International Arbitration

International Arbitration

International Arbitration

International arbitration is the settlement by a mutually acceptable third party of disputes between sovereign states. Modern international arbitration began with the conclusion of Jay’s Treaty (1794) by Great Britain and the United States. Numerous disputes were arbitrated during the 19th century, many involving these two countries. The most important disputes were settled in the Treaty of Ghent (1814) and in various treaties defining fishing rights in specific areas. The Treaty of Washington (1871) embodied arbitrations of the San Juan Boundary Dispute and of claims arising from the American Civil War. In Europe, the first important development in international arbitration in modern times was the Hague Conference of 1899, which resulted in the creation of the Permanent Court of Arbitration. Although reluctant to participate in many early international treaties, the U.S. continued to make individual arbitration treaties, especially in the years between World Wars I and II.

Today, international arbitration may be used to settle boundary disputes, controversies about interpretation of international agreements, and claims arising out of wartime damage. International commercial arbitration involves private parties and/or governments engaging in commercial activity. The International Bank for Reconstruction and Development, for example, sponsors the International Center for Settlement of Investment Disputes, to hear disputes between private investors and the countries in which their investments were made.

International commercial arbitration, like its counterpart in the U.S., proceeds on the basis of an arbitration clause contained in an export-import, investment, or similar contract between persons from different countries. Since neither party wishes to have future disputes adjudicated in the courts of the other party, arbitration in a neutral forum is a common solution. The arbitration clause usually provides for the manner of selecting arbitrators; sometimes provision is made for arbitration to be conducted under the supervision of an institution such as an international trade association.

Some 80 countries, including the United States, the former Soviet republics, and all other major commercial nations outside Latin America, are parties to the United Nations Convention on the Recognition of Foreign Arbitral Awards. This convention enforces arbitral awards rendered in any contracting state, regardless of the nationalities of the parties to the dispute. Agreements to arbitrate are also enforceable, and a court will generally not hear a dispute that is governed by a valid agreement to arbitrate between persons from different contracting states.

Typically, international arbitrations are heard before three arbitrators, one appointed by each side and the third by mutual agreement or by designation of an administering body. Most arbitrators are jurists and are expected to support their award by full opinions. Centers for international arbitration are London, Paris, Zürich, Geneva, New York, Tokyo, Hong Kong, and (for East-West trade disputes) Stockholm. (1)

Arbitration in the Pacific Settlement of International Disputes

International arbitration is a proceeding in which two nations refer their differences to one or more selected persons, who, after affording to each party an opportunity of being heard, pronounce judgment on the matters at issue. It is understood, unless otherwise expressed, that the judgment shall be in accordance with the law by which civilized nations have agreed to be bound, whenever such law is applicable. Some authorities, notably the eminent Swiss jurist, J.K. Bluntschli, consider that unless this tacit condition is complied with, the award may be set aside. This would, however, be highly inconvenient since international law has never been codified. A fresh arbitration might have to be entered on to decide (1) what the law was, (2) whether it applied to the matter in hand. Arbitration differs from Mediation (q.v.) in so far as it is a judicial act, whereas Mediation involves no decision, but merely advice and suggestions to those who invoke its aid.

Source: Encyclopedia Britannica (1911)

Comparative Analysis

International Overview

The Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention) adopted on 10 June 1958, in force 7 June 1959. States party as at 1 May 2005: 135. See UN Treaty website.

The Inter-American Convention on International Commercial Arbitration (Panama Convention), adopted by the Organization of American States (OAS) at the Specialized Inter-American Conference on Private International Law, in Panama City on 30 January 1975; in force 16 June 1976. States party as at 13 April 2005: 18 – Argentina, Bolivia, Brazil, Chile, Colombia, Costa Rica, Ecuador, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Panama, Paraguay, Peru, United States, Uruguay, Venezuela. See OAS website.

The Inter-American Convention on Extraterritorial Validity of Foreign Judgments and Arbitral Awards, (Montevideo Convention), adopted by the Organization of American States (OAS) at the Specialized Inter-American Conference on Private International Law, at Montevideo, 8 May 1979; in force 14 June 1980. States party as at 13 April 2005: 10 -Argentina, Bolivia, Brazil, Colombia, Ecuador, Mexico, Paraguay, Peru, Uruguay, Venezuela. See OAS website.

The United Nations Commission on International Trade Law Model Law on International Commercial Arbitration, 1985, adopted on 21 June 1985 (“UNCITRAL Model Law 1985”). Legislation based on the UNCITRAL Model Law on International Commercial Arbitration 1985 has been enacted in Australia, Azerbaijan, Bahrain, Bangladesh, Belarus, Bermuda, Bulgaria, Canada (by the federal Parliament and all provinces and territories), Chile, in China: Hong Kong Special Administrative Region, Macau Special Administrative Region; Croatia, Cyprus, Egypt, Germany, Greece, Guatemala, Hungary, India, Iran (Islamic Republic of), Ireland, Japan, Jordan, Kenya, Lithuania, Madagascar, Malta, Mexico, New Zealand, Nigeria, Oman, Paraguay, Peru, Philippines, Republic of Korea, Russian Federation, Singapore, Spain, Sri Lanka, Thailand, Tunisia, Ukraine, within the United Kingdom of Great Britain and Northern Ireland: Scotland; in Bermuda, overseas territory of the United Kingdom of Great Britain and Northern Ireland; within the United States of America: California, Connecticut, Illinois, Oregon and Texas; Zambia, and Zimbabwe. See UNCITRAL website.

