International arbitration: an effective dispute
settlement forum for International Organisations
THESIS
DANIEL PALBUCHTA
LL.M. INTERNATIONAL AND EUROPEAN LAW: INTERNATIONAL TRADE AND INVESTMENT LAW
STUDENT NR. 11118733
SUPERVISOR: PROF. DR. STEPHAN W. SCHILL 29 AUGUST 2016
The Author wishes to thank the aegis of his postgraduate studies by the National of Secretary of Education, Science and Technology of the Republic of Ecuador.
Table of Contents
Abstract ... 4
International arbitration: an effective dispute settlement forum for International Organisations ... 5
I. Introduction ... 5
II. General Aspects of the involvement of International Organisations in arbitration processes 7 a. Legal personality of International Organisations ... 7
b. Privileges and immunities: Limitations for the involvement of IOs in arbitration processes .... 11
c. Legal basis for IOs to be involved in International Arbitration processes ... 13
III. International Arbitration as a forum for International Organisations ... 18
a. General aspects of Arbitration for International Organisations ... 19
b. Cases in which IOs have been and are involved in Arbitration ... 23
c. Evaluation of international Arbitration as a forum for International Organisations ... 30
IV. Conclusions ... 33
Bibliography ... 36
Abstract
The present thesis addresses the issue of the involvement of International Organisations (IOs) in arbitration processes as a dispute settlement forum for their potential wrongful acts. This involvement has been proposed as a response to the absence of a dispute settlement forum that might serve for the accountability of those organisations.1 On the one hand, it has been agreed that IOs are not likely to be brought before national courts due their immunity, whereas on the other hand, IOs are unable to become a party to contentious cases before the International Court of Justice.
In order to address this issue, the analysis will set out the main characteristics of this forum for IOs, as well as the applicable law and cases of conflicts based on Headquarters agreements or contracts concluded with other actors. This thesis excludes conflicts regarding tort cases, violations of Human Rights, or disputes concerning their employees.
In the first chapter, the analysis refers to the general internal characteristics of an international organisations that enables their participation in international arbitration processes. It highlights the legal basis of their legal personality throughout three theories, including the presumptive approach of their legal personality. Furthermore, it outlines the privileges and immunities to which IOs are entitled to, and the effects that these might play in a dispute. Next, it lays down the relationship that international organisations have with other actors of international law. These relationships have been evidenced on agreements that IOs conclude and in which International Arbitration has been chosen as a dispute settlement forum.
The bulk of the analysis is encompassed in the third chapter, where the dispute settlement forum for IOs as such is analysed, and where it also compares diverse arbitration disputes in which IOs have been involved.
Overall, it determines that International Arbitration is an effective solution for the accountability for wrongful acts of international organisations; especially due to the flexibility that this system offers. It demonstrates the private approach to arbitration procedures involving IOs, which are commonly resolved under rules of commercial arbitration nature.
Furthermore, it concludes that the treatment that IOs receive can be compared to that given to States when facing an arbitration dispute. This similar treatment is evidence in all aspects, except in the confidentiality and transparency of the procedures. To address this issue, it suggests to include transparency policies in current arbitration clauses or to foster an international agreement signed by all International Organisations to disclose their disputes.
1 For the purpose of this thesis, the accountability shall be understood as having the possibility to bring an IO before an
International arbitration: an effective dispute settlement forum for
International Organisations
Daniel A. Palbuchta I. Introduction
International organisations (IOs) have been increasingly participating in the achievement of major public goals throughout the last decades. Such participation entails interactions with other actors such as host states, third states and individuals. These interactions are generally instrumented in agreements that provide the necessary means for the achievement of the goals of IOs. Nevertheless, these agreements also contain clauses that foresee potential conflicts, such as the non-compliance with the obligations contained therein. Such conflicts call for an effective dispute settlement mechanism that satisfies the needs of the parties involved, regardless of their nature of the parties.
In that context, the present thesis evaluates international arbitration as a dispute settlement forum for disputes involving international organisations (IOs). This forum has been proposed in response to the impossibility to embroil IOs in other dispute settlement forums, both in the national and international legal orders. In the former, IOs are not likely to be brought before national courts due to their immunity, and on the latter, IOs are unable to become a party to contentious cases before the International Court of Justice. Moreover, the administrative tribunals of IOs are mostly limited to internal activities of the organisation rather than to external relations with other actors.
The application of international arbitration as the applicable forum is also underpinned by a human rights perspective. The European Court of Human Rights determined that by granting immunity to International Organisations, a Court would not violate the right of free access to justice2, if reasonable alternative means to protect the rights in question effectively and if
satisfactory system of dispute settlement in the relevant international instruments would be given.3 Hence, Arbitration processes would simplify that due to the implied waiver of IOs’ immunity by agreeing to submit their claims before that forum.
2 Council of Europe, European Convention for the Protection of Human Rights and Fundamental Freedoms, as amended by
Protocols Nos. 11 and 14, 4 November 1950, ETS 5 (ECHR) art 6(1)
3 Waite and Kennedy v. Germany, Application No. 26083/94 February 1999 and Beer and Regan v. Germany, Application
On this basis, it must be addressed whether international arbitration can be considered as a reasonable and effective forum for disputes in which IOs are involved.
The analysis of this thesis will be delimited by two main factors. On the one hand, the effectiveness of the international arbitration forum for IOs will be enclosed by four sub-questions: (i) Are international organisations able to be involved in arbitration processes? (ii) Is the procedural law of arbitration procedures suitable to solving disputes in which IOs might be involved? and (iii) Are arbitration tribunals entitled to control the compliance of obligations that IOs have agreed with other parties?
On the other side, the involvement of IOs in international arbitration will exclusively focus on wrongful acts that might arise form cases and agreements concluded by IOs with host states, third states, and individuals. Hence, the analysis will exclude tort cases, violations of Human Rights, or concerning labour conflicts. Those sources or causes of action are left out of this analysis due to existing special procedure for those matters.4
To address this question, this thesis will entail a comparative analysis of cases and agreements, highlighting the legal basis for the involvement of IOs in international arbitration processes as well as the treatment that IOs receive in that forum.
In the first chapter, the analysis refers to the general internal characteristics of international organisations that enable them to be involved in international arbitration processes. It highlights the legal basis of their legal personality and outlines the privileges and advantages to which IOs are entitled as well as the effects that these might play in a dispute. Furthermore, it focusses on the legal basis upon which IOs might be involved in arbitration processes. The bulk of the analysis is encompassed in the third chapter, where the dispute settlement forum for IOs is laid out. Furthermore, it entails a comparison among diverse arbitration disputes in which IOs have been involved. This comparison presents various elements upon which a judgement of how beneficial and how often is international Arbitration resorted to as a dispute settlement mechanism, can be. Conclusions follow.
