ARBITRATION AND CONCILIATION

AT THE PERMANENT COURT OF ARBITRATION

MEETING OF THE STATES PARTIES TO UNCLOS

14 JUNE 2017

Dirk Pulkowski
Senior Legal Counsel
[email protected]

HISTORY AND FUNCTION OF THE PCA

www.pca-cpa.org

1
Historic Trends: Inter-State Arbitrations
(1801-1900)

www.pca-cpa.org

Results of the Hague Peace Conference

The Conference adopts

the 1899 Convention on
the Pacific Settlement
of Disputes

“With the object of facilitating an immediate recourse to

arbitration for international differences, which it has not
been possible to settle by diplomacy, the Signatory
Powers undertake to organize a Permanent Court of
Arbitration, accessible at all times”
1899 Hague Convention, Article 16

www.pca-cpa.org

2
 Purpose of the PCA

• Permanent forum to
assist the resolution of
international disputes
• Originally focused on
disputes between States
• Has come to include
international disputes
between States and
private parties

www.pca-cpa.org

The Peace Palace

• Andrew Carnegie
created:
“with the sum of one and one
half million dollars … a
foundation for the purpose of
building, establishing and
maintaining in perpetuity at
the Hague a Court-House
and Library (Temple of
Peace) for the Permanent
Court of Arbitration
established by the Treaty of
July 29th 1899.”

• Completed in 1913

www.pca-cpa.org

3
 www.pca-cpa.org

How the PCA Functions

• Independent intergovernmental organization

• Permanent administrative framework for dispute
settlement proceedings
• Structure:
– The Administrative Council (governing body)
– The Members of the Court (list of arbitrators)
– The International Bureau (provides registry support to
arbitral tribunals and parties in PCA proceedings)

www.pca-cpa.org

4
 Current PCA Caseload
(as of May 2017)

Investment Treaty
Arbitrations
(73)

Arbitrations under
Contracts involving
States, State Entities,
or International Inter-State
Organizations Arbitrations and
(40) Conciliations
(6)

www.pca-cpa.org

STATE-STATE ARBITRATION

www.pca-cpa.org

5
 Recent PCA Inter-State Cases

• Eritrea/Yemen - Sovereignty and Maritime Delimitation in the Red Sea (1996)

• The Rhine Chlorides Arbitration concerning the Auditing of Accounts (The
Netherlands/France) (2000)
• Eritrea-Ethiopia Boundary Commission (2001)
• Eritrea-Ethiopia Claims Commission (2001)
• Ireland v. United Kingdom (OSPAR Arbitration) (2001)
• MOX Plant Case (Ireland v. United Kingdom) (2002)
• Iron Rhine Arbitration (Belgium/Netherlands, (2003)
• Barbados v. Trinidad and Tobago (2004)
• Guyana v. Suriname (2004)
• Land Reclamation by Singapore in and around the Straits of Johor (Malaysia v. Singapore)
(2004)
• [Abyei Arbitration (The Government of Sudan / The Sudan People's Liberation
Movement/Army) (2008)]
• [Confidential Case] (2009)
• Bay of Bengal Maritime Boundary Arbitration (Bangladesh v. India) (2010)
• Indus Waters Kishenganga (Pakistan v. India) (2011)
• Chagos Marine Protected Area Arbitration (Mauritius v. UK) (2011)
• Arbitration Between the Republic of Croatia and the Republic of Slovenia (2012) (pending)
• The Republic of Ecuador v. The United States (2012)
www.pca-cpa.org

Recent PCA Inter-State Cases

• Railway Land Arbitration (Malaysia/Singapore) (2012)

• ARA Libertad Arbitration (Argentina v. Ghana) (2013)
• The Arctic Sunrise Arbitration (Netherlands v. the Russian Federation) (2013) (pending)
• Arbitration under the Timor Sea Treaty (Timor-Leste v. Australia) (2013)
• The South China Sea Arbitration (The Republic of Philippines v. The People's Republic of
China) (2013)
• The Atlanto-Scandian Herring Arbitration (The Kingdom of Denmark in respect of the Faroe
Islands v. The European Union) (2013)
• The Duzgit Integrity Arbitration (Malta v. São Tomé & Príncipe) (2013) (pending)
• The “Enrica Lexie” Incident (Italy v. India) (2015) (pending)
• Arbitration under the Timor Sea Treaty (Timor-Leste v. Australia) (2015)
• Timor Sea Conciliation (Timor-Leste v. Australia) (2016) (pending)
• Dispute Concerning Coastal State Rights in the Black Sea, Sea of Azov, and Kerch Strait
(Ukraine v. the Russian Federation) (2017) (pending)

www.pca-cpa.org

6
 PCA Inter-State Cases by Type

Economic Disputes
4

Detention of Vessel
3

Jurisdiction and Immunity

3

Natural Resources
2

Environment and Water

6

Coastal State Rights

3

Armed Conflict
1

Maritime Boundaries
8

Land Boundaries
2
0 1 2 3 4 5 6 7 8 9
www.pca-cpa.org

PCA Inter-State Cases

since 1996 by World Regions

Oceania, 6 Africa, 9

Americas, 7

Europe, 20

Asia, 12

(Number of States from a particular region that appeared as parties in PCA State-State arbitrations)
www.pca-cpa.org

