ARBITRATION, INTERNATIONAL. International Arbitration34082-h.htm'>Arbitration is a proceeding in which two nations refer their differences to one or more selected persons, who, after affording to each party an opportunity of being heard, pronounce judgment on the matters at issue. It is understood, unless otherwise expressed, that the judgment shall be in accordance with the law by which civilized nations have agreed to be bound, whenever such law is applicable. Some authorities, notably the eminent Swiss jurist, J.K. Bluntschli, consider that unless this tacit condition is complied with, the award may be set aside. This would, however, be highly inconvenient since international law has never been codified. A fresh Arbitration34082-h.htm'>Arbitration might have to be entered on to decide (1) what the law was, (2) whether it applied to the matter in hand. Arbitration34082-h.htm'>Arbitration differs from Mediation (q.v.) in so far as it is a judicial act, whereas Mediation involves no decision, but merely advice and suggestions to those who invoke its aid.
Arbitral Tribunals.—An international arbitrator may be the chief of a friendly power, or he may be a private individual. When he is an emperor, a king, or a president of a republic, it is not expected that he will act personally; he may appoint a delegate or delegates to act on his behalf, and avail himself of their labours and views, the ultimate decision being his only in name. In this respect international arbitration differs from civil arbitration, since a private arbitrator cannot delegate his office without express authority. The analogy between the two fails to hold good in another respect also. In civil arbitration, the decision or award may be made a rule of court, after which it becomes enforceable by writ of execution against person or property. An international award cannot be enforced directly; in other words it has no legal sanction behind it. Its obligation rests on the good faith of the parties to the reference, and on the fact that, with the help of a world-wide press, public opinion can always be brought to bear on any state that seeks to evade its moral duty. The obligation of an ordinary treaty rests on precisely the same foundations. Where there are two or any other even number of arbitrators, provision is usually made for an umpire (French sur-arbitre). The umpire may be chosen by the arbitrators themselves or nominated by a neutral power. In the “Alabama” arbitration five arbitrators were nominated by the president of the United States, the queen of England, the king of Italy, the president of the Swiss Confederation, and the emperor of Brazil respectively. In the Bering Sea arbitration there were seven arbitrators, two nominated by Great Britain, two by the United States, and the remaining three by the president of the French Republic, the king of Italy, and the king of Sweden and Norway respectively. In neither of these cases was there an umpire; nor was any necessary, since the decision, if not unanimous, lay with the majority. (See separate articles on Bering Sea Arbitration and “Alabama” Arbitration.)
Arbitral tribunals may have to deal with questions either of law or fact, or of both combined. When they have to deal with law only, that is to say, to lay down a principle or decide a question of liability, their functions are judicial or quasi-judicial, and the result is arbitration proper. Where they have to deal with facts only, e.g. the evaluation of pecuniary claims, their functions are administrative rather than judicial, and the term commission is applied to them. “Mixed commissions,” so called because they are composed of representatives of the parties in difference, have been frequently resorted to for delimitation of frontiers, and for settling the indemnities to be paid to the subjects of neutral powers in respect of losses sustained by non-combatants in times of war or civil insurrection. The two earliest of these were nominated in 1794 under the treaty negotiated by Lord Grenville with Mr John Jay, commonly called the “Jay Treaty,” their tasks being (1) to define the boundary between Canada and the United States which had been agreed to by the treaty signed at Paris in 1783; (2) to estimate the amount to be paid by Great Britain and the United States to each other in respect of illegal captures or condemnation of vessels during the war of the American Revolution.
Although arbitrations proper may be thus distinguished from “mixed commissions,” it must not be supposed that any hard or fast theoretical line can be drawn between them. Arbitrators strictly so called may (as in the “Alabama” case) proceed to award damages after they have decided the question of liability; whilst “mixed commissions,” before awarding damages, usually have to decide whether the pecuniary claims made are or are not well founded.
