CH 17 - Settlement of Disputes

Enquiry/inquiry

Function. As stated in Article 9 of the 1907 Hague Convention for the Pacific Settlement of Disputes,??? is meant to facilitate a solution for disputes involving neither honor nor vital interests by elucidating facts by means of an impartial and conscientious investigation.

Third Parties.

Generally, intervention and joinder in an arbitration proceeding is prohibited without express consent of the parties. This is because arbitration proceedings, unlike court proceedings, are inherently based on the consent of the parties involved.

1. Reprisal.

HOSTILE METHODS: 1. ???? Unfriendly and unlawful acts in retaliation for reciprocal unlawful acts of another State.

1. Retorsion

HOSTILE METHODS: 1. ????. Unfriendly, but lawful, coercive acts done in retaliation for unfair treatment and acts of discrimi nation of another State, e.g., the levy of high discriminatory tariffs on goods coming from the other State.

1. Security Council

The 1. ??? will recommend appropriate measures, considering any amicable measures already adopted by the parties, or that the dispute should be referred to the International Court of Justice.

Arbitrators

The ??????, who must act impartially, have no powers except for those given to them by the parties through agreement, as may be expanded or tempered by the Lex Loci Arbitri. As such, they cannot issue interim awards unless expressly permitted.

Philippine Rules

1. ??????. In the Philippines, arbitration proceedings are governed primarily by R.A. No. 876. Note that under Philippine Law, there is no such concept as automatic recognition of foreign judgments. (See: Mi jares vs. Ranada, G.R. No. 139325, April 12, 2005, where the Supreme Court discussed the rules regarding recognition of foreign judgments in the Philippines.]

1. Conciliation a. Rules.

1. ??????? Active participation of a third party, whose services are solicited by the disputants, in the effort to settle the conflict; but the conciliator's recommendations are not binding. a. ???? Although there are no hard and fast rules on conciliation proceedings, UNCITRAL has nevertheless adopted the Permanent Court of Arbitration's Optional Rules for Conciliation in 1980 with regard to international commercial disputes.

Mediation.

???? A third party offers to help with a solution, usually based on a compromise. Distinguished from good offices in that mediation offers a solution; good offices merely bring the parties together. Proposals made by mediators are not binding.

1. private international law,

Limits to Choice of Law. Based on principles of 1. ???? a case can be made that the choice of law for arbitration proceedings should, in order to evade absurdity, be given the same limits as the choice of law principle in private international law [See: Saudi Arabia Airlines vs. Court of Ap peals, G.R. No. 122191, October 8, 1998, for a discussion on choice of law as applied in cases of private international law.]

Toolbox Analogy

Dispute settlement in the international arena is generally likened to a toolbox. This is because each mode of dispute settlement is a tool used to resolve conflicts, but just like picking tools in a toolbox, it is generally up to the worker to decide which tools he wants to use.

Inter-Temporal Law.

Doctrine of ?????? This doctrine provides that the existence of a right should not only be based on the standards when the law was first made, but also on contemporary standards. An example of this doctrine beinc applied can be seen in the Island of Palmas Arbitration Case [(1928) 2 RIAA 829).

Nationality Issues

For arbitration, non-State entities have been allowed to participate. However, in the event that the tribunal only allows States to appear before it, the rules on when an individual or other entity is considered a national of the State under international law will apply (See Chapter on Nationality).

Hostile Methods.

1. ???? Where the pacific methods of settlement have failed, States sometimes find it necessary to resort to hostile methods, which may be severance of diplomatic relations, retorsion, reprisal, or intervention: a. Severance of diplomatic relations b. Retortion c. Reprisal

1. Res Judicata 2. Stare Decisis

1. ???. Between the parties, any award, or judgment is res judicata. 2. ????. There is no concept of stare decisis for judgments and awards under arbitration.22

