International Dispute Resolution

Introduction

Disputes are part and parcel of human life and just as people disagree over certain issues, so does states. Similarly, just like domestic civil courts, the International Court of Justice (ICJ) is the center for litigation by states. Away from litigation, there are Alternative Dispute Resolution mechanisms at an international level to wit mediation, conciliation, arbitration and inter alia. Arbitration stands out among the other ADR mechanisms when reference is made to resolution of international disputes. It is now used by states and state entities for conflict resolution between states and or other entities.

Arbitration is not a new concept at the world stage, as a peaceful way of resolving disputes. There is evidence of ancient practices of arbitration in Rom. As early as 1868, Mexico and United States of America were already engaging an international tribunal to decide on a matter of financial claims dispute. Moreover, the case was arbitrated upon by Permanent Court of Arbitration in 1901. Today, there are cases that are still pending at Hague, Netherlands for arbitration. Essentially, states are increasingly adopting arbitration as major mechanism of amicably resolving disputes. In favoring arbitration, states are driven by the need to handle certain matters privately, faster and on their own terms, as will be elaborated going forward.

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Confidentiality

Contrary to the norm in litigation, the procedure in arbitration entails privacy of the parties. Some parties have gone as far as including a privacy clause in their arbitration agreements. There are instances that states wish to settle the dispute between them without inviting unnecessary media attention. However, this will not be possible where the case is decided by an international court of justice like the ICJ where the proceedings are open to the public for attendance and even through broadcast.

In arbitration proceedings, the documents and transcripts introduced by both parties are treated differently. Such documents are not made public or open to public scrutiny as the case in litigation scenarios. This important since states may be using arbitration to solve matters bordering on security of respective states. Therefore, it is important that certain documents containing sensitive and secret information bordering public security remain confidential.

Speed

Generally, traditional civil litigation takes a longer period of time than arbitration to reach its conclusion. Arbitration is more direct, shorter and efficient with regard to procedures leading to final determination of a case. Tools available to traditional civil litigants like summary judgments and motions to dismiss are not commonplace in arbitration settings hence precludes delay occasioned by the same. Again deadlines are further restricted by arbitrators and they are known to go as far as setting a timeline in which the case shall have been concluded. The result is that parties will save time and money by avoiding such procedures. As justice delayed is justice denied, arbitration presents sates with an opportunity to expeditiously resolve their matters.

Possibility of choosing the arbitrator

States to a dispute, and even, businesses have the luxury of choosing arbitrators who will finally make awards in the given case. Moreover, where the states do not agree on the arbitrators, they are allowed to make a rank list from which they can be selected. For states that have submitted to the jurisdiction of the Permanent Court of Arbitration, when in a dispute, they are allowed to choose non-partisan arbitrators after which the two will appoint a president. Eventually a three-member tribunal is constituted to decide the case.

In contrast, traditional civil litigation does not present a party with the opportunity to decide which judge will listen to their case. Judges are randomly assigned cases and they will hear a case even if a party has reservations against them, and the only option is application for recusal. The ability to select an arbitrator presents parties with an opportunity, albeit limited, to control the case’s destiny and they can as well opt for arbitrators whom they know are capable of applying the law.

Parties have the ability, to an extent, to determine or influence the applicable rules of procedure. While in traditional civil litigation civil procedure rules are strict on discovery procedures, the same can be watered down by the parties as they deem fit for the purposes of the case. Therefore, discovery can be restricted to a certain extent- with regard to certain documents. States may not want to reveal certain information during discovery owing to their sensitive nature. In that case parties will relax the discovery rules by limited the amount of information they can provide to the other party. Moreover, there is control as to the amount of information that one party will obtain from the other.

The scope of the arbitration jurisdiction may be provided

Where parties proceed to arbitration mandated by a signed agreement, jurisdiction shall have been stipulated in the same document. The effect of this feature is that the arbitration tribunal will have limited jurisdiction with regard to certain matters not covered by the agreement in force. In fact, when such matters arise, the parties have an option to approach another forum with the appropriate capacity to hear the dispute in question.

The level of control in arbitration by parties is definitely higher than traditional litigations. They get to choose arbitrators deliberating on their case. They can determine the extent of information to give to the other party by limiting discovery rules. In jurisdictions where jury trial is the norm, parties can dispense with that by expressly providing to that extent in the arbitration agreement. Political intermediaries will ultimately take advantage of the fact that parties have the prerogative to decide the legal questions to be decided by the arbitration tribunal.

