The subject of interstate arbitration has been largely neglected in the field of international relations, often dismissed as merely an obscure legal process. Drawing on numerous cases, this article argues that interstate arbitration has been a significant strategic factor in settling important international disputes and that its merit as a dispute resolution method should be evaluated not only on the basis of arbitrators’ decisions alone but also on its impact on the underlying diplomatic process between disputants. The author examines the nature of interstate arbitration, traces its historical development, outlines its contemporary processes, and proposes a framework explaining how and when it may be applied to international conflicts between states.

The 1899 Convention for the Pacific Settlement of International Disputes, still in force today among seventy‐two states, staked out an important role for interstate arbitration when it declared: “In questions of a legal nature, and especially in the interpretation of International Conventions, arbitration is recognized by the Signatory Powers as the most effective, and at the same time the most equitable, means of settling disputes which diplomacy has failed to settle” (1899 Convention, Art. 16). Despite that strong endorsement, interstate arbitration after more than a century remains a largely forgotten item at the bottom of the dispute settlement toolbox, overlooked in books, articles, and courses on conflict resolution, seemingly a matter best left to lawyers and of little relevance to the contentious disputes that plague the world today.

While it is true that interstate arbitration is essentially a legal process, to view it only in legal terms overlooks its tactical and strategic importance in enabling contending states under appropriate conditions to settle significant international conflicts. For example, the Taba Arbitration between Egypt and Israel, whose formal purpose was to judge competing claims to an insignificant piece of the Sinai Peninsula (despite its luxury hotel and tourist resort), enabled the two countries to make their 1979 Peace Treaty ending thirty years of war and laid the foundation for massive aid programs to both from the United States (Taba Arbitration). Similarly, the 1986 U.N. Secretary General’s Ruling in the Rainbow War Case, functionally an interstate arbitration, was legally about requiring France to compensate New Zealand for the actions by French secret service agents in sinking the Rainbow Warrior—a ship flying the New Zealand flag—while moored in Auckland harbor. However, the effect of the case was to enable both countries, albeit fitfully, to re‐establish normal diplomatic and economic relations (Rainbow Warrior Case 1986). And while the legal purpose of the Red Sea Islands Arbitration between Eritrea and Yemen was to settle their competing claims to some uninhabited rocks in the Red Sea, its strategic effect for both countries, and indeed the world, was to provide a face‐saving way to end a dangerous military confrontation in 1995 that threatened an important global trade route (Red Sea Case).

These few examples indicate the supportive role that interstate arbitration can play in international negotiations and relationships. They lead one to conclude that rather than applying arbitration when diplomacy fails, as the Convention for the Pacific Settlement of International Disputes suggests, interstate arbitration is more appropriately seen as a way to give diplomacy a needed helping hand. It surely deserves an important place in the toolboxes of international peacemakers and in the programs that train them.

The aim of this article is to explore the role of interstate arbitration in international relations by considering four factors: (1) the nature of interstate arbitration, (2) the history of its modern development, (3) the interstate arbitral process, and finally, (4) a suggested theoretical framework to help negotiators determine when an interstate conflict is ripe for arbitration.

Arbitration is basically a method of dispute settlement by which the parties to a dispute agree to submit their dispute to a third person or persons for a binding decision according to agreed norms or rules and then to carry out that decision. In the realm of international relations, three types of arbitration exist:

  1. arbitrations between states, usually referred to as interstate arbitration and probably the least numerous of the three types;

  2. arbitrations between a state and a foreign national or company, many of which are investor–state cases, a fast‐growing category now numbered to include over eleven hundred cases (UNCITRAL 2021); and

  3. arbitrations between nationals and companies from different countries, known generally as international commercial arbitration, the preferred method for settling disputes among international businesses and the most used of the three.

Although subject to different legal regimes, the three arbitration types share many principles and processes in common and often employ the same persons to serve as arbitrators or legal counsel in all three types of cases. When the 1899 Convention cited “…arbitration … as the most effective, and at the same time the most equitable, means of settling disputes which diplomacy has failed to settle,” it was clearly referring to interstate arbitration since the Convention’s stated purpose was “… obviating, as far as possible, recourse to force in the relations between States…” (1899 Convention Art. 1).

