PEACEFUL SETTLEMENT

OF DISPUTES

PROFESSOR
DR. ABDUL GHAFUR HAMID

6.1 The principle of peaceful

settlement
Objective of the UN: Article 1(1)
One of the major objectives of the United
Nations is described in Art. 1(1) of the
Charter as being
to bring about by peaceful means, and in
conformity with the principles of justice and
international law, adjustment or settlement
of international disputes or situations which
might lead to a breach of the peace.

Obligation to settle disputes

peacefully: Article 2 (3)
peaceful settlement of disputes is a cardinal
principle of international law and a basic principle
of the United Nations. Art. 2(3) of the Charter
provides that:
All Members shall settle their international
disputes by peaceful means in such a manner that
international peace and security, and justice, are not
endangered.
It is the logical corollary of the principle of nonuse of force set forth in Article 2(4) of the Charter

Peaceful means of dispute settlement :

[Article 33]
1. The parties to any disputes, the
continuance of which is likely to endanger
the maintenance of international peace and
security, shall, first of all, seek a solution by
negotiation,
enquiry,
mediation,
conciliation, arbitration, judicial settlement,
resort to regional agencies or arrangements,
or other peaceful means of their own
choice.

Peaceful means of dispute settlement [two

categories]

These methods can be categorized into:

(1) Diplomatic means: (negotiation,
mediation, enquiry, and conciliation); and
(2) Adjudicative means: (arbitration and
judicial settlement).

6.2 Negotiation, Mediation, Inquiry

and Conciliation
Negotiation
Negotiation is the simplest means and
always the first step of settling state
differences.
it is also a technique for preventing them
from arising. Since prevention is better than
cure, there is a form of negotiation, known
as consultation.

Good offices and Mediation

When

the parties to an international dispute are

unable to resolve it by negotiation, the
intervention of a third party is a possible means of
breaking the impasse and producing an acceptable
solution.
Sometimes third states, or IOs, or often even an
eminent individual, may try to help the disputing
states to reach agreement. Such help can take two
forms: good offices and mediation.

Good offices and Mediation [Cont.]

Good

offices: A third party (as a go-between)

tries to persuade disputing states to enter into
negotiations; when negotiations start, its functions
are at an end.
Mediation: As compared with offering good
offices, a mediator, on the other hand, is more
active and actually takes part in the negotiations
and may even suggest terms of settlement to the
disputing states.

Inquiry
The

main purpose of inquiry is fact-finding.

After some negotiations, disputing states may
sometimes agree to appoint an impartial body to
carry out an inquiry; the object of the inquiry is to
produce an impartial finding of disputed facts, and
thus to prepare the way for a negotiated
settlement.
Korean Air Line Flight KE 007 incident (1983);
inquiry by the SG of the ICAO.

Conciliation
Conciliation

is referring the dispute to a

commission of persons whose task it is to elucidate
the facts and to make a report containing proposals
for a settlement.
Report of the commission does not have the
binding character of an award or a judgment.
It differs from inquiry in that the main object of
inquiry is the elucidation of the facts, in the hope
that the parties will of their own accord be able to
settle the dispute;

Conciliation

[Cont.]

whereas the main object of conciliation is to

provide the active services of a commission of
persons in bringing the parties to an agreement.
It

differs from arbitration and judicial settlement in

that under conciliation the parties are under no
obligation to adopt the proposed settlement;
whereas a legal obligation exists to comply with
the award or judgment of a duly constituted
tribunal.

6.3 Arbitration
Arbitration

can be defined as a procedure for the

settlement of disputes between states by a binding
award on the basis of law and as a result of an
undertaking voluntarily accepted.
Arbitration has been used for a long time by states
to settle their disputes and it may be considered
the most effective method, in view of the large
number of cases and variety of types of disputes
that have been settled in this way. [See: RIAA]

Consent: a prerequisite
Arbitration depends upon the willingness of the
states involved to submit to adjudication. Consent
can be on an ad hoc basis or based on a treaty.
The identity of the arbitrators, the formulation of
the question to be submitted to the tribunal, the
rules of law to be applied and the time limit within
which an award must be made must also be
mutually agreed upon by the states concerned.
Such issues are spelt out in a special agreement
between the parties known as the Compromis.

party autonomy
Arbitration

is a device for leaving the

settlement of disputes as much in the hands
of the parties as is possible.
Parties are free in deciding the law to be
applied, and also the method of settlement,
including the place where the dispute is to
be settled, by whom and in accordance with
what procedures.

