Permanent Court of Arbitration

Organization

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.

The Administrative Council (formally the Permanent Administrative Council) is a body composed of all diplomatic representatives of Member States accredited to the Netherlands. It is presided by the Minister of Foreign Affairs of the Netherlands, who is also a member. It is responsible for "direction and control" of the International Bureau, directs the organisation's budget and reports on its activities.

The International Bureau is the Secretariat of the PCA and is headed by the Secretary-General. It provides linguistic, research, administrative support to PCA arbitration tribunals.

The judges or arbitrators that hear cases are called Members of the Court. Each member state may appoint up to four "of known competency in questions of international law, of the highest moral reputation and disposed to accept the duties of arbitrators" for a renewable 6-year term. Members of each member state together form a "national group". Members may be selected in arbitration cases in which the PCA provides support. National Groups may propose candidates for International Court of Justice members.

The PCA sometimes gets confused with the International Court of Justice, which has its seat in the same building. The PCA is however not part of the UN system, although it does have observer status in the UN General Assembly since 1993.

Procedure of Arbitration

In the Articles 30-57 of the Hague Convention of 1899 the rules of arbitration procedure are outlined. These rules are the adapted version of pre-existing treaties among the states.They were amended in 1907 , the creation of a summary procedure for simple cases being the most conspicuous change. They came in handy again in 1920 to serve the Permanent Court of international Justice.

The first act of parties is the submission of the so called "compromisis", stating the issue and the competence of the arbitrator(s). Basically the lawsuit is divided in two phases: written pleadings and oral discussion. During the first part of the procedure the agents and the barristers of parties submit and exchange all relevant documents corroborating their case.

In the second phase there is a verbal debate in front of the Court that retires once the debate is over to deliberate and conclude the case by a simple majority of votes.

The verdict in the writ, possibly including the dissenting views of a minority of arbitrators, is then undersigned by president and secretary (previous to 1907 by the arbitrators) and read to a public session to which the agents and lawyers of the parties are summoned. The award binding on the parties and no appeal is allowed. However, a minor restriction for revision is made in case fresh evidence of a decisive nature has come up between the debate and the award. Naturally, any decision as to its relevance and the subsequent admission of the request is up to the Court, while the compromise fixes the period within which the demand for revision must be made. It is this Article 55, incidentally, which led to heated argument within the body of the Third Commission in 1899.

Budget and fees

Between 2007 and 2008, the budget was 1.8 million Euro.

The budget of PCA comes from the contributions of its members and income through arbitration cases. The distribution of the amounts to be paid by the individual member states is based on the system in use by the Universal Postal Union.

Parties to arbitration have to pay the expenses of the arbitral tribunal set up to hear the case, including the salary of the arbitrators, registry and administrative functions, but not including overhead of the organization). The costs of arbitration vary from case to case and discussions may be held between the PCA and the parties over fee arrangements.

The fixed costs for action as an appointing authority are €2000.

Participation

Parties to the Convention on the Pacific Settlement of disputes of 1899 (71 member states) and 1907 (101 member states) are automatically parties to the PCA. As 51 are parties to both conventions, the PCA has 121 member states: 119 members of the United Nations, as well as Kosovo and Palestine.

History

PCA is one of the oldest institutions for international dispute resolutions. It was established in 1899 by the first Hague Peace Conference under Articles 20 to 29 of the 1899 Hague Convention for the Pacific Settlement of International Disputes. 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 Nicholas 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."

Functions

PCA tribunals have jurisdiction for disputes based on the PCA founding documents (the Conventions on Pacific Settlement of International Disputes), or based on bilateral and multilateral treaties. Its Secretary General furthermore acts as an appointing authority for arbitration.

Appointing Authority

When problems arise in designating arbitrators for an arbitration under UNCITRAL arbitration rules (e.g. because one of the parties refuses to designate an arbitrator, or when the designated arbitrators are unable to agree on designation of a third arbitrator), the PCA Secretary-General may be requested to serve as an appointing authority. This option is also open for other arbitration agreements, in which the Secretary General is designated. Between 2011 and 2015, 257 of such requests were submitted.

Interstate arbitration based on the Hague Convention

Arbitration between two states takes place when two member states of the PCA decide to submit a dispute for arbitration to a PCA Tribunal. The Tribunal consists of 5 arbitrators, two of which are selected by each party to the arbitration (and one of whom may be a national of the party concerned). The four arbitrators choose the fifth and presiding arbitrator.

Interstate arbitration based on UNCLOS

The United Nations Convention on the Law of the Sea (UNCLOS) provides for a dispute resolution mechanism regarding maritime boundaries in which member states can choose either the

1. International Tribunal for the Law of the Sea
2. International Court of Justice,
3. arbitral tribunal (constituted in accordance with Annex VII, UNCLOS)
4. a special arbitral tribunal (constituted in accordance with Annex VIII).

If two member states have elected different dispute resolution measures, the third option is to be used. As of August 2016, the PCA has administered 12 cases initiated by States under Annex VII to the UNCLOS., thus administring all cases initiated under this Annex except for one.

Investor-State investment disputes

Many Free Trade Agreements provide for a mechanism to resolve disputes between investors and states through arbitration through so called ISDS clauses. The PCA may play a role in such proceedings as appointing authority for arbitrators, by use of its arbitration rules or by providing support to the arbitration case.

Cases

Examples of cases are shown below:

Inter-state

Interstate: Annex VII UNCLOS

Investor-State

Other