4 See also: Rishi Gulati, The Internal Dispute Resolution Regime of the United Nations, (Max Planck Yearbook of United
Nations Law, Volume 15, 2011, 2011 The Netherlands) p. 489-538.
II. General Aspects of the involvement of International Organisations in arbitration processes
The possibility for international organisations to be involved in international arbitration processes, either as a claimant or as a respondent, is primarily influenced by two essential milestones of international law: legal personality and privileges and immunities. In addition to this, an element such as consent is also required as a legal basis for such involvement, which is generally expressed in agreements concluded by IOs with other actors. Thus, the present chapter will present the following as relevant criteria to be considered for an IOs to participate in arbitration instances: legal personality, the limitation of their involvement by privileges and immunities, and the legal basis for potential arbitration cases.
a. Legal personality of International Organisations
The first criterion that an international organisation needs to meet in order to be involved in arbitration processes is legal personality. Under international law, legal personality is generally granted to actors based on (i) their recognition by other actors and on (ii) their participation in the international arena. However, since IOs are actors that may be granted legal personality by other actors, (iii) the way in which the latter has been granted, is also relevant. Hence, the legal personality of International organisations must be addressed in consideration of those three elements.
First, the recognition of actors under international law –and hence of IOs- is enhanced through two theories, namely the objective theory and qualified theory.
The objective theory entails the acceptance of an IO ‘as an international person by any other
international person with which it does not necessarily have to conduct relations.’5
In contrast, the qualified theory encompasses the –binding- acceptance of IOs only by actors with which that actor has consented certain agreements.6 Overall, practice has shown that the legal personality of IOs is generally granted through the application of both theories.
Second, the element regarding participation of actors in the international arena is delimited by their competences and attributions as well as by international agreements implemented for that purpose. For instance, States’ participation -as constitutive members of IOs- is delimited by the Montevideo Convention on Rights and Duties of States7, which sets out the criteria that have to be complied with in order to acknowledge their legal personality. Since the latter
5 Malcolm N. Shaw, International Law (Cambridge University Press, 7th edition, 2014), 190 6 Ibid, 143
mentioned convention is exclusively set out for states, the notion of IOs’ participation does not rely on this instrument; it rather depends on their participation in regard of their ‘possession of
international legal personality as distinct from, and in addition to, personality under domestic law.’8 Both kinds of personality have distinct application spheres. The notion of “International” legal personality relates to the ability of an IOs to negotiate and conclude, for instance, a host state agreement and to present claims in respect of rights contained therein. In contrast, “national” legal personality enables an organisation, for instance, to lease office buildings and
buy office equipment.9
Third, since IOs are considered to be a clear emanation of the States’ attribution, their legal personality is often delimited by them in the constitutive instruments of IOs. For that reason, legal personality does not only rely on the elements of recognition and participation, but also in the way in which IOs acquire domestic and international legal personality.
The acquisition of domestic legal personality of an IO is mostly imposed by the constitutive instrument of the organisation upon its members.10 After the Second World War, the concept of domestic legal personality was granted under Article 104 of the UN Charter (from now on also UNC), as a functional legal personality which excluded international legal personality. Based on this limitation, the outcome of the Reparation for Injuries Suffered in the Service of the United Nations Advisory Opinion held by the ICJ was the key component to bring their “international legal personality” to life. In that context, the ICJ entered into an analysis of whether or not, and under which conditions, an International Organisation has legal personality, giving a brief concept of the nature of the legal personality of International Organisations. After an extensive analysis, the ICJ acknowledged ‘that fifty states had the
power to create an objective legal person presuming that those states had indeed utilized their power to create an international legal person.’11 However, with regard to the nature and extent of this personality, it clearly indicated that, since “the subjects of law in any legal system are
not necessarily identical”, the legal personality of IOs differs from that of states.12
8 Ibid, 939
9 Alexander Samuel Muller, International Organisations and their Host States. Aspects of their legal relationship (Kluwer Law
International, 1995) 69-70;
10 Tarcisio Gazzini, ‘Personality of international organisations’ in Jan Klabbers and Asa Wallendahl (eds), Research Handbook
on the Law of International Organizations (Edward Elgar Publishing limited 2011) 45
11 Reparation for Injuries Suffered in the Service of the United Nations Advisory Opinion, 185; Jan Klabbers, Presumptive
Personality: The European Union in International Law (International Law Aspects of the European Union (Kluwer Law International 1998) 246
In its outcome, the ICJ affirmed that the legal personality of IOs turns them into ‘a subject of
international law and capable of possessing international rights and duties, and that it has the capacity to maintain its rights by bringing international claims.’ 13
The notion and extent of this concept seems to only briefly address the active competences of IOs. This rather limited approach would no longer be accurate if we consider the activities that IOs have engaged in entail not only rights, but also obligations. In this line, Amerasinghe proposed a more contemporaneous concept of the legal personality of IOs, which encompasses their active as well as their passive role, defining it as ‘(…) possessing rights, duties, power,
and liabilities, as distinct from its members or its creators on the international plane and in international law.’14 This approach, therefore, provides a broader concept of obligations with regard to International Organisations.
To comprehend the extent and notion of the legal personality of IOs, a response has been sought in its origin. Despite several existing theories, the concept of the acquisition and nature of legal personality is laid down in two most prominent doctrines: the ‘will theory’ and the ‘objective theory’.
The ‘will theory’ relies on the intention of the parties that create the international organisation. From this perspective, IOs possess international legal personality ‘because the status is given
to them, either explicitly or, if there is no constitutional attribution of this quality, implicitly.’15
According to Kelsen, ‘[a]n international community possesses juridical personality in the field
of international law if the treaty constituting the community confers upon its organs the competence to exercise certain functions in relation to the members and especially the power to enter into international agreements establishing duties, rights and competences.’16
In contrast, the ‘objective theory’ is based on the objective fact of the existence of the international organisation, rather than on the intention of the members when constituting the organisation.17 As Koskeniemi describes it, “the endowment of international legal personality
13 Ibid.
14 Chittharanjan Felix Amerasinghe, Principles of the Institutional law of International Organisations (Cambridge University
Press, 1996) 78
15 Henry Schermers and Niels Blokker, International Institutional Law (Martinus Nijhoff 1995) para 1565
16 Shaw (Fn.5) 939; The Court noted the lack of establishment of a separate legal personality from that of the states in the
(Trusteeship) Agreement approved by the United Nations for the Joint Administering Authority of Nauru (1947). See also: ICJ’s decision in Nauru v. Australia; Tarcisio Gazzini, (Fn. 10) 35. See also: ILA Committee on Accountability of International Organisations, which indicated that an International Organisation must fulfil certain criteria in order to acquire international legal personality, i.e. the compliance of (i) a permanent association of states equipped with organs, (ii) a distinction in terms of legal powers and purposes between the organisation and its members, and (iii) the existence of legal powers exercisable on the international level.