Occasionally, people confuse arbitration with other forms of third‐person dispute intervention, such as mediation and conciliation, both of which are very different from arbitration. The difference is this: arbitrators have the power to decide a dispute because the parties to the dispute have given them that power by agreement. Mediators and conciliators, on the other hand, have no such power. In addition, unlike mediators, arbitrators rely on the application of rules to settle disputes. Arbitration is therefore a form of adjudication (Bilder 2007). While judges in courts gain their authority to decide cases from the law, arbitrators’ authority comes from the parties’ agreement to arbitrate their dispute. And unlike courts, which are normally permanent institutions created by law to decide whole classes of disputes, arbitration tribunals in most cases are ad hoc organizations established by agreement of the parties to decide a particular dispute and then disband when that task is completed.

The arbitration agreement, which is always written and usually very detailed, is fundamental to any arbitral process and serves as its constitution. As a result, the agreement’s specific words and how they are interpreted may themselves become matters of dispute as the arbitration proceeds. Interstate arbitrations are proceedings between states represented by their governments, often aided by outside counsel. Their agreement to arbitrate may be embodied either in an elaborately negotiated agreement between the two states designed for a specific conflict, referred to as a “submission agreement” or “compromis,” or in an existing international treaty governing specified relations in which the two countries agree to arbitrate any dispute that may arise in that relationship. Thus, the arbitration agreement in the Eritrea–Yemen Red Sea case was painstakingly negotiated in two phases: an “Agreement on Principles” signed in Paris on May 21, 1996, and a minutely detailed, six‐page, single‐spaced Arbitration Agreement concluded on October 3 of the same year. On the other hand, the arbitration between Italy and Cuba that occurred during the period 2003–2008, concerning Cuba’s treatment of certain Italian investors, was based on the dispute resolution provisions in the two countries’ 1995 bilateral investment treaty (Italy v. Republic of Cuba 2008).

Although an arbitration’s submission agreement and an arbitration clause in a treaty are equally binding, the two forms may have significant practical differences. In general terms, the differences between them resemble those between a tailor‐made “bespoke” suit and a mass‐produced, “off‐the‐rack model.” Like a bespoke suit, a “compromis” is designed to fit all the contours and idiosyncrasies of the body of a specific, existing dispute, while an arbitration clause in a treaty aims generally to fit all unknown future disputes that may arise under the treaty’s provisions. The latter situation may offer a reluctant potential respondent an opportunity to challenge the jurisdiction of the arbitral tribunal on grounds that the dispute in question does not fit exactly the required conditions of the treaty’s arbitration clause and is therefore not subject to arbitration. That was precisely the Chinese government’s position when the Philippines initiated an arbitration in 2013 under the United Nations Convention on the Law of the Sea ratified by both countries, seeking a declaration that China’s activities in the South China Sea violated the Convention. China refused to participate in the arbitration, arguing in public statements that the Philippines was seeking to arbitrate matters of territorial sovereignty over several maritime features in the South China Sea and that such matters were outside the scope of the Convention; therefore, they and China were not subject to arbitration (Philippines v. China – Jurisdiction 2015). A five‐person arbitral tribunal established under the dispute resolution provisions of the Convention determined in a 151‐page decision in 2015 that it had jurisdiction of the Philippines claim and then examined the merits of the case, ultimately deciding in a 491‐page award in 2016 that certain Chinese activities in the South China Sea did violate the Convention (Philippines v. China – Award 2016). At the end of this process, the Chinese government declared that the tribunal’s award was null and void, and that China was therefore not obligated to respect it. There is no evidence that the award has affected Chinese activities in the South China Sea. Here then was a case of a dispute which both diplomacy and arbitration failed to settle.

Other factors may make the application of a treaty clause problematic. For example, an arbitration clause in a treaty concluded many years before the dispute arose by a former, discredited political regime may give a current reluctant government a political, if not a legal basis for refusing to participate in arbitration or for challenging the arbitrator’s jurisdiction. No similar justification would enable a government to oppose a submission agreement that it had negotiated and agreed to. Moreover, a treaty clause governing arbitration is likely to be more general and less detailed compared to a submission agreement, such as the one negotiated by Eritrea and Yemen, thereby raising the risk of conflict and delay in its application to the case as the arbitration progresses.

Normally, arbitration agreements in interstate arbitrations cover a host of matters governing the proceeding, including the number of arbitrators, the method of their selection, the languages to be used, the place where it will happen, the procedural rules applicable to the case, required nationalities and qualifications of the arbitrators, the institution chosen to administer the arbitration, the parties’ responsibilities for paying arbitral costs, a commitment by both sides to abide by the decisions of the arbitrators, and the law to be applied by the arbitrators in deciding the case, a choice that in interstate arbitrations invariably includes “international law.”