Awards.—International awards, as already pointed out, differ from civil awards in having no legal sanction by which they can be enforced. On the other hand, they resemble civil awards in that they may be set aside, i.e. ignored, for sufficient reason, as, for example, if the tribunal has not acted in good faith, or has not given to each party an opportunity of being heard, or has exceeded its jurisdiction. An instance under the last head occurred in 1831, when it was referred to the king of the Netherlands as sole arbitrator to fix the north-eastern boundary of the state of Maine. The king’s representatives 328 were unable to draw the frontier line by reason of the imperfection of the maps then in existence, and he therefore directed a further survey. This direction was beyond the terms of the reference, and the award, when made, was repudiated by the United States as void for excess. The point in dispute was only finally disposed of by the Webster-Ashburton treaty of 1842.
Subject-matter.—The history of international arbitration is dealt with in the article Peace, where treaties of general arbitration are discussed, both those which embrace all future differences thereafter to arise between the contracting parties, and also those more limited conventions which aim at the settlement of all future differences in regard to particular subjects, e.g. commerce or navigation. The rapid growth of international arbitration in recent times may be gathered from the following figures. Between 1820 and 1840, there were eight such instances; between 1840 and 1860, there were thirty; between 1860 and 1880, forty-four; between 1880 and 1900, ninety. Of the governments which were parties in these several cases Great Britain heads the list in point of numbers, the United States of America being a good second. France, Portugal, Spain and the Netherlands are the European states next in order. The present article is concerned exclusively with arbitration in regard to such existing differences as are capable of precise statement and of prompt adjustment. These differences may be arranged in two main groups:—
(a) Those which have arisen between state and state in their sovereign capacities;
(b) Those in which one state has made a demand upon another state, ostensibly in its sovereign capacity, but really on behalf of some individual, or set of individuals, whose interests it was bound to protect.
To group (a) belong territorial differences in regard to ownership of land and rights of fishing at sea; to group (b) belong pecuniary claims in respect of acts wrongfully done to one or more subjects of one state by, or with the authority of, another state. To enumerate even a tenth part of the successful arbitrations in recent times would occupy too much space. Some prominent examples (dealt with elsewhere under their appropriate titles) are the dispute between the United States and Great Britain respecting the “Alabama” and other vessels employed by the Confederate government during the American Civil War (award in 1872); that between the same powers respecting the fur-seal fishery in Bering Sea (award in 1893); that between Great Britain and Venezuela respecting the boundary of British Guiana (award in 1899); that between Great Britain, the United States and Portugal respecting the Delagoa railway (award in 1900); that between Great Britain and the United States respecting the boundary of Alaska (award in 1903). The long-standing Newfoundland fishery dispute with France (finally settled in 1904) is dealt with under Newfoundland. Other examples are shortly noticed in the tables on p. 329, which although by no means exhaustive, sufficiently indicate the scope and trend of arbitration during the years covered. The cases decided by the permanent tribunal at the Hague established in 1900 are not included in these tables. They are separately discussed later.
The Hague Tribunal.—The establishment of a permanent tribunal at the Hague, pursuant to the Peace convention of 1899, marks a momentous epoch in the history of international arbitration. This tribunal realized an idea put forward by Jeremy Bentham towards the close of the 18th century, advocated by James Mill in the middle of the 19th century, and worked out later by Mr Dudley Field in America, by Dr Goldschmidt in Germany, and by Sir Edmund Hornby and Mr Leone Levi in England. The credit of the realization is due, in the first place, to the tsar of Russia, who initiated the Hague Conference of 1899, and, in the second place to Lord Pauncefote (then Sir Julian Pauncefote, British ambassador at Washington), who urged before a committee of the conference the importance of organizing a permanent international court, the service of which should be called into requisition at will, and who also submitted an outline of the mode in which such a court might be formed. The result was embodied in the following articles of the Convention, signed on behalf of sixteen of the assembled powers on the 29th of July 1899.