17 The Headquarters Agreement between the International Criminal Court and the Host State (Kingdome of the Netherlands)
follows quite naturally from the fact that an organisation exists: as soon as it meets certain objective standards, it must be deemed to be an international legal person, in much the same way states, once they meet the criteria of statehood, possess legal personality”18. The essence of this theory would avoid the immediate need to discuss the intention of the members when creating an organisation. This doctrine has also been noted on the Convention on the Privileges and Immunities of the United Nations, since the ICJ determined that ‘it is difficult to see how
such a convention could operate except on the international plane and as between parties possessing internal personality.’19 Alternatively, as it has been written by Klabbers, “an organisation which exists in any meaningful way simply must possess legal personality, regardless of the will of its founders.” 20
Presumptive legal personality
Both, the will theory and the objective theory can be found in the Reparation for Injuries Suffered in the Service of the United Nations Advisory Opinion. For instance, the will theory is represented by the analysis of the Court when determining “whether the International
organisation [United Nations] has international legal personality vis-à-vis its members, (…) since [it considered that] the UN Charter remained silent on this point.”21 On the other hand, the Court generally drew a distinction between the organisation’s intention and the
organisation’s existence; hence, recognising the objective theory. Based on these premises, the
ICJ determined its obligation to analyse the intention of the founders, yet without determining that an international organisation could not have legal personality only by its existence. However, despite that both doctrines have been encountered to a certain extent as a combination in the before mentioned Advisory Opinion22, Klabbers and Koskeniemi have proposed a different approach to the mentioned outcome, namely the application of a presumptive personality. This approach abandons the normative concept of international legal personality, due to a lack of empirical support for both theories. Klabbers infers that the concept of the legal personality of an IOs vis-à-vis its members was almost predictable based on Article
personality as may be necessary for the exercise of its functions and the fulfilment of its purposes. It shall, in particular, have the capacity to contract, to acquire ad dispose of immovable and movable property and to participate in legal proceedings.’
18 Martti Koskeniemi, International Law Aspects of the European Union (Kluwer Law International 1998) 240
19 Philippe Gautier. The Reparation for Injuries Case Revisited: The Personality of the European Union, Max Planck UNYB
4 (2000). P. 340 http://www.mpil.de/files/pdf2/mpunyb_gautier_4.pdf, Accessed on 29 May 2016
20 Koskeniemi (Fn. 18) 231-253 21 Ibid.
104 of the UNC23. Hence, the most important analysis of the Advisory Opinion was to determine the objective personality with regard to third parties. 24 He stated that the Court’s opinion lacked argumentation and conclusions, since it left a ‘floating in mid-air’ conclusion by never determining that the power that fifty states had to create an IOs with objective legal personality, was enacted. This led Klabbers to the denouement that the Court based the objective international legal personality of International Organisations on a presumption that was never disputed. However, this presumptive legal personality is, in his words, a satisfactory explanation that the ‘attribution of international personality is indispensable.’25
Overall, the scope and extent of the international legal personality will differ from case to case, as well as from institution to institution. However, regardless of which theory is applied, the Advisory Opinion of the ICJ in the Reparation for Injuries Suffered in the Service of the United Nations case, as well as further interpretations of academics and practitioners, have determined and interpreted that the International Organisations’ objective and international legal personality is indispensable for the involvement of these in international dispute settlement bodies.
The evolution of this concept has proven not to constitute an obstacle when determining the legal personality of IOs, especially through the presumptive legal personality approach, under which regardless of the origin of their legal personality, IOs possess it. Therefore, IOs are provided with the required legal personality that allows them to be involved in international arbitration processes.
b. Privileges and immunities: Limitations for the involvement of IOs in arbitration processes The creation of IOs immediately transposes us to the States’ attribution to pursue common goals through an institution that has a specialised nature. It has been considered that to fulfil the object of these goals, the creation of an independent institution required the endowment of privileges and immunities vis-à-vis national law. For this reason, regulatory regimes have been permitting certain activities to IOs that are generally not allowed to other actors. These distinct regimes have rarely been challenged. However, the increasing participation of IOs in the international scene has shifted this conduct due to two main factors. First, due to the awareness
23 The Organization shall enjoy in the territory of each of its Members such legal capacity as may be necessary for the exercise
of its functions and the fulfilment of its purposes.
24 Koskeniemi (Fn. 18) 231-253
25 Ibid, 247; Nowadays International Organisations tend to conclude more comprehensive agreements in that regard. The HqA
of the PCA, establishes in its Article 2 that ‘(t)he PCA shall possess full legal personality. In Particular, it shall have the
of the extent to which the participation of IOs actually takes place; and second, due to the increased and easier access to information. Those factors have triggered a debate on whether these advantages are justified or not.26
The extent of the limitation that privileges and immunities represent for the involvement of IOs in arbitration processes, has to be analysed separately. The terms “privileges” and “Immunities” are together considered to be “a wide range of special rights and prerogatives
often in the form of exceptions from parts of national legal order.”27 However, their scope of
application differentiates between both advantages.
According to Schermers and Blokker, privileges consist of exemptions from the application of the substantive law of States, such as tax, foreign exchange controls, customs, or immigration rules; whereas, immunities are exemptions from the execution and enforcement powers of the administrative, adjudicatory or executive branches of States.