The parties are free to agree on any number of arbitrators they desire. In many cases, the arbitral tribunal consists of three arbitrators, one appointed by each side and the third, the tribunal president, chosen by agreement of the parties or, if the parties cannot agree, by a designated “appointing authority,” such as the president of the International Court of Justice, the Secretary General of the Permanent Court of Arbitration (PCA), or some other respected dignitary. The parties are free to depart from the basic model to shape the arbitral process to meet their needs and interests. For example, the tribunals in the Red Sea and Taba cases consisted of five arbitrators, while in the Tinoco case, a 1923 arbitration in which Great Britain sued Costa Rica for alleged financial injuries done to two British nationals by the Costa Rican government, the tribunal consisted of a single arbitrator, William Howard Taft, the Chief Justice of the U.S. Supreme Court and a former American president (Tinoco Case).

A variation on the use of direct interstate arbitration to settle claims between states is the “claims commission” or “claims tribunal,” a type of arbitral tribunal created by states to resolve a group of claims, usually based on injuries sustained by their nationals or companies, arising from the same event, often a war or revolution. One of the most important contemporary examples of this type of body is the Iran–United States Claims Tribunal. Created in 1981, the tribunal continues to function as part of an indirect agreement between the U.S. and the Iranian government to liberate American diplomats taken hostage by Iranian radicals and to settle the claims of American investors who had lost their investments in Iran through expropriations resulting from the Iranian revolution of 1979 (Algiers Declaration). In most instances, a claims tribunal or commission is created by agreement between two states as part of a diplomatic peacemaking effort to allow a defined group of one state’s nationals injured by another state’s actions to seek compensation from that other state by arbitrating their claims before an international arbitral tribunal (Dolzer 2013; Brilmayer and Giorgetti 2017). The resulting arbitrations are not interstate processes but instead are cases between a state and a foreign national; however, the existence of a claims commission depends on an agreement between the two concerned states.

Ordinarily, when a state’s actions have injured nationals of another state, the government of the second state will seek to obtain a remedy for its injured nationals through negotiation and diplomatic processes. When a negotiated solution does not result, the two states may agree to an interstate arbitration to settle the matter, as Great Britain and Costa Rica did in the Tinoco case. A third solution, a claims tribunal, has two advantages over these two traditional interstate dispute settlement processes. First, it may remove contentious disputes from the relations between the two governments and thus facilitate the development of an improved relationship between them. Second, the existence of a claims tribunal relieves the government of the injured nationals from bearing the financial, bureaucratic, and diplomatic burdens of seeking a remedy directly from the other state, especially in situations where a government would otherwise be obligated to litigate individual claims on behalf of hundreds or even thousands of its nationals. If injured nationals nonetheless persist in demanding help from their government against another state despite the existence of a claims tribunal, that government may avoid that onerous task, which most diplomats are not enthusiastic about carrying out, by telling supplicants, in effect: “The claims tribunal we have created gives you a means of redress for your claims. Use it if you wish. Now go away and stop bothering us.” The effect of a claims tribunal is to outsource to an arbitral tribunal the government’s responsibility for protecting certain of its nationals.

From a strictly legal point of view, the purpose of the two states’ claims tribunal agreement is to create an international legal framework to govern arbitral processes carried out by the tribunal. From an international perspective, the aim of claims tribunals is—through arbitration—to improve relations between the contracting states. A functional analysis leads one to say that international claims tribunals and commissions serve two theoretical purposes: (1) post‐conflict compensation mechanisms for individual injuries and (2) post‐conflict peace‐building mechanisms between nations. Whether claims commissions actually achieve these goals is a matter of debate.

Arbitration is an ancient method of dispute settlement that seems to have existed in all societies throughout human history. In former times, monarchs, warlords, or barons in conflict with one another might turn to a superior authority—a king or indeed the Pope—to settle the matter. For example, in 1493, Pope Alexander VI drew a line on a map in arbitrating the dispute between Spain and Portugal over which country had the right to control the newly discovered lands of the Western Hemisphere. According to the Pope’s map, Portugal would have rights over the area east of the Pope’s line, while Spain would control all territory to the west. One of the far‐reaching consequences of that fifteenth‐century arbitration is that today Brazil speaks Portuguese, and the rest of Latin America speaks Spanish.

