During that era, arbitration was the method for fixing problems relating to independence and sovereignty, in which the Pope, the Emperor or the King were the ones who acted as arbitrators. In both mentioned periods, the conflicts were solved based on principles of equity- rather than law. The resolutions were not reasoned, and arbitrators were not independent nor impartial.
Jay Treaty Arbitration
In the 18th century, the United States achieved independence with the British Defeat of 1783, and that was the moment The American War of Independence- started in 1775- came to an end. During the battle, thirteen North-American Colonies confronted The Reign of Great Britain.
In 1795 The Britannic Majesty and the President of the US- with the advice and consent of the senate- decided to sign one of the most important agreements in the history of International Law. The Jay Treaty Arbitration (JTA), which constituted a novelty for the time, proclaimed a set of rules regarding amity, commerce, and navigation. This in itself marked a turning point giving birth to what we know now as Modern Arbitration.
JTA established three types of commissions: disputes in relation to boundaries; claims for compensation due to British nationals (Britain owed the US); and claims from US nationals against Great Britain for treatment of their property. This treaty took reasonable decisions based on law and partial arbitrators.
Since then, other important inter-state instruments stood out in the history of modern arbitration such as The Alabama Claims Arbitration (1872)- damage suffered by the US government due to attacks on Union ships by Confederate Navy ships during the American Civil War- and The Washington Treaty (1871)- between the US and GB through an international arbitration tribunal in Geneva. The latter set an important precedent to successfully settle interstate claims through arbitration with the presence of a tribunal composed by majority arbitrators not nationals of state parties to the dispute.
Modern International Arbitration
Settles disputes designed by the parties as both have the possibility to choose the arbitrators, the applicable law, the procedural law, and the issues that are going to be submitted in the tribunal's decision. The selection of arbitrators is the main principle that distinguishes this resource from the judicial settlement (through recourse to international courts and tribunals).
During the 20th century, with the creation of the Permanent Court of International Justice and The International Court of Justice, the use of arbitration slowed down. The reason for this was basically that parties preferred a judicial settlement. What made arbitration resurface was the establishment of the International Centre for Settlement of Investment Disputes in 1960 which seeks to solve conflicts between foreign investors and states, and the implementation of the Iran-United States Claims Tribunal created in 1981.
For the proper functioning of this procedure, there are needed individuals fully independent and impartial, in order to solve the conflicts in a fair and equitable way as the arbitrator's decision, the outcome, is binding for the parties.
By Micaela Seidman
Micaela Seidman is a 21-year-old-student from Buenos Aires, Argentina who is currently studying a Law Degree at the University of San Isidro. She is working at the Buenos Aires City Government. She is the CEO and Founder of Consilium Worldwide.