Content and scope of Privileges and Immunities
Since, privileges and immunities are limited by the standard of functionality, but extended to both types of legal personality of an IO (national and international legal personality),28 these advantages are directly connected with the concept of functional legal personality.29
This standard implies the concession of the advantages towards activities and officials, provided that the latter are directly connected with the object and purpose of the IO. In this regard, Professor Reinisch asserted that rather than focusing on issues related to privileges, the attention should be drawn to the extent to which immunities are granted to IOs and their
26 August Reinisch, ‘Privileges and immunities’ in Jan Klabbers and Asa Wallendahl (eds), Research Handbook on the Law
of International Organizations (Edward Elgar Publishing limited 2011) 132
27 ibid, 133
28 Reinisch, (Fn. 26) 139. For the development of these advantages throughout time, see also the initial advantages granted for
the League of Nations recognising privileges only concerning their employees and its property, as compared to the regulation of these limitations by the Convention on the Privileges and Immunities of the United Nations of 1946; Cf. Treaty Series 2387 I:43072-43123; Agreement between the Government of the French Republic and the Central Commission for Navigation of the Rhine Concerning the Headquarters agreement; C.f. Article 3 of the Letters of Exchange between the Kingdome of the Netherlands and President of the “Iran- United States Claims Tribunal”, Tractatenblad Nr. 150 – 1990.; C.f. Gabor Rona, The ICRC privilege not to testify: confidentiality in action (International committee of the red cross) https://www.icrc.org/eng/resources/documents/article/other/5wsd9q.htm Accessed 18 April 2016;
29 Ibid. 133; This incorporation has started with the entry into force of the United Nations Charter, particularly by its Article
104. In the UNC, this feature was coupled with its subsequent article, combining the notion of a “functional legal personality” with “functional privileges and immunities’. This has been widely repeated: Specific principles governing the headquarters agreement of the Report of the Preparatory Commission for the International Criminal Court: ‘Under this principle the
headquarters agreement should refer to article 4, paragraph 1, of the Statute, which provides that the Court has international legal personality and also has such legal capacity as may be necessary for the exercise of its functions and the fulfilment of its purposes.; 105 UNC: 1. The Organization shall enjoy in the territory of each of its Members such privileges and immunities as are necessary for the fulfilment of its purposes. 2. Representatives of the Members of the United Nations and officials of the Organization shall similarly enjoy such privileges and immunities as are necessary for the independent exercise of their functions in connection with the Organization.
officials.30 Immunities are usually vaguely conceptualized since they involve future uncertain activities that an IO might have with regard to host states and other actors of international law.31 Multilateral agreements have limited the scope of immunities through a restrictive approach. One such example is the European Patent Convention under which the scope of immunities is restricted to the official activities that are “strictly necessary” for the administrative and technical operation of an International Organization.32 Moreover, some national legislations determine a similar immunity status as that given to states, e.g. the International Organisations Immunity Act of the United States of North America when determining that “International
organizations’ property and assets, wherever located, (…) shall enjoy the same immunity from suit and every form of judicial process as is enjoyed by foreign governments, except to the extent that such organizations may expressly waive their immunity for the purpose of any proceedings or by the terms of any contract.”33
As Professor Reinisch explains it, “the precise meaning and reach of jurisdictional immunity
has been difficult to ascertain. In practice, the prevailing concept of functional immunity often leads de facto to be absolute immunity.”34 This means that, in practice, it is common to see
Courts rule in favour of an absolute immunity even if the latter goes beyond the functions of the IO.
Overall, on the one hand, privileges and immunities have been considered as a functional necessity of international organisations. However, on the other hand, these advantages are also features that can deprive other actors from pursuing IO’s responsibility, due to the lack of adjudicatory power of domestic courts towards these organisations. Nevertheless, this lack of adjudicatory power may be acceptable if “alternative ways of legal recourse” are provided;35 especially for actors that secured an arbitration agreement before -or during- a dispute with an IO.
c. Legal basis for IOs to be involved in International Arbitration processes
Having determined the features (legal personality and privileges and immunities) that, respectively, enable and delimit the involvement of IOs in international arbitration processes,
30 Reinisch, (Fn. 26) 140
31 Ibid. 136; The diverse doctrines that address them range from ‘absolute’, ‘Quasi-sovereign’ to ‘restricted’ immunity, or as
it has been described under other jurisdictions, from a ‘restrictive’ to an ‘absolute’ immunity approach.
32 Article 3 (4) European Patent Convention. <https://www.epo.org/law-practice/legal-texts/html/epc/2013/e/ma5.html>
Accessed on April 2016.
33 International Organizations Immunities Act of the United States of North America, 1945.
<http://www.ipu.org/finance-e/PL79-291.pdf.> Accessed on April 2016.
34 Reinisch, (Fn. 26) 138 35 Ibid. 140
the analysis presented in this section will highlight the interactions of IOs that derive from the legal basis for the involvement of IOs in arbitration processes.
In general terms, the participation of IOs as actors of international law is carried out through different organs and institutions. The interactions of that participation depend on the classification of IOs, which according to several criteria, can be either Universal or Regional Institutions, and intergovernmental or non-governmental organisations36. Regardless of which classification is applied, all of the afore mentioned IOs depend on the legal personality and capacity given to them. For that reason, if the conditions explained in the previous sub-chapters are met, those IOs are capable of agreeing to obligations, and hence, able to submit a dispute to and to be brought before an International Arbitration Centre.
The relations of International Organisations with other international actors are separated (i) vis-à-vis their members and (ii) vis-à-vis other international actors.
The main issue regarding the relation with their members, is the extent of independence of IOs. Although their international legal personality would imply independence, practice has shown that governmental IOs mostly depend on the political will of their members. To increase this independence, secretariats, expert organs or judicial institution have been created to establish a separation between IOs and their members those actors. The extent of the involvement of member is generally delimited by the constitutive instrument.
In this type of relations, disputes usually arise between contracting states, rather than between states and the organisations as such. The applicable regulation for such a dispute is generally controlled and governed by the constitutive instrument itself or by other international applicable instruments. One such example is the Vienna Convention on the Law of Treaties between States and International Organizations or between International Organizations, which affirms that ‘disputes concerning treaties, like other international disputes, should be settled,
in conformity with the Charter of the United Nations, by peaceful means and in conformity with the principles of justice and international law.’37
Regarding the relation between IOs and other actors, various relations can be found. However, as it has been mentioned in the introduction of the present dissertation, the focus will be driven
36 This classification divides IOs in organisations governed by states, as opposed to organisations that pursue common goals
solely or in conjunction with states, but without the dependence of the latter.