The incident also provoked a long‐standing debate over whether the Pope’s actions were in fact those of an arbitrator. No less an authority than Hugo Grotius, a towering figure in the history of international law, declared that Pope Alexander VI was an arbitrator, but others have argued that the Pope, as the leader of Christianity, was merely exercising his God‐given authority over the kings of the two countries (Vanden Linden 1916).

Contemporary interstate arbitration is very much a product of developments over the last 225 years. Scholars usually consider the history of modern interstate arbitration to begin with the 1794 Treaty between the United States and Britain, an agreement that sought to settle lingering disputes between the two states resulting from America’s separation from Great Britain following its War of Independence. In that treaty, often referred to as the “John Jay Treaty” after America’s first U.S. Supreme Court Chief Justice John Jay—the Americans’ chief negotiator at the talks with Great Britain—the United States and Britain agreed to arbitrate specific disputes, such as territorial boundaries between Canada and Britain’s American former colonies and the losses incurred by certain colonial inhabitants who remained loyal to Britain during the war (Jay Treaty).

Under Jay’s influence, the 1794 Treaty provided in rather specific terms for the arbitration of all those disputes and thereby set a pattern that would influence the development of interstate arbitration in the succeeding years. In particular, the treaty established that the authority to arbitrate and decide specific disputes would be granted to and vested in an organ that was then called a “commission” and we now would call a “tribunal.” The treaty created separate commissions for territorial disputes and those dealing with claims by individuals. It also provided that the United States and Britain would appoint equal numbers of commissioners, who would unanimously choose an additional member, a procedure that is roughly similar to the one used to select tribunal members in contemporary cases. Although the members of commissions would be appointed by the disputant states, they were to function independently. In terms that are similar to contemporary arbitrators’ ethical standards, the treaty specified that all commissioners upon taking up their responsibilities were required to take the following oath: “… I will honestly, diligently, impartially, and carefully examine, and to the best of my Judgement, according to justice and equity, decide all such complaints, preferred to the commissioners: and … I will forebear to act as a commissioner, in any case in which I may be personally interested” (Jay Treaty, Article 6). Thus, commission members were not to act as diplomats negotiating on behalf of their governments but as independent judges deciding a dispute.

Other organizing principles that emerged from the Jay Treaty included those holding that the Commission had the power to determine and define its own jurisdiction, and that the Commission’s decisions, which the two states were obligated to accept, were to be made according to specified rules of law. These principles were later accepted as basic to modern forms of arbitration, a factor that justifies considering John Jay to be the father of modern international arbitration.

Looking at the Jay Treaty through twenty‐first century lenses, one is tempted to say that Chief Justice Jay, through the treaty, was seeking to introduce elements of the rule of law into a dispute resolution process that previously lacked that quality and, at the time, was fundamentally viewed as more political than legal. Unlike diplomats negotiating a settlement to an interstate dispute, the conduct of interstate arbitrators should be governed by definite rules of law independent from the will of either sovereign involved in the case. Prior to the John Jay Treaty, anything that could be called interstate arbitration was used very sporadically, applied unsystematically, and relatively rule‐free. With the John Jay arbitrations as precedent, governments in the nineteenth century began to take interstate arbitration seriously and to use it in troubled relationships with other countries.

One notable example was its application in the famous Alabama Claims cases between the United States and Great Britain, following the U.S. Civil War in the 1860s. The case proved to be a second major building block in the development of modern interstate arbitration. During that war, Great Britain asserted its status as a neutral. At the same time, the southern American Confederacy, which was fighting to secede from the United States, sought to build its navy in Great Britain by buying ships from private shipbuilders and arming them for use in attacks on the northern Union’s commercial shipping. One of those ships was the Alabama, which the Confederacy secured from a British private supplier in 1862 and used to attack Union shipping during the next two years, destroying, damaging, or capturing sixty‐eight Union ships. The U.S. government strongly complained to the British government about the support given by British shipyards to the Confederacy, asserting that the British government as a neutral had an obligation to withhold such support. The United States took the position that since Great Britain had violated its neutrality obligations under international law, international law required it to compensate the United States for the damage to American commerce caused by the Alabama and similar ships built in Britain during the Civil War.

After the Civil War and the defeat of the Confederacy in 1865, the U.S. government continued to press its claims for compensation from Great Britain for the injuries it had sustained. In the face of British refusal, relations between the two countries became increasingly tense. Some observers feared that the situation would lead to war. Negotiations continued for several years until the two countries finally reached an agreement to arbitrate the matter in a treaty concluded in Washington, DC on May 8, 1871, some six years after the end of the American Civil War (Washington Treaty).

