INTERNATIONAL ARBITRATION
International Arbitration is one of the two ways to settle disputes, together with judicial settlement, contrary to judicial settlement, which is characterized by the fact that a dispute is settled by a standing tribunal, like International court of justice, arbitration is designed by parties to the disputes.
According to the Arbitration and conciliation act,1996 “international commercial arbitration” means an arbitration relating to disputes arising out of legal relationships, whether contractual or not, considered as commercial under the law in force in India and where at least one of the parties is—
(i) an individual who is a national of, or habitually resident in, any country other than India; or
(ii) a body corporate which is incorporated in any country other than India; or
(iii) *** an association or a body of individuals whose central management and control is exercised in any country other than India; or
(iv) the Government of a foreign country. They can choose arbitrators. The law that governs the arbitration proceeding (procedural law) and the law applicable to the dispute is called applicable law.
Arbitration can be categorize in several ways
- One can distinguish between the parties to the dispute – parties can be inter-state arbitration, between state and non-state actors, individual and private companies and the last between two non-state actors. Leaving the first type aside rest of them are called mixed arbitration and the first one is called direct arbitration.
- Second categorization is based on the way in which arbitration is conducted – the conduct is divide in two parts that is ad- hoc and the other is institutional arbitration. Ad hoc is the one in which case the parties to the disputes are responsible for determining and agreeing on the arbitration procedure and are not subjected to the procedure of an arbitral institution. Institutional arbitration is the one which rely on the procedural rules of chosen arbitration institution and are assisted during the procedure by that institution.
- The third categorization consists of dividing arbitrations based on the subject matter of the disputes– the subject matters are arbitration of commercial laws, investment disputes and disputes in relation with law of seas (Boundary Determination).
- There are different arbitral institutions that can assist arbitral tribunals in the settlement of disputes.
- For the disputes in the field of international law the most prominent institutions are permanent court of arbitration, situated in Hague and in the area of investment, disputes between the state and a foreign investor, the International Centre for the settlement of investment disputes, headquarters in Washington
Arbitration between states and states like entities were settled through International arbitration way before the first international court or tribunals were created by states.
Even at the time of ancient Greece, early forms of what we call arbitration were used to solve disputes between allied states and the city states relating to their independence and sovereignty.
Arbitration was also a famous method of dispute resolution in the middle ages. The dispute was often settled by a single arbitrator called emperor. With the 1648 peace treaties of Westphalia, which followed the 30 years’ war in Europe, and the primary of states sovereignty that came along, arbitration almost disappeared in the contemporary arbitration we now have.
The jay treaty arbitration is usually considered as the starting point of modern international arbitration. The treaty was signed between Great Britain and the United States, mainly to settle outstanding issues following the American war of independence. The mechanism established under the treaty to settle these disputes is remarkable in several respects.
After this in the 19th century and the start of 20th centuries, saw more than 120 so-called Mixed claims commissions like the jay treaty this commissions heard several types of claims, interstate claims and or/claims from national of one state against another state.
They were very often created following an armed conflict between two states or internal disturbances in one state during which nationals of other states had suffered injuries. For example United States Mexico claims commissions in late 19th and early 20th century and the various commissions established after the Second World War to settle claims with Germany.
It’s important to note however, that the claims of individuals very often especially in the early examples, had to be brought by the states of their nationality, in other words, individuals often had no direct access to the commission or tribunal.
In other words, individuals often had no direct access to the commission or tribunal. I mentioned this because this stand in the stark to the current practice in for example, investment treaty arbitration.
This was a bit of historical perspective of international arbitration. This all is my perspective about International arbitration.