Permanent Court of Arbitration and ad hoc arbitrations

The Permanent Court of Arbitration (PCA), is an international organization based in The Hague in the Netherlands. It was established in 1899 at the first Hague Peace Conference. The PCA provides services for the arbitration and resolution of disputes involving states, state entities, intergovernmental organizations, and private parties. The PCA is different from the International Court of Justice which is housed in the same building, the Peace Palace in The Hague.

The creation of the PCA is set out under Articles 20 to 29 of the 1899 Hague Convention for the pacific settlement of international disputes, which was a result of the first Hague Peace Conference. At the second Hague Peace Conference, the earlier Convention was revised by the 1907 Convention for the Pacific Settlement of International Disputes. The Conference was convened at the initiative of Czar Nicolas II of Russia "with the object of seeking the most objective means of ensuring to all peoples the benefits of a real and lasting peace, and above all, of limiting the progressive development of existing armaments." The most concrete achievement of the Conference was the establishment of the PCA: the first global mechanism for the settlement of disputes between states. The 1899 Convention was revised at the second Hague Peace Conference in 1907.

The PCA is not a “court in the conventional understanding of that term, but an administrative organization with the object of having permanent and readily available means to serve as the registry for purposes of international arbitration and other related procedures, including commissions of enquiry and conciliation.”^[2] It is a permanent framework available to assist temporary arbitral tribunals or commissions. The judges or abitrators that hear cases are officially called "Members" of the Court.

The PCA is housed in the Peace Palace in The Hague, which was built specially for the Court in 1913 with an endowment from Andrew Carnegie. From 1922 on, the building also housed the distinctly separate Permanent Court of International Justice, which was replaced by the International Court of Justice in 1946.

The public at large is usually more familiar with the International Court of Justice than with the Permanent Court of Arbitration, partly because of the closed nature of cases handled by the PCA and due to the low number of cases dealt with between 1946 and 1990. The PCA's caseload has, however, increased since then.^[3]

The PCA administers cases arising out of international treaties (including bilateral and multilateral investment treaties), and other agreements to arbitrate. The cases conducted by the PCA span a wide range of legal issues, including disputes over territorial and maritime boundaries, sovereignty, human rights, international investment (investor-state arbitrations), and matters concerning international and regional trade.

Hearings are rarely open to the public and sometimes even the decision itself is kept confidential at the request of the parties. Many decisions and related documents are available on the PCA website.

Cases: Hanish Islands conflict (1998 and 1999), Barbados v. Trinidad and Tobago (2006), Decision Regarding Delimitation of the Border between The State of Eritrea and The Federal Democratic Republic of Ethiopia (2002) The Eritrea-Ethiopia Boundary Commission was organized through the Permanent Court of Arbitration., Mauritius v United Kingdom (pending), Philippines v. China (pending).

Ad hoc arbitration is a proceeding that is not administered by others and requires the parties to make their own arrangements for selection of arbitrators and for designation of rules, applicable law, procedures and administrative support. Provided the parties approach the arbitration in a spirit of cooperation, ad hoc proceedings can be more flexible, cheaper and faster than an administered proceeding. The absence of administrative fees alone make this a popular choice.

Provided the parties approach the arbitration with cooperation, ad hoc proceedings have the potential to be more flexible, faster and cheaper than institutional proceedings. The absence of administrative fees alone provides an excellent incentive to use the ad hoc procedure.

The arbitration agreement, whether reached before or after a dispute has arisen, may simply state that 'disputes between parties will be arbitrated'. It is infinitely preferable at least to specify the place or 'seat' of the arbitration as well since this will have a significant impact on several vital issues such as the procedural laws governing the arbitration and the enforceability of the award. If the parties cannot agree on the detail all unresolved problems and questions relating to the implementation of the arbitration - for example, how the tribunal will be appointed or how the proceedings will be conducted – will be determined by the 'seat' or location of the arbitration. However, this approach will only work if the seat of the arbitration has an established arbitration law.

Ac hoc proceedings need not be kept entirely separate from institutional arbitration. Often, appointing a qualified arbitrator can lead to the parties agreeing to designate an institutional provider as the appointing authority. Additionally, the parties may decide to engage an institutional provider to administer the arbitration at any time.

