• Introduction
  • Types of Arbitration: Public, Mixed and Commercial Arbitration Courts
    • Stand-alone
    • Ad hoc
      • Appointing Authority
    • Institutional (or administered) Courts
  • The Commerciality of Arbitral Institutions
Introduction

Generally, an adjudicatory body in International Justice may be an arbitral or judicial court (or tribunal). A “tertium genus” is the so-called non-adjudicatory processes, such as compliance mechanisms in multilateral environmental agreements and inspection mechanisms in international development banks. Notice that there is a difference between court and tribunal. Both can be regarded as synonyms but are not, according to a few scholars. Regarding the distinction between courts and tribunals within International Justice, the article “The Proliferation of International Judicial Bodies: The Pieces of the Puzzle” can be found on the author’s website, Romano.

Here, court and tribunal are considered equivalent terms to explain the types of arbitral courts (or tribunals).

Types of Arbitration: Public, Mixed and Commercial Arbitration Courts

The arbitral court is governed by arbitral law, which is created by the concerned States, persons, or corporations through conventions, compromises, agreements, and commercial contracts. The arbitral court renders a binding award on the disputants, following a procedural rule and according to the law.

The arbitration court can be classified as public, mixed, or commercial (private), considering whether the disputants are State-State, State-private person (natural or juristic), or private person-private person, respectively. So, the criterium for this classification is the subjective element in the dispute.

An arbitral court may also be classified as ad hoc or institutional (or administered) regarding how it is constituted and performs its tasks.

(…) two basic types of arbitration: ad hoc and institutional. While institutional arbitration is administered
by an arbitration institution and conducted in accordance with the arbitration rules of that institution, ad hoc arbitrators are neither administered by any institution (there are a few rare exceptions to this), nor do they have to follow any pre-designed arbitration rules. Instead, the parties to an ad hoc arbitration may either adopt the UNCITRAL Arbitration Rules or, together with the tribunal, agree upon and design their own rules of procedure.

University of London (textbook, LWM42)

Notwithstanding, in light of the States’ practice in International Law, it seems that there should also be a distinction between ad hoc and stand-alone arbitration.

Stand-alone arbitration court

The characteristics of not being administered by any institution and not following any pre-designed arbitration rules define indeed not an ad hoc arbitral court but a stand-alone arbitral tribunal, which were common until the creation of the PCA – Permanent Court of Arbitration in 1899.

There are dozens of arbitrations with those characteristics recorded since 1794, and in all of them, the court was constituted, organised, administered and, eventually, laid down its own arbitral procedural rules. Such ancient arbitration had the form of a commission consisting of equal numbers of national arbitrators appointed by the parties (plus the umpire or neutral one), or even was an arbitration of one single arbitrator deriving from “the long-established practice of referring a dispute to a foreign head of state or government for decision.”1

Currently, there are no longer stand-alone arbitration courts because, although they demand less costs, they require a heavy workload on the arbitrators, who must perform administrative tasks and simultaneously judge the subject matter.

So, it seems more accurate to consider a stand-alone arbitral tribunal the one that is defined by the textbook as an ad hoc arbitral tribunal.

The Venezuela-British Guiana Boundary Arbitration of 18992 is an example of stand-alone arbitration. It is noticeable that the treaty of arbitration signed at Washington on 2 February 1897 establishes the rules of procedure, setting out how many arbitrators the tribunal will be constituted of, the replacement of arbitrators, the tribunal´s powers, law applicable determining the boundary-line, factual conditions admissible as for the adverse holding, tribunal´s seat (in Paris), timetable, form of the pleadings, representatives, costs, award etc. Another example is Brazil and Great Britain3 arbitration, which was a conflict the object of which is the boundary with Guiana. However, in the Guiana boundary case between Brazil and Great Britain, the dispute was referred to a sole arbitrator, Victor-Emmanuel, King of Italy. That stand-alone arbitration was underpinned by Article I of a compromise of arbitration, signed at London, on 6 November 1901, aiming to determine the boundary line between the Colony of British
Guiana and the United States of Brazil.

Ad hoc Arbitral Tribunal

In this sense, an ad hoc arbitral tribunal is the one that receives administrative assistance from an arbitral organisation such as the PCA or the ICSID – International Centre for Settlement of Investment Disputes.

It is crucial to point out that the fact of arbitrators receiving outside administrative assistance is not the decisive distinction line between ad hoc and stand-alone arbitration, as in stand-alone arbitration arbitrators did employ administrative assistance to be paid by the conflicting States. The concept of ad hoc arbitration is construed more in the face of administered (institutional) arbitration, having regard to the level of influence an arbitral institution may exert upon the constitution and procedures rules of the arbitration court. Before the emergence of arbitral institutions, of which the PCA was the milestone in 1899, there were only stand-alone arbitrations. Afterwards, inasmuch as arbitration agreements started to refer to that institution, the feature of “administered” or “institutional” arbitration arose as a new type of arbitration court, in contrast to those earlier compromis of arbitration that did not any reference PCA. Thus, the stand-alone arbitral court is the most ancient and the paradigm model of arbitration, which started to receive “transformations” as the PCA´s arising brought alternatives for the arbitration to be only administratively assisted (ad hoc arbitration) or to be entirely constituted, organised and guided by the PCA (institutional or administered administration).

