11. International Arbitration

14 Jan

International Arbitration

1. In the contemporary international scene the peaceful settlement of disputes between States is a supreme imperative of international law, which is usually projected in the law of nations. In this regard, the Constitution of many countries has the commitment (both domestically and internationally) to apply, when the circumstances warrant, methods of peaceful settlement of disputes. Such procedures in its implementation and development must take into account the adjustments imposed by the new international realities, such as the fact that societies have now become interdependent and interconnected (and computerized) in many areas, particularly in the financial and commercial fields.

2. Arbitration has been established as a procedure for peaceful settlement of disputes by which the contesting states voluntarily submit the matter to one or more judges (referees), agreed to by both parties, and to whose decision they undertake to abide. Arbitration is part of the so-called peaceful legal methods of applying Article 33 of the UN Charter whose judgements are binding on the parties.

3. On the other hand, in bodies like the WTO, arbitration procedures themselves rely on to the resolution of disputes between its members. Similarly, inter alia, free trade agreements usually establish procedures for peaceful settlement of disputes. For instance, Central America Free Trade Agreement and the Dominican Republic entered in its Article 20.6 the option of a “Request for an Arbitral Panel” as a means of resolving disputes between its members.

4. In essence, in international law, arbitration is essentially a legal solution issued through an award by a person or a court to officiate as referees to end a dispute between States. The principles or legal rules to guide the intervention of the referees are general international law, unless the contesting states authorise the judge to act as a “conciliator.”

5. The so-called Permanent Court of Arbitration is not a court in the traditional sense. It consists basically of a list of arbitrators, to be able eventually to choose the judges for a particular arbitration case.

6. The nomination of arbitrators can be done either by the an agreement between States. They can also agree upon the rules or principles that the arbitration court will apply, the nature and timing of evidences, the site of the court, the language to be used, the time to produce the sentence, the application of the sentence, and, of course, to be bound by its ruling.

7. Similarly, the nomination of arbitrators may be the consequence of a treaty that provides for the arbitration mechanism for settling disputes that arise between the States. No doubt, the arbitration is a formal agreement that is perfected by means of a treaty. Its nature may be general (when there is agreement to submit all types of disagreements to arbitration); or special (when only certain cases are submitted).

8. Arbitration is different from international jurisdiction which operates through permanent courts with uniform rules. Arbitration is useful to resolve a particular dispute or a series of similar disputes or other isolated cases.

9. Arbitration differs from mediation in that the arbitrator must issue a decision in a matter of law, while the mediator proposes a compromise or recommend the best and fairest method to do so. Unlike mediation, arbitration judgements are binding on the parties. Ultimately, the effectiveness of arbitration, as in other methods of peaceful settlement, rests in the good faith of the States concerned.

10. Ultimately, international order also requires that the decision of an arbitration must be accompanied by the responsibility of both States to uphold it. The more complex, uncertain and fluid the external environment, the more it will require solid diplomacy, ethics and sense of responsibility by both States not to renounce the decision of an arbitration to which they both initially agreed.

© by Odeen Ishmael


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