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States have different options for settling disputes with other states. Arbitration and international courts are two ways of setting disputes, but each has its own benefits and drawbacks.
 

Under what conditions are two states likely to seek the help of a third party to settle a dispute?

Legal scholars Eric A. Posner and John C. Yoo identify three conditions where states might seek outside help:

  1. When two states stand to gain more from future cooperation than benefit from using force or deception in the present,
  2. Neither state has sufficient information regarding either the meaning of the treaty or convention, or do not have all the facts relevant to the case. A neutral third party can help the states clear up both of these information problems.
  3. The third party has the right kind of expertise and motivation. The third party should have adequate legal and political expertise and have the capacity to gather information from several sources. The third party must also be neutral.

However, given these conditions, there are different forms that an international tribunal can take:

  • A single arbitrator,
  • Three or more arbitrators,
  • A court.

Each of these forms of dispute resolution offer both benefits and problems.

Single Arbitrator

Arbitrators are selected by the states after the dispute arises. The job of the arbitrator is to settle the dispute only with reference to the issues at hand. Decisions of arbitrators do not extend beyond the particular dispute—they do not create a binding precedent nor do they have any necessary implication for other aspects of the states' relationship.

Benefits

It may seem odd to think that states could agree on a third party arbitrator when they cannot agree on the issue at hand. However, the criteria for selecting an arbitrator with the relevant expertise and neutrality are different than the criteria for solving the dispute.

It is common for the head of a third state to serve as an arbitrator for a dispute among two other states. While a single arbitrator may be biased toward one or the other state, this potential for bias is decreased somewhat by the fact that the arbitrator will have to deal with both states in the future.

The single arbitrator is also very likely to decide the dispute in such a way that it is acceptable to both states (or, at least more acceptable than the alternative of war or coercive sanctions). If the arbitrator makes a decision that is not acceptable to both states, he not only damages his reputation as an arbitrator, but could also make relations between the states worse.

Potential Problems

Bias is a potential problem with a single arbitrator. There are a number of ways that a state can influence the decisions of an arbitrator. For instance, the arbitrator might be bribed or might be offered an important or lucrative position in the future by one of the states.

While the reputation of the arbitrator is an important governor on bias, there is, nonetheless, an incentive for bias if the arbitrator can act in the interest of one of the parties while still appearing to be neutral.

Three or More Arbitrators

One way of getting around the problem of bias with a single arbitrator is for each state to nominate an arbitrator and then these two arbitrators nominate a third, neutral arbitrator. While each of the state arbitrators act in the interests of their state, the third, neutral arbitrator acts as a tie-breaker.

Benefits

It may be that the state official who is responsible for addressing international conflicts is not familiar with the legal and factual details of the dispute. The government minister may also not know any neutral arbitrators. In this case the states would give their appointees the ability to work together to select a third, neutral arbitrator.

The benefit of this tack is that the state appointed arbitrator may have more expertise and information in identifying the best third arbitrator.

Potential Problems

State appointed arbitrators may not carry out their job (that is, act in a state's best interest) either because they are outwitted by the other state appointed arbitrator, or because they receive some benefit from the other state. When a state appoints an arbitrator to protect its interest, it cannot be sure the arbitrator will do the best job in furthering the state's interests.

International Courts

Unlike arbitrators, courts exist before the dispute occurs. Courts also are charged with making decisions based on justice and the rule of law. The particular interests of the states are less important than the legality of the court's decision.

Benefits

Courts Can Save Time and Effort

It takes work for two states to set up arbitration: the arbitrator (or arbitrators) must be agreed to and the range of acceptable outcomes have to be identified (at least implicitly). In addition, the shear logistics of carrying out the arbitration can be costly.

States can avoid many of these costs by using existing courts. Courts already exist and do not have to be recreated for every dispute.

Compulsory Jurisdiction May Help Some States

If the states have agreed to compulsory jurisdiction of the court, one state can compel another to address the dispute within the court. So, submitting to compulsory jurisdiction can actually provide a state with a bit of leverage in conflicts with other states.

For example, weak states may gain an important advantage from agreeing to the the compulsory jurisdiction of an international court. If a weak state has a grievance against a very strong state, it may have very little ability to do anything outside a court. However, if both the weak and strong states have agreed to compulsory jurisdiction, then the small state can “force” the strong state to address the grievance by using the court.

Courts May Decrease the Potential for Bias

When negotiating over an arbitrator, either state has veto power over the identity of the arbitrator. A state will not agree to an arbitrator that it does not trust. However, in a court, neither state has veto power over the selection of the judges even though they may not trust the judges to act in the state's best interests. In some situations, a state may have the right to have one of the judges be a national, but this judge may be outvoted by other non-national judges.

An independent court provides far less possibility of bias.

Courts Develop Institutional Memory

When a court exists over time (unlike arbitration situations) a body of case law begins to develop. Principles may be applied across different issue areas and across different international relationships. This provides a degree of coherence to international law.

Courts Embody the Liberal Ideal of the Rule of Law

Politicians and ordinary citizens may see adjudication and the rule of law as an ideal alternative to international conflict. People may believe that international relations governed by the rule of law based on universal values may reduce the likelihood of negative outcomes like war. Justice, not power, should govern international relations. International courts are a key part of the international rule of law.

The creation of international courts in the past century has often followed a major war. During these periods, when the costs of war are most acutely felt, people may be more likely to support international courts as an alternative to war.

Potential Problems

From a state's perspective, the greatest risk from settling a dispute in a court is that the court is not designed to act in any state's selfish interests. When deciding a case based on established law, it is possible for a court to render a decision that is not satisfactory to either party.

When a state does not find a court decision acceptable, it may delay complying with the court's decision or it may reject the decision out-right. Ignoring a court's decision may jeopardize the reputation of the country, but it also calls into question the legitimacy of the court.

Bottom Line

Under certain conditions, states may seek outside help to settle disputes. States may use an arbitrator, a panel of arbitrators or an international court. While both forms of arbitration are attractive because the arbitrator is charged with coming up with a solution that is acceptable to both states, arbitration is open to the potential of bias. International courts, while less susceptible to bias, are not bound to decide cases in a way that congruent with states' interests.

 
Data and Methods:

Data Sources:

Analysis of legal research.

Funding Sources:

  • Russell Baker Scholars Fund (Eric A. Posner)
  • Boalt Hall Fund (John C. Yoo)
 
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Reference

Posner, Eric A., and John C. Yoo. 2005. “Judicial Independence in International Tribunals.” California Law Review 93:1-74.

 
 
 
 
 
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