(Art. 23). Each of the signatory powers is to designate within three months from the ratification of the convention four persons at the most, of recognized competence in international law, enjoying the highest moral consideration, and willing to accept the duties of arbitrators. Two or more powers may agree to nominate one or more members in common, or the same person may be nominated by different powers. Members of the court are to be appointed for six years and may be re-nominated. (Art. 25). The signatory powers desiring to apply to the tribunal for the settlement of a difference between them are to notify the same to the arbitrators. The arbitrators who are to determine this difference are, unless otherwise specially agreed, to be chosen from the general list of members in the following manner:—each party is to name two arbitrators, and these are to choose a chief arbitrator or umpire (sur-arbitre). If the votes are equally divided the selection of the chief arbitrator is to be entrusted to a third power to be named by the parties. (Art. 26). The tribunal is to sit at the Hague when practicable, unless the parties otherwise agree. (Art. 27). “The signatory powers consider it a duty in the event of an acute conflict threatening to break out between two or more of them to remind these latter that the permanent court is open to them. This action is only to be considered as an exercise of good offices.” Several of the powers nominated members of the permanent court pursuant to Art. 25, quoted above, those nominated on behalf of Great Britain being Lord Pauncefote, Sir Edward Malet, Sir Edward Fry and Professor Westlake. On the death of Lord Pauncefote, Major-General Sir John C. Ardagh was appointed in his place.
Hague Cases.—(1) The first case decided by the Hague court was concerned with the “Pious Fund of the Californias.” A fund bearing this name was formed in the 18th century for the purpose of converting to the Catholic faith the native Indians of The pious fund of the Californias. Upper and Lower California, both of which then belonged to Mexico, and of maintaining a Catholic priesthood there. By a decree of 1842 this fund was transferred to the public treasury of Mexico, the Mexican government undertaking to pay interest thereon in perpetuity in furtherance of the design of the original donors. After the sale of Upper California to the United States, effected by the treaty of Guadalupe Hidalgo (1848), the Mexican government refused to pay the proportion of the interest to which Upper California was entitled. The question of liability was then referred to commissioners appointed by each state, and, on their failing to agree, to Sir Edward Thornton, British minister at Washington, who by his award, in 1875, found there was due from Mexico to Upper California, or rather to the bishops there as administrators of the fund, an arrear of interest amounting to nearly 0,000, which was directed to be paid in gold. This award was carried out, but payment of the current interest was again withheld as from the 24th of October 1868. Claim was thereupon made on Mexico by the United States on behalf of the bishops, but without success. Ultimately, in May 1902, an agreement was come to between the two governments which provided for the settlement of the dispute by the Hague tribunal. The points to be determined were (1) whether the matter was res judicata by reason of Sir E. Thornton’s award; (2) whether, if not, the claim for the interest was just. The arbitrators selected by the United States were Sir E. Fry and Professor F. de Martens, and by Mexico, Professor Asser and Professor de Savornin Lohman, both of Amsterdam. These four (none of whom, it will be observed, was of the nationality of either party in difference) chose for their umpire Professor Matzen, of Copenhagen, president of the Landsthing there. In October 1902, the court decided both questions in the affirmative, awarding the payment by Mexico of the annual sum claimed, not in gold, but en monnaie ayant cours légal au Mexique. The direction to pay in gold made by Sir E. Thornton was held to be referable only to the mode of the execution of the award, and therefore not to be chose jugée.
(2) The second arbitration before the Hague court was more important than the first, not only because so many of the great powers were concerned in it, but also because it brought about the discontinuance of acts of war. The facts may Great Britain, Germany and Italy versus Venezuela. be stated shortly thus. By three several protocols signed at Washington in February 1903, it was agreed that certain claims by Great Britain, Germany and Italy, on behalf of their respective subjects against the Venezuelan government should be referred to three mixed commissions, and that for the purpose of securing the payment of these claims 30 percent of the customs revenues at the ports of La Guayra and Puerto Caballo should be remitted in monthly instalments to the representative of the Bank of England at Caracas. Prior to the date of these protocols, an attempt had been made by Great Britain, Germany and Italy to enforce their claims by blockade, and a further question arose as between these three powers on the one hand, and the United States of America, France, Spain, Belgium, the Netherlands, Sweden and Norway, and Mexico (all of whom had claims against Venezuela, but had abstained from hostile action) on the other hand, as to whether the blockading powers were entitled to preferential treatment. By three several protocols signed in May 329 1903 this question was agreed to be submitted to the Hague court, three members of which were to be named as arbitrators by the tsar of Russia, but no arbitrator was to be a subject or citizen of any of the signatory or creditor powers. The arbitrators named by the tsar were M. Muraviev, minister of justice and attorney-general of the Russian empire; Professor Lammasch, member of the Upper House of the Austrian parliament; and M. de Martens, then member of the council of the ministry of foreign affairs at St Petersburg. The arbitrators by their award in February 1904 decided unanimously in favour of the blockading powers and ordered payment of their claims out of the 30% of the receipts at the two Venezuelan ports which had been set apart to meet them.
