PCA Optional Rules for Arbitration Involving International Organizations and States Model Arbitration Clauses

Updated at:September 2020
SUMMARY

Future Disputes. Existing Disputes.

 
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CONTENTS

Introduction 97

Section I. Introductory Rules 99

Scope of Application (Article 1) 99

Notice, Calculation of Periods of Time (Article 2) 99

Notice of Arbitration (Article 3) 100

Representation and Assistance (Article 4) 101

Section II. Composition of the Arbitral Tribunal 101

Number of Arbitrators (Article 5) 101

Appointment of Arbitrators (Articles 6 to 8) 101

Challenge of Arbitrators (Articles 9 to 12) 103

Replacement of an Arbitrator (Article 13) 105

Repetition of Hearings in the Event of the Replacement of an Arbitrator

(Article 14) 105

Section III. Arbitral Proceedings 106

General Provisions (Article 15) 106

Place of Arbitration (Article 16) 106

Language (Article 17) 107

Statement of Claim (Article 18) 107

Statement of Defence (Article 19) 108

Amendments to the Claim or Defence (Article 20) 108

Pleas as to the Jurisdiction of the Arbitral Tribunal (Article 21) 108

Further Written Statements (Article 22) 109

Periods of Time (Article 23) 109

Evidence and Hearings (Articles 24 and 25) 109

Interim Measures of Protection (Article 26) 110

Experts (Article 27) 111

Failure to Appear or to Make Submissions (Article 28) 111

Closure of Hearings (Article 29) 112

Waiver of Rules (Article 30) 112

Section IV. The Award 112

Decisions (Article 31) 112

Form and Effect of the Award (Article 32) 113

Applicable Law (Article 33) 113

Settlement or Other Grounds for Termination (Article 34) 113

Interpretation of the Award (Article 35) 114

Correction of the Award (Article 36) 114

Additional Award (Article 37) 115

Costs (Articles 38 to 40) 115

Deposit of Costs (Article 41) 116

Notes to the Text 117

INTRODUCTION

These Rules have been elaborated for use in arbitrating disputes arising under treaties, or other agreements or relationships between an international organization and a State, or between two international organizations; they can be modified for use in connection with multiparty disputes. The Rules are based on the UNCITRAL Arbitration Rules with changes in order to:

(i) reflect the public international law character of disputes involving international organizations and States, and diplomatic practice appropriate to such disputes;

(ii) indicate the role of the Secretary-General and the International Bureau of the Permanent Court of Arbitration at The Hague; and

(iii) provide freedom for the parties to choose to have an arbitral tribunal of one, three or five persons.

Experience in arbitrations since 1981 suggests that the UNCITRAL Arbitration Rules provide fair and effective procedures for peaceful resolution of disputes involving international organizations and States, even though they were originally designed for commercial arbitration.

The Rules are optional and emphasize flexibility and party autonomy. For example:

(i) the Rules, and the services of the Secretary-General and the International Bureau of the Permanent Court of Arbitration, are available for use by international organizations and all States, and are not restricted to disputes in which the State concerned is a party to either the Hague Convention for the Pacific Settlement of International Disputes of 1899 or that of 1907;

(ii) the choice of arbitrators is not limited to persons who are listed as Members of the Permanent Court of Arbitration;

(iii) parties have complete freedom to agree upon any individual or institution to be appointing authority. In order to provide a failsafe mechanism to prevent frustration of the arbitration, the Rules provide that the Secretary-General will designate an appointing authority if the parties do not agree upon the authority, or if the authority they choose does not act.

A model clause that parties may consider inserting in treaties or other agreements to provide for arbitration of future disputes, and a model clause for arbitration of existing disputes are set forth at pages 235-236.

These Rules are also appropriate for use in connection with multiparty disputes, provided that appropriate changes are made in the procedures for choosing arbitrators and sharing costs. Guidelines to assist parties in adapting these Rules for use in resolving disputes that may involve more than two parties are included at page 245.

Explanatory ‘Notes to the Text’ appear at pages 117-118.

PERMANENT COURT OF ARBITRATION OPTIONAL RULES FOR ARBITRATION INVOLVING INTERNATIONAL ORGANIZATIONS AND STATES

Effective July 1, 1996

SECTION I. INTRODUCTORY RULES

Scope of Application

Article 1

  1. Where an international organization, on the one hand, and a State or an international organization, on the other hand, have agreed in writing that disputes that may arise or that have arisen between them shall be referred to arbitration under the Permanent Court of Arbitration Optional Rules for Arbitration Involving International Organizations and States, such disputes shall be settled in accordance with these Rules subject to such modification as the parties may agree in writing.

