The Permanent Court of Arbitration

Author:Anthony Connerty
Profession:Barrister and member of WIPO arbitration panel

1) Introduction. -2) Historical Overview. -3) Convention for the Pacific Settlement of International Disputes, 1899. -4) Present-Day Rules and Procedures. -5) The PCA Rules for Arbitrating Disputes Between Two States. -6) The PCA Optional Conciliation Rules: i) Introduction. ii) The Conciliation Rules. -7) The PCA and UNCITRAL. -8) The PCA Caseload - Pending and Recent Cases. -9) Conclusions.


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1) Introduction

The Permanent Court of Arbitration (PCA) is one of the major supranational bodies concerned with international disputes, and its work is complementary to that of the International Court of Justice (ICJ) (see Box 6). Both institutions are housed in the Peace Palace in The Hague.

Box 6: The UN Secretary-General on the Importance of the PCA

The importance of the PCA is shown by UN Secretary-General Kofi Annan's Foreword to the Basic Documents of the PCA, in which he said that:

"... the Permanent Court of Arbitration and the International Court of Justice are not merely neighbours in the Hague Peace Palace; they are complementary institutions offering the international community a comprehensive range of options for the peaceful resolution of disputes.

"Settling international disputes by peaceful means, in conformity with the principles of justice and international law, is one of the central purposes of the United Nations set out in Article 1 of the United Nations Charter. Arbitration is among the methods of peaceful settlement cited in Article 33 of the Charter, and the Permanent Court has a long and distinguished history in this regard. In 1993, the General Assembly granted the Court the status of permanent observer, enabling it to participate actively in the discussions of the Assembly's Legal Committee.

"I encourage States, international organizations and private parties to make greater use of the Court's services, which also include fact-finding and conciliation; such recourse would help ease the workload of the International Court of Justice and fill gaps concerning arbitrations involving private parties and international organizations. I also urge States which have not ratified the Hague Conventions to do so. Developing countries, in particular, could well find the flexible instruments of dispute resolution to be invaluable."

An historical overview of the PCA is given in the next section, followed by a consideration of the Hague Peace Convention of 1899. That Convention, and the 1907 Hague Convention, set out the thinking behind the concept of an international body whose function would be to secure the peaceful resolution of disputes. This led to the creation of the PCA.

The chapter then goes on to consider some of the present-day procedures operated by the PCA. Two in particular are considered in some detail: first, the PCA's Optional Rules for Arbitrating Disputes between Two States, which are taken as an example of one of thePage 116 various sets of Arbitration Rules available from the Court; and second, the PCA's Optional Rules for Conciliation.

The UN has a role to play in the PCA in that many of the Court's dispute resolution procedures - both arbitration and conciliation - are based on United Nations Commission on International Trade Law (UNCITRAL) Rules. Further, the 1976 UNCITRAL Arbitration Rules entrust the Secretary-General of the PCA with the task of designating, on request, an 'appointing authority' for the purpose of appointing the members of an arbitral tribunal. The relationship between the PCA and UNCITRAL is considered in one of the later sections.

The final sections of the chapter look at the work of the PCA and at the type of cases it currently handles.

2) Historical Overview

The PCA was established by the Convention for the Pacific Settlement of International Disputes. That Convention was concluded at The Hague in 1899 during the first Hague Peace Conference, convened on the initiative of Czar Nicolas II of Russia. The aim was to seek "the most objective means of ensuring to all peoples the benefits of a real and lasting peace, and above all, of limiting the progressive development of existing armaments". The most significant achievement of the Conference was the establishment of the PCA, which was the first global mechanism for the settlement of inter-State disputes. The 1899 Convention, which provided the legal basis for the PCA, was revised at the second Hague Peace Conference in 1907.

In recent years there has been a sharp increase in accessions to the Conventions of 1899 and 1907. There are currently 103 States that are parties to one or both of the Conventions.

The Peace Palace in The Hague, completed in 1913, was specifically built to accommodate the Court. The Carnegie Foundation, the Hague Academy of International Law, the Peace Palace International Law Library and, as mentioned earlier, the ICJ are also based at the Peace Palace.