The 1871 Treaty was essentially an elaborate interstate arbitration agreement. It became a precedent for subsequent interstate arbitration agreements and can be viewed as giving further impetus to the recognition of arbitration as a legitimate and useful means for settling interstate disputes. The treaty had several features that became standard in later arbitration agreements. First, it emphasized the neutrality of the arbitrators’ role by providing for a five‐ person tribunal, three of whom were from neutral countries. The United States and Britain each appointed one arbitrator, but the other three were to be appointed by the heads of three neutral states—Italy, Switzerland, and Brazil. The reason for neutrality is to give some assurance that the arbitral decision‐making process will be based on law and not on politics, personal interests, or favoritism. Requiring arbitrator neutrality was another factor needed to assure the rule of law. Second, all decisions of the tribunal were to be made by a majority vote. Thus, an arbitrator appointed by one of the parties did not have the power to override or veto a decision of the tribunal, or even dominate its operations. Third, neutrality of the arbitral process was to be further assured by holding the proceeding in a neutral country, something that is standard in most of today’s international arbitration agreements. The 1871 Treaty achieved neutrality in the site of arbitration by specifying that it was to take place in Geneva, Switzerland. Fourth, to create a dispute resolution process governed by law, the treaty specified in detail the applicable rules of law that bind a neutral government during a time of war, specifying that arbitrators would be governed by those rules and also by “… such principles of international law not inconsistent therewith as the Arbitrators shall determine to have been applicable to the case.”

As required by the 1871 Treaty, the arbitral tribunal convened in Geneva, Switzerland, at its City Hall (Hotel de Ville) on December 15, 1871. After nine months of deliberations, on the fourteenth of September 1872 it issued an award in the case, which the tribunal called “Alabama Claims of the United States of America against Great Britain.” By a vote of 4 to 1, with the British arbitrator dissenting, the tribunal awarded $15,500,000 to the United States as compensation for the injuries resulting from Great Britain’s failure to respect its obligations as a neutral country (Alabama Claims Arbitration). Great Britain paid the United States the amount awarded by the tribunal shortly thereafter. In today’s dollars, the sum paid would be equivalent to over $300 million.

The award in the Alabama Claims case had three important consequences. First, it dramatically improved the extremely tense relations between the United States and Great Britain created by tacit British support of the Confederacy in a war that threatened the very existence of the United States. Indeed, one might say that it ended the century‐long troubled relationship between the two countries that had existed since the American War of Independence. The award also laid the foundation for the close relations—what some eventually called “the special relationship”—that would develop between the United States and Britain in the century after the Alabama Claims case.

Second, the award demonstrated that international arbitration could be used to settle disputes between states. As a result, this means of dispute resolution drew increased international attention and support. Third, it gave impetus to a movement among major powers of the day to encourage the use of arbitration to resolve international disputes.

Evidence of the positive public reaction to the Alabama Claims arbitration is to be found on a marble plaque located today in Geneva’s City Hall. Exhibited in a dedicated room named La Salle d’Alabama, the plaque commemorates with civic pride the achievement of the arbitration in resolving the dispute between Great Britain and the United States.

In the years following the Alabama Claims case, the leading powers of the world made strong efforts to encourage the use of nonviolent methods of international dispute settlement. Those efforts culminated in 1899 with a peace conference held at The Hague in the Netherlands. The principal result of that conference was the adoption of a multilateral treaty—the Convention on the Pacific Settlement of International Disputes—which was modern arbitration’s third major building block.

With respect to the practice of arbitration, the convention achieved three important goals. First, it affirmed and endorsed the importance of international arbitration as a means of settling international disputes “which diplomacy has failed to settle.” Second, it established the Permanent Court of Arbitration (PCA) at The Hague as an institution for organizing and managing interstate and other international arbitrations. This provision implicitly recognizes that while international arbitration is essentially an ad hoc process created anew for each particular dispute, it requires a stable, permanent supporting institution to function efficiently. According to the convention, the basic objective of the PCA is to facilitate “an immediate recourse to arbitration for international differences, which it has not been possible to settle by diplomacy” (1899 Convention Art. 20). An immediate recourse to arbitration requires strong institutional support for the arbitral process.

The third accomplishment of the convention was to set down rules of procedure for arbitrations conducted under PCA auspices. This section of the treaty would also influence rules adopted by other arbitral institutions that were established later.