(3) The third case before the Hague court was heard in 1904-1905. A controversy not amenable to ordinary diplomatic methods arose between Great Britain, France and Germany on the one hand and Japan on the other hand as to the legality of a house-tax imposed by Japan on Great Britain, France and Germany versus Japan. certain subjects of those powers who held leases in perpetuity. The question upon the true construction of certain treaties between the European powers and Japan which had been made a few years previously. By three protocols signed at Tokyo in August 1902 this question was agreed to be submitted to arbitrators, members of the court at the Hague, one to be chosen by each party with power to name an umpire. The arbitrators chosen were M. Renault, professor of the law faculty in Paris, and M. Montono, the Japanese envoy to the French capital. They named as their umpire and president M. Gram, ex-minister of the state of Norway. In May 1905, an award was pronounced by the majority (M. Gram and M. Renault) in favour of the European contention, M. Montono dissenting both from the conclusion of his colleagues and from the reasons on which it was based.
(4) Barely two months had elapsed since the date of the last award when the Hague court was again called into requisition. The scene of dispute this time was on the S.E. coast of Arabia. Muscat, the capital of the kingdom of Oman on that coast, is ruled by a sultan, Great Britain and the French flag at Muscat. whose independence both Great Britain and France had, in March 1862, “reciprocally engaged to respect.” Notwithstanding this, the French republic had issued to certain native dhows, owned by subjects of the sultan, papers authorizing them to fly the French flag, not only on the Oman littoral but in the Red Sea. A question thereupon arose as to the manner in which the privileges thereby purported to be conferred affected the jurisdiction of the sultan over such dhows, the masters of which, as was alleged, used their immunity from search for the purpose of carrying on contraband trade in slaves, arms and ammunition. In October 1904 the two governments agreed to refer this question to the Hague court. Chief Justice Melville W. Fuller, of the Supreme Court of the United States, was named as arbitrator on the part of Great Britain, M. de Savornin Lohrnan, who had acted in the case of the Californias (No. 1), as arbitrator on the part of France. The choice of an umpire was entrusted to the king of Italy. He named Professor Lammasch, who, as we have seen, had acted in the arbitration with Venezuela in 1903.
A unanimous award was made in August 1905. It was held that although generally speaking every sovereign may decide to whom he will accord the right to fly his flag, yet in this case such right was limited by the general act of the Brussels conference of July 1890 relative to the African slave trade, an act which was ratified by France on the 2nd of June 1892; that accordingly the owners and master of dhows who had been authorized by France to fly the French flag before the last-named date retained this authorization 330 so long as France chose to renew it, but that after that date such authorization was improper unless the guarantees could establish that they had been treated by France as her protégés within the meaning of that term as explained in a treaty of 1863 between France and Morocco. A further point decided was that the owners or master of dhows duly authorized to fly the French flag within the ruling of the first point, did not enjoy, in consequence of that fact, any such right of extra-territoriality as would exempt them from the sovereignty and jurisdiction of the sultan. Such exemption would be contrary to the engagement to respect the independence of the sultan solemnly made in 1862.
