Jurisdiction of International Court of Justice and Permanent Court of Arbitration - Essay Example

Addressing these demands in July 1899 the “Convention for the Pacific Settlement of International Disputes,” established a global body for resolving international disputes known as the Permanent Court of Arbitration or PCA. The PCA was a precursor to all the other international institutions formed to resolve international disputes, including the International Court of Justice (ICJ) formed in 1945 under the convention of the United Nations. Arbitration, which has turned into a hugely popular process in the last 50 years for commercial dispute settlement is widely accepted amongst the various states worldwide that regularly enforce the resolution awarded by the court of arbitration. However, the ICJ and the scores of other similar tribunal bodies created by the states have not become popular, and their rulings are not widely accepted by the various states. Despite the popularity of the arbitration body, both the institutions (PCA and ICJ) face criticism from the experts, while observations reveal that a lack of enforcement of the awarded statements remains a major problem for both bodies. In this context, the article will examine the differences in the jurisdictions of PCA and the IJC in the resolution of International Investments/Commercial Disputes. It will study various texts to identify the problems associated with these international legal bodies especially those created for resolving global commercial problems.

Traditionally the jurisdictions of courts depend primarily on the consent of the contending parties. The first famous commercial dispute case was seen in the 19th century during the US civil war, where consent was forwarded by Britain. Here we find that the US had submitted the ‘Alabama Claims’ under the jurisdiction of arbitration. This claim centered on the activities of a particular ship named Alabama, built by an English shipyard and later sold to the Confederates, during the civil war. Here the US felt that Britain had contravened the neutrality rules, and it claimed compensation under the Three Rules of Washington for the losses suffered by its army when the Confederacy used Alabama. In this case, under arbitration, the verdict went against Britain, whereupon the state took a political decision to accept the indictment, as awarded by arbitration. This process of submission to arbitration to solve a transnational dispute and the manner of resolution encouraged other states to also start using arbitration, which finally led to the formation of the Permanent Court of Arbitration (PCA).

During the initial years, a large number of inter-State disputes came under the various tribunals established under PCA. Since PCA was primarily established to resolve disputes between the states, all its initial tribunals were asked to decide on disputes related to matters on public international legal issues like treaty implications, state duties, and territorial sovereignty. Many of the principles formed during these early years still hold good as international laws, often given as a reference by other international bodies, like the International Court of Justice.