The PCA, housed in the Peace Palace at The Hague along with the International Court of Justice, continues to function as one of the most important intergovernmental arbitral institutions in the world. It does not itself adjudicate disputes or have a permanent cadre of arbitrators, as its designation as a “court” might lead one to believe. Instead, its purpose is to support arbitrations in accordance with parties’ arbitration agreements. Over the years, it has administered many significant interstate arbitrations, such as the Red Sea case, in addition to other types of international arbitration, notably investor–state cases. In 2021 the PCA administered seven interstate arbitration cases.

The efforts by nineteenth‐century proponents of interstate arbitration have yielded fruits. Today, arbitration is an established dispute resolution technique with definite rules and institutions that numerous disputants have used to settle many international disputes since the Alabama case in 1872.

The proceedings of interstate arbitrations tend to follow a basic model. First, an arbitration is a process, that is, a progressive movement toward a desired end. In virtually all arbitrations, that desired end is an arbitral decision, a decision that will settle the parties’ dispute. Second, far from being some sort of rough justice, where decisions are made informally with an eye toward factors other than the legal rights of the disputants, arbitration is a rule‐driven process, usually managed by lawyers, that imposes upon arbitrators, disputants, and their lawyers definite roles with clear norms on how to play them. Arbitration is a principled and rational method of dispute resolution that seeks to arrive at a result based on the applicable rules of law, the evidence, and the arguments presented to the arbitrators. Although an arbitral proceeding may not exhibit all the hallowed ritual and procedural technicalities common to hearings in a court, it must nevertheless conform to minimal standards of justice common to most of the world’s legal systems. Thus, the parties must be given an opportunity to be heard, the arbitrators must be impartial, and the decision‐making process must be fair. The failure to respect minimal requirements of justice will diminish the legitimacy of any resulting award, open it up to governmental challenges and public opposition, and ultimately make its enforcement difficult, if not impossible.

Unlike the freewheeling processes of international mediations, such as the one conducted by President Jimmy Carter at Camp David (Wright 2014), interstate arbitration proceedings, following minutely defined steps and stages, tend to resemble tightly choreographed ballets. The first step, which one might call the “invitation to the dance,” consists of a formal written demand or request for arbitration from the state making the claim (the claimant) to another state (the respondent). The second step is to “constitute” the arbitral tribunal, which involves the appointment of the arbitrators in accordance with the arbitration agreement. Once the arbitral tribunal is constituted, the arbitration “dance,” that is, the arbitral proceeding, begins. In effect, it becomes what in ballet is known as a “pas de trois”—a dance by three performers: the claimant, the respondent, and the tribunal. The first dance step for the three performers is usually a meeting or series of meetings to agree on preliminary procedural matters and a schedule for the submission of documents and for conducting hearings and other meetings.

While many dance forms from ballet to flamenco are group efforts, they also give a central role to solo performances by individual dancers. Arbitration follows this pattern. The fundamental principle upon which arbitration is based—that a state party should have a full opportunity to present its case—means that each party has a chance to make a solo performance to that effect in the arbitral proceeding. The parties carry out their solos through their individual pleadings in the case, which are their presentations, both written and oral, in support of their respective factual and legal positions. Normally, the parties first make written submissions of their pleadings, which have various names, such as “statements,” “memorials,” or “points of claim,” depending on the applicable arbitral system. The pleadings usually are submitted sequentially, with the claimant making the first submission to which the respondent makes a submission in reply. That, in turn, may be followed by a second round of pleadings. Often, these written submissions will be accompanied by relevant supporting documents, factual statements, exhibits, and witness affidavits intended to establish important facts related to the case.

The submission of documents will be followed by a hearing, which may extend over many days, a process where witnesses will be called and examined by both sides and their lawyers will have an opportunity to make oral arguments in support of their cases. Simultaneous translation will be used when the proceeding is conducted in more than one language. Court reporters normally transcribe the entire oral phase of the proceeding. As a result, the written record of the case may amount to thousands of pages of documents, all of which require close study by the tribunal.

At the close of this phase of the arbitration, the arbitrators undertake the next phase in the dance by commencing their deliberations, which will conclude with a decision in the case. Just as a ballet usually has a dramatic ending, variously referred to as “the finale” or “the coda,” the arbitration comes to a formal and somewhat ceremonial ending with the issuance by the tribunal of its decision. Normally, in its decision, often referred to as “the award,” the tribunal seeks to respond to all the various issues and arguments raised by the parties. As a result, depending on the complexity of the case, the tribunal’s decision can amount to many pages, often reaching more than a hundred. The award may be deemed “final” if it disposes of all issues in the case or it may be deemed “partial” or “interim” when it leaves certain issues for a later determination. For example, in complicated cases like Philippines v. China in which the tribunal’s jurisdiction was challenged, it is not uncommon for arbitral tribunals to bifurcate their decisions, making a first award on jurisdiction, which is followed later by an award on liability.

