Kartikeya Tandon

Permanent Court of Arbitration

The Permanent Court of Arbitration (PCA) is an inter-governmental organisation located at The
Hague. Established in 1899 to facilitate arbitration and other forms of dispute resolution between
states, the PCA has developed into a modern, multi-faceted arbitral institution perfectly situated to
meet the evolving dispute resolution needs of the international community. The PCA is not a court
in the traditional sense but provides services of arbitral tribunal to resolve disputes that arise out of
international agreements between member states, international organisations or private parties.1 The
cases span a range of legal issues involving territorial and maritime boundaries sovereignty, human
rights, international investment, and international and regional trade. The PCA is constituted
through two separate multilateral conventions, the convention of the Pacific Settlement of Disputes
of 1899 and 19072. It has a combined membership of 122 states which includes 71 members of the
1899 convention, 101 members from the 1907 convention and 51 members which are parties to
both the conventions. Headed by Secretary General Hugo Hans Siblesz since 2012, the PCA is an
official United Nations Observer.3

The history of the Permanent Court of Arbitration started in the final year of the 19th century when
in the summer of 1899, the Tsar of Russia, Nicholas II, called the world’s leading Powers’ to a con-
ference.The agenda was the strengthening of the system for the peaceful settlement of international
disputes. This was the first major multilateral international peace conference that was not held in
the immediate aftermath of a European war, and is said to have marked the beginning of The Hague
as ‘the International Capital of Peace and Justice’.4 The sovereign Powers, meeting in The Hague at
the first International Peace Conference, adopted a Convention for the Pacific Settlement of In-
ternational Disputes, which established a global institution for international dispute resolution: The
Permanent Court of Arbitration. The PCA was conceived by the drafters of the 1899 Convention as
a precursor of all present-day forms of international dispute resolution, including the International
Court of Justice.
Among the aims of the Conference had been the strengthening of systems of international dispute
resolution especially international arbitration. The delegates at the Conference knew that, during the
previous 100 years, there had been a number of successful international arbitrations, starting with
the “Jay Treaty” Mixed Commissions at the end of the 18th century, the Alabama arbitration in
1871-1872 and the Institute de Droit International which had adopted a code of procedure for arbi-
tration in 1875.Throughout the 19th century, arbitration was used in a number of international dis-
putes, including for instance the Alabama arbitration between the United States of America and the
United Kingdom arising out of the US Civil War, but these had been organised on an ad hoc basis
relating to a particular claim or set of claims. This movement toward arbitration as a means of in-
ternational dispute resolution was continued in 1899, the most concrete achievement of the 1899

1 Services - PCA-CPA, Available at: https://pca-cpa.org/en/services/ (Visited on July 18,019).

2 History PCA,Available at: https://pca-cpa.org/en/services/ (Visited on July 18,019).

3  Intergovernmental Organizations, Available at: www.un.org (Visited on July 18,019).

4S. Rosenne, “The Hague Peace Conferences of 1899 and 1907 and International Arbitration Reports and
Documents” ,The Hague: TMC Asser Press, Apr. 8, 2001.
Conference was the establishment of the PCA as the first global mechanism for the settlement of
disputes between states.The drafting of the 1899 Convention was the first time the process had been
systematically organised through a general, multilateral convention.
The 1899 Convention was revised at the Second Hague Peace Conference in 1907, by the adoption
of a second “Convention for the Pacific Settlement of International Disputes.” Although the majori-
ty of States are parties to the 1907 Convention, both Conventions remain in force since the creation
of the Permanent Court of Arbitration was done by the 1899 Hague Peace Conference. Apart from
setting up a permanent, continually accessible mechanism to which States could have recourse for
the settlement of disputes by arbitration, the 1899 Convention and its successor Convention of 1907
organised the rules of law governing the process of international arbitration, by setting out basic
rules of procedure. At the time of the PCA’s creation, war was a recognised part of international re-
lations. The drafters of the 1899 Convention strove to promote the peaceful alternatives that were
available to States in dispute, such as arbitration, mediation, and fact-finding commissions of in-
quiry. It was “with the object of facilitating an immediate recourse to arbitration for international
differences, which it has not been possible to settle by diplomacy” that the Signatory Powers under-
took “to organise a Permanent Court of Arbitration, accessible at all times”.5 This was further made
possible by the construction of the Peace Palace in The Hague in 1913, the building built to serve as
PCA headquarters. The Peace Palace now also houses the ICJ, the Carnegie Library and the Hague
Academy of International Law. Though the PCA has a fixed location inside the Peace Palace ,dis-
pute resolution proceedings conducted under its auspices may take place at any other location
agreed upon by the parties to a case and/or the adjudicators.
The PCA was created with a three-part structure: first, the Administrative Council, the Members of
the Court and the International Bureau.The International Bureau is the Secretariat of the PCA and is
headed by the Secretary-General. It provides linguistic, research, administrative support to PCA ar-
bitration tribunals.6 It maintains the permanent roster of potential arbitrators, receives communica-
tions directed to the PCA (including requests for arbitration), and provides ongoing administrative
services to the arbitral tribunals, including provision of the facilities of the PCA building. If the par-
ties so wish, the Bureau acts as registry to a tribunal.

