POLI 4041 Lecture : ILFinalNotes2 Part 2
Dispute Settlement
In international law, a dispute is defined as a disagreement on a point of law or fact, a conflict of legal
views or interests between parties. This definition was provided by the ICJ in the Mavrommatis case.
Based on this definition, there are several disputes that take place on the international scene.
Why? Countries worry about their national interests. It takes time. Countries use other means and
there are uncertainties.
Countries of the world often make a distinction between political disputes and legal disputes.
Political disputes are defined as disputes that can not be solved by the judicial process.
Legal disputes are those that could be easily settled by a court of law. This usually means that they involve
legal questions and not political questions. The truth is that this distinction is not always very clear because
countries could take either position based upon the dispute at hand.
Examples:
In the 1986 Nicaragua vs. US case, the US argued that the case was essentially political and could not be
resolved/settled by the ICJ. They were mining ports in Nicaragua. In the 1979 US v. Iran Case (settled in
the ICJ) in resolving a dispute concerning hostages, the US said that the issue was legal.
According to international law, whenever and wherever parties are willing all disputes would be settled by
the judicial process, meaning that this distinction is relevant. The court argued that all disputes involve
some legal issues and settling these disputes could usually have political consequences.
Example. In the Certain Expenses Case, a Soviet Judge of the ICJ said that the dispute was political and
not legal.
There is a requirement in international law that before a case is taken before an international tribunal, local
remedies must be exhausted. This means that you have to settle all issues at the lowest possible level and
you can not go to the next level until issues are resolved at each step.
Prior to bringing a case before the international tribunal, an aggrieved subject must first turn to domestic
tribunals for possible legal help. Some scholars have argued that the exhaustion of local remedies has been
instituted to show some respect for municipal law.
In a case (1959 Interhandel Case) between Switzerland and the US, the US seized the assets of a company
that was based in Switzerland known as Interhandel. They seized the assets because the US believed that
the company had ties to Nazi Germany.
Following the war, Interhandel was trying to recover its assets that were seized, but as the case was being
considered by the Supreme Court of the US, the Swiss government began proceedings in the ICJ.
The ICJ turned down the request from the Swiss government with the argument that the local remedies had
not been exhausted.
The Claim of Certain Shipowners vs. Great Britain – Finnish people began proceedings against Great
Britain in an international tribunal, but the British refused to take part in it because they claimed that local
remedies had not been exhausted. However, the commission ruled against Great Britain instead, with the
argument that the British government had made it impossible for the Finnish ship owners to exhaust local
remedies.
The Calvo Clause became popular and it is the idea that Latin Americans forbade Western countries to
intervene when one of their companies had trouble in the Latin American countries. The idea was that
because the western countries were so powerful, their intervention would make their judicial system
difficult to operate effectively, and the US could impede on court proceedings.
Western countries came to argue that having this clause denies individuals the right to diplomatic
protection.
Arbitration
Arbitration can be defined as a procedure for setting disputes between states by binding Award on the basis
of law and as a result of an undertaking that is voluntarily accepted. A ruling that is made in an arbitration
settlement is often known as an award. The only problem is that many would insist that in an arbitration,
an award is binding (because it is voluntarily accepted) and it can’t be challenged.
This definition was provided in international law by the ILC of the UN.
According to Bederman, he believes that arbitration seems to be in decline in today’s world. The truth is
that many businesses prefer arbitration over adjudication because access to the ICJ is only open to nation-
states.
Arbitration has become one of the oldest methods of settling disputes by using a third party. The fact is
that arbitration and the award are binding (pacta sunt servanda).
Arbitration goes back to a 1974 Treaty (Jaj Treaty). Most arbitration often consisted of a mixed
commission with both parties that selected someone to arbitrate the dispute (mutual agreement in
selection). It is possible to have only one arbitrator and arbitration has become one of the oldest methods to
settle disputes by using a third party.
The Function/Process of Arbitration
A) Establish an agreement or accord (compris d’ arbitrage) that states that both parties have
agreed to engage in arbitration. This document has the status as a treaty in international law,
meaning that it is binding.
B) After the agreement has been established, both parties must invest in a tribunal and its
mandate, meaning that the tribunal will tell them what has to be done. The tribunal can also
tell the arbitrator how to decide the case. It can be as vague as allowing them to decide it
according to law or on a particular convention that has been signed. The general principle
could be used in some situations to ensure equity and justice.
In the 1928 Island of Palmas Case between the US and the Netherlands is an example of arbitration.
Many people do not like arbitration because it is binding and they consider it to be far too excessive. In
international law, when something is binding, it can’t be appealed, which is the concept of res judicata.
The argument is that it is far to excessive to give an arbitration this much power in a legal proceeding.
Conditions to Nullify an Arbitration Award
A) The first condition relates to jurisdiction. This means that you simply exceed the jurisdiction that
was given to you, or the tribunal does more than what was asked.
B) The second condition relates to procedure. This means that perhaps one of the parties refused to
cooperate with the other partner.
C) The third condition relates to fraud and corruption. This means that when fraud and corruption is
detected. One example of that Is a dispute between US and Venezuela and corruption charges were made
on 2/3 of the panel members. Whatever decision was made in the end was nullified because other members
were there.
D) The fourth occurs when essential errors are made, essentially when all evidence was considered.
The Value of Arbitration
The Value is somewhat more conciliatory. This means that you would even meet with the other parties to
decide what happens. This would also allow the parties to exercise some degree of autonomy. It also
would involve less publicity.
Adjudication
Adjudication came as a result of collaborative work by the ICJ and the PCIJ in the establishment of the
World Court. The PCIJ was created after World War I (existed from 1920 – 1939). The ICJ was created
after 1945 and it exists up to the present.
One of the big questions is why did it take so long before these courts were created. The answer is they
could not agree on how the judges would be selected, where they would come from, and what kind of
powers the court would have (lack of consensus).
Lack of Consensus
All of this changed when two diplomats (Root & Philmore) came up with a plan that is today known/seen
as a compromise whereby both the League of Nations assembly and the League of Nations Counsel would
play a role in selecting judges.
The Statute of the ICJ is part of the UN Charter. It is set over in the Hague in Netherlands (headquarters is
there).
Selection/Appointment of Judges
One of the issues talked about in the statute is the issue of the appointment of judges. One of the big things
this institution had to deal with is to somehow depoliticize the process (this means that they would have to
remove politics out of the situation).
The non-politicized entity was the Permanent Court of Arbitration (these people would be important
because representation in the Court of Arbitration is not tied to your nation state). The PCA is comprised
of a group of experts and national groups that who would decide who the ICJ judges would be.
The next stage after the PC of Arbitration is where the trouble begin (it goes to the UN’s General Assembly
and the Security Council and it becomes politicized). Country’s begin to lobby citizens of other countries
for a seat on the court.
Sometimes, many would argue that not only do countries lobby, but they also seek deals. (Ex. Allowing
someone from Sierra Leone to sit in the court will allow someone from Guinea to do so as well.)
Where would Judges come from (geographical consideration)?
The next stage involves geographical consideration sometimes helping to decide who will be in the court.
This suggests that somehow legal training and academic programs are minimized.
Members of the Security Council always have one person who represents them in the court. It’s also
argued that when the Security Council votes before the Assembly, the votes in the General Assembly are
also influenced. This process is very politicized because countries lobby for their citizens to have a seat on
the court, and a lot of deals are made (people voting for one country and vice versa).