Canada

The United Nations Foreign Arbitral Awards Convention Act, S.C. 1986, c. 21, ratifying the New York Convention, 1958.

The Commercial Arbitration Act, S.C. 1986, c. 22, ratifying the UNCITRAL Model Law 1985.

Also, the 10 provinces and 2 territories all adopted the two conventions in 1986.

United Kingdom

The Arbitration Act 1950, 1950 U.K., c. 27, amended by the Arbitration Act 1979, 1979 U.K. c. 42.

The Arbitration (International Investment Disputes) Act 1966, 1966 U.K., c. 41.

The Arbitration Act 1975, 1975 U.K. c. 3 giving effect to the New York Convention, 1958.

By virtue of the Law Reform (Miscellaneous Provisions) (Scotland) Act 1990, 1990 U.K., c. 40, sect. 66 and Sch. 7., only Scotland is a party to the UNCITRAL Model Law 1985.

The Arbitration Act 1996, 1996 U.K., c. 23, assented to on 17 June 1996, SI 1996/3146, which continues to enforce Geneva Convention awards and New York Convention awards under the 1950 Act.

United States

The United States Arbitration Act, 9 U.S. Code sects. 1-14, first enacted 12 February 1925 (43 Stat. 883), codified 30 July 1947 (61 Stat. 669) and amended on 3 September 1954 (68 Stat. 1233). Chap. 2 was added on 31 July 1970 (84 Stat. 692); sect. 15 was added 16 November 1988 (102 Stat. 3969); sect. 16 was added 19 November 1988 (102 Stat. 4671) and redesignated 1 December 1990 (104 Stat. 5120); Chap. 3 was added 15 August 1990 (104 Stat. 448).

The U.S. is a party to the New York Convention,1958, but not the UNCITRAL Model Law 1985.

France

France enacted the New York Convention, 1958 by Decree No. 80-354 of 14 May 1980, in force 1 October 1980, codified as arts. 1442 to 1507 of the New Code of Civil Procedure by Decree No. 81-500 of 12 May 1981.

France has not yet adopted the UNCITRAL Model Law 1985.

China

China acceded to the New York Convention on 2 December 1986.

The People’s Republic of China: Arbitration Law, promulgated 31 August 1994, in force 1 September 1994.

By William Tetley, Q.C.

Administrative aspects of International Arbitration

International Arbitration: appointment of agents

International Arbitration: appointment of arbitrators

International Arbitration as a choice for judicial settlement

Arbitration Awards in the Pacific Settlement of International Disputes

International Arbitration awards

Appeal from International Arbitration awards

Binding nature of International Arbitration awards

Correction of International Arbitration awards

International Arbitration awards distinguished from judicial settlement

Execution of International Arbitration awards

Implementation: dispute relating to International Arbitration awards

International Law Commission: model rules on International Arbitration awards

Interpretation of International Arbitration awards

Mixed tribunals and International Arbitration awards

Optional compulsory procedures relating to International Arbitration awards

International Arbitration awards: presentation in writing

International Arbitration awards: relation to inquiry

Resort to International Arbitration awards under regional agencies or arrangements

Revision of International Arbitration awards

International Arbitration Clause and the Electronic Commerce

International Arbitration Clause in the Online Business Law

The Arbitration (International)

Name

The Arbitration (International) is the standarized name of one of the International Courts and Tribunals (see the entries in this legal Encyclopedia about court rules and procedural law for more information on some aspects of the Arbitration (International) in international law).

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Notes and References

  1. Encarta Online Encyclopedia

See Also

Hierarchical Display of International arbitration

International Relations > International security > Peace > Settlement of disputes
Law > Organisation of the legal system > Legal system > Courts and tribunals > International court
Law > Justice > Judicial proceedings > Arbitration
Trade > International trade > International trade > International commercial arbitration

International arbitration

Concept of International arbitration

See the dictionary definition of International arbitration.

Characteristics of International arbitration

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Resources

Translation of International arbitration

Thesaurus of International arbitration

International Relations > International security > Peace > Settlement of disputes > International arbitration
Law > Organisation of the legal system > Legal system > Courts and tribunals > International court > International arbitration
Law > Justice > Judicial proceedings > Arbitration > International arbitration
Trade > International trade > International trade > International commercial arbitration > International arbitration

See also

  • Permanent Court of Arbitration
  • International conciliation
  • International mediation

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