The issuance of an award by the tribunal ends the arbitration, but it does not necessarily end the dispute. The winning party must now secure the other side’s compliance with the award, which may not happen readily when a sovereign state is involved and its government senses strong opposition from internal forces to obeying the orders of “foreigners” that violate national interests. Sometimes, compliance with an award requires active negotiation between the parties, often with the intervention of other countries that favor a final settlement of the conflict. In the Taba case, the tribunal issued its award in favor of Egypt on September 28, 1988, but Israel did not withdraw from the contested territories until March 15, 1989, and then only after tense negotiations between the two governments with the strong encouragement of the United States (Sofaer 2017).

Looking at interstate arbitration not as a legal instrument but as a tool of international dispute settlement, one needs to ask some final questions: What are the conditions under which interstate arbitration may be used? When is an interstate conflict ripe for arbitration? Since interstate arbitration requires the consent of state disputants for its application, peacemakers face a more fundamental question: What are the conditions under which states are likely to consent to arbitrate a dispute in which they are engaged? While lawyers rarely study this question, political scientists have given it significant consideration (e.g., Simmons 2002; Allee and Huth 2006). Drawing on this work and an examination of interstate cases, one may identify the following seven factors that international negotiators and peacemakers should consider in deciding whether to reach in their toolboxes for interstate arbitration.

1. Evident Failure of Diplomatic Options

Governments always insist on participating in international decisions that affect their interests. They are therefore extremely reluctant to yield that responsibility to a thirty party, like an arbitral tribunal, over which they have little or no control. As a result, they will usually never agree to arbitrate contentious disputes unless they are convinced that a “diplomatic option” is not feasible. The 1899 Convention on the Pacific Settlement of International Disputes recognized this phenomenon when it endorsed arbitration as “the most effective, and at the same time the most equitable, means of settling disputes which diplomacy has failed to settle.” “Diplomacy” in this instance generally refers to the processes of negotiation between the disputants with or without the assistance of mediators. Usually, the parties to an interstate dispute will come to the realization that they have no diplomatic options for solving their dispute only after they have experienced a protracted period of failed negotiations. Thus, before advancing arbitration as a possible solution to an interstate dispute, third‐party intervenors need to determine whether disputing states accept the notion that diplomatic solutions to a conflict are not possible. If they have not, intervenors may have to convince them of this reality.

2. Governments’ Interests and Expectations

Governments are unlikely to agree to interstate arbitration of issues that they consider to be highly important or indeed essential to their continued existence. Thus, Egypt and Israel were willing to arbitrate the question of sovereignty over a small portion of the Sinai because the stakes, although important, were relatively small compared to what they would gain from a peace treaty. On the other hand, they would never have agreed to arbitrate the conditions for a final peace treaty. They agreed to Jimmy Carter as a mediator because that solution allowed them to maintain control over their dispute; they would never have accepted Carter as an arbitrator, a situation which would have meant a dangerous loss of control. In evaluating opportunities for interstate arbitration, it is important to recognize that governments’ expectations of realizing their interests may change over time, particularly as negotiations result in governments becoming more realistic. Thus, the timing of a proposal to arbitrate is critical. An arbitration proposal made at the beginning of negotiations is likely to be rejected summarily; a proposal made after weeks of futile negotiation will probably receive more serious consideration from the parties.

3. Governments’ Estimation of the Strength of Their Legal Case

A government’s estimation of the strength of its legal case factors into its decision on whether to agree to interstate arbitration. A government is more likely to sign an arbitration agreement if it believes it has a strong case, which not only increases its chance of success but also enables it to justify its decision to the public. A weak legal case, on the other hand, may cause a state to reject arbitration. Third‐party intervenors proposing interstate arbitration need to explain carefully to both sides the nature of the applicable law and the process by which the arbitration will be conducted.