37 1986 Vienna Convention on the Law of Treaties between States and International Organizations or between International
Organizations – Preamble. UN Treaty Collection 25 ILM 543 (1986) / Doc. A/CONF.129/15; C.f. United Nations Treaty Collection https://treaties.un.org/pages/ViewDetails.aspx?src=TREATY&mtdsg_no=XXIII-3&chapter=23&lang=en Accessed 18 April 2016.
to host state agreements and individuals; therefore, excluding relations concerning labour law, tort law or violations of human rights.
i. Host states
Every IO requires the establishment of a seat from which it can conduct operations, reason for which it requires a direct bond with a determined state. This relationship is primarily regulated by a bilateral agreement denominated headquarter or host state agreements between the organisation as such, and, usually, one of its member states.38 It can undoubtedly be inferred that ‘the seat, premises or headquarters of an international organization play a crucial role in
the relations between an international organization and its host state.’39
The substance of those instruments contains two main types of provisions that have been encountered through a survey, namely functional and factual provisions.40 Those provisions, in addition to regulating advantages in line with the principle of functionality, establish the limits within which the IOs can operate. Factual provisions involve the exact determination of the facilities of an IO e.g. an address or a cadastral number. This detailed determination of the location where the IOs will operate, limits the advantages to be granted to them.
In contrast, functional provisions involve a broad scope of these advantages, by granting them to officials in relation with their activities, rather than to the determined facilities in which they may operate.41
Consequently, the exact delimitation of the extent of these advantages is of utmost importance for the application of certain rights and prerogatives.42
38 For the purpose of this examination, host states of International Organizations will be addressed regardless on whether the
agreement relies on a headquarters agreement or a host state agreement. Their distinction only focusses on the nature of the facilities under certain territory. In that regard, Headquarter Agreements are arrangement between the IOs and a determined country for the incorporation of the IOs’ facility that holds its main administration centre; whereas Host state or Host Country agreements refer to additional facilities that IOs maintain in third countries that depend on their headquarters, such as the Host Country Agreements signed by the Permanent Court of Arbitration with, inter alia, the People’s Republic of China, the Republic of Chile, the Republic of Costa Rica, the Republic of Singapore, and the Socialist Republic of Vietnam.
39 Muller (Fn. 9) 121 40 Ibid.
41 Ibid.; One example of the functional approach of headquarter agreement of the Permanent Court of Arbitration, which
establishes that ‘The appropriate authorities shall take whatever reasonable action may be necessary, within their powers, to
ensure that the PCA shall not be dispossessed of all or any part of the Headquarters. To the extent necessary, the Kingdome of the Netherlands shall either facilitate the acquisition on its territory (…).’ Hence, without determining an exact delimitation
of the territory.
42 Ibid, 125; The application of both provisions can be recognised in a single instrument as well as in two different international
conventions of distinct kind. For instance, the agreement of the United Nations with the United States of America has established in its first headquarters agreement a clear delimitation of what is considered to be part of the headquarters district. However, not all of the facilities that have been increasingly occupied by that IO have been laid down in an instrument, since the parties considered that the General Convention of 1946 would include all facilities due to a functional approach for the determination of the seat. In spite of that, the UN building in Geneva – Switzerland was the only facility of the UN that has an exact determination of its facilities, entailing a cadastral number. This is not a common practice among Swiss-based International Organisations, as their Agreements tend to rely on a functional approach. Examples: Association of Iron Exporting Countries AIEC, the BIS, ITU or EFTA Agreements. In contrast: The Agreement between the United Nations and
Since International Organisations will have their facilities in a sovereign State, they will have to follow the laws and regulations of the latter due to the exclusive right and prerogative of the state to legislate within its territory.43 Article 41 of the Vienna Convention on Diplomatic Relations falls under the same interpretation, establishing that ‘[w]ithout prejudice to their
privileges and immunities, it is the duty of all persons enjoying such privileges and immunities to respect the laws and regulations of the receiving state.44 However, as it has been described
in the section on privileges and immunities of IOs, these advantages imply certain limitations to the applications of national law.
Arbitration clauses in Host State Agreements
The general dispute settlement clause determined for these type of agreements refers to an Ad-Hoc International Arbitration mechanism as the applicable forum, e.g. Article 55 of the Headquarters Agreement between the International Criminal Court and the Host State, Article 16 of the Headquarters Agreement of the Permanent Court of Arbitration, Article XIX Section 51 of the Headquarters Agreement of the International Atomic Energy Agency, among others. This pattern is repeatedly applied throughout almost every dispute settlement clause of this type of instruments, creating the legal basis for the arbitration fora.
A slight modification to this pattern is the additional provision set out in the Headquarters Agreement of the United Nations, in which the dispute settlement clause asserts that, despite the interpretation or application of the Agreement being submitted to an Arbitral Tribunal, it also included the optional request for an Advisory Opinion of the International Court of Justice for any legal question arising out of the course of proceedings before the Arbitral Tribunal.45 In sum, the legal basis for the involvement of IOS in arbitration processes is evidenced on headquarters or host state agreements. These agreements include dispute settlement clauses
the Swiss Confederation on the Ariana Site (1946) 1 UNTS 154, Permanent Mission of Switzerland to the United Nations Office and to other international organisations in Geneva, 11 May 2016.; Although the members to an IO are free to choose the State of the seat, practice has shown a pattern among many IOs. This pattern reflects that cities like New York, Geneva, Brussels, and Vienna have repeatedly been considered to be the best places for the seat of IOs. As a matter of fact, ‘Switzerland
has been home to international organizations for more than a century’. International organizations in Switzerland.
<https://www.eda.admin.ch/eda/en/fdfa/foreign-policy/international-organizations/international-organizations-switzerland.html> Accessed 29 April 2016; See also: Offer by Switzerland to host the Permanent Secretariat of the Minamata
Convention on Mercury in Geneva of June 2015.
<https://www.google.nl/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&ved=0ahUKEwjIhMTSja3NAhUGnRQKHZ-SDX0QFgggMAA&url=http%3A%2F%2Fwww.genevaenvironmentnetwork.org%2F%3Fq%3Den%2Fsystem%2Ffiles%2F
offer_switzerland_2015-06-26.pdf&usg=AFQjCNHABGlO1f2nc9aAHLyI8W8MNAdkWA&sig2=5YVCUOgg3Gj9rnVGJyLi_A>
43 Muller (Fn. 9) 129
44 1961 Vienna Convention on Diplomatic Relations, Article 41.
45 United Nations Headquarters Agreement (The American Journal of International Law, Vol. 42, No.2, 1948) 445-447, in
that repeatedly establish arbitration as the main mechanism for the resolution of their potential disputes. Most of these arbitration clauses do not entail provisions related to the confidentiality of the process, but to the application of special rules of procedure and the freedom of the arbitration tribunal.46
The content of these instruments as well as the different interpretations that the parties might have about it, are potential origins of disputes under this type of relationships.
ii. Relations of IOs with Individuals.