Just like in judicial judgments, an arbitration award is binding on the parties. The only difference is the process leading to the award and presence of arbitrators chosen by the parties. Consequently, state parties to a dispute while shying away from court will resort to arbitration. In comparison with other ADR mechanisms like mediation, negotiation, conciliation and enquiry, it has a more formal, procedural and a final binding decision that cannot be ignored by another party unless there is an appeal on grounds of fraud. For this and other reasons, state parties prefer this method of resolution of disputes.

The arbitration agreement may provide that the award is non-binding.

Whereas binding arbitration awards are final and cannot be appealed except on ground of fraud or misuse of power, non-binding awards parties have a choice. Either party can reject the award and demand a trial if the feel aggrieved by the decision of the arbitral tribunal. Hence, parties may prefer nonbinding awards where it is their aim to get an independent assessment of the suit before proceeding to trial.

Non-membership of one of the parties to the dispute in international courts.

A state becomes a member of an international court by ratifying a certain convention or treaty. For instance, the United Nations Conventions on the Law of the Sea when ratified by a state, paces it under the jurisdiction of a UNCLOS tribunal or Permanent Court of Arbitration. Therefore a non-member state cannot be bound by the decision of the concerned arbitration tribunal and the first preliminary objection they will raise is lack of jurisdiction. If a decision is subsequently made it will not be binding. The South China Sea case between Philippines and China presents a similar challenge. Although China has intimated that they will not be bound by the award, they submitted to the jurisdiction of the Permanent Court of Arbitration once they ratified the UNCLOS convention.

The possibility of choosing the language of arbitration

It is the prerogative of the parties to determine which languages to be used in the proceedings of the tribunal. This may expressly be expressed in agreement mandating arbitration or may be a decision made when parties for example have submitted to the jurisdiction of an international court vested with powers of arbitration. This is advantageous to the parties who would otherwise have had to use an interpreter in civil litigation where translation is the only option in case the language is foreign to one of the parties.

In most cases, it is upon the parties to choose a neutral forum to conduct the arbitration proceedings. For sates to a dispute, they can decide on a neutral country as the forum for arbitration. This ways parties will not feel like they are submitting to the jurisdiction of another state. However, it will be the responsibility of the parties to pay for the venue of arbitration unlike courts which offer free venues to hear cases.

Conclusion

The upshot of the foregoing is that international arbitration has become an important means of resolving disputes among states compared to traditional civil litigation. This has been occasioned by the numerous advantages conferred upon the parties to a dispute. Parties have more control over the procedure, language, confidentiality, arbitrators, and the process being flexible and relatively cheaper. Despite the challenges of isolated noncompliance cases, arbitration remains one of the most effective ways of solving disputes without the rigors, formality and hostility involved in traditional civil litigation.

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Table of cases

  • The Arctic Sunrise Arbitration (Netherlands v. Russia [2013])
  • The Pious Fund of the Californias (The United States of America v. The United Mexican States [1901])
  • The South China Sea Arbitration (The Republic of Philippines v. The People's Republic of China [2013])
  • Table of statutes

  • Conventions for the Pacific Settlement of International Disputes (Hague Convention I [1899]’)
  • Conventions for the Pacific Settlement of International Disputes (Hague Convention I 1907 Unite Nations Charter of 1945
  • Bibliography

  • A SD Subramanian, 'The Participation Of Amicus Curiae In Investment Treaty Arbitration' (2016) 05 Journal of Civil & Legal Sciences
  • 'Abgarjan D. The Place Of The International Tribunal For The Law Of The Sea In Progressive Development Of The Law Of The Sea' (2014) 4 SENTENTIA. European Journal of Humanities and Social Sciences
  • Alter K, The New Terrain Of International Law (Princeton University Press 2013) Born G, International Arbitration (Kluwer Law International 2016)
  • Jorritsma R, 'National Groups (Permanent Court Of Arbitration)' [2017] SSRN Electronic Journal
  • Kaushal A, 'The Issue Of Confidentiality In International Commercial Arbitration' [2014] SSRN Electronic Journal
  • Mordi C, 'An Analysis Of National Courts Involvement In International Commercial Arbitration; Can International Commercial Arbitration Be Effective Without National Courts?' (2016) 06 Open Journal of Political Science
  • Nathan K, 'The Selection Of Arbitrators: Another View' (2012) 1999 Amicus Curiae
  • Phan H, 'International Courts And State Compliance: An Investigation Of The Law Of The Sea Cases' [2019] Ocean Development & International Law
  • Shany Y, 'Compliance With Decisions Of International Courts As Indicative Of Their Effectiveness: A Goal-Based Analysis' [2010] SSRN Electronic Journal
  • Verges T, 'Evolution Of The Arbitration Forum As A Response To Mandatory Arbitration' [2017] SSRN Electronic Journal
  • Wahlgren P, Arbitration Stockholm Institute for Scandinavian Law, Law Faculty, Stockholm Universit

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