The scope of administrative assistance encompasses a variety of activities, reaching the trait of true consultation on administrative matters, for instance, in connection with the assessment of arbitrators´s fees. Regularly, such administrative services may be transmitting oral and written communications from the parties to the arbitral tribunal and vice-versa and between the parties, maintaining an archive of filings and correspondence, making all the arrangements concerning the amounts of the arbitrators´ fees and advance deposits to be made on account of such fees in consultation with the parties and the arbitrators, carrying out any other tasks entrusted by the parties or the arbitral tribunal (See the PCA´s case administration page).

Stand-alone arbitration is fundamentally distinct from ad hoc arbitration and administered (or institutional) arbitration. The critical difference lies in the fact that stand-alone arbitration is self-sufficient. In contrast, ad hoc arbitration has minimal institutional involvement, whereas administered (or institutional) arbitration has substantial institutional involvement not only in terms of administrative assistance but also with participation in the process of constituting the court and its ensuing procedural and proceedings rules. On the other hand, stand-alone arbitration operates without any external assistance or influence.

On 27 February 2023, the Republic of Azerbaijan served on the Republic of Armenia a notice of arbitration pursuant to Article 27 of the Energy Charter Treaty and the Arbitration Rules of the United Nations Commission on International Trade Law, 1976. The arbitral court is ad hoc because its constitution follows the Article 27 (3) of the Energy Charter Treaty4 to which the Republic of Azerbaihan and he Republic of Armenia are parties; moreover, the procedural arbitration rules to be followed by that court were not the PCA´s arbitral procedural rules, but the UNCITRAL´s procedural arbitration rules. So, the PCA´s role was only of an administrative assistent or a registry in this arbitration.

Appointing Authority

The administrative services consisting of appointing authority may indicate administered (or institutional) arbitration but not necessarily; if the role of institutional arbitration as appointing authority is isolated or limited, and not coupled with other administrative services, it may fit well as an ad hoc arbitration. Notice that even before the PCA´s era, the role of the appointing authority existed, though it was not yet known by this name.

Administered or Institutional Arbitration

Administered (or institutional) arbitration refers to a process established and conducted under the guidance of an arbitral institution. In such cases, the disputing parties agree, via a convention or an arbitration agreement, to entrust the comprehensive management of the arbitration process to the institution they have selected. So, in addition to the regular secretariat service, the arbitral institution will act as the appointing authority.

The Agreement Regarding the Sovereignty over the Island of Palmas 5(or Miangas), signed at Washington, on 23 January 1925, supported an arbitration to be entertained by the PCA; therefore, under that arbitration agreement, the arbitration court was to be constituted, organized, and governed under the PCA´s total patronage. So, that case was an institutional (administered) arbitration court.

The commerciality of arbitral institutions

The significance of distinguishing between stand-alone, ad hoc, and administered (or institutional) arbitration courts may not be dogmatic. It could instead be based on the optimal economic choice (for disputants), coupled with the fascinating historical perspective of observing how international adjudication has evolved from a matter of global security to one of profitability and self-sustainability over the past century.

To understand the evolution from “worldwide peace” to “worldwide profit,” pathway walked down by global intergovernmental institutions dedicated to the peaceful settlement of disputes, it suffices to look at the Permanent Court of Arbitration since its inception in 1899 through the Convention for the Pacific Settlement of International Disputes6. Reading its foundation convention, it is clear-cut that PCA shall be at the disposal of Signatory Powers as a pre-organised structure to ease the constitution and administration of a State-State arbitral court to avoid aggression and other reciprocal acts of violence against peace.

Notwithstanding, as time goes by, the PCA becomes an institution that offers services for arbitration, not only within a State-State conflict but also towards commercial arbitrations, including national7 ones in some parts of the world under the host country agreements. In this sense, PCA competes with the International Chamber of Commerce Arbitral Tribunal and other similar commercial arbitration courts worldwide. It is impressive how PCA has changed its shape and adapted to new times.

  1. Merrills lays out the forms of arbitration in Chapter 5, p. 83. Merrills, J.G. International Dispute Settlement. 5ª ed. Cambridge University Press. 2011. ↩︎
  2. The Ad hoc Public Arbitral Court was constituted under Article I of the Treaty of Arbitration dated 2 February 1897, at Washington, between Great Britain and the United States of Venezuela, regarding the boundary between the colony of British Guiana and the United States of Venezuela. See the award below. ↩︎
  3. See the document on the case below. ↩︎
  4. Please see the Energy Charter Treaty and its Article 27 (3) below. See also Procedural Order nº 1 The Republic of Azerbaijan and The Republic of Armenia. ↩︎
  5. Please see below the United States of America and the Netherlands Agreement regarding the Sovereignty over the Island of Palmas, signed at Washington on January 23, 1925. ↩︎
  6. See below the Convention. ↩︎
  7. Sol de Cuyo v. CAMMESA Sol de Cuyo S.A. v. Compañía Administradora del Mercado Mayorista Eléctrico S.A., PCA Case nº 2024-01 ↩︎
elfilho international law Decision Treaty of Washington 3 10 1899Download
elfilho inernational law USA-Netherlands-Agreement-regarding-the-Sovereignty-over-the-Island-of-Palmas-or-MiangasDownload
elfilho international law energy_charter_enDownload
elfilho international law Procedural Order No. 1 THE REPUBLIC OF AZERBAIJAN THE REPUBLIC OF ARMENIADownload
elfilho international law 1899-Convention-for-the-Pacific-Settlement-of-International-DisputesDownload
elfilho international law COMPROMIS Treaty and Declaration of 6 November 1901Download