The subjects with whom International Organisations are constantly involved are individuals, States and other IOs. The nature of the agreements signed between those actors is mostly related to general procurement, professional services, guaranteed loans, as well as the provision of required goods.
By an analysis of several templates or model contracts of a variety of organisations, it is common to see well-defined provisions to which, it seems, individuals have short room for negotiations. These model contracts can be found in the General Conditions of Contract of the United Nations, which include, among others, de minimis field contracts, long-term aircraft
charter agreements, contracts for the provision of goods and services, etc., as well as in the
Guidelines for the Selection and Employment of Consultants of the World Bank. Further examples are the model contracts of guarantee between the Multilateral Investment Guarantee Agency (MIGA) and other companies.47
Despite the negotiation methodology of International Organisations, which has not been disclosed so far, every one of the mentioned documents entail a dispute settlement clause that refers to an Arbitration procedure. As a common pattern, most of them refer to lax arbitration rules, and to The Hague as the seat of the proceedings.
These agreements may experience further influences of other instruments of international law. Those influences are related to limitations as well as obligations to be taken into consideration for agreements to be concluded. One example of such limitation is the inability to become parties to contentious proceedings before the ICJ.48
In regard to obligations, those agreements are partly governed by the host or the headquarters agreements, mostly due to provisions that foresee the settlement of dispute of the IO with third
46 See for example, Article XXVIII of the Headquarters Agreement of the International Tribunal for the Prosecution of persons
responsible for serious violations of international humanitarian law committed in the Territory of the former Yugoslavia since 1991.
47 These contracts are set up to provide loans for Project enterprises or equity investments. 48 United Nations, Statute of the International Court of Justice, 18 April 1946, Article 34.
parties. One such example is Article 54 of the Headquarters Agreement of the International Criminal Court, which determines that ‘the Court shall, without prejudice to the powers and
responsibilities of the Assembly under the Statue, make provisions for appropriate modes of settlements of: (a) disputes arising out of contracts and other disputes of a private-law character to which the Court is party; and (b) disputes involving any person referred to in this Agreement who, by reason of his or her official position or function in connection with the Court, enjoys immunity, if such immunity has not been waived.’49
Overall, the examination of the mentioned model contracts reflects the intention of IOs to be involved in arbitration processes for the settlement of disputes arising in contracts with individuals or other actors.
III.
International Arbitration as a forum for International OrganisationsInternational arbitration can be traced back to the operation of the United States through Friendship Commerce and Navigation (FCN) treaties, in which arbitration was one of the selected dispute settlement mechanisms.50
Several decades later, when States started to conclude treaties establishing international organisations, this dispute settlement mechanism was also incorporated therein as a clause. One of the first treaties that combined the creation of an International Organisation with the incorporation of private arbitration clause as a dispute settlement mechanism, was the Agreement between the Government of the French Republic and the Central Commission for Navigation of the Rhine concerning the headquarters of the latter.51
Nowadays, it is common to find agreements concluded by IOs that incorporate a dispute settlement clause with reference to arbitration processes. However, in spite of the vast history of IOs’ agreements incorporating arbitration clauses, the amount of public disclosed cases, is still low.
On this basis, the general aspects of this forum for IOs will be discussed, which will lead to the analysis of existing cases.
49 Headquarters Agreement of the International Criminal Court, Article 54.
50 Sebastián López Escarcena, Indirect Expropriation in International Law, Edward Elgar Publishing (2014)
51 Agreement between the Government of the French Republic and the Central Commission for Navigation of the Rhine
a. General aspects of Arbitration for International Organisations
International arbitration as a dispute settlement forum for international organisations has been justified throughout many perspectives. This forum has inter alia, been addressed from a human rights perspective and from a functionality perspective. Despite of the existence of several perspectives, the central point of the concept of the involvement of IOs in arbitration, remains as the confrontation between the need to hold IOs responsible for their actions and the limitation to bring such institutions before several national and international forums.
From a human rights perspective, it seems to be that the essential characteristics of IOs (such as their privileges and advantages) and provisions of Human rights are in conflict with the possibility to hold an IOs responsible before a dispute settlement forum.
This confrontation was addressed by the European Court of Human Rights in Waite and Kennedy v. Germany. In the proceedings, a Grand Chamber of the Court determined that by granting immunity to International Organisations, a Court would only violate the right of free access to justice under Article 6(1) of the European Convention on Human Rights, if no reasonable alternative means to protect the rights in question effectively and if no satisfactory system of dispute settlement in the relevant international instruments, would be given.52 From this perspective, this confrontation could be eliminated by the incorporation of international arbitration clauses in that regard.
From the functionality perspective, Professor Shaw stated that practice has shown that ‘immunity is critical to the working of international organisations, but in some circumstances
it seems right and desirable that an effective alternative dispute settlement procedure be created.’53
To address this issue, several international organisations have established internal administrative Tribunals as an alternative solution. However, those dispute settlement mechanisms were not created for disputes that IOs might have on the basis of an external agreement with other subjects of international law. Hence, an effective solution for the settlement of disputes of IOs would still be missing.
As a result, international arbitration has been confirmed as an independent alternative mechanism enabling their involvement in a valid forum to entertain determined issues, by the
52 Waite and Kennedy v. Germany, Application No. 26083/94 February 1999 and Beer and Regan v. Germany, Application
No. 28934/95; Shaw (Fn. 5) 957-958.
53 Shaw (Fn. 5) 958; C.f. Kirsten Schmalenbach, ‘Dispute Settlement’ in Jan Klabbers and Asa Wallendahl (eds), ‘Research
constant incorporation of clauses in agreements negotiated by IOs. However, it is not clear whether the mentioned confrontation has been completely resolved by the usage of such forum. The general aspects of International Arbitration processes for IOs entail the same advantages and obligations as those for other actors. However, certain particularities, as the mentioned below, determine the treatment that IOs receive.
i. Consent
The involvement of international organisations in international arbitration processes depends on the existence of an agreement to arbitrate a dispute, regardless whether this agreement is either ‘a priori’ or ‘a posteriori’ to the dispute.54 This agreement –among other features- has to entail the cornerstone of every arbitration process, i.e. consent.