3) Convention for the Pacific Settlement of International Disputes, 1899

Article 1 of the 1899 Convention states that the Signatory Powers have agreed to use their best efforts to ensure the pacific settlement of international differences. Two of the methods of resolving disputes are good offices and mediation. The functions of the mediator are said to consist of "reconciling the opposing claims and appeasing the feelings of resentment which may have arisen between the States at variance".

Two further methods of resolving differences specified in the Convention are international commissions of inquiry and international arbitration. Article 15 states that the latter has for its object "the settlement of differences between States by judges of their own choice, and on the basis of respect for law".

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Article 16 states that in questions of a legal nature, and especially in the interpretation or application of international conventions, "... arbitration is recognized by the Signatory Powers as the most effective, and at the same time the most equitable, means of settling disputes which diplomacy has failed to settle".

Article 20 of the Convention makes provision for the setting up of the PCA: "With the object of facilitating an immediate recourse to arbitration for international differences, which it has not been possible to settle by diplomacy, the Signatory Powers undertake to organize a Permanent Court of Arbitration, accessible at all times and operating, unless otherwise stipulated by the parties, in accordance with the Rules of Procedure inserted in the present Convention."

Article 23 provides that each Signatory Power is to select four arbitrators (known as 'Members of the Court'). They are to be persons "... of known competency in questions of international law, of the highest moral reputation, and disposed to accept the duties of Arbitrators".

Article 28 makes provision for the setting up of a Permanent Administrative Council. Composed of "the Diplomatic Representatives of the Signatory Powers accredited to The Hague and of the Netherlands Minister for Foreign Affairs, who will act as President, [it] shall be instituted in this town as soon as possible after the ratification of the present Act by at least nine Powers". That Council would be charged with the establishment and organisation of an International Bureau that would, among other things, settle Rules of Procedure and all other necessary Regulations.

The Rules of Procedure referred to in Article 20 are contained in Chapter III of the Convention. Article 30 states that, with a view to encouraging the development of arbitration, the Signatory Powers have agreed on the Rules that are to be applicable to arbitral procedure.

The Powers who wish to have recourse to arbitration are to sign a special Act or 'Compromis' in which the subject of the difference is to be defined. The Compromis "implies the undertaking of the parties to submit loyally to the Award" (Article 31).

The Convention then goes on to set out detailed rules for the conduct of an arbitration:

* the appointment of the arbitrators;

* the place of arbitration (the Tribunal is to sit at The Hague, unless the parties decide otherwise);

* the Tribunal is to decide on the choice of language to be used;

* the arbitral procedure is to comprise two distinct phases, namely preliminary examination (which involves the communication of documents containing argument) and discussion (which consists of the parties' oral argument to the Tribunal);

* the Tribunal may require the production of documents, and may demand explanations;

* the Tribunal is entitled to decide its competence by interpreting the Compromis and by interpreting any relevant Treaties, and also by applying "the principles of international law";

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* the Tribunal may issue Rules of Procedure for the conduct of the arbitration and can decide the forms and periods within which each party is to conclude its arguments;

* when all explanations and evidence have been presented, the hearing is closed.

The Tribunal then deliberates in private. The Award is to be by a majority of votes and accompanied by a "statement of reasons. It is drawn up in writing and signed by each member of the Tribunal." Any members in the minority may record their dissent when signing. The Award "puts an end to the dispute definitively and without appeal".

The parties are entitled to provide in the Compromis for the right to demand a revision of the Award. The demand for revision is to be addressed to the Tribunal that made the Award. The revision can only be made on the ground of "the discovery of some new fact calculated to exercise a decisive influence on the Award, and which, at the time the discussion was closed, was unknown to the Tribunal and to the party demanding the revision".

It is interesting to note that the detailed provisions made over 100 years ago for the conduct of arbitrations between States differ very little from the kind of provisions to be found in present-day arbitrations. Indeed, the concept...

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