The judges or arbitrators that hear cases are called Members of the Court. Each member state may
appoint up to four "of known competency in questions of international law, of the highest moral
reputation and disposed to accept the duties of arbitrators" for a renewable 6-year term. Members of
each member state together form a "national group".7 Members may be selected in arbitration cases
in which the PCA provides support. National Groups may propose candidates for International
Court of Justice members. Since the parties prefer to have the autonomy to appoint arbitrators from
outside of a closed panel of arbitrators and judges, the article 47 of the 1907 convention authorises
the International Bureau “to place its offices and staff at the disposal of the Contracting Powers for
the use of any special Board of Arbitration.” This article has been invoked to authorise PCA in-
volvement in arbitration involving non-State parties, including the adoption of various sets of pro-
cedural rules therefor and to enable parties to select whomever they wish as arbitrators.

5 Article 20, Hague Convention,1899; Article 41, Hague Convention, 1907.

6 Article 49, Hague Convention,1907.

7 Article 4, International Court of Justice Statute, 1946.

The Administrative Council is a body composed of all diplomatic representatives of Member States
accredited to the Netherlands. It is presided by the Minister of Foreign Affairs of the Netherlands,
who is also a member.8 It is responsible for direction and control of the International Bureau, directs
the organisation's budget and reports on its activities.The Council provides general guidance to the
work of the PCA, and supervises its administration, budget and expenditure.
In 1995, the PCA established a Financial Assistance Fund,9 aimed at helping developing countries
meet the costs involved in PCA dispute settlement. The Fund comprises voluntary financial contri-
butions by States, international organizations, NGOs and natural or legal persons, However, only
States or State controlled entities are eligible to receive financial support, provided that they are
signatory to either the 1899 or 1907 Hague Conventions, have concluded an agreement to refer a
dispute (or disputes) to PCA dispute settlement and are listed on the Development Assistance
Committee (DAC) list of Aid Recipients regularly prepared by the Organisation for Economic Co-
operation and Development (OECD). Moreover the Permanent Court of Arbitration pursues a poli-
cy of concluding ‘Host Country Agreements’ (HCAs) with its member states, which is designed to
allow the conduct of PCA-administered proceedings in the host country on similar terms as in the
Netherlands, making PCA arbitration and other services more accessible to parties in the host coun-
try and the wider region. To date, the PCA has concluded HCAs in South America (Chile, Costa
Rica); Africa (Mauritius, South Africa); Asia (Singapore, India), and pursuant to the Mauritius
HCA, opened its first overseas office in Mauritius in 2010. In addition to its case administration ac-
tivities, the PCA acts as a centre for academic discourse. In this capacity, the PCA convened a sem-
inar for Members of the Court and other invited guests in October 2013 to celebrate the centenary
of the Peace Palace.