Arbitration v Court
Party

autonomy
Judges of their own choice: sole arbitrator, arbitral
tribunal, mixed arbitral commission
Specialty: arbitrators can be experts in a particular
field of law
Confidentiality: Arbitration sits in private.
No appeal: The award is final and without appeal.
Effective enforcement: 1958 New York Convention on
the Recognition and Enforcement of Foreign Arbitral
Awards.

6.4 International Court of

Justice
Article 92 [Charter]
The International Court of Justice shall be
the principal judicial organ of the United
Nations. It shall function in accordance with
the annexed Statute, which forms an
integral part of the present Charter.

Composition of the Court

The

Court consists of fifteen judges of high moral

character.
The judges must possess the qualifications
required in their countries for appointment to the
highest judicial office, or must be jurists of
recognized competence in international law.
The Court may not include more than one judge of
any nationality.

Composition of the Court [Cont.]

The

composition of the Court should represent the

main forms of civilization and the principal legal
systems of the world.
The recent practice has been to select four judges
from West European states, one from the US, two
from South America, two from East European
states and six from Asia and Africa.
The five permanent members of the Security
Council are always represented by a judge in the
Court.

Composition of the Court [Cont.]

Judges ad hoc or national judges [Art. 31]
If a state appearing before the Court does
not have a judge of its own nationality at
the Court, it may appoint an ad hoc judge
for the particular case.
Such an ad hoc judge takes part in the
decision of the Court on terms of complete
equality with other judges.

6.5 Jurisdiction of the Court

The

ICJ has two main categories of

jurisdiction, namely:
(1) Jurisdiction in contentious cases
(2) advisory jurisdiction

(1) Jurisdiction in contentious

cases
Access to the Court: Article 34 [Statute]
(1) Only States may be parties in cases before the
Court.
-

The Court is not open to private individuals or

corporations.
- International organizations also have no locus standi
as parties in a contentious proceeding. They have
only the right to request advisory opinions.

Consent is the basis of the Courts

jurisdiction
Article 36 [Statute]
1. The jurisdiction of the Court comprises all cases
which the parties refer to it and all matters specially
provided for in the Charter of the United Nations or
in treaties and conventions in force.
The phrase all cases which the parties refer to it,
clearly indicates that the Court can exercise
jurisdiction only when the parties refer the case to it.

 The

word parties is in the plural, and implies

that all the parties to the dispute must agree that
the dispute should be referred to the Court.
Therefore, the Courts jurisdiction is not
compulsory; it is voluntary only.
The Court on a number of occasions declared that
its jurisdiction in contentious cases is dependent
on the consent of the parties.
It is reaffirmed in Monetary Gold case.

Monetary Gold case

(1954) ICJ Rep., p. 19, at p. 32
In this case, gold belonging to the National Bank
of Albania had been seized by Germany from a
bank in Rome during the World War II. It had
since fallen into the hands of the allied forces,
consisting of France, the UK and the US.
Italy and Albania disputed over the gold before an
arbitral tribunal and the tribunal decided that the
gold belonged to Albania.

Monetary Gold case [Cont.]

Italy

instituted proceedings before the ICJ, against

the three allied powers claiming the gold, But
Albania, in whose favour the arbitrator had
decided, declined to be a party to the case before
the ICJ.
The Court held that it did not have jurisdiction
because Albania, whose legal interests would form
the very subject-matter of the decision, did not
consent to its jurisdiction.

Ways of expressing consent to the

jurisdiction of the Court
Consent of a state to appear before the Court may
take several forms, for example:
(A) Consent ad hoc: by a special agreement
(compromis);
(B) By a compromissory clause in a treaty;
(C) By forum prorogatum; or
(D) By accepting compulsory jurisdiction
under Art. 36 (2) of the Statute.

(A) Consent ad hoc:

By a special agreement
(compromis)
The

classic method by which the parties refer a

case to the Court is by a special agreement
(compromis).
This is an agreement whereby two or more states
agree to refer a particular and defined matter to the
Court for a decision.
Examples: Case concerning Pulau Ligitan and
Pulau Sipadan (Indonesia v Malaysia); case
concerning Pulau Batu Puteh (Malaysia v
Singapore).