Other options available to parties wishing to proceed ad hoc, who are not in need of rules drawn specially for them, or of formal administration and oversight, include: (i) adaption of the rules of an arbitral institution, amending provisions for selection of the arbitrator(s) and removing provisions for administration of the arbitration by the institution, (ii) incorporating statutory procedures such as the United States Federal Arbitration Act (or applicable state law) or the English Arbitration Act 1996, (iii) adopting rules crafted specifically for ad hoc arbitral proceedings such as the UNCITRAL Rules (U.N. Commission on International Trade Law) or CPR Rules (International Institute for Conflict Prevention and Resolution), which may be used in both domestic and international disputes, and (iv) adopting an ad hoc provision copied from another contract. Risks accompanying two of the available options are worthy of particular note.

Properly structured, ad hoc arbitration should be less expensive than institutional arbitration and, thus, better suit smaller claims and less affluent parties. Ad hoc arbitration places more of a burden on the arbitrator(s), and to a lesser extent upon the parties, to organize and administer the arbitration in an effective manner. A distinct disadvantage of the ad hoc approach is that its effectiveness may be dependent upon the willingness of the parties to agree upon procedures at a time when they are already in dispute. Failure of one or both of the parties to cooperate in facilitating the arbitration can result in an undue expenditure of time in resolving the issues. The savings contemplated by use of the ad hoc arbitral process may be somewhat illusory if delays precipitated by a recalcitrant party necessitate repeated recourse to the courts in the course of the proceedings.

17.Establishment and work of the Iran – U.S. Claims Tribunal

The Iran-United States Claims Tribunal was established on 19 January 1981 by the Islamic Republic of Iran and the United States of America to resolve certain claims by nationals of one State Party against the other State Party and certain claims between the State Parties. To date, the Tribunal has finalized over 3,900 cases. Currently on the Tribunal’s docket are several large and complex claims between the Islamic Republic of Iran and the United States of America.

The Iran–United States Claims Tribunal (IUSCT) is an international arbitral tribunal established out of an agreement between Iran, Algeria and the United States under an understanding known as the Algiers Accords of January 19, 1981. The Algiers Accords were the outcome of negotiations between Iran and the United States, mediated by Algeria, to resolve a hostage crisis. In exchange for the release of the hostages by Iran, the United States agreed to unfreeze Iranian assets. The tribunal was established to resolve claims by United States nationals for compensation for assets nationalized by the Iranian government, and claims by the governments against each other; any national court proceedings were nullified by the declarations. This was necessary in part because a large part of the frozen Iranian funds had already been transferred by United States courts to United States nationals as compensation; the declarations resulted in the reversal of all these United States court decisions.

The seat of the Tribunal is The Hague. It held its first meeting in the Peace Palace on July 1, 1981; in April 1982, it moved to its own premises in The Hague.

The Tribunal is composed of nine arbitrators: three appointed by Iran, three appointed by the United States, and a further three (neither Iranian nor United States nationals) appointed by the previous six arbitrators. The Tribunal hears individual cases in the formation of three-member chambers (consisting of one Iranian, one American, and one from the three appointed by the other six); it meets as a full tribunal to consider disputes between the two governments, and cases referred from the chambers.

The Tribunal closed to new claims by private individuals on January 19, 1982. In total, it received approximately 4,700 private US claims. The Tribunal has ordered payments by Iran to US nationals totaling over USD 2.5 billion. Almost all private claims have now been resolved; but several intergovernmental claims are still before the Tribunal.

Iranian officials have called for the release of frozen assets; according to private businessman and economic analyst Saeed Laylaz, the frozen assets held in the United States amount "to something like $8 billion to $12 billion"

In 1986 an English court held the tribunal to be void under its own lex loci arbitri (which the court held to be Dutch law); see Dallal v Bank Mellat [1986] 1 QB 441.

The Tribunal hasjurisdictionto decide claims of United States nationals against Iran and of Iranian nationals against the United States, which arise out of debts, contracts, expropriations or other measures affecting property rights; certain "official claims" between the two Governments relating to the purchase and sale of goods and services; disputes between the two Governments concerning the interpretation or performance of the Algiers Declarations; and certain claims between United States and Iranian banking institutions. Claims had to be filed with the Tribunal by 19 January 1982. For more information on jurisdiction see the following documents.

Date: 2015-12-18; view: 981