Lecture 5 :

Continuation Lecture on
Dispute Settlement

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Who is to arbitrate?

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• States which conclude the arbitration treaty have to agree
upon the arbitrators.
• The parties may agree on a single (sole) arbitrator, who
may be the Head of a third State (who in turn may delegate
his responsibilities to a person knowledgeable in
international law) or a dignitary.

• In the Rainbow Warrior case, the UN Secretary General

was called upon to arbitrate for the 1st time.

• The parties may also agree to entrust the arbitration to a

body of individuals, a so called arbitration commission or
tribunal.

• Finally the parties may entrust a mix-commission, usually

composed of 2 national commissioners and an3 umpire.
The law applied by arbitrators
• The treaty of arbitration usually stipulates the
principles according to which the arbitrators have to
give their award.

• These principles are normally the general rules of

international law, but if the parties so desire they may
be rules of equity, or other rules specially laid down in
the treaty of arbitration for the special case.

• The treaty also frequently lays down rules of procedure

to be followed by the arbitrators or empowers them to
lay down the rules of procedure.
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Binding force of arbitral award

 An arbitral award is final if the arbitration treaty does not

stipulate the contrary, and is binding upon the parties.

 As, however, no central authority exists above the States to

execute the award against a State refusing to submit, in case of
such a refusal the other party has the right to enforce the arbitral
award by such compulsive means as are open to it under
international law…

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Arbitration v Court

• The main difference between arbitration and judicial

settlement is that in arbitration there is “party autonomy”.

• It is a device for leaving the settlement of disputes as much

in the hands of the parties as is possible.

• Parties are free in deciding the law to be applied, and also

the method of settlement, including the place where the
dispute is to be settled, by whom and in accordance with
what procedures.

• Furthermore, arbitration can be conducted confidentially

(without any publicity). 6
The Utility of Arbitration

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 Arbitration has been used for a long time by States to
settle their disputes and it may be considered the most
effective method, in view of the large number of cases
and variety of types of disputes that have been settled
in this way.

 Arbitration provides the parties to a dispute with the

opportunity to obtain a decision from a judge or judges
of their own choice. Moreover, arbitration, unlike
inquiry and conciliation, results in a decision which is
binding.

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 In view of these advantages it is not surprising that in
the period since 1945 States have continued to regard
arbitration as an appropriate way of handling certain
types of disputes.

 Of the various cases referred to ad hoc tribunals, the

majority have concerned territorial or quasi-territorial
disputes.

 The Lake Lanoux arbitration, the Rann of Kutch

arbitration, the Channel arbitration and the St. Pierre &
Miquelon arbitration all fall into this category.
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Arbitration has also played an important role in
international treaty practice and is to be found in
multilateral and bilateral treaties on a wide variety of
subjects.

The 1982 UN Convention on the Law of the Sea, for

instance contains extensive provisions on arbitration.

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 C. INTERNATIONAL COURT OF JUSTICE

 1. Jurisdiction of the ICJ

 a. Contentious Jurisdiction: power of court to hear
disputes between states.
 1) Prerequisite: states parties must recognize the
Court's jurisdiction.
 a) Most commonly done on an ad hoc basis.
b) Sometimes these agreements are made permanent
by:
 1] Inclusion in a bilateral treaty.
2] Unilateral declarations made by each of11 the parties
(called "optional clause" or Art. 36(2) declaration).
 b. Advisory Jurisdiction: power of ICJ to give
opinions about issues of international law at the
request of the UN or its specialized agencies.
 1) Cases will be rejected if they have the effect
of making a state a party to a dispute without its
consent.
 c. Judgments
 1) Decision of ICJ is binding between the parties
and with respect to the particular case only.
 a) Stare decisis does not apply
b) Judgment is final and without appeal.
 1] ICJ will interpret a judgment,
2] ICJ may revise a judgment within 10 years if a
request is made within 6 months of the discovery
of some new relevant fact.
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 2) Compliance with ICJ judgments
 i) Theoretically: Security Council may take
"measures to give effect to the judgment.“

ii) Practically: there is no way to force a state to
comply with a judgment.

iii) Usually: judgments are complied with
voluntarily.
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E. CHOOSING THE GOVERNING LAW

 1. Municipal Courts apply the laws of other states

because this the fair thing to do.
 a. Rationale: To have a court in another country apply
different laws would discourage international
exchanges of all kinds.
 2. Choosing the Law
 a. Courts use "choice of law" or "conflict of law" rules
to determine if they should apply their own laws or the
laws of another state in settling civil disputes.
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b. This involves a two-step procedure:
 1)If the parties to a dispute have agreed to the application of
the laws of a particular country, the court will apply those laws.

2) If the parties have not agreed as to which laws should apply
(either expressly or impliedly), then the court (depending on the
state it is located in) will determine for itself which laws it
should apply by:
 a) Following statutory dictates,
b) Using the "most significant relationship" test.
c) Using the "governmental interest" test.

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 F. REFUSAL TO EXERCISE JURISDICTION
 1. Forum Non Conveniens Doctrine
 a. Defined: A court may refuse to exercise its power to
hear a case when it believes that it would be fairer and
more convenient for the case to be decided elsewhere.
 1) Factors the court will consider are:
 a) Private interests of the parties (e.g., the ease and cost
of access to documents and witnesses).
b) Public interest factors (e.g., the interests of the
forum state, the burden on the courts, and the notion of
judicial comity).
 Case 3-12. Reyno v Piper Aircraft Company (Supreme
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Court Decision)
G. PROVING FOREIGN LAW

 1. Presumptions
 a. Courts are held to know the law that applies in their
own state.
b. Courts are held to know the rules of international
law.
c. Courts are assumed not to know the law of foreign
states.
 1) The parties must prove foreign law as a fact.

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H. RECOGNITION OF FOREIGN JUDGMENTS

 1.Foreign court judgments: a hearing will be

held by a court asked to convert a foreign
judgment into a local judgment.
 a. Common consideration: Did the foreign
court have jurisdiction before handing down its
judgment?
b. Other considerations depend on the country.

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 2. Foreign arbitral awards:
 a. Treated like domestic judgments in courts in states
that are parties to the United Nations Convention on
the Recognition and Enforcement of Foreign Arbitral
Awards.

b. Otherwise, must be converted into a foreign
judgment in the state where the arbitration takes place,
and then that judgment is treated like any other foreign
court judgment.
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 The advisory function of the court is not open to states,
but only to international organizations.

 The right to request an advisory opinion is an original

right for the General Assembly and the Security Council.

 It is a derivative right for other organs of the UN and

specialized agencies (they have the right to request only
when so authorized by the General Assembly).

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 Advisory opinion
 In contrast to a judgment in a contentious case, an advisory
opinion has of itself no binding force.

 The organs are not obliged to request them; once the request has
been made, they are similarly not obliged to comply with them.
 Nevertheless, in practice, advisory opinions are complied with in
most cases.

 Indeed, they may contribute and sometimes they have contributed

in large measure, to the formation or to the confirmation of
international customary rules.
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END OF LECTURE

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