 Arbitration exists in domestic law and notably in commercial matters, but arbitration also exists in international law. Arbitration is a binding method of dispute settlement in the sense that it results in a decision taken by a third party which is binding on the parties to the dispute and which settles the dispute by application of the rules of international law. Arbitration is an old institution of international law and in its modern form it is usually traced back to the Jay Treaty of 1794, a treaty concluded in London between the young United States of America and Great Britain. The Jay Treaty is named after John Jay, the first Chief Justice of the United States and Negotiator of the London Treaty. It is a treaty of amity, commerce and navigation which established mixed commissions of arbitration to solve certain pending disputes that existed between the two parties. And later, under the Washington Treaty concluded in 1871, the same two countries agreed to settle through arbitration important claims relating to the damages caused to American merchant ships by warships among which the Alabama warship that were built in Britain and sold to the Confederate States during the American Civil War. The US government claimed that by letting those ships being sold, the British government had failed to meet its obligations under the laws of neutrality during the Civil War in the US. This led to a famous arbitration held in the town hall of the city of Geneva. The tribunal upheld the US claim and ordered Great Britain to pay 15.5 million dollars in gold for the losses caused to the US merchant navy, which was a huge sum of money at the time that was duly paid by the British government. And the success of the Alabama proceedings in a complex matter stimulated further arbitrations and led to the conclusion of the 1899 Hague Convention for the Pacific settlement of international disputes. Article 15 of the Hague Convention defines arbitration as follows. I quote, International arbitration has for its object the settlement of differences between states by judges of their own choice and on the basis of respect for law. End of quote. The 1907 Hague Convention repeated that definition in its article 37 and it added quite obviously that I quote, Recourse to arbitration implies an engagement to submit in good faith to the award, end of quote. Under the 1899 Convention, the Permanent Court of arbitration or PCA was established. The Permanent Court of arbitration is an international organization but it is not a court despite its name. It is an organization providing administrative support to arbitral tribunals. It is there to facilitate arbitration so as to encourage states to resort to arbitration. Each state party to the Hague Convention may nominate up to four members of the PCA who are experts of international law and those members of the PCA are then put on the list from which disputing states may pick up and choose their arbitrators. However, even states that are parties to the conventions, they may decide to establish arbitration tribunals outside the PCA. But what is great about the PCA is that it has all the rules of procedure ready. It has all the administrative facilities ready, all the experience and the professionalism to conduct arbitration. The PCA has its seat in the Hague and it shares with the International Court of Justice the building of the Peace Palace. It can also host arbitration at other locations around the world. So the PCA is very convenient for states. It is very convenient for them to refer to the PCA to set up an arbitration. Originally, the PCA was established to facilitate and to serve interstate arbitral tribunal, but it now hosts also arbitration involving international organizations. And this is important and likely to develop since international organizations do not have a standing before the ICJ as we shall see. The PCA may also serve as registry in cases involving a state or an international organization on the one hand and a private party on the other. And it notably hosts some 50, currently some 50 investment disputes between corporations and states. The PCA has also served, for instance, as registry in the ABE arbitration which was a case between the Republic of Sudan and a non-state actor, which was, at the time, the Sudan's People Liberation Movement slash Army, which later became the Government of South Sudan. The fundamental rule in this matter is that there is no international arbitration, no state to state arbitration, and no mixed arbitration between a state and another entity without the consent of both disputing parties. Both claimant and respondent must have consented to submit their dispute over a specific object to arbitration. Such consent can be given after the dispute has arisen, after states have, for instance, realized that they would not find an agreed settlement so that they just agree to go to arbitration, and in such a case the disputing parties agree on a special agreement or a compromise. And in it they specify not only the object of the dispute to be educated upon, but they also specify the various institutional and procedural aspects relating to the arbitral tribunal. And this is where states can simply refer to the PCA rules, if they wish so. But consent to arbitration can even be given before any dispute arises. And such consent is then expressed in a treaty in advance. The treaty provision by which states express their consent to arbitration is called a compromise reclose. And again, states may refer to the PCA arbitration or they may also agree on any other institutional or procedural rules. Compromise recloses can be inserted in specific treaties for the purpose of the settlement of the disputes relating to the interpretation and application of that specific treaty, or they can be inserted in bilateral or multilateral treaties, providing for arbitration in relation to any type of dispute arising between the contracting parties. When they agree on a compromise reclose, states may insert certain prior conditions that have to be met before resorting to arbitration. And for instance, they can agree that before resorting to arbitration, the disputing parties must have conducted negotiations for a certain period of time, and that it is only if negotiations have failed that any of the parties may resort to arbitration. Or they may also agree on a cooling off period or on some specific notification requirements. Those prior requirements are treated as judicial requirements, that is, they must be met in order for consent to arbitration to exist. And we'll see that later in details when dealing with the ICJ jurisdiction. For the time being, let me outline, in the next video, some institutional and procedural aspects of arbitration.