7
 13 Cases under UNCLOS Annex VII

• MOX Plant Case (Ireland v. United Kingdom) (2002) (settled 2009)

• Barbados v. Trinidad and Tobago (2004) (award 2006)
• Guyana v. Suriname (2004) (award 2007)
• Land Reclamation by Singapore in and around the Straits of Johor (Malaysia v.
Singapore) (2004) (settled 2005)
• Bay of Bengal Maritime Boundary Arbitration (Bangladesh v. India) (2010) (award
2014)
• Chagos Marine Protected Area Arbitration (Mauritius v. UK) (2011) (award 2015)
• The ARA Libertad Arbitration (Argentina v. Ghana) (2013) (settled 2013)
• The South China Sea Arbitration (The Republic of Philippines v. The People's
Republic of China) (2013) (award 2016)
• The Atlanto-Scandian Herring Arbitration (The Kingdom of Denmark in respect of
the Faroe Islands v. The European Union) (2013) (settled 2014)
• The Arctic Sunrise Arbitration (Netherlands v. Russia) (2013) (pending)
• The Duzgit Integrity Arbitration (Malta v. São Tomé & Príncipe) (2013) (pending)
• The “Enrica Lexie” Incident (Italy v. India) (2015) (pending)
• Dispute Concerning Coastal State Rights in the Black Sea, Sea of Azov, and
Kerch Strait (Ukraine v. the Russian Federation) (2017) (pending)
www.pca-cpa.org

STATE-STATE CONCILIATION

www.pca-cpa.org

8
 Timor Sea Conciliation (UNCLOS Annex V)
(Timor-Leste v. Australia)

Key Features of Conciliation

• May be initiated by agreement or through treaty provisions for

(compulsory) conciliation (Annex V to UNCLOS)
• Objective may vary:
– Assist the parties in reaching an agreement;
– Provide the parties with a recommendation on an equitable solution;
– In any event, no binding decision.

• Flexible procedure:
– Commission can meet with parties ex parte;
– May involve political and legal considerations (“interests” in addition to “rights”);
– Profile of commissioners may involve diplomatic expertise, as well as legal.

www.pca-cpa.org

9
 ASPECTS OF ARBITRAL PROCEDURE

www.pca-cpa.org

Basis for Jurisdiction in PCA Cases

• Dispute settlement provision in bilateral or multilateral treaty

• Agreement to arbitrate a particular dispute (compromis)
• Treaties providing for general jurisdiction

Example: UNCLOS provides for the compulsory settlement

of disputes relating to the Convention
– Includes arbitration pursuant to Annexes VII and VIII
– Default option is arbitration under Annex VII
– Jurisdiction may not extend to all elements of a dispute

www.pca-cpa.org

10
 Dispute Settlement Options: UNCLOS Art. 287

Article 287 - Choice of procedure

1. When signing, ratifying or acceding to this Convention or at any time thereafter, a State
shall be free to choose, by means of a written declaration, one or more of the following
means for the settlement of disputes concerning the interpretation or application of this
Convention:
(a) the International Tribunal for the Law of the Sea established in accordance with Annex
VI;
(b) the International Court of Justice;
(c) an arbitral tribunal constituted in accordance with Annex VII;
(d) a special arbitral tribunal constituted in accordance with Annex VIII for one or more of the
categories of disputes specified therein.
[…]

www.pca-cpa.org

Dispute Settlement Options: UNCLOS Art. 287

Basis of UNCLOS Annex VII arbitration – three possibilities

– Both States have made declarations accepting arbitration
– One State has made a declaration accepting arbitration, and the other State has not
– Neither State has made any declaration, or there is no acceptance of same procedure
=> All three possibilities have materialized in PCA arbitration

Article 287 - Choice of procedure

3. A State Party, which is a party to a dispute not covered by a declaration in force, shall
be deemed to have accepted arbitration in accordance with Annex VII.
4. If the parties to a dispute have accepted the same procedure for the settlement of the
dispute, it may be submitted only to that procedure, unless the parties otherwise agree.
5. If the parties to a dispute have not accepted the same procedure for the settlement of
the dispute, it may be submitted only to arbitration in accordance with Annex VII, unless the
parties otherwise agree.
www.pca-cpa.org