(B) By a compromissory clause in

a treaty
States

can agree in advance by treaty to confer

jurisdiction to the Court.
That is what Art. 36 (1) means when it refers to
matters specially provided for in treaties.
There are several hundred treaties in force which
contain such a jurisdictional clause stipulating that
if parties to the treaty disagree over its
interpretation or application, one of them may
refer the dispute to the Court.

Compromissory clause [Cont.]

Such

a clause is known as a
compromissory clause.
The treaty may be a general treaty of
peaceful settlement of disputes, or a treaty
regulating some other topic and containing
a compromissory clause.

(C) By forum prorogatum

There

is no reason why each party should

not make a separate reference to the Court
by a unilateral application [under Article
40(1) of the Statute].
While the Court is considering the unilateral
application of one state, the other may
expressly or impliedly signify its consent to
the jurisdiction.

Forum prorogatum [Cont.]

Such

consent may be express or implied. It

can be implied if the defendant state
defends the case on the merits without
challenging the jurisdiction of the Court.
(Like an estoppel by conduct.)
In such circumstances the jurisdiction is
known as forum prorogatum.

Corfu Channel Case

(Preliminary Objection)
1948 ICJ Reports 15
The

United Kingdom, on May 22, 1947, brought a

claim against Albania before the ICJ by unilateral
application in accordance with Article 40(1).
It argued that the Court had jurisdiction under
Article 36(1) of its Statute on the ground that the
SC of the UN, after dealing with the dispute under
Article 36 of the Charter, by a resolution, decided
to recommend both the UK and Albania to refer
the present dispute to the ICJ.

Corfu Channel Case

[Judgment]
The

letter of July 2, 1947, addressed by the

Albanian government to the Court, constitutes a
voluntary acceptance of its jurisdiction.
Albanian Govt. declare in that letter that it fully
accepts the recommendation of the SC, it
accepts in precise terms the jurisdiction of the
Court for this case. The letter of July 2, therefore,
constitutes a voluntary and indisputable
acceptance of the courts jurisdiction.

Forum prorogatum [Cont.]

The

doctrine relied upon by the Court to find its

jurisdiction in Corfu Channel case is that of the
forum prorogatum.
Applications relying on forum prorogatum have
since been made in some later cases.
In each case the respondent state took no positive
action and eventually the case was struck off the
Courts list. To avoid this kind of fishing for
jurisdiction , (Art. 38.5 of)the Rules of Court was
amended.

(D) By accepting compulsory

jurisdiction under Art. 36 (2)
Art. 36 [Statute]
(2) The States parties to the present Statute
may at any time declare that they
recognize as compulsory ipso facto and
without special agreement, in relation to
any other states accepting the same
obligation, the jurisdiction of the Court in
all legal disputes concerning:

Art. 36 [Cont.]
(a) the interpretation of a treaty;
(b) any question of international law;
(c) the existence of any fact which, if
established, would constitute a breach of
an international obligation;
(d) the nature and extent of the reparation to
be made for the breach of an international
obligation.

Art. 36 (2) [explanation]

Article

36(2) of the Statute provides what is

known as compulsory jurisdiction of the ICJ.
It is compulsory once it is voluntarily accepted.
By the use of the term may, Article 36(2) is not
obligatory upon Member States.
There is no obligation to make a declaration under
Article 36(2). That is the reason why it is called
the optional clause.

Art. 36 [Cont.]
(3) The declaration referred to above may be made
unconditionally or on condition of reciprocity on
the part of several or certain states, or for a
certain time.
.
(6) In the event of a dispute as to whether the Court
has jurisdiction, the matter shall be settled by the
decision of the court. [This provision is known as
jurisdiction over jurisdiction] comp`etence de
la comp`etence

Art. 36 (3) [Explanation]

Under Article

36(3), the declarations may be made

unconditionally or on condition of reciprocity or
for a certain time.
As declarations may be made conditionally, Some
states have accepted the compulsory jurisdiction
with reservations.
These reservations may exclude from the
acceptance of compulsory jurisdiction a particular
dispute or whole class of disputes.