The scope of such consent for IOs goes beyond the extent of the consent given by other subjects, since for IOs and States, it tantamounts to a waiver of their immunity. However, it must be borne in mind that this immunity is not waived with regard to the stage of enforcement of their disputes, neither for IOs nor for States.55
In addition to this limitation, the involvement of IOs in arbitration disputes entails a limitation based on the nature of their operations, i.e. acts that are considered to be within the commercial administration of the IO or their official administration related to their object and purpose. On the one hand, actions of iure imperii (official administrative acts) would require a specific waiver of the IO’s immunity. On the other hand, acts of iure gestionis (Commercial Acts) would not be circumscribed to that requirement.
The consent given by parties to arbitrate a dispute is generally understood as being a limitation to entertain a dispute in other dispute settlement forums. However, the consent to arbitrate a dispute by an IO is not always a limitation to pursue a dispute exclusively before an arbitration tribunal. One such example is the 1982 judgment of the Corte di Cassazione of Italy on an IO’s immunity.56 In this case, the arbitration clause that was introduced in almost every acta iure
gestionis contract of that IO, was found to be contrary to Italian law. Therefore, since the
dispute would have arisen due to a contract concluded under its attribution of acta iure
gestionis, no jurisdictional immunity of national courts could have been invoked. In that
54 Annex 1 provides a model clause established by the Permanent Court of Arbitration for disputes involving international
organisations.
55 See also: United Nations Immunities Convention (Article 21), which excludes diplomatic property, cultural, scientific
purposes and central bank assets, from commercial property.
56 Declaration by the representative of Italy on FAQ’s immunity from legal process and from measures of execution in Italy,
context, the Court determined that, ‘if the other contractor attempted to ignore the arbitration
clause and initiated legal proceedings against that IO before an Italian court, the Organization would have to appear before the judge in order to demonstrate to him the existence of a valid arbitration clause; otherwise, the proceedings would continue "in absentia" until the issuance
of a final judgement.
Overall, throughout an analysis of several sources57 for the purpose of this study, it has been found that agreements concluded by IOs almost always include a priori arbitration clauses for their disputes; hence, showing that IOs constantly consent to seeking a settlement for their disputes in arbitration forums. These clauses, however, have been subject to changes during certain procedures, demonstrating that IOs have been willing to agree on modifications to those agreements, especially taking into consideration the applicable procedural regime that a tribunal might apply.
ii. Applicable law
Since IOs conclude agreements in light of their international as well as of their national legal personality, the applicable regime for their involvement in arbitration processes is bifurcated in that regard.
This bifurcation can also be observed through the applicable law on the merits as opposed to the applicable law on the procedure. The general principle that defines those legal regimes will derive from the consent of the parties.
For the applicable law on the merits, although acts with both personalities can apply international law, national law, as well as other sources such as bilateral conventions, commercial acts of IOs tend to refer to national law, whereas Administrative acts of IOs are usually bound by international law and other conventions. For instance, the application of national law is demanded in cases in which an International Organisation acts within its domestic legal personality, by leasing or purchasing buildings and buying office equipment. In contrast, the application of international law is based on the criterion that IOs are established through international conventions as an emanation of states’ attribution. However, the application of international law is not limited to the establishment of organisations, but also includes international agreements entered with other subjects of international law, e.g. by agreeing to Host State Agreements or Headquarter Agreements, as well as to obligations based
on the internal law of an international organisation that encompasses its constitutive instrument and its regulations for its purposes and goals.58
Despite the importance of the applicable law on the merits, the application of procedural rules for the involvement of IOs in arbitration processes, stands out. In general terms, every party to an arbitration dispute, regardless of their nature, can determine the applicable regime for the procedural stage. However, as it will be seen, disputes involving IOs tend to make use of this flexibility more often than other actors. The legal basis for such flexibility is the consent of the parties, which enables them to choose existing rules or to create rules that may help the procedure.
In regard to existing procedural rules, the latter have been issued or compiled by several organisations in order to create a more suitable environment for the involvement of IOs in arbitration processes. One such example is the issuance of the Optional Rules for arbitration processes in which International Organizations are involved by the Permanent Court of Arbitration. These rules were based on the general rules of arbitration of UNCITRAL proceedings, which were adapt to be flexible and general enough to be applied for IOs. As an evolution, the Permanent Court of Arbitration has developed the PCA Optional Rules for Arbitrating Disputes between Two Parties of Which Only One is a State (1993), the PCA Optional Rules for Arbitration Involving International Organizations and States (1996); and, the PCA Optional Rules for Arbitration between International Organizations and Private Parties (1996).
In contrast, IOs involved in arbitration have created new rules or modified existing rules to shape the framework of the settlement of a dispute for arbitral tribunals. This modification is possible due to the nature of this dispute settlement mechanism, which is dependent on the consent of the parties.
Furthermore, the applicable law that arbitral tribunals apply for their substantive interpretation usually refers to other sources. One such example is the reference to the Vienna Convention on the Law of Treaties between States and international organisations or between international organisations (1986), for potential disputes between IOs and other actors. This instrument entails an annex regarding arbitration and conciliation procedures, which in its second chapter, for instance, determines the functioning of the arbitral tribunal granting special provisions for the settlement of disputes with IOs.
58 Shaw (fn. 4) 948
b. Cases in which IOs have been and are involved in Arbitration
The evaluation of existing international arbitration cases involving IOs has led to the observance of certain patterns. The previously discussed characteristics will be addressed throughout disputes based on headquarters agreements, as well as through cases that involve IOs with private parties.
i. Disputes based on Headquarters or host state agreements
European Molecular Biology Laboratory (EMBL) against Germany59
One of the disputes that arose out of a Headquarter Agreement (HqA) is that between the European Molecular Biology Laboratory (EMBL) against Germany. This arbitration procedure was based on a disagreement on the interpretation of the mentioned agreement, particularly regarding the scope of exemptions in favour of the EMBL and their officials (for taxes and customs duties for purchases made with respect to the official activities) as well as in regard of the status and immunities of its Director-General.60 The advantages in this particular dispute were governed by the Headquarters Agreement itself in combination with the Vienna Convention on Diplomatic Relations of 1961.
In sum, the German government requested the EMBL to pay taxes and duties on certain activities of this laboratory. These obligations were generated, according to Germany, due to the income produced from the operation of a canteen and a guest-house, which was used by staff and scientists visiting the organisation. The EMBL claimed that those operations were part of their official activities.
Moreover, the HqA established that goods purchased by EMBL would only benefit from the exemptions established therein, if those goods were for the official activities of the IO. Hence, excluding those benefits for goods that were to be personally used by the staff and the Director-General of EMBL.