11
 Unity of Jurisdiction under UNCLOS Art. 288

• UNCLOS Article 288 circumscribes jurisdiction identically for all three

possible mechanisms (ITLOS, ICJ, arbitration)
• Arbitral Tribunals habitually refer to ICJ and ITLOS decisions as
persuasive authority
Article 288 - Jurisdiction
1. A court or tribunal referred to in article 287 shall have jurisdiction over any dispute
concerning the interpretation or application of this Convention which is submitted to it in
accordance with this Part.
2. A court or tribunal referred to in article 287 shall also have jurisdiction over any dispute
concerning the interpretation or application of an international agreement related to the
purposes of this Convention, which is submitted to it in accordance with the agreement
3. The Seabed Disputes Chamber of the International Tribunal for the Law of the Sea
established in accordance with Annex VI, and any other chamber or arbitral tribunal
referred to in Part XI, section 5, shall have jurisdiction in any matter which is submitted to
it in accordance therewith. […] www.pca-cpa.org

Composition of Tribunals

• Parties can influence the composition of the tribunal

• In inter-State cases: 3, 5, or 7 arbitrators
• Configuration may significantly affect decision-making
– Annex VII: each party appoints 1 arbitrator; 3 non-party appointees
• ITLOS President as appointing authority

– Annex VIII: each party appoints 2 arbitrators; 1 non-party appointee

• UN SG as appointing authority

• Appointments may be restricted under some treaties

– Default appointments in UNCLOS arbitrations limited to list
maintained by the United Nations

www.pca-cpa.org

12
 Design and Conduct of the Procedure

Tribunal will consult the parties in respect of:

• Schedule of submissions and the timing of the hearing
• Bifurcation vel non of jurisdictional objections
• Venue of the hearing
• Languages used
• Procedure for evidence (incl. witness and expert evidence)
• (Degree of) confidentiality or publicity of the proceedings
• […]

www.pca-cpa.org

Expert Support

• Geographic/hydrographic experts appointed by the tribunal

– Terms of reference of the expert determined in consultation with the
parties
– Past PCA boundary delimitations have included a technical annex
explaining all calculations used in the award
• Technical expert can be appointed as arbitrator/voting
member of tribunal
– Indus Waters arbitration involved a hydrologist as a member of the
tribunal
• Document master
– In Guyana v. Suriname, tribunal appointed independent expert to
review sensitive materials in archives
www.pca-cpa.org

13
 Expert Support

In Guyana v. Suriname, a hydrographic expert

(appointed by the tribunal) conducted a site visit
to Guyana, accompanied by the registrar and
party representatives

www.pca-cpa.org

Site Visits

• Site visits appear more common in arbitration proceedings

– Grisbådarna Arbitration
– Indus Waters Kishenganga Arbitration (twice)
– Bay of Bengal Arbitration
• Easier to arrange the visit of a smaller tribunal
• Greater role for tribunal experts
• Procedure can be adapted to suit the needs of the case

www.pca-cpa.org

14
 Site Visits
In the Bay of Bengal Maritime Boundary Arbitration, the full
tribunal conducted a site visit to the coasts of Bangladesh
and India

Site Visits

www.pca-cpa.org

15
 Third States and Amici Curiae

• Observer status for, and intervention of, third States

– In South-China Sea arbitration, upon request and having consulted the
parties, the tribunal permitted:
• Viet Nam, Malaysia and Indonesia to receive copies of the pleadings;
• Brunei Darussalam to receive copies of documents (transcripts and other relevant documents);
• Australia, Indonesia, Japan, Malaysia, Singapore, Thailand and Viet Nam to attend the hearing
as observers.
(The tribunal recognized Viet Nam’s note verbale and written statement reserving the right to
intervene, and included it in the record; the tribunal also stated that it would address the
permissibility of intervention upon a formal written request; Viet Nam ultimately did not apply to
intervene.)

• Amicus curiae submissions

– Not excluded by usual rules of procedure, could include non-State
entities
– No example in UNCLOS context www.pca-cpa.org

Costs

• Counsel and costs of representation appear to constitute

substantial majority of total costs of dispute settlement

– Commercial arbitration: costs of tribunal and institution less than 20%

– Investment arbitration: costs of tribunal and institution around 10%

– Similar proportion likely to apply in UNCLOS arbitration

• Costs of tribunal and registry borne by the parties in

arbitration, usually in equal shares

• PCA Financial Assistance Fund may permit defraying costs

of dispute settlement
www.pca-cpa.org

16
www.pca-cpa.org

17