29 May The Alabama Claims Commission
The essence of the dispute that gave rise to the Alabama Claims Commission concerned the role of the British in the American Civil War. Britain was officially neutral in the American Civil War and under British neutrality laws, this precluded aid to either the North or the South in the prosecution of the war. Following Lincoln’s naval blockade of the South, agents from the Confederacy traveled to Britain to purchase arms and, more importantly, naval warships built in English shipyards. The Southern agents consulted with English legal experts to find a way to technically comply with the neutrality laws while violating its very spirit. They learned they could do so by using false declarations as to the purpose and purchaser of the war ships, and by installing the guns on the warships only after they left British territorial waters. Thus, in the case of the naval warship Alabama, the false papers said that the ship was destined for China, when everyone knew it was to be used to support the Southern confederacy. The American minister in Britain loudly protested that the British were supplying warships to the South in violation of British and international law, but to no avail. These warships eventually provided the bulk of the Confederate naval fleet, which caused substantial damage to American interests. Direct losses were put at $15 million and indirect losses purportedly exceeded $2 billion.
Following the end of the Civil War, bitter negotiations between the Americans and British ensued over Britain’s involvement in the American Civil War. This eventually led to the signing of the 1871 Treaty of Washington. Article 1 of that treaty included an expression of regret by the British and an agreement to arbitrate their differences. That article provided that the “High Contracting Parties agree that all the said claims, growing out of Acts committed by the aforesaid vessels, and generically known as the Alabama Claims, shall be referred to a tribunal of arbitration to be composed of five arbitrators … one shall be named by Her Britannic Majesty; one shall be named by the President of the United States; His Majesty the King of Italy shall be requested to name one; the President of the Swiss Confederation shall be requested to name one; and His Majesty the Emperor of Brazil shall be requested to name one.”
The arbitrators rendered their decision on September 14, 1872, ruling 4 to 1 in favor of the United States and awarding damages of $15.5 million, plus interest. The key portion of the award provided that “The Tribunal, making use of the authority conferred upon it by Article VII of the said Treaty, by a majority of four voices to one, awards to the United States the sum of fifteen million five hundred thousand dollars in gold as the indemnity to be paid by Great Britain to the United States for the satisfaction of all the claims referred to the consideration of the Tribunal…. Made and concluded at the Hotel de Ville of Geneva in Switzerland, the 14th day of the month of September in the year of our Lord, one thousand eight hundred and seventy-two.” As Lord Bingham notes, promulgation of the award was greeted by an artillery salute as Swiss gunners held aloft the flags of Geneva, Switzerland, the United States and Britain. Sir Alexander Cockburn, the British arbitrator, was furious, refused to sign the award, and issued an angry dissent. But in the end the British honored the obligation and paid the damages by surrendering US bonds equal to the value of the award.
Lord Bingham nicely summarizes the importance of the Alabama Claims Commission for the future of international dispute resolution: “The Alabama arbitration is … significant as one of the very few instances in history when the world’s leading nation, in the plenitude of its power, has agreed to submit an issue of great national moment to the decision of a body in which it could be, as it was, heavily outvoted…. [W]hen in 1872 Gustave Moynier made the first proposal to establish a permanent international criminal court to rule on breaches of the 1864 Convention on the treatment of wounded combatants, he based his model on th[is] Geneva tribunal. It was experience of this tribunal which inspired the Tsar and President Theodore Roosevelt to seek, in the Hague Conferences of 1899 and 1907, to explore means of making international arbitration more effective. On these foundations the Permanent Court of Arbitration, the Permanent Court of International Justice, and the International Court of Justice were in due course to be built.”