[19] See Martens, N.R.G. 3rd Ser. IV. (1911), p. 79.
What differences can be decided by Arbitration.
§ 17. It is often maintained that every possible difference between States could not be determined by arbitration, and, consequently, efforts are made to distinguish those groups of State differences which are determinable by arbitration from others. Now although all States may never consent to have all possible differences decided by arbitration, theoretically there is no reason for a distinction between differences decidable and undecidable through arbitration. For there can be no doubt that, the consent of the parties once given, every possible difference might be settled through arbitration, either by the verdict being based on rules of International Law, or rules of natural equity, or by opposing claims being compromised. But, differing from the theoretical question as to what differences are and are not determinable by arbitration, is the question as to what kind of State differences ought always to be settled in this manner. The latter question has been answered by article 38 (formerly 16) of the Hague Convention for the peaceful adjustment of international differences, the contracting Powers therein recognising arbitration as the most efficacious, and at the same time the most equitable, means of determining differences of a judicial character in general, and in especial differences regarding the interpretation or application of international treaties. But future experience must decide whether the signatory Powers will in practice always act according to this distinction.
However this may be, when, in 1903, Great Britain and France, following the suggestion of this article 38 (formerly 16), concluded a treaty in which they agreed to settle by arbitration all such differences of a legal nature as do not affect their vital interests, their independence, or their honour, many other States followed the lead. Great Britain, in the same and the following years, entered into such arbitration treaties with Spain, Italy, Germany, Sweden, Norway, Portugal, Switzerland, Austria-Hungary, Holland, Denmark, the United States of America, Colombia, and Brazil. All these agreements were concluded for five years only, but those which have since expired have all been renewed for another period of five years.
Yet there is a flaw in all these treaties, because the decision as to whether a difference is of a legal nature or not, is left to the discretion of the parties. Cases have happened in which one of the parties has claimed to have a difference settled by arbitration on account of its legal nature, whereas the other party has denied the legal nature of the difference and, therefore, refused to go to arbitration. For this reason the arbitration treaties signed on August 3, 1911, between the United States of America and Great Britain and between the United States of America and France are epoch making, since article 3 provides that, in cases where the parties disagree as to whether or not a difference is subject to arbitration under the treaty concerned, the question shall be submitted to a joint High Commission of Inquiry; and that, if all, or all but one, of the members of such Commission decide the question in the affirmative, the case shall be settled by arbitration. Article 3 has, however, been struck out by the American Senate, with the consequence that these treaties have lost their intrinsic value, even should they be ratified.
It should be mentioned that, whereas most arbitration treaties limit arbitration in one or more ways, exempting cases which concern the independence, the honour, or the vital interests of the parties, Argentina[20] and Chili in 1902, Denmark and Holland in 1903, Denmark and Holland in 1905, Denmark and Portugal in 1907, Argentina and Italy in 1907, the Central American Republics of Costa Rica, Guatemala, Honduras, Nicaragua, and San Salvador in 1907, Italy and Holland in 1907 entered into general arbitration treaties according to which all differences without any exception shall be settled by arbitration.[21]
[20] Earlier than this, on July 23, 1898—see Martens, N.R.G. 2nd Ser. XXIX. p. 137—Argentina and Italy, and on November 9, 1899—see Martens, N.R.G. 2nd Ser. XXXII. (1905), p. 404—Argentina and Paraguay had concluded treaties according to which all differences without exception shall be settled by arbitration. See also above, § [3], concerning the Compromise Clause.
[21] A list of all the arbitration treaties which have been entered into by the several States since the First Hague Peace Conference of 1899, is to be found in Fried, op. cit. p. 185.
Value of Arbitration.
§ 18. There can be no doubt that arbitration is, and every day becomes more and more, of great importance. History proves that in antiquity and during the Middle Ages arbitration was occasionally[22] made use of as a peaceable means of settling international differences. But, although an International Law made its appearance in modern times, during the sixteenth, seventeenth, and eighteenth centuries very few cases of arbitration occurred. It was not until the end of the eighteenth century that arbitration was frequently made use of. There are 177 cases from 1794 to the end of 1900.[23] This number shows that the inclination of States to agree to arbitration has increased, and there can be no doubt that arbitration has a great future. States and the public opinion of the whole world become more and more convinced that there are a good many international differences which may well be determined by arbitration without any danger whatever to the national existence, independence, dignity, and prosperity of the States concerned. A net of so-called Peace Societies has spread over the whole world, and their members unceasingly work for the promotion of arbitration. The Parliaments of several countries have repeatedly given their vote in favour of arbitration; and the Hague Peace Conference of 1899 created a Permanent Court of Arbitration, a step by which a new epoch of the development of International Law was inaugurated. It is certain that arbitration will gradually increase its range, although the time is by no means in sight when all international differences will find their settlement by arbitration.