Reservations in the USs declaration

accepting compulsory jurisdiction
[See Textbook, p. 481]
This declaration shall not apply to:
(b) disputes with regard to matters which are
essentially within the domestic jurisdiction of the
United States of America as determined by the
United States of America: or
(c) disputes arising under a multilateral treaty, unless
(1) all parties to the treaty affected by the decision
are also parties to the case before the Court,

 The

first reservation is known as automatic

reservation or self-judging reservation. The
second one is multilateral treaty reservation.
There are 63 declarations in force under the
Optional Clause system in accordance with
Article 36(2) of the Statute.
France terminated its declaration in 1974 as a result
of the Nuclear Tests cases.
The United States terminated its declaration in 1985
because of the Nicaragua case.

The principle of reciprocity

[p. 480]
States

which accept the jurisdiction of the Court

under the optional clause system [Article 36(2)] do
so only in relation to any other state accepting the
same obligation.
This is known as the principle of reciprocity.
This principle has two aspects:
The first aspect is that the optional clause system
applies only between those States which have
accepted compulsory jurisdiction.

 Therefore,

both parties to a dispute must have made

declarations under Article 36(2) in order that the
Court may exercise jurisdiction.
The second aspect concerns the subject matter
over which the Court may have jurisdiction by
virtue of the phrase: accepting the same obligation.
Thus the principle of reciprocity means that the
Court has jurisdiction over the areas (or subjectmatters) in respect of which no reservations are
made by both States Declarations.

 According

to Article 36(3), states may make

reservations when accepting the jurisdiction of
the Court. By virtue of the principle of reciprocity,
one state may rely on the reservations contained in
another states Declaration.
For example, Suppose that State As Declaration
contains a reservation regarding delimitation of
the continental shelf. There is no such reservation
in State Bs Declaration.

 If

there is a dispute between A and B regarding

delimitation of the CS. The Court has no
jurisdiction because there is no consent to
jurisdiction by State A as far as delimitation of the
CS is concerned.
It implies that state B also can take the benefit of
the reservation of State A even though there is no
such reservation in its Declaration.

Norwegian Loans Case

(France v Norway) 1957 ICJ Rep. 9
France

brought a claim against Norway before the

ICJ. Both France and Norway had made
declarations under Article 36(2) accepting the
compulsory jurisdiction.
The French Declaration contains the following
reservation: This declaration does not apply to
differences relating to matters which are
essentially within the national jurisdiction as
understood by the Government of the French
Republic. [self-judging reservation].

Norwegian Loans case [Cont.]

Norway

objected to Frances action by arguing

that the issue was essentially a matter within
Norways domestic jurisdiction.
Although Norway did not have such a reservation
in its declaration, it submitted that it could rely on
the fact that France did have such a reservation.
The Court upheld Norways submission and held
that it had no jurisdiction.

Norwegian Loans case

[Judgment]
The

Court does not consider that it should examine

whether the French reservation is compatible with
Article 36 (6) of the Statute
The validity of the reservation has not been questioned
by the Parties. It is clear that France fully maintains its
Declaration, including the reservation, and that Norway
relies upon the reservation.
The Court considers that the Norwegian Government is
entitled, by virtue of the condition of reciprocity, to
invoke the reservation contained in the French
Declaration.

Judge Lauterpacht s individual

opinion
The

French reservation is contrary to Art. 36 (6)

and therefore null and void.
However, the question as to whether the entire
declaration becomes void remains.
Lauterpacht refered to the doctrine of severance of
contract: if part of the contract is illegal, it is
necessary to consider whether the illegal part is the
essential portion of the contract. If it is so, the
entire contract would be tainted with illegality and
void.

Lauterpacht s opinion [Cont.]

But

if the illegal part is not the essential part, then

it has to be severed from the contract and the
remaining portion of the contract will be valid.
Applying this principle to the instant case,
Lauterpacht said that the reservation was the
essential part of the declaration and could not be
severed. Therefore, the entire declaration was
tainted with illegality and void.
Accordingly, the Court had no jurisdiction.

Judge Guerrero (dissenting opinion)

I

do not agree that the Court is without

jurisdiction when its lack of jurisdiction is
founded on the terms of a unilateral
instrument which I consider to be contrary
to the spirit and to the letter of the Statute
and which, in my view, is, for that reason,
null and void.