Judicial Settlement

1. ???? Similar to arbitration in the nature of the proceedings and in the binding character of the award. This differs from arbitration viz.: in judicial settlement, the judicial body is pre-existing while in arbitration, the arbitrary body is ad hoc; jurisdiction in judicial settlement is usually compulsory, and the law applied by the judicial tribunal is independent of the will of the parties. The judicial settlement of the international disputes is now lodged in the International Court of Justice.

enquiry/inquiry

/?? Application Although ??? has been used many times after its official recognition, the first time it was memorably used was the Dogger Bank Incident of 1904. In that case, as the Japanese Russian War ensued, the Russians mistook Brit ish ships for Japanese ships and sank them. Using inquiry, it was found that Russia was li able and so they were made to pay compensation to the British. Another incident was the Lete lier Case where a former Chilean minister and his American aide were killed by a car bomb in Washington, D.C. that turned out to be an assassination plot masterminded by the head of Chile's secret police. In that case, the Bryan Treaties of 1913-14, which was a dispute settlement treaty between the U.S. and Chile, was used to resolve the conflict. (For more information on the Dogger Bank Incident and the Letelier Case, as well as other examples of inquiry being used to settle dis pute, See: J.G. Merrills, International Dispute Set tlement, pp. 41-57. Cambridge University Press (2011)]

Legal Conflict.

1. ???????? As explained by the PCIJ in the Mavrommatis Concessions Case [PCIJ Series A no. 2], a dispute is a disagreement on a point of law or fact, a conflict of legal views or of interests between two persons. In the South West Africa Case [(1966) ICJ Rep 6], it was held that such a disagreement between the parties on their respective claims must be positively shown. In the Peace Treaties Case [(1950) ICJ Rep 221), it was held that when States hold opposite views regarding the performance or non-performance of a treaty obligation, a legal dispute exists.

1. Rule-Drafting 2. 1985 UNCITRAL Model Law on International Commercial Arbitration. a3. Harmony

1. ?????????. A key responsibility of UNCITRAL is the drafting of rules which could be adopted in ad hoc arbitrations. 2. ? ?????????? Rules created in order to harmonize differences between the domestic laws of different jurisdictions especially regarding the recognition and enforcement of awards. a3). ?????????. The 1985 UNCITRAL Model was meant to be in harmony with the UNCITRAL Arbitration Rules and the 1958 New York Convention.

1. Negotiation

1. ??????????. The process by which States settle their differences through an exchange of views between diplomatic agencies.

1. Lex Loci Arbitri 2. Lex Loci Arbitri 3. Lex Loci Arbitri

1. ?????????????????: This is the law of the State governing arbitration proceedings that take place within the State's jurisdiction. Purpose: 2. ?????????????? is meant as a form of respect to the State in which the proceedings are taking place. This is because while it is recognized that arbitration proceedings are private by nature, the State nevertheless has an interest in ensuring that all procedures occurring within its jurisdiction are both fair and just. Procedural Rules: 3. ????????????? is concerned with the conduct of the proceedings itself and not the merits. As such, while Lex Arbitri can provide procedural rules concern ing the removal of arbitrators, how many days will be given to file pleadings, and even the issuance of injunctions, the same does not cover substantial rules such as what ele ments a valid contract has, or what constitutes a valid sale.

Moot Cases.

????? Unlike in jurisdictions like the Philippines where ??? can still be decided on if the same involves an issue capable of repetition yet evading review, or if the same is necessary for the instruction of bench and bar, moot cases will not be decided by international courts and tribunals. ( See; Northern Cameroons Case ([1963] ICJ Rep 15), where the existence of a legal dispute was an issue, and where Judge Fitzmaurice opined that decisions should not be made in abstracto.

The Security Council.

????? The >????? shall have jurisdiction to intervene in all disputes affecting international peace and security, and in all disputes which, although coming under the domestic jurisdiction clause, have been submitted to it by the parties for settlement. Such disputes may be brought to it by the Security Council itself, the General Assembly, the Secretary General, any member of the UN, or any party to the dispute.