The PCA tribunals have jurisdiction for disputes based on the PCA founding documents that is the
Conventions on Pacific Settlement of International Disputes, or based on bilateral and multilateral
treaties. Its Secretary General acts as an appointing authority for arbitration.Though the PCA was
originally established for inter state arbitration, the Hague Conventions allow considerable flexibili-
ty in the constitution of a special Board of Arbitration.10 Pursuant to the various Optional Rules, the
following parties can agree to bring a case before the PCA; two or more states, a State and an in-
ternational organisation, two or more international organisations, a state and a private party or an
international organisation and a private party.
The potential subject-matter jurisdiction of PCA arbitral tribunals is unlimited. In each case howev-
er, the scope of jurisdiction is governed by the wording of the applicable arbitration agreement.The
cornerstone of the jurisdiction is agreement of the parties. This agreement can be made by way of a
separate agreement covering an existing dispute or through a clause in a treaty, contract, or other
legal instrument, which is usually more general, covering any future disputes “arising under” or “in
connection with” the instrument concerned.
The PCA Rules of Procedure for Arbitrating Disputes Relating to Natural Resources and/or the En-
vironment and the Optional Rules for Conciliation of Disputes Relating to Natural Resources and/or
the Environment contain no requirement that one of the parties be a State or organisation of
States.Private parties may agree to use the administrative and other facilities of the PCA in arbitra-

8 Article 49, Hague Convention,1907.

9 Financial Assistance Fund, PCA, Available at: https://unctad.org/en/Docs/edmmisc232add26_en.pdf(Visited on

July 18,019).

10 Article 26, Hague Convention,1899; Article 47, Hague Convention, 1907.

tions conducted under the UNCITRAL Rules, and the PCA is contemplating adopting its own insti-
tutional version of the UNCITRAL Rules for this purpose.11 There is no requirement that a State
agreeing to PCA dispute resolution be a party to the 1899/1907 Conventions, and accession to the
Conventions does not establish any type of compulsory jurisdiction. The various PCA Rules follow
the UNCITRAL Rules in empowering the arbitral tribunal to decide on any objections to its juris-
diction,12 and providing Dispute Settlement that, for purposes of determining jurisdiction, an arbi-
tration agreement shall be considered separable from the instrument in which it is contained.13
Thus, the invalidity of the contract, agreement or instrument does not ipso facto deprive the arbitral
tribunal of jurisdiction.
Moreover, PCA practice, knows no distinction between contentious and advisory jurisdiction. Arbi-
tration is virtually always contentious, and can be distinguished from other forms of non-judicial
dispute resolution by the final and binding nature of the resulting arbitral award, which is the final
decision of the tribunal in the form of a written documents stating the decision of the arbitrators as
well as the reasons. However, if the parties reach a settlement before the end of the proceedings,
they may request the tribunal to record their agreement in the form of an award on agreed terms.14
The arbitral awards are final and there is no right to appeal, though the awards in cases involving
private parties are generally enforceable in the same manner as any international commercial arbi-
tration award.Therefore, the PCA’s non-binding methods of dispute resolution, including mediation,
conciliation and inquiry or fact-finding, might be more appropriate for parties seeking an advisory
or non-binding – declaration of their mutual rights and obligations.

Inter-State disputes submitted to arbitration under PCA auspices have concerned such diverse mat-
ters as territorial sovereignty, the delimitation of land and maritime boundaries, environmental pro-
tection, treaty interpretation, human rights, and international humanitarian law. Arbitration between
two states takes place when two member states of the PCA decide to submit a dispute for arbitration
to a PCA Tribunal. The Tribunal consists of five arbitrators, two of which are selected by each party
to the arbitration and one of whom may be a national of the party concerned. The four arbitrators
choose the fifth and presiding arbitrator.A number of the inter-state disputes administered by the
PCA have taken place in post-conflict settings. Notably, the PCA provided support in the arbitration
between Eritrea and Ethiopia to decide multiple claims arising out of breaches of the laws applica-
ble in armed conflict that took place during the Eritrean-Ethiopian war of 1998-200015. The case
was submitted to arbitration pursuant to the Algiers Agreement, signed by Eritrea and Ethiopia in
December 2000, which brought the war to an end. The PCA further provided support to the bound-
ary commission that was established, also pursuant to the Algiers Agreement, to delimit and demar-
cate the boundary between Eritrea and Ethiopia. Another important inter-state case dealt by the

11 United Nations document no. A/CN. 9/230 Available at:: http://www.pca-cpa.org/GI/scheduleofcosts.htm (Visited on
July 18,019).

12 United Nations document no. A/CN. 9/230 Available at:: http://www.pca-cpa.org/GI/scheduleofcosts.htm (Visited on
July 18,019).

