An arbitral tribunal, constituted under the auspices of the Permanent Court of Arbitration, issued its final and unanimous award in the Croatia v. Slovenia case on 29 June 2017. The arbitration concerned a territorial and maritime dispute between Croatia and Slovenia. This post will focus on the maritime delimitation issues. The present post will deal with the Arbitration Agreement of 2009 (“AA”) (II), the Junction Area (III), and the maritime boundary (IV) in turn. The questions of contamination of the proceedings and the annulment of inter-state arbitral awards have caused a series of controversies. These fall outside the scope of this post and have already been dealt with by Alison Ross and Peter Tzeng respectively. These issues were determined by the reconstituted arbitral tribunal in its partial award rendered on 30 June 2016.
II. The Arbitration Agreement of 4 November 2009
The dispute between the Parties was submitted to arbitration in accordance with an Arbitration Agreement signed by the parties on 4 November 2009 in Stockholm (Annex HRLA-75, Final Award), and witnessed by the then Swedish Prime Minister, Fredrik Reinfeldt, since Sweden then held the Presidency of the Council of the European Union (“EU”). The Arbitration Agreement is unique because it is the first intra-state arbitration agreement of its kind to be drafted under the auspices of the EU, despite the fact that this is not the first occasion where an international organisation was involved in such a task. [See for example the signature for specific purposes of the World Bank of the Indus Waters Treaty 1960, between India and Pakistan, although that treaty is much more complex and not just a simple arbitration agreement (see Article IX and Annexure G). See also for example the involvement of the African Union, the UN and a few EU member states in the drafting of the Comprehensive Peace Agreement 2005, which was witnessed by the Minister of Development Co-operation of the Netherlands on behalf of the EU, paving the way for the drafting of the Abyei Arbitration Agreement 2008, which was eventually signed by the government of Sudan and the Sudan’s People’s Liberation Movement Army only. Brooks Daly has written more on the procedural aspects of the Abyei arbitration.]
The brokering of the Arbitration Agreement by the EU is reflected in Article 9, which requires Slovenia to “lift its reservations as regards the opening and closing of negotiation chapters where the obstacle is related to the dispute”. This was an important provision for Croatia’s accession to the EU. It is to be noted that Slovenia had already been a member of the EU for approximately 5 years at the date of signature of the arbitration agreement, as it had acceded to the EU on 1 May 2004. On the other hand, on the date of signature of the Arbitration Agreement, Croatia was on the path to accession, which was to last for another 4 years, as it eventually became an EU member state on 1 July 2013.
There are two other points worth mentioning regarding the 2009 Arbitration Agreement. First, the applicable law as set out in Article 4 is unusual. The “rules and principles of international law” were applicable to determining the course of the maritime and land boundary (Article 3(1)(a)). International law, equity and “the principle of good neighbourly relations in order to achieve a fair and equitable result” were applicable to determining Slovenia’s junction to the High Sea and the regime for the use of the relevant maritime areas (Article 3(1)(b) and (c)). This is probably a rare instance of the principle of good neighbourly relations for the achievement of a “fair and just result” being encountered in a modern Arbitration Agreement. While it is doubtful whether such a principle could count as a “general principle of law recognised by civilized nations” within the meaning of Article 38(1)(C) of the Statute of the International Court of Justice, it might be regarded as similar to a requirement to determine a case ex aequo et bono under Art. 38(2) of the ICJ Statute. The inclusion of this source of “applicable law” is a curious addition, which can probably be explained by the fact that it was a product of negotiations under the auspices of the EU.
The second point worth mentioning regarding the Arbitration Agreement is that one of the tasks of the arbitral tribunal, as per Article 3 (b)-(c), was to determine “Slovenia’s junction to the High Sea” and “the regime for the use of the relevant maritime areas”. This is a peculiar insertion, and apparently led the arbitral tribunal to determine that starting point of the present arbitration was not whether Slovenia should have a junction to the high sea, but rather where the junction would be and what would be the package of rights given to Slovenia over that area. Read the rest of this entry…