Enquiry

????? a. History. ??? as a form of dispute settlement was brought about by the Maine Affair. In 1898, the USS Maine, which was harbored in Havana, Cuba was sunk, presumably by the Spaniards. This led to two major events: the first is the American-Spanish War which would culminate in the Treaty of Paris that saw colonies such as the Philippines ceded from Spain to America; the second is the First Peace Conference held at The Hague in 1899, the Convention for the Pacific Settlement of International Disputes was made. It was during this Conference tł.at inquiry was first held to be an acceptable means of resolving an international conflict.

Rules of Court.

?????? Alternative Dispute Resolution ("ADR") has been recognized under Rule 18, Section 2(a) of the Rules of Court. Notably, pilot cases for ADR have already occurred around Metro Manila, particularly Valenzuela and Mandaluyong.

The General Assembly

?????? Under the Uniting for Peace Resolution, adopted in 1950, if the Security Council, because of lack of unanimity, fails to exercise its primary responsibility to maintain peace and security, the General Assembly shall consider the matter immediately, with a view to making recommendations to the members for collective measures, including the use of armed forces when necessary.

Political Cases

?????? There mere fact that a legal dispute is highly politicized should not stop a court or tribunal from deciding it. (See: PCA Case No. 2013-19, where the case was still decided despite ongoing political tensions between the parties.)

Enquiry.

??????? Ascertainment of the pertinent facts and issues in a dispute.

Delocalization

???????? Denotes the liberalization of arbitration proceedings by disregarding Lex Loci Arbitri and letting par ties choose what rules will govern their ar bitration. In practice, delocalization's appli cation has remained more theoretical than actual.

Stabilization Clause

????????? Given that the choice of an applicable law may lead to abuse and absurdity, parties often employ a stabilization clause which provides that the applicable law shall be a specific law as is in effect on a certain date.

Truncrited Tribunals

?????????? As opposed to tribunals which were invalidly constituted from the start, truncated tribunals are validly constituted tribu nals which, during the course of the proceedings, are reduced in number. In the Peace Treaties Case [(1950) ICJ Rep 221], it was settled that truncated tribunals can still validly render a proper award.)

Applicable Law.

?????????? Generally, the parties are free to choose what law shall be used to resolve the issues of the dispute.

Mediator

?????????? The ??? can be an individual, group of individuals, or even a State. By way of example, during the Beagle Channel Dispute between Argentina and Chile in 1978, Pope John Paul II offered and was eventually allowed to mediate. As for the U.S.-Iran Hostage crisis in 1980, it was mediated by Algeria.

Pacific or Amicable

?????????????? Modes. Article 3 of the UN Charter provides that the parties to any dispute, the continuance of which is likely to endanger the maintenance of international peace and security, shall, first of all, seek a solution by negotiation, enquiry, mediation, conciliation, arbitration, judicial settlement, resort to regional agencies or arrangements, or other peaceful means of their own choice.

Dispute Settlement Only.

??????????????? Courts and tribunals will only settle the legal disputes before them. Once the legal dispute before them is settled, their role is fulfilled. (See: Asylum Case ([1950] ICJ Rep 266), where ICJ ruled on the legality of the Haya de la Torre asylum situation but did not provide any further solutions for the parties on how to settle their dispute.]

United Nations Commission on International Trade Law.

???????????????? Also known as UNCITRAL, it is a body established in 1966 by the United Nations General Assembly to promote the progressive harmonization and unification of international trade law.

Tender of Good Offices

????????????????????? Where a third party, either alone or in collaboration with others, offers to help in the settlement of a dispute. When the offer is accepted, there is supposed to be an "exercise of good offices."

1. Arbitrate A. Contents B. Timing. C. Independent Nature

Agreement to 1. ??? Despite the New York Convention providing that an agreement to arbitrate must be in writing, in practice not all jurisdictions require an agreement to arbitrate to be written. A..???? Generally, an agreement to arbi trate should contain provisions on how to assemble the tribunal, where the proceed ings will take place, the law to be used in resolving the issues, and other matters such as language to be used, shouldering of costs, and maximum number of witnesses. B. ???? Note that an agreement to arbitrate can be drafted before or after the dispute occurs. If the agreement to arbitrate occurs after the dispute has begun, it is properly referred to as a submission agreement. C. ????? An agreement to arbitrate is always independent of the validity of the agreement or contract it is found in. This is because to permit otherwise would lead to an absurd situation wherein the validity of the agreement or contract would first have to be established before it can be subjected to arbitration proceedings to examine once again whether the agreement or contract where it was contained was valid.