Due to different interpretations of the HqA, the Director General informed the German government that he intended to submit the interpretation of that instrument to an arbitral tribunal. On this basis, the parties agreed to constitute an arbitration tribunal, as well as a working group that would be established in order to assess the practical application of the tribunal’s award. Hence, the creation of this external body constituted an additional institution
59 E. Lauterpacht, International Law Reports, Volume 105 (1997) 60 Ibid
that would have certain faculties, even giving some sort of power to evaluate the execution and implementation of the award; something not considered to be normal in arbitration processes. The main issue of the proceedings was related to the applicable law for the interpretation of the HqA. According to the EMBL, there was legal equity between the two parties to the treaty. The EMBL inferred that this led to the interpretation of the HqA in light in public international law and customary international law, and therefore, to the determination that a restrictive interpretation tending to limit the immunities and privileges would be inadmissible. On the other side, Germany held that there were few, if any, rules of customary international law ‘by
reason of the variety of the nature and tasks of international organisations.’61
The tribunal, in its Award, decided that on the level of public international law, the EMBL and the Federal Republic of Germany were in a position of formal equality. In that regard, the HqA had to be interpreted in light of the rules of public international law. Based on these rules, it interpreted the HqA recommending that the purchase of goods for the activities of the EMBL had to follow factual investigations during an appropriate period to determine whether the use of these goods was for official activities or not.
In substance, this case showed the equality of the parties when signing a Headquarter Agreement, i.e. the impossibility of one of the parties to ‘impose its conditions and
understandings of the HqA.’62 However, its main contribution for the involvement of IOs in
arbitration procedures relies on the modification of the applicable procedural regime. Under those circumstances, it is not to imagine that other dispute settlement mechanism would have been flexible enough to allow a working group to evaluate the application of its outcome; thereby demonstrating the advantages of the applicability of this forum for the enforcement of obligations determined in arbitration procedures, in which IOs are involved.
The question of a tax regime governing pensions paid to retired UNESCO officials residing in France entertained by an Arbitration Tribunal in 2003
One further arbitration dispute that involved an IO, refers to a conflict based on a Headquarters Agreement between the UNESCO and France. The instrument upon which international arbitration was sought, was the Agreement between the Government of the French Republic and the United Nations Educational, Scientific and Cultural Organization regarding the
61 Ibid, 3
Headquarters of the UNESCO and the Privileges and Immunities of the Organization on French Territory of 1954.
The arbitration agreement contained a delimitation of the jurisdiction of the Tribunal to only ‘determining, elucidating and clarifying, in the light of international law and in particular
international civil service law, what the Parties have decided in article 22(b); also determining
that the Tribunal is not authorized to say that the Parties could not have taken such a decision
because it would have been contrary to a principle or rule of international law.’63
The privileges and immunities granted in the Headquarters Agreement also included provisions relating to the privileges and immunities enjoyed by officials of UNESCO, since France had, at the time, not acceded to the Convention on the Privileges and Immunities of the Specialized Agencies of 1947. However, the extent of the applicability was not clear, since the term retirement pension to UNESCO officials residing in France, was not included in the special tax regime.64
The tribunal determined that ‘there is no subsequent practice of the Parties which constitutes an interpretation of the Agreement other than that which clearly derives from its terms and which coincides with the intentions of the Parties at the time of the negotiations.’65 Furthermore, it determined that it ‘was not competent to consider the subsidiary claim of UNESCO concerning whether a portion of the pension is principal and constitutes an emolument of the official, or what happens when the retiring official receives a lump-sum payment upon retirement in lieu of a pension.’66
This arbitration procedure did not show special characteristics in regard of the proceedings. However, the parties determined that the tribunal would only have the possibility to entertain certain issues within their jurisdiction and competence.
Since international arbitration is a consent based dispute settlement mechanism, the delimitation of the scope of a dispute can be undertaken. However, for the purpose to hold IOs responsible and accountable in regard to obligations contained in their agreements, it is questionable whether the limitation imposed in this case by the parties to the Tribunal to not rule that the agreement of the parties is contrary to international law, would affect the enforcement of obligations contained therein.
63 REPORTS OF INTERNATIONAL ARBITRAL AWARDS, Tax regime governing pensions paid to retired UNESCO
officials residing in France (France – UNESCO), VOLUME XXV, (2003). P. 231-266
64 Ibid 65 Ibid. 66 Ibid.
ii. Commercial contract conflicts
In spite of the confidentiality that some arbitration processes involving IOs embroil, two commercial contract based conflicts -that have been made public- have drawn significant attention. One of them is a case between multiple private subjects and an International Organisation, and the other a managing company of an investment fund against an international organisation. The conflict in the first case stems from an international convention, whereas the conflict of the second one arises from a lease agreement signed between two parties.
International Arbitration involving International Organisations and other multiple private parties: the Bank for International Settlement case.
The first contract based dispute encompassed an IO and other multiple actors as parties of the arbitration proceedings. Despite the intervention of several parties, it was expressly stated as a non-class action. This dispute was generated, among others, due to a reform of the Statutes of the Organisation.
To comprehend the issue at stake, the organisational structure of that IO has to be explained. Although the Bank for International Settlement (BIS) was established as a result of the negotiations of the ‘Young plan’, which initially intended to determine the renegotiation of Germany’s World War I reparation payments, it has changed its objectives throughout time. Nowadays, it is considered to be the international organisation that promotes cooperation between central banks and fosters international financial settlements.
At its very beginning, it encompassed a unique framework and complex structure. Its ownership arrangement was composed by shareholders rather than by members, since the first statutes allowed their shareholders ‘to issue their shares to private investors.’67 This procedure
was adopted, since ‘some central banks were unable to subscribe and hold shims in the Bank
at the time of its founding.’68 Hence, a substantial proportion of the shares were held by private
actors;69 a rare situation for an IO, which in that context could be comparable to a ‘corporate
body empowered to issue publicly-traded shares.’70
67 Article 16 of the original Statutes of the Bank for International Settlements
68 Scott Amstrong Spence, Organizing an Arbitration Involving an International Organization and Multiple Private Parties:
The Example of the Bank for International Settlements Arbitration, 21 Journal of International Arbitration 2004 Kluwer Law
International. P. 312
69 Henry Schloss, The Bank for International Settlements: An Experiment I Central Bank. Cooperation 37 (1958). 70 Ibid.