13 Article 21(2), Hague Convention,1899.

14 Article 34(1), Hague Convention,1899.

15 Eritrea-Ethiopia Boundary Commission, Available at: http://pca-cpa.org/showpage.asp?pag_id=1150 ( Visited on

July 17, 2019).
Permanent Court of Arbitration is Island of Palmas Case16 of 1928 between USA and The Nether-
lands it was a territorial dispute over the Island of Palmas between the Netherlands and the United
States which was heard by the Permanent Court of Arbitration. The Island was declared to be a part
of the Netherlands East Indies and is now part of Indonesia.The case is one of the most influential
precedents dealing with island territorial conflicts.

In the law of the sea, the PCA has administered the last seven arbitrations initiated under the 1982
United Nations Convention on the Law of the Sea, including a pending dispute between Mauritius
and the United Kingdom17 and one between Bangladesh and India18. A number of the PCA’s inter-
State disputes have been concerned with environmental protection, including two cases submitted
by the Netherlands: the Rhine Chlorides arbitration between the Netherlands and France19, which
concerned the treaty framework for international efforts to reduce industrial pollution; and the Iron
Rhine arbitration between the Netherlands and Belgium20, concerning the measures of environmen-
tal protection to be taken in the reactivation of an historic railway.

In addition to inter-state disputes, the PCA also offers its services in other cases where just one of
the parties is a state or a state entity. The PCA’s founding Conventions expressly authorise the In-
ternational Bureau to place its offices and staff at the disposal of the Contracting Powers for the use
of any special Board of Arbitration.The International Bureau first provided services under this pro-
vision in a dispute between a private body and a State in the 1930s, when a private company, Radio
Corporation of America, brought a contractual claim against China 21. This case involved a claim
that a contract to provide radio services was exclusive and had been violated by China’s entry into
contracts with other companies. While the claim of Radio Corporation of America was rejected by
the tribunal, the case constituted an important precedent in the history of the PCA.Today, around 90
of the PCA’s currently pending cases are ‘mixed’ disputes involving a state or public entity, in par-
ticular, in the field of investor-state arbitration under investment treaties. Typically, in a bilateral or
multi-lateral investment treat, the states parties to the treaty include a clause giving investors from
one state the right to bring arbitration against the host state of the investment, to address claims re-
lating to the rights provided to investors in the investment treaty. Those substantive rights will in-
clude guarantees against expropriation of the investment, guarantees of fair and equitable treatment,
full protection and security, and most favoured nation treatment.This type of arbitration is a rela-
tively new field which has seen rapid expansion in the last two decades. For foreign investors, this
means that proceedings to protect an overseas investment can be initiated independently of foreign
policy considerations of the state of nationality.

16 H. Harry L. Roque Jr, "Palmas Arbitration revisited" 77 (4) PhLJ 437 (2003).

17 The Republic of Mauritius v. The United Kingdom of Great Britain and Northern Ireland (2011) PCA-CPA 2011-03.

18 People’s Republic of Bangladesh v. Republic of India (2010) PCA-CPA 2010-16.

19 The Netherlands v. France (2000) PCA-CPA 2000-02.

20 Kingdom of Belgium v. The Netherlands (2003) PCA-CPA 2003-02.

21 Radio Corporation of America v. The National Government of the Republic of China (1934) PCA-CPA 1934-01.
A unique case in this context is an intra-State dispute between the Government of Sudan and the
Sudan People’s Liberation Movement22 , a boundary delimitation case between a central government
and a national liberation movement. The question submitted to arbitration in 2008 was whether the
Abyei Boundaries Commission or ABC, an earlier international boundary commission which had
been tasked with establishing the boundary of the Abyei area, had gone beyond the powers entrust-
ed to it. The tribunal created in 2008 was tasked, if it found that there had been an excess of power,
with drawing the boundary afresh. This arbitration demonstrated the potential for speed of in-
ternational arbitration. The arbitration agreement was deposited by the Parties in July 2008, the fi-
nal award was rendered in July 2009. So far, this case has remained unique; however, given that
most armed conflicts these days are non-international ones, the question arises whether this mecha-
nism might be applied more often in future.

Evidently, the Permanent Court of Arbitration which remained relatively dormant period from the
Second World War to the turn of the millennium, is now experiencing renewed growth in its activi-
ty, with more cases currently pending than were submitted in the first century of its existence.

22 Sudan v. Sudan People’s Liberation Movement (2008) PCA-CPA 2008-07.