International Dispute

An actual disagreement between States regarding the conduct to be taken by one of them for the protection or vindication of the interests of the other. A situation is the initial stage of a dispute

International Agreements.

Arbitration has been the subject of several international agreements such as the 1923 Geneva Protocol, the 1927 Geneva Convention on the Execution of Foreign Arbitral Awards, and the 1961 Geneva Convention on International Commercial Arbitration.

Lex Loci Arbitri

Awards: The procedure regarding recognition and enforcement of decisions and awards is generally covered by ??????????. Nevertheless, it must be noted that under the 1958 New York Convention and the UNCITRAL, all that is required is for parties to submit a certified true copy of the award and the arbitration agreement to the proper tribunal.

1. foreign tribunals

Challenges. Awards granted by 1. ???? can still be challenged. However, these challenges are generally not towards the merits of the case but rather towards external factors such as the jurisdiction of the tribunal, badges of fraud, and abuse of discretion.

1. ICC 2. UNCITRAL

Choice of Law. For both 1. ?? and 2. ??, the parties can stipulate what law will be used to resolve the dispute. If they fail to do so, the applicable law will be determined by the tribunal.

Justiciability

Deals with whether or not a court or tribunal can take already take jurisdiction over the matter. As such, a dispute is justiciable when it is already an actual controversy that involves rights that are legally demandable and enforceable. Thus, as a general rule, the absence of any injury whatsoever to the State makes the claim not yet justiciable.

International Chamber of Commerce

Difference with ????????????????????. UNCITRAL rules are deemed much more neutral compared to ICC rules since ICC rules originate from a capitalist philosophy. Likewise, UNCITRAL rules are more detailed, and the UNCITRAL system does not have a permanent institution to apply the rules, unlike the ICC which has the International Court of Arbitration. Also, while the ICC Rules allow the chairman to render a decision if no majority decision is reached, there appears no justification to allow the same under UNCITRAL Rules.

1. Freezing 2. Embargo 3. Pacific blockade 4. Non-intercourse 5. Boycott

HOSTILE METHODS: Reprisal may take the form of: 1. ??? of the assets of the nationals of the other State. 2. ??? the forcible detention or sequestration of the vessels and other property of the offending State. 3. ????: the prevention of entry to or exit from the ports of the offending State of means of communication and transportation. (Note, however, that this could be violative of the UN Charter.) 4. ?????: suspension of all intercourse with the offending State, particularly in matters of trade and commerce. 5. ??????: concerted suspension of commercial relations with the offending State, with particular reference to a refusal to purchase goods.

Diplomatic relations

HOSTILE METHODS: Severance of 1. ???. Unfriendly and coercive action that effectively terminates amicable communications between States.

I. Preventive action II. Enforcement action

If the terms of settlement are rejected, then the Security Council may take: i. ?????: such measures not involving the use of armed force, such as complete or partial interruption of economic relations, and of rail, sea, air, postal, telegraphic, radio or other means of communications, and severance of diplomatic relations; or if these measures are still inadequate. Ii. ?????: action by air, sea or land forces as may be necessary to maintain or restore international peace and security, including demonstrations, blockades and other operations by air, sea or land forces of members of the UN. [Note that a member State is obliged to render assistance in carrying out the measures decided upon by the Security Council.)

1. Security Council

If these should prove unsuccessful, the 1. ??? itself may recommend such terms of settlement as it may deem appropriate.

i. New York Convention ii. Non-Binding Rules.

