Daily Archives: May 18, 2014

All The World’s A Stage … and 115 Years Ago Today, the First Hague Conference Tried to Set the Rules of Performance.

One hundred and fifteen years ago today, the First International Peace Conference was held at The Hague in the Netherlands. The goal of the peace conference was to negotiate disarmament, the laws of war, and war crimes and, if possible, to create a binding international court for compulsory arbitration to settle international disputes — an establishment considered necessary to replace the institution of war. While most of the countries present favoured the process for binding international arbitration — including the United States, Britain, Russia, and China, a few countries — including Germany — vetoed it.

However, in addition to the creation of three primary treaties, ratified by all major powers, namely:

  • Convention for the Pacific Settlement of International Disputes
  • Convention with respect to the Laws and Customs of War on Land
  • Convention for the Adaptation to Maritime Warfare of the Principles of the Geneva Convention

and three declarations, ratified by all major powers except the United States (and Great Britain with respect to the first declaration):

  • Declaration concerning the Prohibition of the Discharge of Projectiles and Explosive from Balloons or by Other New Analogous Methods
  • Declaration concerning the Prohibition of the Use of Projectiles with the Sole Object to Spread Asphyxiating Poisonous Gases
  • Declaration concerning the Prohibition of the Use of Bullets which can Easily Expand or Change their Form inside the Human Body

it did manage to establish a voluntary forum for arbitration, the Permanent Court of Arbitration (PCA), which is typically overshadowed by the International Court of Justice that replaced its sister court, the Permanent Court of International Justice that was formed in 1922.

The PCA is important, even though you’ve probably never heard of it, because it is the court that administers cases that arise out of international treaties (including bilateral and multilateral investment treaties) that span a wide range of legal issues, including maritime boundaries, international investment, and matters concerning international and regional trade. While your company will likely never end up in the courtroom, your government likely will, and the decisions might change what your country is, and thus what you are, allowed to do — and might be the entire reason laws change overnight (which will happen if a maritime boundary is rezoned and you are fishery, for example).

Of course, if you are a big multinational, the PCA might be the registry for your government arbitration that is being conducted under UNCITRAL arbitration rules.

(For example, the PCA recently held a hearing between Bilcon of Delaware et al v. Government of Canada on an arbitration claim about the need for Canada and its subnational governments to fairly administer and follow their environmental and investment laws and regulations to ensure a high standard of environmental protection that arose out of unfair, arbitrary, and discriminatory application of certain government measures relating to the permitting of a basalt quarry and marine terminal at Whites Points in Digby County, Nova Scotia because the type of environmental assessment that the Investors were required to carry out were more burdensome, unfair, and arbitrary than the types of environmental assessments other Canadian investors with similar projects have had to undergo.)

While it was not the preferred outcome of the Peace Conference, the court does give nation states a viable alternative to war and corporations and investors a way to hold nation states accountable to the global agreements they signed up for. And it is a fairly busy court. Right now, the PCA is the registry in eight inter-state arbitrations, fifty-two investor-state arbitrations, and thirty-three arbitrations under contracts or other agreements to which one party is a state, state-controlled entity, or intergovernmental organization. If you’re working for a big multi-national, the PCA is an entity you should be aware of.