Settlement of international disputes between Canada and the USA.

• Author: King, Henry T., Jr.
• Position: P. 84-123

Article 1: Compulsory Jurisdiction

In any dispute between the States Parties, any question of interpretation, application or operation of a treaty in force between them, which has not been settled within a reasonable time by direct negotiations or referred by agreement of the Parties to the International Court of Justice or to some other third-party procedure, shall be submitted to third-party settlement at the written request of either Party addressed to the other's cabinet officer in charge of foreign affairs, or by an exchange of notes between the two.

Comment. This is the main jurisdictional clause. It provides that a certain category of questions (those which relate to the interpretation or application of a treaty) may be submitted to arbitration by the unilateral request of one of the two Parties, without the advance agreement of the other. This compulsory jurisdiction is strictly limited to that one category: treaty interpretation, application, and operation. It can be invoked only when the question relates to a treaty binding on both countries. As of 1 January 1979, there were some 200 treaties in force between them, counting both multilateral and bilateral instruments. They cover subjects from aeronautical research to zoology; and the number and variety grow annually.

The article has been carefully worded so that the arbitral jurisdiction is compulsory only as to the treaty question itself. In mixed disputes involving non-treaty legal questions or non-legal questions, compulsory jurisdiction will not extend to these other matters. The tribunal should be able to deal with non-treaty legal issues only to the extent that they are essential to a proper resolution of the treaty issues; the Group understands this to be implied in the draft provision on applicable law (Article 8, infra). It must be noted further that Article 4(2) follows the normal practice, both international and domestic, of leaving the precise limits of the tribunal's jurisdiction for the tribunal itself to decide. International tribunals have developed a fairly substantial and consistent jurisprudence in reference to similar jurisdictional clauses.

The Group recognizes that, as in the case of the legal/non-legal distinction already discussed, it may often be difficult to excise the treaty question from the rest of the dispute for separate analysis. But here again the Group believes that the problem is more theoretical than real. Municipal tribunals, especially appellate courts with constitutional jurisdiction, are often asked to consider matters of statutory interpretation in isolation from the central issues of a dispute. And the International Court of Justice and the Court of Justice of the European Communities are among international tribunals which have performed similar functions. Moreover, the Group has drawn a definite line around treaty questions in an attempt to be modest in its proposals, to suggest something that is politically feasible. There is no juristic or other legal reason why such a line would have to be held in practice, were it not for the parties' likely concern about keeping compulsory jurisdiction tightly circumscribed.

It is a matter of long-standing and widespread agreement among States that treaty interpretation or application is an especially apt subject for international adjudication. The Hague Convention of 1899 for the Pacific Settlement of International Disputes stated in Article 16 that arbitration was the most equitable means of settling "questions of a legal nature, [especially those relating to] the interpretation or application of international conventions" (Article 38 of the 1907 Hague Convention is identical in this respect). The "interpretation of a treaty" was one of the main categories of legal disputes listed as suitable for arbitration and judicial settlement in Article 13 of the Covenant of the League of Nations and is given a prominent position in the optional clause contained in Article 36 of the Statute of the International Court of Justice.

The term "treaty" is to be taken in the broad sense used by the Vienna Convention on the Law of Treaties, including any kind of international agreement. On the other hand, it does not apply to agreements not involving the Governments of the two countries, excluding therefore compacts between states and provinces, or agreements involving public corporations or government-owned entities.

The terms "interpretation" and "application" are those customarily used in special compromissory clauses to describe the types of questions which arise under treaties. The intent of using both is to make sure that jurisdictional objections cannot be raised on the ground either that a question is too connected with the actual working of the treaty to be regarded simply as a matter of interpretation, or that it is so abstract as not to be one of application. The difference between them in practice may be quite small, however, as most disputes involve both interpretation and application. To indicate emphasis of the fact that jurisdiction extends to any problem which may arise with respect to treaty language, the term "operation" is added here as well. Most recently, this wording has been incorporated into Article 9 of the 1977 United States-Canadian Transit Pipeline Treaty.

This special position of treaty interpretation is probably due in part to the fact that a treaty contains only rules which have been agreed upon by the parties. Compulsory jurisdiction over its interpretation does not expose a party to prejudice through the submission of domestic issues, of questions which it has not considered as governed by international law, or of those for which international law provides only obscure or ambiguous answers. It merely provides an impartial and authoritative way of ascertaining the meaning and effect of terms to which both parties have already subscribed.

Treaties, particularly bilateral agreements, between Canada and the United States comprise the law for the two countries. Some commentators liken treaties to international "statutes." Others see them as interstate contracts. In either case, the two countries are both committed to the binding force of their provisions. And they have a strong tradition of judicial recourse in the case of domestic differences over statutory or contractual interpretation.

Through historical development or implicit common understanding, some treaties or treaty provisions may no longer be properly given strict legal effect. The Rush-Bagot Agreement of 1817 is perhaps the classic example of an extant treaty with more symbolic value than literal enforceability. Article IV of the 1909 Boundary Waters Treaty, containing a broad antipollution provision, may be another example. But such instruments are not, therefore, necessarily inappropriate for international adjudication. The precepts of international jurisprudence require an arbitral panel to interpret any treaty in light of all the relevant circumstances, including historical development and implicit understandings. The Parties are thus protected from an overly "legalistic" reading of a treaty. Nevertheless, there may be instruments or parts thereof which the Parties may not wish to have made subject to the general grant of compulsory jurisdiction. If this proves to be the case, excluded provisions could be listed in an annex to which Article 1 could refer. Accordingly, Article 1 could be revised to add after "in force between them," the clause "except those treaties or parts thereof listed in Annex A to the present Treaty." Alternatively, such an annex might list the treaties to be covered by Article 1. In this case, the words "in force between them" could be replaced by "listed in Annex A to the present Convention."

If it does prove necessary to restrict the generality of Article 1, the Group would recommend the first alternative. Moreover, it would recommend keeping the list of excluded instruments as short as possible. Regardless of initial commitments, the ultimate success of a third-party settlement system will depend upon its ability to build governmental and public confidence, to show that the system is even-handed and that the Parties are on a footing of equality. While arbitration or adjudication does not by any means always produce a "winner" and a "loser," any given decision may be more favorable to one side's position than the other. If the range of arbitral or judicial jurisdiction is severely limited, the net effect will be very few decisions on a restricted set of instruments. In this situation, the arbitral record may look one-sided, due not to the nature of the system, but rather to the limited subject matters of the chosen instruments. Thus, an excessively modest grant of jurisdiction may result in the apparent confirmation of the concerns which prompted the caution in the first place. General compulsory jurisdiction is especially appropriate for Canada and the United States in large part because their mutual treaties are many and varied. If arbitration or adjudication is permitted to range over this entire field, the favor which either State may find in any particular decision will be balanced by favor to the other State in other decisions. The net result will then properly reflect the equality and fairness inherent in genuine third-party proceedings.

It is worth emphasizing that the article does specify arbitration only as a last resort. Negotiation is explicitly recognized as a normal first step. Moreover, the parties are required to devote a reasonable time to these negotiations in a serious attempt to resolve the matter bilaterally. The two States can also agree to refer the dispute at any time to any special fact-finding or other procedure, such as the International Joint Commission. Even in treaty interpretation, arbitration is to be reserved for those cases where other procedures cannot bring the parties all the way to settlement.

The Group...