International Agreements: i. ???????????? The 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards was a landmark Agreement whereby States had to ensure that their Courts would recog nize as valid an agreement to arbitrate. This meant that when an agreement to arbitrate was present, a Court no longer had jurisdiction to hear and resolve the issues involved therein. Likewise, recognition and enforcement of foreign awards was simplified inso far as a party would only need to present in Court an authenticated copy of the foreign decision which, if not contested, would be recognized. ii. ??????????? As with all international agreements, they are only binding if a State binds itself to them. One way by which States do this is by integrating the same in their domestic laws.

1. Background. 2. Members. 3. Submission Clause 4. Competence de la Competence

International Chamber of Commerce. 1. ??? The International Chamber of Commerce was founded in 1919 and is based in Paris. It has two permanent institutions, namely the International Court of Arbitration, and the Secretariat. ii. ???. Unlike most international organizations, the members of the International Chamber of Commerce are not limited to States. As such, various non-State business organizations are members of the International Chamber of Commerce. iii. ???. Generally, arbitration before the International Court of Arbitration is a voluntary procedure. However, if parties include a submission clause in their contract where they expressly provide that all disputes shall be settled using the rules of arbitration of the international chamber of commerce, such a clause is binding on the parties and arbitration is no longer considered voluntary. iv. ???. Each arbitral tribunal can decide whether it has jurisdiction over the matter before it.

1. Exhaustion. 2. Delays. 3. Stipulations.

Negotiation: 1. In the Case Concerning Land and Maritime Boundary between Cameroon and Nigeria [(2002) ICJ Rep 303], the ICJ held that there is no requirement under international law for States to exhaust all possible negotiations before bringing a dispute before a tribunal. 2. In the Hostages Case ((1980) ICJ Rep 3), the ICJ ruled that the obligation to negotiate should not work to delay legal proceedings especially where the delay is due to a refusal to negotiate by the other party. 3. However, if parties wish to enter into agreements whereby they will not resort to judicial proceedings unless they have both had an opportunity to negotiate, the same would be valid.

Choices of Law

Other ??????????. Aside from simply choosing the law of the forum where the dispute is being heard, parties can also choose to employ the general principles of law, as well as the Lex Mercatoria or Merchant Law among others.

1. 1985 UNICTRAL Model 2. domestic Courts

Purpose. The 1. ???????? was meant to strike a balance between the right of the parties to choose how to settle their dispute, and the right of the State to regulate matters occurring within its territory or against its nationals. Prohibitions. Under the 1985 UNICTRAL Model, a case cannot be brought directly to the 2. ??? for resolution when the dispute is covered by a writ ten arbitration agreement. In such instances, parties have no choice but to settle the dispute through arbitration.

Regional Organizations

Resort to 1. ???. The parties may, of their own volition, or at the instance of the organization itself, assume the obligation of settling the dispute

1. United Nations 2 Security Council

Role of the 1. ??. Where none of the above mentioned methods succeeds in settling the dispute, the United Nations may be asked oi may decide on its own authority to take a hand in the settlement. This task is principally addressed to the 2. ???, but may be taken over by the General Assembly under certain conditions.

optional jurisdiction clause.

The ??????????? Although the ICJ's jurisdiction is based on the consent of the parties, nonetheless, Article 36 of the Statute of the International Court of Justice provides that the States/parties to the Statute recognize the jurisdiction of the Court over disputes concerning interpretation of a treaty, any question of international law, the existence of any fact which would constitute a breach of international obligations, and the nature or extent of the reparation to be made for such breach.

1. Background 2. Function

The Permanent Court of Arbitration 1. ???? The Permanent Court of Arbitration was created during The Hague Peace Convention of 1899. It is based at The Hague and is located in the same building as the International Court of Justice. 2. ???. The Permanent Court of Arbitration is not a court in the traditional sense. Characterized as a framework for arbitral tribunals constituted to resolve specific disputes, it is those specific tribunals and not the Permanent Court of Arbitration which resolves conflicts. Aside from this, the PCA also has the duty of giving nominations to the ICJ, as provided for in Article 4 of the ICJ Charter.

Arbitration

The solution of a dispute by an impartial third party, usually a tribunal created by the parties themselves under a charter known as a compromise.