Peace Palace 100: Getting Reintroduced to the Permanent Court of Arbitration

[Travel and other expenses related to my participation in the “100 Years Peace Palace” program provided by the Government of the Netherlands and Radio Netherlands Worldwide.]

It is a bit surreal to be attending programs commemorating 100 years of the Peace Palace on a day when the news is filled with the possibility of US military intervention in Syria. Kevin and Julian have been parsing through the Syria issues so, for now, I’ll focus on the Hague meetings I have been attending.

For this post, a few snapshots from conversations today with Secretary General Hugo Hans Siblesz and Senior Counsel Sarah Grimmer of the Permanent Court of Arbitration.

The main take-away from the PCA meetings is how rapidly its case-load has increased and changed  in the last ten years. Founded in the 1899 Convention on the Peaceful 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…”), the PCA was largely moribund for about 100 years, overtaken by the Permanent Court of International Justice and then the International Court of Justice in state-to-state dispute resolution.

However, according to its website, the PCA:

has developed into a modern, multi-faceted arbitral institution that is now perfectly situated at the juncture between public and private international law to meet the rapidly evolving dispute resolution needs of the international community. Today the PCA provides services for the resolution of disputes involving various combinations of states, state entities, intergovernmental organizations, and private parties.

The PCA actually now has about eighty pending cases, fifty-four of which are investor-state arbitrations. Only eight cases are state-to-state disputes. While the PCA still has boundary cases like the Abyei arbitration or the Ethiopia-Eritrea boundary commission and other state-to-state cases such as the Ethiopia-Eritrea claims commission, the PCA has transformed into being primarily an investor-state dispute resolution mechanism.

Blame it on the BITs. The proliferation of bilateral investment treaties in recent decades caused an increased number of cases, which effected both ICSID and the PCA. While the PCA has a cooperation agreement with ICSID, most PCA investor-state disputes are under UNCITRAL rules and are enforceable under the New York Convention, rather than the ICSID Convention. The differences between ICSID versus UNCITRAL procedural rules, as well as any differences between the New York Convention and  the ICSID Convention (such as in the enforcement of awards or provisions for challenging arbitrators) may drive some arbitrations into the PCA as opposed to ICSID. Moreover, while ICSID publishes a list of all of its investor-state cases, the PCA does not. (This may, of course, make the PCA more attractive to parties who want to settle their disputes in private.)

Last August, Luke Eric Peterson observed in the Kluwer Arbitration Blog that in many cases the decision to go to ICSID or the PCA may be determined due a combination of contract clauses that are decades old.

Nonetheless, I think that the question of potential regulatory competition between ICSID and the PCA will be an interesting issue to track in the coming years.