PCA Optional Rules for Arbitration of Disputes Relating to Natural Resources and/or the Environment Model Arbitration Clauses

• Updated at: February 2023

Introduction 183

Section I. Introductory Rules 185

Scope of Application (Article 1) 185

Notice, Calculation of Periods of Time (Article 2) 186

Notice of Arbitration (Article 3) 186

Representation and Assistance (Article 4) 187

Section II. Composition of the Arbitral Tribunal 187

Number of Arbitrators (Article 5) 187

Appointment of Arbitrators (Articles 6 to 8) 187

Challenge of Arbitrators (Articles 9 to 12) 190

Replacement of an Arbitrator (Article 13) 191

Repetition of Hearings in the Event of the

Replacement of an Arbitrator (Article 14) 192

Section III. Arbitral Proceedings 192

General Provisions (Article 15) 192

Place of Arbitration (Article 16) 193

Language (Article 17) 194

Statement of Claim (Article 18) 194

Statement of Defence (Article 19) 195

Amendments to the Claim or Defence (Article 20) 195

Pleas as to the Jurisdiction of the Arbitral

Tribunal (Article 21) 196

Further Written Statements (Article 22) 196

Periods of Time (Article 23) 196

Evidence and Hearings (Articles 24 and 25) 197

Interim Measures of Protection (Article 26) 198

Experts (Article 27) 198

Failure to Appear or to

Make Submissions (Article 28) 199

Closure of Hearings (Article 29) 199

Waiver of Rules (Article 30) 200

Section IV. The Award 200

Decisions (Article 31) 200

Form and Effect of the Award (Article 32) 200

Applicable Law (Article 33) 201

Settlement or Other Grounds for Termination

(Article 34) 201

Interpretation of the Award (Article 35) 202

Correction of the Award (Article 36) 202

Additional Award (Article 37) 202

Costs (Articles 38 to 40) 203

Deposit of Costs (Article 41) 204

Notes to the Text 205

1 Explanatory ‘Notes to the Text’ indicating changes from the UNCITRAL Arbitration Rules appear at page 205. 2 Parties should in that connection bear in mind any legal or other issue that might affect the arbitrability of such disputes. 3 Parties may also choose from arbitrators listed as Members of the PCA. The choice of arbitrators is not limited to these lists.

INTRODUCTION

These Rules are based on the UNCITRAL Arbitration Rules with changes in order to:

(i) reflect the particular characteristics of disputes having a natural resources, conservation, or environmental protection component;

(ii) reflect the public international law element which pertains to disputes which may involve States and utilization of natural resources and environmental protection issues, and international practice appropriate to such disputes;

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

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

(v) provide for establishment of a specialized list of arbitrators mentioned in article 8(3) and a list of scientific and technical experts mentioned in article 27(5) of these Rules.3

(vi) provide suggestions for establishing procedures aimed at ensuring confidentiality.

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 PCA, are available to States, international organizations, and private parties;

(ii) The Rules may be used, inter alia, in relation to disputes between two or more States parties to a multilateral agreement relating to access to and utilization of natural resources concerning the interpretation or application of that agreement;

(iii) The parties have complete freedom to agree upon any individual or institution to act as appointing authority. In order to provide a fail-safe mechanism to prevent frustration or delay of the arbitration, the Rules provide that the Secretary-General will act as the appointing authority if the parties do not agree upon the authority, or if the authority chosen does not act.

Mindful of the possibility of multiparty involvement in disputes having a conservation, natural resources, or environmental protection component, these Rules provide specifically for multiparty appointment of arbitrators.

Where the dispute is to be referred to an arbitral tribunal of three or more arbitrators, parties should particularly bear in mind that these Rules do not empower the appointing authority to appoint all arbitrators when multiple claimants or respondents fail to make a joint appointment. Such a provision, if desirable to the parties, may be added to the arbitration agreement.

Where arbitrations deal with technical questions, provision is made in article 24(4) for the submission to the arbitral tribunal of a document agreed to by the parties, summarizing and providing background to any scientific or technical issues which the parties may wish to raise in their memorials or at oral hearings.

The framers of existing and future agreements may need to determine the relationship between these Rules and those agreements, and may modify them as necessary.

Modifications to these Rules or such agreements as to jurisdiction ratione personae may be especially necessary to allow for the participation of non-State actors.

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 page 241.

PERMANENT COURT OF ARBITRATION OPTIONAL RULES FOR ARBITRATION OF DISPUTES RELATING TO NATURAL RESOURCES AND/OR THE ENVIRONMENT

Effective June 19, 2001

SECTION I. INTRODUCTORY RULES

Scope of Application

Article 1

1. Where all parties have agreed in writing that a dispute that may arise or that has arisen between them shall be referred to arbitration under the Permanent Court of Arbitration Optional Rules for Arbitration of Disputes Relating to Natural Resources and/or the Environment, such disputes shall be settled in accordance with these Rules subject to such modification as the parties may expressly agree upon in writing. The expression ‘agreed upon in writing’ includes provisions in agreements, contracts, conventions, treaties, the constituent instrument of an international organization or agency or reference upon consent of the parties by a court. The characterization of the dispute as relating to natural resources and/or the environment is not necessary for jurisdiction where all the parties have agreed to settle a specific dispute under these Rules.

2. Agreement by a party to arbitration under these Rules constitutes a waiver of any right of sovereign immunity from jurisdiction, in respect of the dispute in question, to which such party might otherwise be entitled. A waiver of immunity relating to the execution of an arbitral award must be explicitly expressed.

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

1. 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 notice has reached its destination. Notice shall be deemed to have been received on the day it is so delivered.

2. 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 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

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

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

3. 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 any rule, decision, agreement, contract, convention, treaty, constituent instrument of an organization or agency, or relationship out of, or in relation to which, the dispute arises;

   (d) the 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.

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

   Representation and Assistance

   Article 4

   The parties may be represented or assisted by a person or persons of their choice. The name and address of that person or persons must be communicated in writing to the other party, to the International Bureau and to the arbitral tribunal after he/she 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 pursuant to the appointment procedure in articles 6 to 8.

   Appointment of Arbitrators (Articles 6 to 8)

   Article 6

1. If a sole arbitrator is to...