called mixed claims commissions.

Like the model of the Jay treaty,

this commissions heard several types of claims,

interstate claims and/or claims from nationals of one state against another state.

They were very often created following an armed conflict between two states or

internal disturbances in one state

during which nationals of other states had suffered injuries.

Examples are: several United States Mexico claims commissions in the late 19th and

early 20th century and

the various commissions established after

the second world war to settle claims with Germany.

It's important to note however,

that the claims of individuals very often especially in the early examples,

had to be brought by the state of their nationality.

In other words, individuals often had no direct access to the commission or tribunal.

I mentioned this because this stands in stark contrast to

the current practice in for example, Investment Treaty Arbitration.

Since the creation of first the Permanent Court of International Justice in 1921,

and its successor the International Court of Justice in 1945,

arbitration became less popular especially to settle interstate disputes.

Arbitration of interstate disputes still took place outside

the context of the Permanent Court of Arbitration

but the numbers were clearly in decline.

More generally, recourse to judicial settlement also

declined as did the use of mixed claims commissions.

Since the end of the Cold War,

arbitration has been increasingly popular among states,

as is illustrated by the growing number of cases

settled under the auspices of the Permanent Court of Arbitration.

Moreover, this is evidenced by

the large interstate arbitration practice

in subject matters such as diplomatic protection,

environmental disputes, territorial disputes,

or disputes under the law of the Sea Convention.

The last decades of the 20th century also

saw a parallel increase in so-called mixed arbitrations.

First, companies which had obtained

large concessions in the extraction of natural resources in developing states,

had secured the use of arbitration to settle disputes arising under the states contracts.

This in turn resulted in the creation of

the International Center for the Settlement of Investment Disputes in

the 1960s which although under utilized in the first decades after its creation,

paved the way for an impressive rise in the number of arbitrations between

foreign investors and states starting at the beginning of the 21st century.

Thirdly, other mechanisms are also evidence of this,

such as Iran-United States Claims Tribunal created in

1981 to settle disputes between Iran and the United States,

and nationals of both against either state following the Iran hostage crisis.

The Iran-US Claims Tribunal is located here in the Hague and has already

decided the vast majority of the claims that have been filed.

In this video, you have learned how international arbitration

has evolved over the past centuries and decades.

In doing, I have pointed to several important principles of

international arbitration which we will discuss in the next video.

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