  2. For the purpose of the preceding paragraph:

    (a) ‘International organization’ means an intergovernmental organization;

    (b) ‘State’ means any State, whether or not it is a member of the international organization concerned;

    (c) The expression ‘any agreement’ includes the constituent instrument of the organization.

  3. The International Bureau of the Permanent Court of Arbitration (the ‘International Bureau’) shall take charge of the archives of the arbitration proceeding. In addition, upon written request of all the parties or of the arbitral tribunal, the International Bureau shall act as a channel of communication between the parties and the arbitral tribunal, provide secretariat services and/or serve as registry.

    Notice, Calculation of Periods of Time

    Article 2

  4. For the purposes of these Rules, any notice, including a notification, communication or proposal, is deemed to have been received when it has been delivered to the addressee through diplomatic channels, in the case of a State, or by any other means by which it can be ascertained that the notification has reached its destination. Notice shall be deemed to have been received on the day it is so delivered.

  5. For the purposes of calculating a period of time under these Rules, such period shall begin to run on the day following the day when a notice, notification, communication or proposal is received. If the last day of such period is an official holiday or a non-work day in the State of the addressee, the period is extended until the first work day which follows. Official holidays or non-work days occurring during the running of the period of time are included in calculating the period.

    Notice of Arbitration

    Article 3

  6. The party initiating recourse to arbitration (hereinafter called the ‘claimant’) shall give to the other party (hereinafter called the ‘respondent’) a notice of arbitration.

  7. Arbitral proceedings shall be deemed to commence on the date on which the notice of arbitration is received by the respondent.

  8. The notice of arbitration shall include the following:

    (a) A demand that the dispute be referred to arbitration;

    (b) The names and addresses of the parties;

    (c) A reference to the constituent instrument of the organization and to any rule, decision, agreement or relationship out of or in relation to which the dispute arises;

    (d) Any pertinent arbitration clause or separate arbitration agreement;

    (e) The general nature of the claim and an indication of the amount involved, if any;

    (f) The relief or remedy sought;

    (g) A proposal as to the number of arbitrators (i.e., one, three or five), if the parties have not previously agreed thereon.

  9. The notice of arbitration may also include the statement of claim referred to in article 18.

    Representation and Assistance

    Article 4

    Each party shall appoint an agent. The parties may also be assisted by persons of their choice. The name and address of the agent must be communicated in writing to the other party, to the International Bureau and to the arbitral tribunal after it has been appointed.

    SECTION II. COMPOSITION OF THE ARBITRAL TRIBUNAL

    Number of Arbitrators

    Article 5

    If the parties have not previously agreed on the number of arbitrators (i.e., one, three, or five), and if within thirty days after the receipt by the respondent of the notice of arbitration the parties have not agreed on the number of arbitrators, three arbitrators shall be appointed.

    Appointment of Arbitrators (Articles 6 to 8)

    Article 6

  10. If a sole arbitrator is to be appointed, either party may propose to the other:

    (a) The names of one or more persons, one of whom would serve as the sole arbitrator; and

    (b) If no appointing authority has been agreed upon by the parties, the name or names of one or more institutions or persons, one of whom would serve as appointing authority.

  11. If within sixty days after receipt by a party of a proposal made in accordance with paragraph 1 the parties have not reached agreement on the choice of a sole arbitrator, the sole arbitrator shall be appointed by the appointing authority agreed upon by the parties.

    If no appointing authority has been agreed upon by the parties, or if the appointing authority agreed upon refuses to act or fails to appoint the arbitrator within sixty days of the receipt of a party’s request therefor, either party may request the Secretary-General of the Permanent Court of Arbitration at The Hague (the ‘Secretary-General’) to designate an appointing authority.

  12. The appointing authority shall, at the request of one of the parties, appoint the sole arbitrator as promptly as possible. In making the appointment the appointing authority shall use the following list-procedure, unless both parties agree that the list-procedure should not be used or unless the appointing authority determines in its discretion that the use of the list-procedure is not appropriate for the case:

    (a) At the request of one of the parties the appointing authority shall communicate to both parties an identical list...

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