4. Governments’ Cost/Benefit Analysis of Engaging in Interstate Arbitration

Governments, like litigants in court, weigh costs and benefits when deciding whether to arbitrate their interstate disputes. Such calculus will be strongly influenced by extended failed diplomatic negotiation with its adversary and its confidence that the parties can form a new relationship once the dispute is settled. Thus, it is likely that Israel would have refused any concession on the Sinai in the years immediately following its successful invasion and occupation of the territory. However, with the prospect of a peace treaty with Egypt and increased aid from the United States, the potential loss of Taba seemed less important. Similarly, for Britain in the Alabama case and for Costa Rica in the Tinoco case, the risk of paying a compensation award was worth the benefit of a new and more positive relationship with an economically important world power.

5. Governments’ Need for Protection from Political Attack

Government leaders who make peace with, or concessions to, foreign adversaries are often subjected to domestic political attack or worse. Interstate arbitration gives political leaders a certain amount of protection from domestic public criticism by allowing them to escape direct responsibility for concessions made to or accepted from foreign adversaries, concessions necessary to achieve state goals. For this reason, presidents and prime ministers may be predisposed to accept interstate arbitration in settling certain disputes. For example, in the Alabama Claims case, anti‐British segments of the American public were demanding as much as $2 billion and portions of Canadian territory as compensation for British injuries to American shipping. Had U.S. diplomatic negotiators accepted $15,500,000 from the British in diplomatic negotiations, they would have been vulnerable to accusations by such anti‐British elements of having “sold out” the American interests for too little. A $15,500,000 arbitration award by a panel of distinguished jurists, on the other hand, protected them from such accusations. In response to any such criticism, U.S. leadership could respond that the arbitrators, not American governmental leaders, were the ones responsible for shortchanging the United States. At the same time, settling the dispute through arbitration also protected the British government from accusations by opponents in Parliament that it paid too much to improve Britain’s relationship with the Americans.

6. Governments’ Desire to Expedite Settlement of the Dispute

Interstate disputes sometimes involve issues whose resolution may require extensive technical expertise and lengthy negotiations. If other issues in negotiation are readily solvable, it may be possible to proceed to a settlement of the dispute by leaving the technical issues out of the negotiations and dealing with them in arbitration. That was precisely the problem faced in the peace treaty negotiations between Egypt and Israel. A determination of which nation had sovereignty over Taba required a lengthy examination and determination of the historic boundary between Egypt and Palestine, a task whose completion would delay and possibly block the completion of a peace treaty. With U.S. support, the two governments decided to sign their peace treaty in 1979 and settle the Taba issue through interstate arbitration, a process that was not completed until 1989.

A similar situation confronted the negotiators of the 1995 Dayton Peace Accords, which sought to end three years of war in the Balkans and establish constitutional arrangements for the newly independent Bosnia and Herzegovina. Although the Dayton negotiations lasted twenty‐one days, the representatives of the substate entities of Bosnia and Herzegovina—the Federation of Bosnia and Herzegovina and Republika Srpska—were unable to reach agreement as to which entity should control the Brčko area in northeastern Bosnia. Sensing that the issue, if left unresolved, would torpedo the entire peace process, the representatives of the two substate entities agreed to arbitrate the matter and to include their agreement in the Dayton Accords, which were signed shortly thereafter (Dayton Accords). Here then was another example of using interstate arbitration to take a hard issue off the table so the disputants could reach agreement on broader issues of greater import. The Brčko tribunal would issue its final award in the case in March 1999 (Brčko Award).

7. Existence of Third‐Party Support

Third countries often have a stake in the resolution of disputes involving states where they have important political and economic interests. In such disputes, third parties’ diplomatic and economic resources and influence may be mobilized both to persuade states to settle their disputes through arbitration and to support the entire arbitral process. The United States played such a supporting role in the Taba arbitration. Similarly, in the Red Sea case, France, along with Egypt, persuaded Eritrea and Yemen to arbitrate their differences and supported the arbitral process through to its successful conclusion.

Through a careful evaluation and application of these seven factors, it is possible for disputants and mediators to help resolve interstate conflicts through interstate arbitration after diplomacy has failed.

In hindsight, the signatories of the 1899 Convention were certainly overly optimistic about the power of interstate arbitration to resolve international disputes, particularly as they chose to take this action on the eve of the twentieth century, which would experience horrendous conflicts among states, conflicts that no amount of arbitration would have resolved. A cynic might say that while the signatories’ intentions were good, their timing was off. Nonetheless, as this article has tried to show, interstate arbitration has remained a useful instrument for peacemakers. It is not, however, a sleek power tool driven by a multi‐horsepower engine capable of mowing down all conflicts in its path. It is more like a Swiss Army knife—handy to have in the right situations.

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