Arbitral Procedure.—Not the least of the benefits of the Hague convention of 1899 (strengthened by that of 1907) is that it contains rules of procedure which furnish a guide for all arbitrations whether conducted before the Hague court or not. These may be summarized as follows:—The initial step is the making by the parties of a special agreement clearly defining the subject of the dispute. The next is the choice of the arbitrators and of an umpire if the number of arbitrators is even. Each party then by its agents prepares and presents its case in a narrative or argumentative form, annexing thereto all relevant documents. The cases so presented are interchanged by transmission to the opposite party. The hearing consists in the discussion of the matters contained in the several cases, and is conducted under the direction of the president who is either the umpire, or, if there is no umpire, one of the arbitrators. The members of the tribunal have the right of putting questions to the counsel and agents of the parties and to demand from them explanation of doubtful points. The arbitral judgment is read out at a public sitting of the tribunal, the counsel and agents having been duly summoned to hear it. Any application for a revision of the award must be based on the discovery of new evidence of such a nature as to exercise a decisive influence on the judgment and unknown up to the time when the hearing was closed, both to the tribunal itself and to the party asking for the revision. These general rules are universally applicable, but each case may require that special rules should be added to them. These each tribunal must make for itself.
One special and necessary rule is in regard to the language to be employed. This rule must vary according to convenience and is therefore made ad hoc. In case No. 1 noted above, the court allowed English or French to be spoken according to the nationality of the counsel engaged. The judgment was delivered in French only. In case No. 2 it was agreed that the written and printed memoranda should be in English but might be accompanied by a translation into the language of the power on whose behalf they were put in. The oral discussion was either in English or French as happened to be convenient. The judgment was drawn up in both languages. In case No. 3 French was the official language throughout, but the parties were allowed to make any communication to the tribunal, in French, English, German or Japanese. In case No. 4 French was again the official language, but the counsel and agents of both parties were allowed to address the tribunal in English. The protocols and the judgment were drawn up in French accompanied by an official English translation.
Limits of International Arbitration.—Of the numerous treaties for general arbitration which have been made during the 20th century that between Great Britain and France (1903) is a type. This treaty contains reservations of all questions involving the vital interests, the independence or the honour of the contracting parties. The language of the reservation is open to more interpretations than one. What, for instance, is meant by the phrase “national independence” in this connexion? If it be taken in its strict acceptation of autonomous state sovereignty, the exception is somewhat of a truism. No self-respecting power would, of course, consent to submit to arbitration a question of life or death. This would be as if two men were to agree to draw lots as to which should commit suicide in order to avoid fighting a duel. On the other hand, if the exception be taken to exclude all questions which, when decided adversely to a state, impose a restraint on its freedom of action, then the exception would seem to exclude such a question as the true interpretation of an ambiguous treaty, a subject with which experience shows international arbitration is well fitted to deal. Again, we may ask, what is meant by the phrase “national honour”? It was thought at one time that the honour of a nation could only be vindicated by war, though all that had happened was the slighting of its flag, or of its accredited representative, during some sudden ebullition of local feeling. France once nearly broke off peaceful relations with Spain because her ambassador at London was assigned a place below the Spanish ambassador, and on another occasion she despatched troops into Italy because her ambassador at Rome had been insulted by the friends and partisans of the pope. The truth is that the extent to which national honour is involved depends on factors which have nothing to do with the immediate subject of complaint. So long as general good feeling subsists between two nations, neither will easily take offence at any discourteous act of the other. But when a deep-seated antagonism is concealed beneath an unruffled surface, the most trivial incident will bring it to the light of day. “Outraged national honour” is a highly elastic phrase. It may serve as a pretext for a serious quarrel whether the alleged “outrage” be great or small.
The prospects of the expansion of international arbitration will be more clearly perceived if we classify afresh all state differences under two heads:—(1) those which have a legal character, (2) those which have a political character. Under “legal differences” may be ranged such as are capable of being decided, when once the facts are ascertained, by settled, recognized rules, or by rules not settled nor recognized, but (as in the “Alabama” case) taken so to be for the purpose in hand. Boundary cases and cases of indemnity for losses sustained by non-combatants in time of war, of which several instances have already been mentioned, belong to this class. To the same class belong those cases in which the arbitrators have to adapt the provisions of an old treaty to new and altered circumstances, somewhat in the way in which English courts of justice apply the doctrine of “cy-près.” “Political differences” on the other hand, are such as affect states in their external relations, or in relation to their subjects or dependants who may be in revolt against them. Some of these differences may be slight, while others may be vital, or (which amounts to the same thing) may seem to the parties to be so. All differences falling under the first of these two general heads appear to be suitable for international arbitration. Differences falling under the second general head are, for the most part, unsuitable, and may only be adjusted (if at all) through the mediation of a friendly power.
