The role of the nations and institutions in the development of International Arbitration
Riyadul Haque Khan Akash
The early history of international arbitration can be traced back to the Jay Treaty of 1794 between Great Britain and the United States, which set up three arbitral commissions to resolve issues and disputes resulting from the American Revolution. In the 19th century, several arbitral arrangements were negotiated that created ad hoc arbitration tribunals for dealing with specific cases or dealing with a vast number of claims. Most notable was the Alabama disputes settlement under the Washington Treaty of 1871, by which the United States and Britain decided to settle charges stemming from Britain’s failure to keep its impartiality during the American Civil War. In the 19th century, commissions composed of members from both disputing countries (“mixed arbitral commissions”) were often used to resolve monetary disputes and compensate immigrants for accidents for which relief could not be sought in foreign courts. This was the object of an agreement between the United States and Mexico in 1868 that resolved grievances of residents of each nation resulting from the Civil War. Arbitration was also regularly used to resolve border disputes between States. The Hague Conference of 1899, which accepted the Hague Convention on the Peaceful Settlement of Foreign Disputes, amended by a conference in 1907, granted international arbitration a much more stable basis by stating that “International arbitration has for its object the settlement of disputes between States by judges of their own choice and on the basis of respect for law. Recourse to arbitration implies an engagement to submit in good faith to the award”. A Permanent Court of Arbitration was formed at The Hague in 1899, comprising of a board of judges selected by the member governments from which the litigating governments chose the arbitrators. Twenty disputes were arbitrated between 1902 and 1932, but only five cases were dealt with from the same year to 1972, largely because the formation of the Permanent Court of Arbitration and its replacement, the International Court of Justice, reduced the significance of the Permanent Court of Arbitration. The Permanent Court of International Justice also referred to as the World Court, operated from 1922 to 1946. This was an international court associated with the League of Nations. Established in 1920, the Court was initially well welcomed by states and scholars alike, and many cases were brought before it for its first ten years of existence. The Court became less accessible, with the heightened political uncertainty of the 1930s. The Court and the League all ceased to exist by a resolution of the League of Nations on 18 April 1946, and were succeeded by the International Court of Justice (result of the combined effort given by the United Kingdom, United States, and China) and the United Nations. Most lately, the International Court of Arbitration, originally designed to resolve disputes between states, extended its facilities to arbitrate disputes between states and human beings or companies. By the dawn of the 21st century more than 10,000 cases had been arbitrated by the judge. There are several international documents that have shaped the modern form of International arbitration. Some of the most noteworthy instruments are: the Geneva Protocol of 1923, the Geneva Convention of 1927, the New York Convention of 1958, the International Centre for Settlement of Investment Disputes (ICSID), The ICSID Convention of 1965, the UNCITRAL Arbitration Rules, the UNCITRAL Model Law. The Geneva Protocol of 1923proposed broad rules for general disarmament, efficient global security and the mandatory arbitration of conflicts. However, after preliminary approval by all 47 League of Nations member states at the 5th General Assembly on 2 October 1924, Great Britain refusedto ratify it the following year and thereafter, the Protocol ended in failure. The Geneva Convention of 1927, the New York Convention of 1958 both deals with the recognition and enforcement of foreign arbitral awards. The International Center for Settlement of Investment Disputes (ICSID) is an international arbitration body founded in 1966 to resolve legal disputes and unite international investors with each other. So far since 2019, 154 contracting Member States have committed to enforce and safeguard arbitral awards according to the ICSID Convention. The UNCITRAL Arbitration Rules (the ‘UNCITRAL Rules’) was adopted in 1976 by the General Assembly of the United Nations, revised in 2010to represent changes in arbitral procedure over the time and in 2013 to embody the UNCITRAL Rules on Transparency in Treaty-based Investor-State Arbitration. The UNCITRAL Model Law on International Commercial Arbitration was introduced in 1985, and subsequent updates of the same were implemented in 2006 to incorporate more detailed provisions relating to interim measures. The model law is not mandatory so individual states will follow the model law by integrating it into their domestic law (as Australia did, for example, in the 1974 International Arbitration Act, as amended). The difference between the UNCITRAL Model Law on International Commercial Arbitration (1985) and the UNCITRAL Arbitration Rules was explained by UNCITRAL on its website as: “The UNCITRAL Model Law provides a pattern that law-makers in national governments can adopt as part of their domestic legislation on arbitration. The UNCITRAL Arbitration Rules, on the other hand, are selected by parties either as part of their contract, or after a dispute arises; to govern the conduct of arbitration intended to resolve a dispute or disputes between themselves. Put simply, the Model Law is directed at States, while the Arbitration Rules are directed at potential (or actual) parties to a dispute”.
International arbitration has gradually become a field of intense competition: competition between arbitral seats, between counsels; between arbitrators; between relevant events; and of course between arbitral institutions. All arbitral institutions seek to promote their services and their rules in the same global market, and the business and legal communities to whom these services are promoted will inevitably be making a choice between one institution and another. Such choice would depend not only on the efficiency and competency of the institution, but also on its accessibility, affordability as well as the level of familiarity with arbitration under its auspices.
The author is a Lecturer & Senior Academic Guidance Tutor London College of Legal Studies (South) and Advocate, Bangladesh Bar Council