The interesting problem of the future is—are we to regard this classification as fixed or as merely transitory? The answer depends on several considerations which can only be glanced at here. It may be that, just as the usages of civilized nations have slowly crystallized into international law, so there may come a time when the political principles that govern states in relation to each other will be so clearly defined and so generally accepted as to acquire something of a legal or quasi-legal character. If they do, they will pass the line which at present separates arbitrable from non-arbitrable matter. This is the juridical aspect of the problem. But there is also an economic side to it by reason of the conditions of modern warfare. Already the nations are groaning under the burdens of militarism, and are for ever diverting energies that might be employed in the furtherance of useful productive work to purposes of an opposite character. The interruption of maritime intercourse, the stagnation of industry and trade, the rise in the price of the necessaries of life, the impossibility of adequately providing for the families of those—call them reservists, “landwehr,” or what you will—who are torn away from their daily toil to serve in the tented field,—these are considerations that may well make us pause before we abandon a peaceful solution and appeal to brute force. Lastly, there is the moral aspect of the problem. In order that international arbitration may do its perfect work, it is not enough to set up a standing tribunal, whether at the Hague or elsewhere, and to equip it with elaborate rules of procedure. Tribunals and rules are, after all, only machinery. If this machinery is to act smoothly we must improve our motive power, the source of 331 which is human passion and sentiment. Although religious animosities between Christian nations have died out, although dynasties may now rise and fall without raising half Europe to arms, the springs of warlike enterprise are still to be found in commercial jealousies, in imperialistic ambitions and in the doctrine of the survival of the fittest which lends scientific support to both. These must one and all be cleared away before we can enter on that era of universal peace towards the attainment of which the tsar of Russia declared, in his famous circular of 1898, the efforts of all governments should be directed. Meanwhile it is legitimate to share the hope expressed by President Roosevelt in his message to Congress of December 1905 that some future Hague conference may succeed in making arbitration the customary method of settling international disputes in all save the few classes of cases indicated above, and that—to quote Mr Roosevelt’s words—“these classes may themselves be as sharply defined and rigidly limited as the governmental and social development of the world will for the time being permit.”
Authorities.—Among special treatises are: Kamarowsky, Le Tribunal international (traduit par Serge de Westman) (Paris, 1887); Rouard de Card, Les Destinées de l’arbitrage international, depuis la sentence rendue par le tribunal de Genève (Paris, 1892); Michel Revon, L’Arbitrage international (Paris, 1892); Ferdinand Dreyfus, L’Arbitrage international (Paris, 1894) (where the earlier authorities are collected); A. Merignhac, Traité de l’arbitrage international (Paris, 1895); Le Chevalier Descamps, Essai sur l’organisation de l’arbitrage international (Bruxelles, 1896); Feraud-Giraud, Des Traités d’arbitrage international général et permanent, Revue de droit international (Bruxelles. 1897); Pasicrisie International, by Senator H. Lafontaine (Berne, 1902); Recueils d’actes et protocols de la cour permanente d’Arbitrage, Langenhuysen Frères, the Hague.
Of works in English there is a singular dearth. The most important is by an American, J.B. Moore, History of the International Arbitrations to which the United States has been a Party (Washington, 1898). The appendices to this work (which is in six volumes) contain, with much other matter of great value, full historical notes of arbitrations between other powers. Arbitration and mediation will be found briefly noticed in Phillimore’s International Law; in Sir Henry Maine’s Lectures, delivered in Cambridge in 1887; in W.E. Hall’s International Law, and more at length in an interesting paper contributed by John Westlake to the International Journal of Ethics, October 1896, which its author has reprinted privately. A London journal, The Herald of Peace and International Arbitration, issued some years ago a list of instances in which arbitration or mediation had been successfully resorted to during the 19th century. David Dudley Field, of New York, subsequently enlarged this list, which has been continued under the title International Tribunals, by Dr W. Evans Darby, and is published, along with the texts of several projects for general arbitration, at the offices of the Peace Society, 47 New Broad Street, London.(M. H. C.)
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